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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-1
(AMENDMENT NO. 1)
TENDER OFFER STATEMENT PURSUANT TO SECTION 14(d)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
QUARTERDECK CORPORATION
(NAME OF SUBJECT COMPANY)
OAK ACQUISITION CORPORATION
A WHOLLY OWNED SUBSIDIARY OF
SYMANTEC CORPORATION
(BIDDER)
COMMON STOCK, PAR VALUE $0.001 PER SHARE
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
(TITLE OF CLASS OF SECURITIES)
747712 10 7
(CUSIP NUMBER OF CLASS OF SECURITIES)
DEREK P. WITTE, ESQ.
VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
SYMANTEC CORPORATION
10201 TORRE AVENUE
CUPERTINO, CALIFORNIA 95014-2132
(408) 253-9600
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE NOTICES AND
COMMUNICATIONS ON BEHALF OF BIDDER)
COPIES TO:
GORDON K. DAVIDSON, ESQ.
DAVID K. MICHAELS, ESQ.
TRAM T. PHI, ESQ.
FENWICK & WEST LLP
TWO PALO ALTO SQUARE
PALO ALTO, CALIFORNIA 94036
(650) 494-0600
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This Amendment No. 1 amends and supplements the Tender Offer Statement on
Schedule 14D-1 filed with the Securities and Exchange Commission on October 19,
1998 (the "Statement") relating to the offer by Oak Acquisition Corporation
("Purchaser"), a Delaware corporation and a wholly owned subsidiary of Symantec
Corporation ("Symantec"), a Delaware corporation, to purchase all outstanding
shares of Common Stock, par value $0.001 per share (the "Company Common Stock")
of Quarterdeck Corporation (the "Company"), a Delaware corporation, including
the associated Preferred Stock purchase rights issued pursuant to the Rights
Agreement dated August 11, 1992, as amended, between the Company and American
Stock Transfer & Trust (the "Rights" and, together with the Company Common
Stock, the "Shares") at a price of $0.52 per Share, net to the seller in cash,
without interest thereon, upon the terms and subject to the conditions set forth
in the Offer to Purchase dated October 19, 1998 (the "Offer to Purchase") and in
the related Letter of Transmittal (the "Letter of Transmittal") which, together
with the Offer to Purchase, as each may be amended or supplemented from time to
time, constitute the "Offer"), copies of which are attached hereto as Exhibits
(a)(1) and (a)(2), respectively. The Offer has been supplemented as regards
tender of Shares issuable upon conversion of Series C Convertible Preferred
Stock of the Company by the letter dated November 5, 1998 from Symantec and by
the form of letter of transmittal with respect to such Shares, copies of which
are attached hereto as Exhibits (a)(9) and (a)(10), respectively.
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ITEM 11. MATERIALS TO BE FILED AS EXHIBITS.
(a)(1) Form of Offer to Purchase dated October 19, 1998.
(a)(2) Form of Letter of Transmittal.*
(a)(3) Form of Notice of Guaranteed Delivery.*
(a)(4) Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Nominees.*
(a)(5) Form of Letter to Clients.*
(a)(6) Form of Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.*
(a)(7) Summary Advertisement as published in the New York Times on October
19, 1998.*
(a)(8) Text of Press Release by Symantec and the Company dated October 15,
1998.*
(a)(9) Form of letter from Symantec to holders of Series C Convertible
Preferred Stock of the Company.
(a)(10) Form of letter of transmittal for use by holders of Series C
Convertible Preferred Stock or warrants of the Company.
(b) None.
(c)(1) Agreement and Plan of Merger, dated as of October 15, 1998, among
Symantec, Purchaser and the Company.*
(c)(2) License Agreement, dated October 15, 1998, between the Company and
Symantec.*
(c)(3) Form of Stockholder Agreements, dated as of October 15, 1998
between Symantec and each of Frank W.T. LaHaye, William H. Lane
III, King R. Lee, Howard Morgan, Frank R. Greico, John Strosahl,
Cheri Kaplan-Smith, Joyce Wrenn, Suzanne Dickson and Gadi Navon.*
(c)(4) Non-Disclosure Agreement, dated October 1, 1998, between the
Company and Symantec, as amended on October 13, 1998.*
(d) None.
(e) Not applicable.
(f) None.
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* Previously filed.
3
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SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this Statement, as amended, is true, complete
and correct.
November 9, 1998
OAK ACQUISITION CORPORATION
By: /s/ DEREK WITTE
------------------------------------
Name: Derek Witte
Title: President
SYMANTEC CORPORATION
By: /s/ DEREK WITTE
------------------------------------
Name: Derek Witte
Title: Vice President, General
Counsel
and Secretary
4
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EXHIBIT INDEX
(a)(1) Form of Offer to Purchase dated October 19, 1998.
(a)(2) Form of Letter of Transmittal.*
(a)(3) Form of Notice of Guaranteed Delivery.*
(a)(4) Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Nominees.*
(a)(5) Form of Letter to Clients.*
(a)(6) Form of Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.*
(a)(7) Summary Advertisement as published in the New York Times on October
19, 1998.*
(a)(8) Text of Press Release by Symantec and the Company dated October 15,
1998.*
(a)(9) Form of letter from Symantec to holders of Series C Convertible
Preferred Stock of the Company.
(a)10) Form of letter of transmittal for use by holders of Series C
Convertible Preferred Stock or warrants of the Company.
(b) None.
(c)(1) Agreement and Plan of Merger, dated as of October 15, 1998, among
Symantec, Purchaser and the Company.*
(c)(2) License Agreement, dated October 15, 1998, between the Company and
Symantec.*
(c)(3) Form of Stockholder Agreements, dated as of October 15, 1998 between
Symantec and each of Frank W.T. LaHaye, William H. Lane III, King R.
Lee, Howard Morgan, Frank R. Greico, John Strosahl, Cheri
Kaplan-Smith, Joyce Wrenn, Suzanne Dickson and Gadi Navon.*
(c)(4) Non-Disclosure Agreement, dated October 1, 1998, between the Company
and Symantec, as amended on October 13, 1998.*
(d) None.
(e) Not applicable.
(f) None.
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* Previously filed.
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EXHIBIT (a)(1)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
OF
QUARTERDECK CORPORATION
AT
$0.52 NET PER SHARE
BY
OAK ACQUISITION CORPORATION
A WHOLLY OWNED SUBSIDIARY OF
SYMANTEC CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON MONDAY, NOVEMBER 16, 1998, UNLESS THE OFFER IS EXTENDED.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER AT LEAST THAT
NUMBER OF SHARES OF COMMON STOCK, PAR VALUE $0.001 PER SHARE (THE "COMPANY
COMMON STOCK") OF QUARTERDECK CORPORATION (THE "COMPANY"), INCLUDING THE
ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS ISSUED PURSUANT TO THE RIGHTS
AGREEMENT DATED AUGUST 11, 1992, AS AMENDED, BETWEEN THE COMPANY AND AMERICAN
STOCK TRANSFER & TRUST AS RIGHTS AGENT (THE "RIGHTS" AND, TOGETHER WITH THE
COMPANY COMMON STOCK, THE "SHARES") THAT SHALL CONSTITUTE AT LEAST A MAJORITY OF
THE THEN OUTSTANDING SHARES ON A FULLY DILUTED BASIS (AS DEFINED HEREIN) AND (2)
THE EXPIRATION OR TERMINATION OF ALL WAITING PERIODS IMPOSED UPON CONSUMMATION
OF THE OFFER BY THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS
AMENDED (THE "HSR ACT"), AND THE REGULATIONS THEREUNDER, AS WELL AS THE OTHER
CONDITIONS DESCRIBED HEREIN.
THE BOARD OF DIRECTORS OF QUARTERDECK CORPORATION HAS DETERMINED UNANIMOUSLY
THAT EACH OF THE OFFER (AS DEFINED HEREIN) AND THE MERGER (AS DEFINED HEREIN) IS
FAIR TO, AND IN THE BEST INTERESTS OF, THE STOCKHOLDERS OF QUARTERDECK
CORPORATION AND RECOMMENDS THAT STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR
SHARES PURSUANT TO THE OFFER.
BROADVIEW INTERNATIONAL LLC ("BROADVIEW"), FINANCIAL ADVISOR TO THE COMPANY,
HAS DELIVERED TO THE BOARD OF DIRECTORS OF THE COMPANY ITS WRITTEN OPINION TO
THE EFFECT THAT, AS OF OCTOBER 15, 1998, THE DATE OF THE MERGER AGREEMENT (AS
DEFINED BELOW) AND SUBJECT TO THE VARIOUS ASSUMPTIONS AND LIMITATIONS STATED
THEREIN, THE $0.52 IN CASH TO BE RECEIVED BY THE HOLDERS OF SHARES IN THE OFFER
AND THE MERGER IS FAIR TO SUCH HOLDERS FROM A FINANCIAL POINT OF VIEW. THE FULL
TEXT OF THE WRITTEN OPINION OF BROADVIEW CONTAINING THE ASSUMPTIONS MADE, THE
MATTERS CONSIDERED AND THE SCOPE OF THE REVIEW UNDERTAKEN IN RENDERING SUCH
OPINION AS WELL AS THE LIMITATIONS OF SUCH OPINION IS INCLUDED WITH THE
COMPANY'S SOLICITATION/RECOMMENDATION STATEMENT ON SCHEDULE 14D-9, WHICH IS
BEING MAILED TO STOCKHOLDERS OF THE COMPANY CONCURRENTLY HEREWITH.
IMPORTANT
Any stockholder of the Company desiring to tender all or any portion of such
stockholder's Shares should either: (i) 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, if separate, the certificates representing the
Rights) and any other required documents to the Depositary or tender such Shares
pursuant to the procedure for book-entry transfer set forth in Section 3 of this
Offer to Purchase, or (ii) request such stockholder's broker, dealer, commercial
bank, trust company or other nominee to effect the transaction for such
stockholder. Any 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.
A stockholder who desires to tender Shares and cannot deliver such Shares
and all other required documents to the Depositary by the expiration of the
Offer, or who cannot comply with the procedure for book-entry transfer on a
timely basis, may tender such Shares by following the procedure for guaranteed
delivery procedure set forth in Section 3 of this Offer to Purchase.
Questions or 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. Additional copies of this
Offer to Purchase, the Letter of Transmittal and the Notice of Guaranteed
Delivery may also be obtained from the Information Agent or from brokers,
dealers, commercial banks or trust companies.
The Dealer Manager for the Offer is:
DONALDSON, LUFKIN & JENRETTE
October 19, 1998
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
INTRODUCTION..................................................... 1
1. Terms of the Offer; Expiration Date......................... 4
2. Acceptance for Payment and Payment for Shares............... 5
3. Procedures for Accepting the Offer and Tendering Shares..... 6
4. Withdrawal Rights........................................... 8
5. Certain Federal Income Tax Consequences..................... 9
6. Price Range of Shares....................................... 10
7. Certain Information Concerning the Company.................. 10
8. Certain Information Concerning Purchaser and Symantec....... 12
9. Source and Amount of Funds.................................. 13
10. Background of the Offer; Contacts with the Company; the
Transaction Documents....................................... 13
11. Purpose of the Offer; Plans for the Company After the Offer
and the Merger; Stockholder Approval and Appraisal.......... 24
12. Dividends and Distributions................................. 26
13. Effect of the Offer on the Market for the Shares, Quotation
and Exchange Act Registration............................... 26
14. Extension of Tender Period; Termination; Amendment.......... 27
15. Certain Conditions of the Offer............................. 27
16. Certain Legal Matters and Regulatory Approvals.............. 29
17. Fees and Expenses........................................... 31
18. Miscellaneous............................................... 32
Schedule I -- Directors and Executive Officers of Purchaser
and Symantec
</TABLE>
i
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To the Holders of Common Stock
(including the Associated Preferred Stock Purchase Rights)
of QUARTERDECK CORPORATION:
INTRODUCTION
The Offer. Oak Acquisition Corporation ("Purchaser"), a Delaware
corporation and a wholly owned subsidiary of Symantec Corporation ("Symantec"),
a Delaware corporation, hereby offers to purchase all outstanding shares of
Common Stock, par value $0.001 per share (the "Company Common Stock"), of
Quarterdeck Corporation (the "Company"), a Delaware corporation, including the
associated Preferred Stock purchase rights (the "Rights" and, together with the
Company Common Stock, the "Shares") issued pursuant to the Rights Agreement
dated August 11, 1992, as amended, between the Company and American Stock
Transfer & Trust, as Rights Agent at a price of $0.52 per Share, net to the
seller in cash, without interest thereon (the "Offer Price"), subject to
reduction for any applicable federal backup or other withholding taxes, upon the
terms and subject to the conditions set forth in this Offer to Purchase ("Offer
to Purchase") and in the related Letter of Transmittal (the "Letter of
Transmittal" which, together with the Offer to Purchase, and any amendments or
supplements thereto, constitute the "Offer").
Fees and Expenses. Tendering stockholders will not be obligated to pay
brokerage fees or commissions or, except as otherwise provided in Instruction 6
of the Letter of Transmittal, stock transfer taxes with respect to the purchase
of Shares by Purchaser pursuant to the Offer. However, any tendering stockholder
or other payee who fails to complete and sign the Substitute Form W-9 that is
included in the Letter of Transmittal may be subject to a required backup
federal income tax withholding of 31% of the gross proceeds payable to such
stockholder or other payee pursuant to the Offer. Purchaser will pay all charges
and expenses of Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ"),
which is acting as Dealer Manager for the Offer (in such capacity, the "Dealer
Manager"), State Street Bank and Trust Company (the "Depositary") and D.F. King
& Co., Inc. (the "Information Agent") incurred in connection with the Offer. See
"Section 17. Fees and Expenses."
THE BOARD OF DIRECTORS OF THE COMPANY HAS DETERMINED UNANIMOUSLY THAT EACH
OF THE OFFER AND THE MERGER (AS DEFINED BELOW) IS 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.
THE OFFER DOES NOT CONSTITUTE A SOLICITATION OF PROXIES FOR ANY MEETING OF
THE COMPANY'S STOCKHOLDERS. ANY SUCH SOLICITATION WOULD BE MADE ONLY PURSUANT TO
SEPARATE PROXY MATERIALS COMPLYING WITH THE REQUIREMENTS OF SECTION 14(A) OF THE
SECURITIES EXCHANGE OF 1934, AS AMENDED (THE "EXCHANGE ACT").
Fairness Option. Broadview International LLC, the Company's financial
advisor ("Broadview"), has delivered to the Company Board its written opinion
dated October 15, 1998 to the effect that, as of the date of such opinion, and
subject to the various assumptions and limitations stated therein, the
consideration to be received by holders of Common Stock pursuant to the Offer
and related Merger (as defined below) 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, and stockholders are
urged to read the opinion in its entirety.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER THAT NUMBER OF
SHARES WHICH SHALL CONSTITUTE AT LEAST A MAJORITY OF THE THEN OUTSTANDING SHARES
ON A FULLY DILUTED BASIS (AFTER GIVING EFFECT TO THE EXERCISE OR CONVERSION OF
ALL OPTIONS, RIGHTS AND SECURITIES EXERCISABLE OR CONVERTIBLE INTO SHARES, BUT
ONLY TO THE EXTENT THAT ANY SUCH OPTIONS, RIGHTS OR SECURITIES ARE EXERCISABLE
OR CONVERTIBLE INTO SUCH
1
<PAGE> 4
SHARES AT A PER SHARE PRICE LESS THAN $0.52) (THE "MINIMUM CONDITION"), AND (2)
THE EXPIRATION OR TERMINATION OF ANY WAITING PERIODS IMPOSED UPON CONSUMMATION
OF THE OFFER BY THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS
AMENDED (THE "HSR ACT"), AS WELL AS THE OTHER CONDITIONS DESCRIBED HEREIN. SEE
SECTION 15 WHICH SETS FORTH IN FULL THE CONDITIONS TO THE OFFER.
Shares, Warrants and Options Outstanding. The Company has advised Purchaser
that as of October 15, 1998, 73,531,703 Shares were issued and outstanding, and
4,248 shares of Series C Convertible Preferred Stock were issued and outstanding
(including 1,379 shares issuable upon exercise of outstanding warrants to
purchase Company Preferred Stock). The Company has advised Purchaser that, as of
October 15, 1998, the outstanding shares of Company's Series C Convertible
Preferred Stock, together with all shares of such Preferred Stock issuable upon
exercise of outstanding warrants, are convertible into 16,030,188 Shares. The
Company has advised Purchaser that as of October 15, 1998, the Company has duly
reserved a total of 7,335,227 Shares for issuance upon exercise of outstanding
Options granted pursuant to the Company's 1990 Directors Stock Options Plan, its
Amended and Restated 1990 Stock Plan, its 1996 Acquisition Stock Option Plan
(the "Stock Option Plans") or outside of such Stock Option Plans, of which
options to purchase 2,882,988 shares have an exercise price of not in excess of
$0.52. Based on the foregoing and assuming all such options and warrants are
exercised, Purchaser believes that approximately 46,222,440 Shares must be
validly tendered and not withdrawn prior to the expiration of the Offer in order
for the Minimum Condition to be satisfied. See "Section 1. Terms of the Offer;
Expiration Date."
Merger Agreement. The Offer is being made pursuant to an Agreement and Plan
of Merger, dated as of October 15, 1998 (the "Merger Agreement"), among
Purchaser, Symantec and the Company. The Merger Agreement provides that, among
other things, as soon as practicable after the purchase of Shares pursuant to
the Offer and the satisfaction of the other conditions set forth in the Merger
Agreement and in accordance with the Delaware General Corporation Law ("Delaware
Law"), Purchaser will be merged with and into the Company (the "Merger").
Following consummation of the Merger, the surviving corporation (the "Surviving
Corporation") will become a wholly owned subsidiary of Symantec. As of the
effective time of the Merger (the "Effective Time"), each Share issued and
outstanding immediately prior to the Effective Time (other than Shares owned by
the Company or by any subsidiary of the Company, or owned by Purchaser, Symantec
or any other subsidiary of Symantec and any Shares which are held by
stockholders who have not voted in favor of the Merger or consented thereto in
writing and who shall have demanded appraisal for such Shares in accordance with
Delaware Law) will be canceled and converted automatically into the right to
receive $0.52 in cash, or any higher price that may be paid per Share in the
Offer, without interest (the "Merger Consideration"). As of the Effective Time,
each issued and outstanding share of any class or series of preferred stock
issued by the Company (the "Company Preferred Stock"), other than shares held by
stockholders who demand appraisal therefor in accordance with Delaware Law, will
be converted automatically into the right to receive in cash, without interest,
the product obtained by multiplying the Merger Consideration by the number of
shares of Company Common Stock into which such share of Company Preferred Stock
is convertible at the Effective Time under the Company's Certificate of
Incorporation. The Merger Agreement is more fully described in Section 10.
Board Representation. The Merger Agreement provides that, effective upon
the purchase by Purchaser of any Shares, Purchaser shall be entitled to
designate the number of members, rounded up to the next whole number, of the
Company's Board of Directors that equals the product of the total number of
members on the Company's Board of Directors (giving effect to the election of
any additional directors pursuant to this paragraph) multiplied by the
percentage that the number of shares of Company Common Stock accepted for
payment by Purchaser bears to the total number of Shares outstanding, subject to
compliance with Section 14(f) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"). In the Merger Agreement, the Company has agreed to take
all actions necessary to cause Symantec's designees to be elected or appointed
to the Company's Board of Directors, including increasing the number of
directors and seeking and accepting resignations of incumbent directors.
2
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The Merger. The consummation of the Merger is subject to the satisfaction
or waiver of certain conditions, including the approval and adoption of the
Merger by the requisite vote of the stockholders of the Company, if such vote is
required under Delaware Law. See "Section 10. Background of the Offer; Contracts
with the Company; the Transaction Documents." Except as described below, under
the Company's Certificate of Incorporation and Delaware Law, the affirmative
vote of the holders of at least a majority of the outstanding Shares is required
to approve and adopt the Merger Agreement and the Merger. Consequently, if
Purchaser acquires (pursuant to the Offer or otherwise) at least a majority of
the outstanding Shares, 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 Purchaser acquires, pursuant to the Offer or
otherwise, at least 90% of the then outstanding Shares, Purchaser will be able
to approve and adopt the Merger Agreement and approve the Merger, without a vote
of the Company's stockholders. If 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. Subject to satisfaction of
the conditions to the Merger, Purchaser, Symantec and the Company have agreed to
use all reasonable efforts to take, or cause to be taken, all actions, and to
do, or cause to be done, and to use all reasonable efforts to assist and
cooperate with the other parties in doing, all things necessary, proper or
advisable to consummate and make effective, in an expeditious manner, the Offer,
the Merger and the other transactions contemplated by the Merger Agreement, and
the Certificate of Merger and the License Agreement (the "License Agreement")
dated October 15, 1998 between the Company and Symantec (together, the
"Ancillary Agreements"). See "Section 10. Background of the Offer; Contacts with
the Company; the Transaction Documents."
License Agreement. Concurrently with the execution of the Merger Agreement,
the Company entered into the License Agreement. Pursuant to the License
Agreement, the Company granted to Symantec a non-exclusive development license
and a non-exclusive distribution license to the Company's CleanSweep(TM) product
and related technology in consideration for the payment by Symantec of certain
royalties. Upon execution of the License Agreement, the Company deposited in
escrow the source code for its CleanSweep product and related technology to be
released to Symantec upon commencement of the distribution license. The
distribution license will not commence until the earlier of consummation of the
Offer or the occurrence of certain events that would obligate the Company to pay
Symantec a break-up fee under the Merger Agreement. See "Section 10. Background
of the Offer; Contracts with the Company; the Transaction Documents -- The
License Agreement."
Stockholder Agreements. Also concurrently with the execution of the Merger
Agreement, Symantec entered into stockholder agreements (the "Stockholder
Agreements") with each member of the Company's Board of Directors and its
executive officers who are not directors. Pursuant to the Stockholder
Agreements, such directors and executive officers have agreed, among other
things, to tender, in accordance with the terms of the Offer, all of the Shares
beneficially owned by them. In the aggregate, these stockholders beneficially
own 2,707,049 Shares, including 316,004 Shares issued and outstanding or 0.43%
of the total Shares issued and outstanding, and 1,500,000 Options to purchase
Shares with an exercise price of less than $0.52 per share, which, when combined
with those Shares beneficially owned that are issued and outstanding, comprise
approximately 2.0% of the outstanding Shares on a fully diluted basis (i.e.,
treating all options having an exercise price of less than $0.52 per share as if
exercised) as of October 15, 1998. See "Section 10. Background of the Offer;
Contracts with the Company; the Transaction Documents -- The Stockholder
Agreements."
The Securities and Exchange Commission (the "Commission") has adopted Rule
13e-3 under the Exchange Act, which is applicable to certain "going private"
transactions. 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. Purchaser believes that
Rule 13e-3 will not be applicable to the Offer or the Merger. However, no
assurances can be given that the Commission will not take the position that Rule
13e-3 is applicable to the Offer or the Merger.
3
<PAGE> 6
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ IN THEIR ENTIRETY BEFORE ANY DECISION
IS MADE WITH RESPECT TO THE OFFER.
1. TERMS OF THE OFFER; EXPIRATION DATE. Upon the terms and subject to the
conditions of the Offer (including, if the Offer is extended or amended, the
terms and conditions of such extension or amendment), Purchaser will accept for
payment and pay for all Shares validly tendered prior to the Expiration Date (as
defined below) and not withdrawn as permitted by Section 4 as soon as
practicable after the Expiration Date. The term "Expiration Date" means 12:00
Midnight, New York City time, on Monday, November 16, 1998, unless the period
during which the Offer is open shall have been extended pursuant and subject to
the terms and conditions of the Merger Agreement, in which event the term
"Expiration Date" shall mean the latest time and date at which the Offer, as so
extended, shall expire.
Subject to the applicable rules and regulations of the Commission,
Purchaser also expressly reserves the right unilaterally to waive any conditions
to the Offer (other than, without the Company's prior written consent, the
Minimum Condition), to increase the price per share payable in the Offer, to
extend the duration of the Offer, or to make any other changes in the terms and
conditions of the Offer (subject to the limitations described below), by giving
oral or written notice of such waiver, increase, extension or amendment to the
Depositary and by making a public announcement thereof. However, the Merger
Agreement provides that Purchaser will not decrease the price per Share payable
in the Offer, reduce the maximum number of Shares to be purchased in the Offer,
impose conditions to the Offer in addition to those set forth in Section 15
hereof, change the form of consideration payable in the Offer, or amend any
other material terms of the Offer in a manner materially adverse to the
Company's stockholders. In addition, at the Expiration Date (as the same may be
extended pursuant to this sentence), if any condition (other than the Minimum
Condition) shall not have been satisfied which could reasonably be expected to
be satisfied within the next succeeding ten business days, then the Offer shall
be extended an additional ten business days (but in no event beyond the date 45
days after the date on which the Offer shall have been first commenced).
Purchaser acknowledges that Rule 14e-1(c) under the Exchange Act requires
Purchaser to pay the consideration offered or return the Shares tendered
promptly after the termination or withdrawal of the Offer and that Purchaser may
not delay acceptance for payment of, or payment for (except as provided in this
paragraph), any Shares upon the occurrence of any of the conditions specified in
"Section 15. Certain Conditions of the Offer" without extending the period of
time during which the Offer is open.
If Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer, or if it waives a material condition of the
Offer, Purchaser will extend the Offer to the extent required by Rules 14d-4(c),
14d-6(d) and 14e-1 under the Exchange Act. See "Section 14. Extension of Tender
Period; Termination; Amendment."
Subject to the terms of the Merger Agreement, if, prior to the Expiration
Date, Purchaser should decide to increase the consideration being offered in the
Offer, such increase in the consideration being offered will be applicable to
all stockholders whose Shares are accepted for payment pursuant to the Offer
(whether or not such Shares were tendered prior to such increase in
consideration) and, if at the time notice of any such increase in the
consideration being offered is first published, sent or given to holders of such
Shares, the Offer is scheduled to expire at any time earlier than the period
ending on the tenth business day from and including the date that such notice is
first so published, sent or given, the Offer will be extended at least until the
expiration of such ten business day period. For purposes of the Offer, a
"business day" means any day other than a Saturday, Sunday or federal holiday
and consists of the time period from 12:01 a.m. through 12:00 Midnight, New York
City time.
This Offer to Purchase and the related Letter of Transmittal will be mailed
to record holders of Shares whose names appear on the Company's stockholder list
and will be furnished, for subsequent transmittal to beneficial owners of
Shares, to brokers, dealers, commercial banks, trust companies and similar
persons whose names, or the names of whose nominees, appear on the stockholder
list, or, if applicable, who are listed as participants in a clearing agency's
security position listing.
4
<PAGE> 7
2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES. On the terms and subject
to the conditions of the Offer (including, if the Offer is extended or amended,
the terms and conditions of any such extension or amendment), Purchaser will
accept for payment, and will pay for, all Shares validly tendered and not
properly withdrawn promptly after the Expiration Date.
In all cases, payment for Shares tendered and accepted for payment pursuant
to the Offer will be made only after timely receipt by the Depositary of (i) the
certificates evidencing such Shares (the "Certificates") or timely confirmation
of a book-entry transfer (a "Book-Entry") of such Shares into the Depositary's
account at The Depository Trust Company (the "Book-Entry Transfer Facility")
pursuant to the procedures set forth in "Section 3. Procedures for Accepting the
Offer and Tendering Shares," (ii) the Letter of Transmittal (or a manually
signed facsimile thereof), properly completed and duly executed, with any
required signature guarantees, or an Agent's Message (as defined below) in
connection with a book-entry transfer and (iii) any other documents required by
the Letter of Transmittal. The term "Agent's Message" means a message,
transmitted by the Book-Entry Transfer Facility to, and received by, the
Depositary and forming a part of a Book-Entry Confirmation, which states that
the Book-Entry Transfer Facility has received an express acknowledgment from the
participant in the 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 such
participant. In addition, in the case of Shares issuable upon conversion of
shares of the Company's Series C Convertible Preferred Stock (including Shares
issuable under the Preferred Stockholder Agreements described below in "Section
10. Background of the Offer; Contacts with the Company; the Transaction
Documents -- Conversion and/or Repurchase of Series C Convertible Preferred
Stock"), such Shares shall be deemed to have been duly tendered for purposes of
the Offer upon delivery to the Purchaser of certificates representing such
shares of Series C Convertible Preferred Stock (or warrants exercisable
therefor), accompanied by a letter of transmittal for such certificates in the
form furnished by the Purchaser, properly completed and duly executed, with any
required signature guarantees (and in the case of any such warrants, payment of
the applicable exercise price). Payment for shares of the Company's Series C
Convertible Preferred Stock that have been delivered and accepted for payment
pursuant to the Offer will be made only after timely receipt of such
certificates and such executed and completed letter of transmittal.
On October 19, 1998, Symantec filed with the Federal Trade Commission (the
"FTC") and the Antitrust Division of the Department of Justice (the "Antitrust
Division") a Pre-merger Notification and Report Form under the HSR Act with
respect to the Offer. The waiting period under the HSR Act applicable to the
Offer expired at 5:00 p.m., New York City time on November 3, 1998. See "Section
16. Certain Legal Matters and Regulatory Approvals."
For purposes of the Offer, Purchaser will be deemed to have accepted for
payment (and thereby purchased) Shares validly tendered and not properly
withdrawn as, if and when Purchaser gives oral or written notice to the
Depositary of Purchaser's acceptance for payment of such Shares pursuant to the
Offer. Upon the terms and subject to the conditions of the Offer, payment for
Shares accepted for payment pursuant to the Offer will be made by deposit of the
purchase price therefor with the Depositary, which will act as agent for
tendering stockholders for the purpose of receiving payments from Purchaser and
transmitting such payments to tendering stockholders whose Shares have been
accepted for payment. Under no circumstances will interest on the purchase price
for Shares be paid, regardless of any delay in making such payment.
If any tendered Shares are not accepted for payment for any reason pursuant
to the terms and conditions of the Offer, or if Certificates are submitted
evidencing more Shares than are tendered or accepted for payment, Certificates
evidencing unpurchased Shares 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 the Book-Entry Transfer Facility pursuant to the
procedure set forth in "Section 3. Procedures for Accepting the Offer and
Tendering Shares," such Shares will be credited to an account maintained at the
Book-Entry Transfer Facility), as promptly as practicable following the
expiration or termination of the Offer.
Purchaser reserves the right to transfer or assign, in whole or from time
to time in part, to Symantec or any direct or indirect wholly owned subsidiary
of Symantec, the right to purchase all or any portion of the Shares tendered
pursuant to the Offer, but any such assignment will not relieve Purchaser of its
obligations
5
<PAGE> 8
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 ACCEPTING THE OFFER AND TENDERING SHARES.
Valid Tender of Shares. In order for a holder of Shares validly to tender
Shares pursuant to the Offer, the Letter of Transmittal (or a manually signed
facsimile thereof), properly completed and duly executed, together with any
required signature guarantees, or an Agent's Message in connection with a
book-entry tender of Shares, and any other documents required by the Letter of
Transmittal, must be received by the Depositary at one of its addresses set
forth on the back cover of this Offer to Purchase on or prior to the Expiration
Date and either (i) the Certificates evidencing tendered Shares must be received
by the Depositary at such address or such Shares must be tendered pursuant to
the procedure for book-entry transfer described below and a Book-Entry
Confirmation must be received by the Depositary, in each case on or prior to the
Expiration Date, or (ii) the tendering stockholder must comply with the
guaranteed delivery procedures described below. In addition, in the case of
Shares issuable upon conversion of shares of the Company's Series C Convertible
Preferred Stock (including Shares issuable under the Preferred Stockholder
Agreements described below in "Section 10. Background of the Offer; Contacts
with the Company; the Transaction Documents -- Conversion and/or Repurchase of
Series C Convertible Preferred Stock,"), such Shares shall be deemed to have
been validly tendered for purposes of the Offer upon delivery to the Purchaser
of certificates representing such shares of Series C Convertible Preferred Stock
(or warrants exercisable thereof), accompanied by a letter of transmittal for
such certificates in the form furnished by the Purchaser, properly completed and
duly executed, with any required signature guarantees (and in the case of any
such warrants, payment of the applicable exercise price).
THE METHOD OF DELIVERY OF CERTIFICATES AND ALL OTHER REQUIRED DOCUMENTS,
INCLUDING DELIVERY THROUGH THE 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.
Book-Entry Transfer. The Depositary will establish accounts with respect to
the Shares at the Book-Entry Transfer Facility for purposes of the Offer within
two business days after the date of this Offer to Purchase. Any financial
institution that is a participant in the system of the Book-Entry Transfer
Facility may make a book-entry delivery of Shares by causing the Book-Entry
Transfer Facility to transfer such Shares into the Depositary's account at the
Book-Entry Transfer Facility in accordance with the Book-Entry Transfer
Facility's procedures for such transfer. However, although delivery of Shares
may be effected through book-entry transfer at the Book-Entry Transfer Facility,
the Letter of Transmittal (or a manually signed facsimile thereof), properly
completed and duly executed, together with any required signature guarantees, or
an Agent's Message in connection with a book-entry transfer, and any other
required documents, must, in any case, be received by the Depositary at one of
its addresses set forth on the back cover of this Offer to Purchase on or prior
to the Expiration Date, or the tendering stockholder must comply with the
guaranteed delivery procedure described below. DELIVERY OF DOCUMENTS TO THE
BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
Signature Guarantees. No signature guarantee is required on the Letter of
Transmittal (i) if the Letter of Transmittal is signed by the registered holder
(which term, for purposes of this Section 3, includes any participant in the
Book-Entry Transfer Facility's systems whose name appears on a security position
listing as the owner of the Shares) of Shares tendered therewith and such
registered holder has not completed either the box entitled "Special Delivery
Instructions" or the box entitled "Special Payment Instructions" on the Letter
of Transmittal or (ii) if such Shares are tendered for the account of a
financial institution (including most commercial banks, savings and loan
associations and brokerage houses) that is a participant in the Securities
Transfer Agents Medallion Program (an "Eligible Institution"). In all other
cases, all signatures on the Letter of Transmittal must be guaranteed by an
Eligible Institution. See Instructions 1 and 5 to the Letter of Transmittal. If
Certificates are registered in the name of a person other than the signer of the
Letter of Transmittal, or if payment is to be made or Certificates for Shares
not tendered or not accepted for payment
6
<PAGE> 9
are to be returned to a person other than the registered holder of the
Certificates surrendered, the tendered Certificates must be endorsed or
accompanied by appropriate stock powers, in either case signed exactly as the
name or names of the registered holders appear on the Certificates, with the
signatures on the Certificates or stock powers guaranteed as described above.
See Instructions 1 and 5 to the Letter of Transmittal.
Guaranteed Delivery. If a stockholder desires to tender Shares pursuant to
the Offer and such stockholder's Certificates evidencing such Shares are not
immediately available or such stockholder cannot deliver the Certificates and
all other required documents to the Depositary prior to the Expiration Date, or
such stockholder cannot complete the procedure for delivery by book-entry
transfer on a timely basis, such Shares may nevertheless be tendered, provided
that all the following conditions are satisfied:
(i) such tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form made available by Purchaser, is
received prior to the Expiration Date by the Depositary as provided below;
and
(iii) the Certificates (or a Book-Entry Confirmation) evidencing all
tendered Shares, in proper form for transfer, in each case together with
the Letter of Transmittal (or a manually signed facsimile thereof),
properly completed and duly executed, with any required signature
guarantees (or, in the case of a book-entry transfer, an Agent's Message),
and any other documents required by the Letter of Transmittal are received
by the Depositary within three National Association of Securities Dealers
Automated Quotation System ("Nasdaq") trading days after the date of
execution of such Notice of Guaranteed Delivery. A "trading day" is any day
on which the Nasdaq is open for business.
The Notice of Guaranteed Delivery may be delivered by hand or mail or
transmitted by telegram, telex or facsimile transmission to the Depositary and
must include a guarantee by an Eligible Institution in the form set forth in the
form of Notice of Guaranteed Delivery made available by Purchaser.
In all cases, payment for Shares tendered and accepted for payment pursuant
to the Offer will be made only after timely receipt by the Depositary of the
Certificates evidencing such Shares, or a Book-Entry Confirmation of the
delivery of such Shares, and the Letter of Transmittal (or a manually signed
facsimile thereof), properly completed and duly executed, with any required
signature guarantees (or, in the case of a book-entry transfer, an Agent's
Message), and any other documents required by the Letter of Transmittal.
Determination of Validity. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance for payment of any tender
of Shares will be determined by Purchaser in its sole discretion, which
determination shall be final and binding on all parties. Purchaser reserves the
absolute right to reject any and all tenders determined by it not to be in
proper form or the acceptance for payment of which may, in the opinion of its
counsel, be unlawful. Purchaser also reserves the absolute right to waive any
condition of the Offer or any defect or irregularity in the tender of any Shares
of any particular stockholder, whether or not similar defects or irregularities
are waived in the case of other stockholders. No tender of Shares will be deemed
to have been validly made until all defects and irregularities have been cured
or waived. None of Purchaser, Symantec, 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 incur any liability
for failure to give any such notification. 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.
Other Requirements. By executing the Letter of Transmittal as set forth
above, a tendering stockholder irrevocably appoints designees of Purchaser as
such stockholder's proxies, each with full power of substitution, in the manner
set forth in the Letter of Transmittal, to the full extent of such stockholder's
rights with respect to the Shares tendered by such stockholder and accepted for
payment by Purchaser (and with respect to any and all other shares or other
securities issued or issuable in respect of such Shares on or after October 19,
1998). All such proxies shall be considered coupled with an interest in the
tendered Shares. Such appointment will be effective when, and only to the extent
that, Purchaser deposits the payment for such Shares with the Depositary. Upon
such acceptance for payment, all prior proxies given by such stockholder with
respect to such Shares (and such other Shares and securities) will be revoked
without further action, and no subsequent proxies may be given nor any
7
<PAGE> 10
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 Purchaser will, with respect to the Shares (and such other Shares
and securities) for which the appointment is effective, be empowered to exercise
all voting and other rights of such stockholder as they in their sole discretion
may deem proper at any annual or special meeting of the Company's stockholders
or any adjournment or postponement thereof, by written consent in lieu of any
such meeting or otherwise. Purchaser reserves the right to require that, in
order for Shares to be deemed validly tendered, immediately upon Purchaser's
payment for such Shares, Purchaser must be able to exercise full voting rights
with respect to such Shares (and such other Shares and securities).
The 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 as well as the tendering stockholder's representation
and warranty that (i) such stockholder has a net long position in the Shares
being tendered within the meaning of Rule 14e-4 under the Exchange Act and (ii)
the tender of such Shares complies with Rule 14e-4. It is a violation of Rule
14e-4 for a person, directly or indirectly, to tender Shares for such person's
own account unless, at the time of tender, the person so tendering (a) has a net
long position equal to or greater than the amount of (x) Shares tendered or (y)
other securities immediately convertible into or exchangeable or exercisable for
the Shares tendered and such person will acquire such Shares for tender by
conversion, exchange or exercise and (b) will cause such Shares to be delivered
in accordance with the terms of the Offer. Rule 14e-4 provides a similar
restriction applicable to the tender or guarantee of a tender on behalf of
another person.
The acceptance for payment by Purchaser of Shares pursuant to any of the
procedures described above will constitute a binding agreement between the
tendering stockholder and Purchaser upon the terms and subject to the conditions
of the Offer.
Backup Federal Income Tax Withholding.
UNDER THE FEDERAL INCOME TAX LAWS, UNLESS AN EXCEPTION APPLIES UNDER THE
APPLICABLE RULES AND REGULATIONS, THE DEPOSITORY WILL BE REQUIRED TO WITHHOLD
31% OF THE AMOUNT OF ANY PAYMENTS MADE TO STOCKHOLDERS PURSUANT TO THE OFFER. TO
PREVENT SUCH BACKUP FEDERAL INCOME TAX WITHHOLDING WITH RESPECT TO THE PAYMENT
OF THE OFFER PRICE FOR SHARES PURCHASED PURSUANT TO THE OFFER, EACH TENDERING
STOCKHOLDER GENERALLY 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 IN THE LETTER OF TRANSMITTAL. SEE "SECTION 5. CERTAIN FEDERAL INCOME
TAX CONSEQUENCES" AND INSTRUCTION 9 OF THE LETTER OF TRANSMITTAL. IF THE
STOCKHOLDER IS A NONRESIDENT ALIEN OR FOREIGN ENTITY NOT SUBJECT TO BACK-UP
WITHHOLDING, THE STOCKHOLDER MUST GIVE THE DEPOSITARY A COMPLETED FORM W-8
CERTIFICATE OF FOREIGN STATUS PRIOR TO THE RECEIPT OF ANY PAYMENTS.
4. WITHDRAWAL RIGHTS. Tenders of Shares made pursuant to the Offer may be
withdrawn by the tendering stockholder at any time prior to 12:00 Midnight, New
York City time, on Monday, November 16, 1998. Thereafter, such tenders are
irrevocable, except that they may be withdrawn after December 18, 1998, unless
previously accepted for payment by Purchaser pursuant to the Offer. If Purchaser
extends the Offer, is delayed in its acceptance for payment of Shares or is
unable to accept Shares for payment pursuant to the Offer for any reason, then,
without prejudice to Purchaser's rights under the Offer, the Depositary may,
nevertheless, on behalf of Purchaser, retain tendered Shares, and such Shares
may not be withdrawn except to the extent that tendering stockholders are
entitled to withdrawal rights as described in this Section 4. Any such delay
will be by an extension of the Offer to the extent required by law.
For a withdrawal to be effective, a written, telegraphic, telex or
facsimile transmission notice of withdrawal must be timely received by the
Depositary at one of its addresses set forth on the back cover page 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 of such Shares, if different
from that of the person who tendered such Shares. If Certificates evidencing
Shares to be withdrawn have been
8
<PAGE> 11
delivered or otherwise identified to the Depositary, then, prior to the physical
release of such Certificates, the serial numbers shown on such Certificates must
be submitted to the Depositary and the signature(s) on the notice of withdrawal
must be guaranteed by an Eligible Institution, unless such Shares have been
tendered for the account of an Eligible Institution. If Shares have been
tendered pursuant to the procedure for book-entry transfer as set forth in
"Section 3. Procedures for Accepting the Offer and Tendering Shares," any notice
of withdrawal must specify the name and number of the account at the Book-Entry
Transfer Facility to be credited with the withdrawn Shares, in which case a
notice of withdrawal will be effective if delivered to the Depositary by any
method of delivery described in the first sentence of this paragraph.
All questions as to the form and validity (including time of receipt) of
any notice of withdrawal will be determined by Purchaser, in its sole
discretion, whose determination will be final and binding. None of Purchaser,
Symantec, 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 thereafter be deemed not to have been
validly tendered for purposes of the Offer. However, withdrawn Shares may be
re-tendered at any time prior to the Expiration Date by following one of the
procedures described in "Section 3. Procedures for Accepting the Offer and
Tendering Shares."
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES. The following discussion,
subject to the limitations set forth herein, describes the material federal
income tax consequences of the Offer and the Merger to holders of Shares who
hold their Shares as capital assets and exchange their Shares for cash pursuant
to the Offer or the Merger. The tax consequences to a specific stockholder may
vary depending upon such stockholder's particular tax situation, and the
discussion set forth below may not apply to certain categories of holders of
Shares subject to special treatment under the Internal Revenue Code of 1986, as
amended (the "Code"), such as foreign stockholders, securities dealers,
broker-dealers, insurance companies, financial institutions, tax-exempt entities
and stockholders who acquired their Shares pursuant to an exercise of an
employee stock option or otherwise as compensation or who hold restricted stock.
The discussion is based on the Code as in effect on the date of this Offer to
Purchase, as well as the rules and regulations thereunder, existing
administrative interpretations and court decisions currently in effect, all of
which are subject to change, retroactively or prospectively, and to possible
differing interpretations and does not address state, local or foreign tax laws.
The receipt of cash for Shares pursuant to the Offer or in 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. In
general, a stockholder 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.
Assuming the Shares constitute capital assets in the hands of the stockholder,
such gain or loss will be capital gain or loss. If, at the time of the Offer or
the Merger, the Shares then exchanged have been held for more than one year,
such gain or loss will be a long-term capital gain or loss. Under current law,
long-term capital gains of individuals are, under certain circumstances, taxed
at lower rates than items of ordinary income.
A stockholder (other than certain exempt stockholders including, among
others, all corporations and certain foreign individuals and entities) that
tenders Shares may be subject to a 31% backup withholding unless the stockholder
provides its Taxpayer Identification Number, or unless an exemption applies.
If backup withholding applies to a stockholder, the Depositary is required
to withhold 31% from payments to such stockholder. Backup withholding is not an
additional tax. Rather, the amount of the backup withholding can be credited
against the federal income tax liability of the person subject to the backup
withholding, provided that the required information is given to the IRS. If
backup withholding results in an overpayment of tax, a refund can be obtained by
the stockholder upon filing an income tax return.
THE FOREGOING DISCUSSION MAY NOT BE APPLICABLE TO CERTAIN TYPES OF
STOCKHOLDERS SUBJECT TO SPECIAL TREATMENT UNDER THE CODE, INCLUDING STOCKHOLDERS
WHO ACQUIRED SHARES PURSUANT TO THE EXERCISE OF EMPLOYEE STOCK OPTIONS OR
OTHERWISE AS COMPENSATION, INDIVIDUALS WHO ARE NOT CITI-
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<PAGE> 12
ZENS OR RESIDENTS OF THE UNITED STATES AND FOREIGN CORPORATIONS, OR WHO
HOLD RESTRICTED STOCK.
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 OWN TAX ADVISORS WITH RESPECT TO THE SPECIFIC TAX CONSEQUENCES OF
THE OFFER AND THE MERGER AND THE APPLICATION AND EFFECT OF THE ALTERNATIVE
MINIMUM TAX, AND STATE, LOCAL AND FOREIGN TAX LAWS.
6. PRICE RANGE OF SHARES. Until October 15, 1998, the Shares were listed
and principally traded on the Nasdaq National Market under the symbol "QDEK" and
the Shares are now traded on the OTC Bulletin Board. See Section 13 "Effect of
the Offer on the Market for the Shares, Quotation and Exchange Act
Registration." The following table sets forth, for the quarters indicated, the
high and low sales prices per Share on the Nasdaq National Market:
<TABLE>
<CAPTION>
HIGH LOW
---- ---
<S> <C> <C>
Fiscal Year ended September 30, 1997:
First Quarter........................................ $ 7 1/4 $ 3 15/16
Second Quarter....................................... 6 5/16 2
Third Quarter........................................ 3 9/16 2 1/8
Fourth Quarter....................................... 3 11/16 2 3/8
Fiscal Year ended September 30, 1998:
First Quarter........................................ $ 3 1/8 $ 1 3/16
Second Quarter....................................... 2 25/32 1 9/16
Third Quarter........................................ 3 5/8
Fourth Quarter....................................... 1 1/32 1/4
Fiscal Year ending September 30, 1999
First Quarter (through October 15, 1998)............. $ 22/32 $ 9/32
</TABLE>
The Company has never declared or paid cash dividends on its capital stock.
On October 15, 1998, the last full trading day prior to the announcement of
the execution of the Merger Agreement and of Purchaser's intention to commence
the Offer (which occurred after the close of trading on October 15, 1998), the
closing price per Share as reported on the Nasdaq National Market was $0.4375.
STOCKHOLDERS ARE URGED TO OBTAIN A CURRENT MARKET QUOTATION FOR THE SHARES.
7. CERTAIN INFORMATION CONCERNING THE COMPANY. Except as otherwise set
forth herein, the information concerning the Company contained in this Offer to
Purchase, including financial information, has been furnished by the Company or
has been taken from or based upon publicly available documents and records on
file with the Commission and other public sources. Neither Purchaser, Symantec,
nor any of their respective affiliates assumes any responsibility for the
accuracy or completeness of the information concerning the Company furnished by
the Company or 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
Purchaser, Symantec or their respective affiliates.
General. The Company is a Delaware corporation with its principal executive
offices located at 13160 Mindanao Way, Marina del Rey, California 90292. The
Company develops and markets software products that help personal computer users
manage information and communications. The Company markets its products
worldwide through retail distribution, corporate resellers, original equipment
manufacturers, direct marketing, and the Internet, focusing in particular on
customers in "low support" environments, such as small offices/home offices,
small businesses and work groups, and remote/mobile users.
The Company was incorporated in California in 1982 as Quarterdeck Office
Systems. In June 1991, the Company changed its state of incorporation from
California to Delaware and in February 1995 changed its name to Quarterdeck
Corporation.
10
<PAGE> 13
Financial Information. The following summary consolidated financial
information relating to the Company and its subsidiaries has been excerpted or
derived from the audited financial statements contained in the Company's Annual
Report on Form 10-K for the fiscal year ended September 30, 1997 (the "Form
10-K") and the unaudited financial statements contained in the Company's
Quarterly Reports on Form 10-Q for the quarters ended June 30, 1998 and June 30,
1997 (the "10-Qs"), in each case filed by the Company with the Commission. More
comprehensive financial information is included in the Form 10-K, the 10-Qs and
other documents filed by the Company with the Commission. The financial
information that follows is qualified in its entirety by reference to such
reports and other documents, including the financial statements and related
notes contained therein. Such reports and other documents may be examined and
copies may be obtained from the offices of the Commission in the manner set
forth at the end of this Section 7.
QUARTERDECK CORPORATION
SUMMARY CONSOLIDATED FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
FISCAL YEAR ENDED SEPTEMBER 30, JUNE 30,
-------------------------------- -------------------
1997 1996 1995 1998 1997
-------- -------- -------- -------- -------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net revenues....................... $ 83,787 $133,100 $117,606 $ 42,009 $68,538
Gross profit....................... 62,516 83,500 82,722 29,665 51,033
Total operating expenses........... 76,569 157,586 73,023 51,524 47,898
Operating income (loss)............ (14,053) (74,086) 9,699 (21,859) 3,135
Income (loss) before income
taxes........................... (18,268) (74,153) 11,583 (21,398) 244
Net income (loss).................. (18,398) (74,959) 11,252 (21,414) 241
Net income (loss) per share:
Primary......................... $ (0.43) $ (2.15) $ 0.32 $ (0.45) $ 0.01
Fully diluted................... $ (0.43) $ (2.15) $ 0.31 $ (0.45) $ 0.01
Shares used to compute net income
(loss) per share:
Primary......................... 43,168 34,894 35,557 47,490 47,644
Fully diluted................... 43,168 34,894 36,499 47,490 47,644
BALANCE SHEET DATA:
Working capital (deficiency)....... $ 6,917 $ (4,684) $ 29,490 $ 3,050 $ 1,842
Total assets....................... 55,881 76,781 76,699 26,832 56,008
Long-term obligations.............. 25,114 25,108 164 25,057 25,067
Stockholders' equity............... 1,173 4,425 44,270 (15,546) 5,345
</TABLE>
Certain Company Estimates. During the course of discussions between
Symantec and the Company that led to execution of the Merger Agreement, the
Company provided Symantec with certain preliminary estimates of the Company's
future performance that are not available to the public. The information
provided included summary preliminary estimates of the Company's income
statement for the quarter ending September 30, 1998 and for each of the four
quarters thereafter during the Company's 1999 fiscal year (from October 1, 1998
through September 30, 1999). These preliminary estimates forecast net revenues
of $11.2 million for the quarter ending on September 30, 1998 (compared to $8.0
million for the prior quarter) with net revenues then generally rising over the
next four quarters to $12.3 million for the last of the four quarters. These
preliminary estimates forecast that gross profit would grow from $8.3 million to
$9.4 million per quarter over the five-quarter period, with total operating
expenses remaining relatively constant (ranging from $7.9 million to $8.1
million). Therefore, total operating income was preliminarily estimated to rise
over the five-quarter period from $230,000 (before interest expense and taxes)
for the quarter ending September 30, 1998 to $1.3 million for the quarter ending
September 30, 1999. The Company's actual results for the first of such quarters
(the quarter and fiscal year ended September 30, 1998) have not yet been
released and are not yet finalized or available, but net revenues and total
operating income
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are not expected by the Company to differ substantially from the preliminary
estimates reflected above. The foregoing preliminary estimates constitute
forward-looking statements subject to material risks and uncertainties that
could cause actual results to differ substantially from those estimated, such as
the Company's ability to retain market share in an environment of increasing
competition, the ability to improve its products and introduce new products on a
timely basis, the ability to retain employees and customers and other business
and competitive factors, as well as the effects on the Company's business of the
Offer and the Merger.
The Company does not as a matter of course make public any estimates as to
future performance or earnings, and the preliminary estimates set forth above
are included in this Offer to Purchase only because the information was made
available to Symantec and Purchaser by the Company. The Company has informed
Symantec that the preliminary estimates were not prepared with a view to public
disclosure or compliance with the published guidelines of the Commission or the
guidelines established by the American Institute of Certified Public Accountants
regarding estimates or forecasts. The Company has also informed Symantec that
its internal financial estimates (upon which the preliminary estimates provided
to Symantec were based in part) are, in general, prepared solely for internal
use and capital budgeting and other management decision-making purposes, are
subjective in many respects and thus susceptible to various interpretations and
periodic revision based on actual experience and business developments.
Projected information of this type is based on estimates and assumptions that
are inherently subject to significant economic and competitive uncertainties and
contingencies, all of which are difficult to predict and many of which are
beyond the control of the Company, Purchaser or Symantec or their respective
financial advisors. Many of the assumptions upon which the estimates were based,
none of which were approved by Symantec or Purchaser, are dependent upon
economic forecasting (both general and specific to the Company's business),
which is inherently uncertain and subjective.
The inclusion of the foregoing preliminary estimates should not be regarded
as an indication that the Company, Purchaser, Symantec or any other person who
received such information considers them accurate predictions of future events,
and neither Purchaser nor Symantec has relied on these estimates or given them
significant weight in assessing the value of the Shares or evaluating the
business or prospects of the Company. None of Purchaser or Symantec or their
financial advisors assumes any responsibility for the accuracy or validity of
any of the preliminary estimates.
Available Information. The Company is subject to the informational filing
requirements of the Exchange Act and, in accordance therewith, is required to
file periodic reports, proxy statements 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, stock 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 disclosed in proxy statements
distributed to the Company's stockholders and filed with the Commission. Such
reports, proxy statements and other information should be available for
inspection at the public reference facilities maintained by the Commission, 450
Fifth Street, N.W., Washington, D.C. 20549, and also should be available for
inspection at the Commission's regional offices located at Seven World Trade
Center, Suite 1300, New York, New York 10048 and Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such materials
may also be obtained (i) by mail, upon payment of the Commission's customary
fees, by writing to its principal office at Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549, or (ii) at the Commission's worldwide web site at
http://www.sec.gov.
8. CERTAIN INFORMATION CONCERNING PURCHASER AND SYMANTEC.
Purchaser. Purchaser is a direct wholly owned subsidiary of Symantec, a
newly incorporated Delaware corporation organized in connection with the Offer
and the Merger and has not carried on any activities other than in connection
with the Offer and the Merger. The principal offices of Purchaser are located at
10201 Torre Avenue, Cupertino, California 95014-2132.
Until immediately prior to the time that Purchaser will purchase Shares
pursuant to the Offer, it is not anticipated that 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 Purchaser is newly formed and has minimal
assets and capitalization, no meaningful financial
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<PAGE> 15
information regarding Purchaser is available. Purchaser is not subject to the
informational filing requirements of the Exchange Act. Purchaser does not file
reports or other information with the Commission relating to its business,
financial condition or other matters.
Symantec. Symantec is a Delaware corporation, with its principal office at
10201 Torre Avenue, Cupertino, California 95014-2132. Symantec is a leading
producer of utility software for business and personal computing. Symantec's
business strategy is to satisfy customer needs by developing and marketing
products across multiple operating platforms (currently those of Microsoft
Corporation and Apple Computer, Inc.) that enable customers to increase
productivity and help to assure the reliability, security and performance of
computers.
The name, citizenship, business address, principal occupation or
employment, and five-year employment history for each of the directors and
executive officers of Purchaser and Symantec and certain other information are
set forth in Schedule I hereto.
Other Information. To the knowledge of Purchaser and Symantec, neither
Purchaser nor Symantec, nor any of the persons listed in Schedule I to this
Offer to Purchase, nor any associate or majority-owned subsidiary of Purchaser,
Symantec or any of the persons so listed, beneficially owns or has any right to
acquire, directly or indirectly, any Shares and neither Purchaser nor Symantec,
nor any of the persons or entities referred to above nor any director, executive
officer or subsidiary of Purchaser nor Symantec has effected any transaction in
the Shares during the past sixty days.
Except as provided in the Merger Agreement and as otherwise described in
this Offer to Purchase, to the knowledge of Purchaser and Symantec, (i) neither
Purchaser nor Symantec, nor any of their respective subsidiaries or any of the
persons listed in Schedule I to this Offer to Purchase, 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 voting of
such securities, finder's fees, joint ventures, loan or option arrangements,
puts or calls, guarantees of loans, guarantees against loss, guarantees of
profits, division of profits or loss or the giving or withholding of proxies;
and (ii) neither Purchaser nor Symantec, nor any of the persons listed on
Schedule I hereto, has had any business relationship or transaction with the
Company or any of its executive officers, directors or affiliates that is
required to be reported under the rules and regulations of the Commission
applicable to the Offer. Set forth below in Section 10 of this Offer to Purchase
and elsewhere herein is a summary description of the mutual contacts,
negotiations and transactions between any of Purchaser and Symantec, or any of
their respective subsidiaries or any of the persons listed in Schedule I to this
Offer to Purchase, on the one hand, and the Company or its affiliates, on the
other hand, concerning a merger, consolidation or acquisition, tender offer or
other acquisition of securities, an election of directors or a sale or other
transfer of material assets.
9. SOURCE AND AMOUNT OF FUNDS. The amount payable by Purchaser to acquire
all Shares outstanding as of October 15, 1998, and all Shares issuable upon
exercise of all warrants for the purchase of the Company's Preferred Stock and
conversion of all such stock to Company Common Stock, plus amounts payable with
respect to Options, totals approximately $48 million. Purchaser will obtain all
such funds from Symantec through a capital contribution or loan, which Symantec
will provide from its working capital. Neither the Offer nor the Merger is
contingent upon obtaining financing. At September 30, 1998, Symantec had cash
and cash equivalents of $175.4 million and working capital (total current assets
minus total current liabilities) of approximately $122.7 million.
10.BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY; THE TRANSACTION
DOCUMENTS.
Background of the Offer; Contacts with the Company.
In August 1998, the Company's financial advisors contacted Symantec
concerning the possible acquisition of the Company by Symantec, and
representatives of Broadview and Symantec held several telephone calls and
discussed possible transaction alternatives.
On September 4, 1998, Enrique T. Salem, Chief Technical Officer of
Symantec, met with representatives of Broadview to obtain additional information
regarding the Company's products and technology and to
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<PAGE> 16
discuss a possible strategic relationship between the two companies. At this
meeting, Mr. Salem and representatives of Broadview proposed a meeting at the
Company's offices on September 15, 1998.
On September 11, 1998, the United States Northern District Court of
California issued a temporary restraining order against Symantec prohibiting
Symantec from selling or developing Norton Uninstall Deluxe, a software product
designed to add and remove programs and files from a user's hard disk drive. In
order to eliminate any uncertainty caused by the ongoing legal proceedings,
Symantec removed the current version of Norton Uninstall Deluxe from Norton
SystemWorks, and discontinued shipping Norton Uninstall Deluxe.
On September 11, 1998, Mr. Salem contacted Suzanne Dickson, Vice President
of Product Management of the Company, to discuss the possibility of the Company
entering into a technology licensing agreement with Symantec with respect to the
Company's CleanSweep uninstaller product, which has capabilities similar to
those of Norton Uninstall Deluxe. On September 13, 1998, the Company replied
that it was not interested in licensing its CleanSweep product and instead
proposed a license of its RemoveIt uninstaller product, which also has some of
the capabilities of the Norton Uninstall Deluxe product. On September 18, 1998,
Symantec and the Company entered into a license agreement under which the
Company licensed Symantec to distribute the Company's RemoveIt uninstaller.
On September 15, 1998, Symantec and the Company entered into a
confidentiality agreement under which Symantec agreed to maintain the
confidentiality of certain material provided to it by the Company, and Mr.
Salem, Dave Daetz, Senior Director of Corporate Business Development of Symantec
and Stephen Cullen, Senior Director of Product Management for Norton Consumer
Products of Symantec, met with representatives of the Company and their
financial advisors at the offices of the Company for a presentation by the
Company to the Symantec representatives of the Company's business plan and
operations.
On September 17, 1998, Mr. Daetz had a telephone conversation with Ms.
Dickson and Rima Hochman of the Company to discuss financial and product
information in order to evaluate the possibility of Symantec acquiring the
Company.
On September 18, 1998, Symantec's Board of Directors authorized Symantec's
management to proceed with negotiations with the Company concerning a possible
acquisition of the Company. On September 18, 1998, Gordon E. Eubanks, Jr., Chief
Executive Officer of Symantec, contacted Fenwick & West LLP to serve as
Symantec's legal counsel in a possible acquisition of the Company.
Representatives of Fenwick & West LLP then contacted counsel for the Company to
commence legal due diligence, which began on September 19, 1998, and continued
over the next several weeks.
On September 21, 1998, Cynthia Harrington, Senior Director of Finance of
Symantec, and Troy Mitchell, Director of Accounting of Symantec, met with Frank
R. Greico, Chief Financial Officer of the Company, to further discuss financial
information in order to evaluate the possibility of Symantec's acquisition of
the Company.
On September 23, 1998, Mr. Eubanks requested DLJ to provide advice in
connection with a possible acquisition of the Company.
During the week of September 21, 1998, several meetings of executives of
Symantec and its advisors were held to further consider a variety of possible
strategic transactions with the Company, including a possible asset acquisition
of the Company or its CleanSweep product or a potential acquisition of the
Company through a tender offer and merger. At the beginning of this week,
representatives of Symantec suggested to representatives of the Company that
Symantec would prefer that any transaction take the form of an acquisition of
the Company's assets or the purchase of the CleanSweep product, but the parties
could not reach agreement on the price or other terms of such a transaction.
On September 23, 1998, representatives of DLJ indicated to representatives
of Broadview that Symantec might be willing to proceed with a transaction
structured as a cash tender offer and subsequent merger, with a grant by the
Company of a license to the Company's CleanSweep product and related technology.
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<PAGE> 17
During the week of September 28, 1998, numerous conversations were held
among Symantec's senior management and legal and financial advisors and the
Company's senior management and legal and financial advisors concerning the
status of due diligence, negotiations and the structure of the proposed
acquisition.
On October 3, 1998, the Company and Symantec entered into a Non-Disclosure
Agreement (the "Non-Disclosure Agreement") dated October 1, 1998, which included
an agreement by the Company not to solicit competing acquisition proposals until
October 13, 1998.
During the week of October 5, 1998, representatives of Symantec and the
Company, together with their respective legal and financial advisors, began
negotiating the definitive agreements providing for the tender offer and the
license.
On October 6, 1998, Derek Witte, Vice President, General Counsel and
Secretary of Symantec, and an attorney from Fenwick & West LLP, met at the
principal office of the Company with Gadi Navon, the General Counsel of the
Company, and a number of other senior executives of the Company, to further
discuss the status of due diligence and the Company's products and operations.
On October 12, 1998, Symantec's Board of Directors authorized Symantec's
management to proceed with negotiations of an all cash tender offer for the
Company's Common Stock and assumption of the Company's net indebtedness for a
total purchase price of $65.0 million and to enter into a technology licensing
agreement with respect to the Company's CleanSweep product.
During the week of October 12, 1998, representatives of Symantec and the
Company, together with their respective legal and financial advisors, further
negotiated the definitive agreements providing for the tender offer and the
license.
On October 13, 1998, the Company and Symantec amended the Non-Disclosure
Agreement to extend the period during which the Company agreed not to solicit
competing acquisition proposals until October 16, 1998.
On October 15, 1998, Symantec and the Company agreed on a price of $0.52
for the tender offer for the Shares and agreed on the terms of the definitive
Merger Agreement and License Agreement, and the Board of Directors of the
Company approved the terms of the proposed Offer and Merger. Thereafter,
Symantec and the Company executed the Merger Agreement, the License Agreement
and the Stockholder Agreements on such date. Later that day, Symantec and the
Company issued a press release announcing the transaction.
The Merger Agreement
The following is a summary of the Merger Agreement, a copy of which is
filed as an Exhibit to the Tender Offer Statement on Schedule 14D-1 (the
"Schedule 14D-1") filed by Purchaser and Symantec with the Commission in
connection with the Offer. Such summary is qualified in its entirety by
reference to the Merger Agreement. Capitalized terms not otherwise defined in
the following description of the Merger Agreement have the respective meanings
ascribed to them in the Merger Agreement.
The Merger Agreement provides for the commencement of the Offer within five
business days after the public announcement of the execution of the Merger
Agreement. The obligation of Purchaser to accept for payment Shares tendered
pursuant to the Offer is subject to the satisfaction of the Minimum Condition
and certain other conditions that are described in Section 15 hereof. Purchaser
and Symantec have agreed that no change in the Offer may be made which decreases
the price per Share payable in the Offer, reduces the maximum number of Shares
to be purchased in the Offer, imposes conditions to the Offer in addition to
those set forth in Section 15 hereof, changes the form of consideration payable
in the Offer or amends any other material terms of the Offer in a manner
materially adverse to the Company's stockholders.
The Merger Agreement provides that, following consummation of the Offer and
upon the terms and subject to the conditions in the Merger Agreement and in
accordance with Delaware Law, at the Effective Time, Purchaser will be merged
with and into the Company. As a result of the Merger, the separate corporate
existence of Purchaser will cease and the Company will continue as the Surviving
Corporation (the "Surviving Corporation") and will become a direct or indirect
wholly owned subsidiary of Symantec. Upon consumma-
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<PAGE> 18
tion of the Merger, each issued and outstanding Share (other than any Shares
owned by the Company or by any subsidiary of the Company, or owned by Purchaser,
Symantec or any other subsidiary of Symantec and any Shares which are held by
stockholders who have not voted in favor of the Merger or consented thereto in
writing and who shall have demanded appraisal for such Shares in accordance with
Delaware Law) shall be automatically converted into, and exchanged for, the
right to receive the Merger Consideration.
Pursuant to the Merger Agreement, each share of capital stock of Purchaser
issued and outstanding immediately prior to the Effective Time shall be
converted into and become one share of common stock, par value $0.001 per share,
of the Surviving Corporation, which will thereby become a wholly owned
subsidiary of Symantec.
The Merger Agreement provides that the directors of Purchaser immediately
prior to the Effective Time will be the initial directors of the Surviving
Corporation and that the officers of Purchaser immediately prior to the
Effective Time will be the initial officers of the Surviving Corporation. The
Merger Agreement further provides that the Certificate of Incorporation and
by-laws of Purchaser as in effect at the Effective Time shall be the Certificate
of Incorporation and by-laws of the Surviving Corporation.
Pursuant to and subject to the conditions in the Merger Agreement, if
stockholder approval is required by law, the Company will, at the request of
Symantec, as soon as practicable following the consummation of the Offer, duly
call, give notice of, convene and hold a meeting of its stockholders for the
purpose of obtaining stockholder approval of the Merger (the "Stockholders
Meeting"). If Purchaser acquires a majority of the outstanding Shares pursuant
to the Offer, Purchaser will have sufficient voting power to approve the Merger,
even if no other stockholder votes in favor of the Merger.
The Merger Agreement provides that, if stockholder approval is required by
law, the Company will, at Symantec's request, as soon as practicable following
the expiration of the Offer, prepare and file a preliminary proxy statement and
related proxy materials (the "Proxy Statement") with the Commission under the
Exchange Act, and will use all reasonable efforts to respond to any comments of
the Commission or its staff and to cause the Proxy Statement to be mailed to
stockholders of the Company as promptly as practicable after responding to all
such comments to the satisfaction of the staff of the Commission. The Company
has agreed, subject to certain fiduciary duties under applicable law as
described below, to include in the Proxy Statement the recommendation of the
Board of Directors that the stockholders of the Company approve and adopt the
Merger. The Merger Agreement provides that, in the event that Purchaser or any
other subsidiary of Symantec acquires at least 90% of the outstanding Shares,
Symantec, Purchaser and the Company agree, at the request of Symantec, to take
all necessary and appropriate action to cause the Merger to become effective as
soon as practicable after expiration of the Offer without a meeting of the
Company's stockholders, in accordance with Delaware Law.
Pursuant to the Merger Agreement, the Company has covenanted and agreed to
carry on the businesses of the Company and its subsidiaries in the ordinary
course of business consistent with past practices and to use all reasonable
efforts to preserve intact their current business organizations, to keep
available the services of their current officers and employees and to preserve
relationships with distributors, licensors, contractors, customers, suppliers,
lenders, employees and others having business dealings with any of them. The
Merger Agreement provides that, except as expressly permitted by the other
provisions of the Merger Agreement and the Ancillary Agreements, or as may be
agreed to in writing by Symantec, neither the Company nor any subsidiary will do
any of the following: (i) declare, set aside or pay any dividends on or make any
other distributions in respect of any of its capital stock, other than by any
wholly owned subsidiary of the Company to its parent or, in the case of less
than wholly owned subsidiaries, as required by agreements existing on the date
of the Merger Agreement, or split, combine or reclassify any of its capital
stock or issue or authorize the issuance of any other securities in respect of,
in lieu of or in substitution for Shares of its capital stock or purchase,
redeem or otherwise acquire any shares of its capital stock or any of its
subsidiaries or any other securities thereof or any rights, warrants or options
to acquire any such shares or other securities; (ii) issue, deliver, sell,
pledge or otherwise encumber any shares of its or of any subsidiary's capital
stock, any other voting securities or any securities convertible into, or any
rights, warrants or options to acquire, any such shares, voting securities or
convertible securities (other than the issuance of Company Common Stock upon
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<PAGE> 19
the exercise of Options and warrants outstanding on the date of the Merger
Agreement and disclosed in the Company's disclosure schedule and the issuance of
Company Common Stock upon conversion of the Convertible Notes or Company
Preferred Stock); (iii) amend its Certificate of Incorporation, by-laws or other
comparable charter or organizational documents; (iv) acquire or agree to acquire
by merging or consolidating with, or by purchasing a substantial portion of the
assets of, or by any other manner, any business or any corporation, partnership,
joint venture, association or other business organization or division thereof,
or any assets that individually or in the aggregate are material to the business
of the Company and its subsidiaries taken as a whole; (v) sell, lease, license,
mortgage or otherwise encumber or subject to any pledge, claim, lien, charge,
title retention, mortgage, security interest or encumbrance or otherwise dispose
of any of its properties or assets (including intellectual property) except for
sales, leases or encumbrances of immaterial or obsolete properties or assets,
and non-exclusive licenses of intellectual property rights, in each case in the
ordinary course of business consistent with past practices; (vi) transfer or
license to any person or entity or otherwise extend, amend or modify in any
material respect any rights to any of the Company's intellectual property rights
or the Company's intellectual property, other than non-exclusive licenses in the
ordinary course of business, or assign or grant any exclusive license to any of
the Company's intellectual property rights; (vii) incur any indebtedness for
borrowed money or draw down on any credit facility or arrangement or guarantee
any such indebtedness of another person, issue or sell any debt securities or
warrants or rights to acquire debt securities of the Company or any subsidiary
of the Company, or guarantee any debt securities of any person, enter into any
"keep well" or other agreement to maintain any financial statement condition of
another person or enter into any arrangement having the economic effect of any
of the foregoing (other than borrowings of not more than $2.0 million in any
calendar month, not to exceed $3.0 million in the aggregate outstanding at any
time after the date of the Merger Agreement);(viii) make any loans, advances or
capital contributions to, or investments in, any other person, other than to the
Company or any subsidiary of the Company; (ix) make or agree to make any new
capital expenditure(s) which individually is in excess of $100,000 or which in
the aggregate are in excess of $200,000; (x) make any material tax election or
settle or compromise any income or franchise tax liability; (xi) pay, discharge,
settle or satisfy any claims (accrued, asserted or unasserted, contingent or
otherwise) for an amount greater than $100,000; (xii) enter into, amend, modify
or terminate any agreement, transaction, commitment or other right or obligation
that, if in effect on the date of the Merger Agreement, would be a material
agreement, or that requires or contemplates a current and/or future financial
commitment, expense or obligation on the part of the Company or any of its
subsidiaries in excess of $100,000, other than in the ordinary course of
business consistent with past practices, or waive, release or assign any
material rights or claims thereunder, other than discounting of accounts
receivable to obtain prompt collection; (xiii) terminate or lay off any material
numbers of employees, other than for cause consistent with past practice and
Company policy; (xiv) other than as disclosed by the Company in its Disclosure
Schedule delivered to Symantec, adopt or amend in any material respect any
employee benefit or employee stock purchase or employee option plan, or enter
into any employment contract, pay any special bonus or special remuneration to
any director or employee, or increase the salaries, wage rates or other
compensation payable to its officers or employees other than in the ordinary
course of business consistent with past practices, or commit or agree to do any
of the foregoing, or otherwise alter or commit to any compensation, benefit or
severance or change of control arrangement for or with any officer or employee
of the Company; (xv) grant or provide any severance or termination pay to any
officer or employee except payments that are in amounts consistent with the
Company's policies and past practices, are made pursuant to written plans or
agreements outstanding or policies existing on the date of the Merger Agreement;
(xvi) voluntarily take actions to liquidate or dissolve the Company or to take
advantage of bankruptcy or other creditor protection laws; (xvii) take any
action that would cause or constitute a breach of any representation or warranty
made by the Company in the Merger Agreement or any Ancillary Agreement or
(xviii) authorize any of, or commit or agree to take any of, the foregoing
actions.
Pursuant to the Merger Agreement, from the date of the Merger Agreement
until the Effective Time, the Company shall, and shall cause its subsidiaries
to, afford Symantec and its officers, employees, accountants, counsel, financial
advisors and other representatives, reasonable access during normal business
hours to all their respective properties, books, contracts, commitments,
personnel and records and to furnish or make
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<PAGE> 20
available promptly to Symantec a copy of each report, schedule, registration
statement and other document filed by it during such period pursuant to the
requirements of federal or state securities laws, and all other information
concerning its business, properties and personnel as Symantec may reasonably
request.
The Company has agreed that until the earlier of the Effective Time or
termination of the Merger Agreement, the Company shall not, nor shall it permit
any of its subsidiaries, nor shall it authorize or permit any of their
respective officers, directors, employees, investment bankers, attorneys or
other advisors or representatives, directly or indirectly, to (i) solicit,
initiate or encourage the submission of any "takeover proposals" (as defined
below), (ii) participate in any discussions or negotiations with, or furnish any
information to any person or group (other than Symantec) in connection with any
takeover proposal or (iii) take any other action to facilitate any inquiries or
the making of any proposal that constitutes, or may reasonably be expected to
lead to, any takeover proposal. Under the Merger Agreement, a "takeover
proposal" means any proposal for a merger or other business combination
involving the Company or any of its subsidiaries, any proposal, offer or tender
offer to acquire (including by license) in any manner, directly or indirectly,
an equity interest in, not less than 35% of the outstanding voting securities of
the Company or any of its subsidiaries, or any proposal to acquire assets
representing not less than 25% of the annual revenues of the Company or any of
its subsidiaries in the fiscal year ended September 30, 1998 or to obtain a
license to the Company's ProComm or CleanSweep products or to any of the
Company's intellectual property that is incorporated, embodied or used therein
and that is material to such product, other than the transactions contemplated
by the Merger Agreement or the Ancillary Agreements. The Company has also agreed
that it, its subsidiaries, officers, directors, employees, investment bankers,
attorneys and other agents and representatives will immediately cease any and
all existing activities, discussions or negotiations with any parties conducted
previously regarding a takeover proposal. Pursuant to the Merger Agreement, the
Company will promptly advise Symantec orally and in writing of any request for
information or of any takeover proposal, or any inquiry with respect to, or
which could reasonably be expected to lead to, any takeover proposal, the
material terms and conditions of such request, takeover proposal or inquiry, and
the identity of the person making any such takeover proposal or inquiry. The
Company has also agreed to keep Symantec informed of the status and material
terms of any such request, takeover proposal or inquiry.
Notwithstanding the foregoing, the Merger Agreement provides that, prior to
the Effective Time the Company may, to the extent the Board of Directors of the
Company determines in good faith, after consultation with outside counsel, that
the Board of Director's fiduciary duty under applicable law requires it to do
so, participate in discussions or negotiations with, or furnish information to,
any person, entity or group in response to an unsolicited bona fide takeover
proposal which the Company's Board of Directors in its good faith reasonable
judgment determines, after consultation with its independent financial advisors,
would result in a transaction more favorable to the Company's stockholders from
a financial point of view than the Offer and the Merger and after reasonable
inquiry by the Company that the party making such takeover proposal is
financially capable of consummating such takeover proposal (a "Superior
Proposal"). In the event the Company receives a Superior Proposal, nothing
contained in the Merger Agreement (subject to the provisions set forth in this
paragraph) will prevent the Company's Board of Directors from recommending such
Superior Proposal to the Company's stockholders, subject to the payment of a
break-up fee discussed below, if the Board determines, in good faith after
consultation with outside legal counsel, that such action is required by its
fiduciary duties under applicable law, and, in connection therewith, withdraw,
modify or refrain from making its recommendation of the Offer; provided,
however, that the Company shall not recommend to the Company's stockholders a
Superior Proposal for a period of not less than 48 hours after the Company's
receipt of such Superior Proposal. The Company further agrees that it will not
provide any non-public information to a third party unless such information is
provided pursuant to a nondisclosure agreement with terms regarding the
protection of confidential information at least as restrictive as such terms in
the mutual nondisclosure agreement between the Company and Symantec. The
provisions described in this paragraph shall not prohibit the Company's Board of
Directors from taking and disclosing to the Company's stockholders a position
with respect to a takeover proposal pursuant to Rules 14d-9 and 14e-2
promulgated under the Exchange Act.
Pursuant to the Merger Agreement, the Company will give written notice to
each holder of a Company Option stating that such Option will terminate at the
Effective Time and that all outstanding Options, whether
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or not vested, will be exercisable during the thirty (30) day period preceding
the Effective Date. All Options that are outstanding immediately prior to the
Effective Time will be terminated and canceled at the Effective Time and the
holders of cancelled Options having an exercise price that is less than the
Offer Price, other than members of the Company's Board of Directors or the
Company's Chief Executive Officer, will be entitled to receive an amount in cash
equal to the product of the difference between the Offer Price and the exercise
price of such Option, multiplied by the number of Shares issuable upon exercise
of such Option immediately prior to the Effective Time.
The Company has entered into an agreement with the holder of the
Convertible Notes providing that, immediately after the Effective Time, the
Surviving Corporation shall be entitled to repay all then-outstanding
Convertible Notes in their original principal amount and accrued interest
without premium or penalty and that the Merger Agreement would provide that
Surviving Corporation will repay the Notes in full within five business days
after consummation of the Merger.
Symantec has agreed to fulfill and honor and cause the Surviving
Corporation to fulfill and honor in all respects the obligations of the Company
pursuant to its Certificate of Incorporation, by-laws and any indemnification
agreements between the Company and its directors and officers in their capacity
as such existing prior to the date of the Merger Agreement. From and after the
Effective Time, such obligations will be the joint and several obligations of
Symantec and the Surviving Corporation, and Symantec has assumed such
obligations. The Certificate of Incorporation and by-laws of the Surviving
Corporation will contain provisions with respect to indemnification and
elimination of liability for monetary damages set forth in the Certificate of
Incorporation and by-laws of the Company, which provisions will not be amended,
repealed or otherwise modified from the Effective Time in any manner that would
adversely affect the rights of the individuals who, immediately prior to the
Effective Time, were directors, officers, employees or agents of the Company or
its subsidiaries, unless required by law.
For at least three years from the Effective Time, Symantec shall maintain
in effect the Company's current directors' and officers' insurance and
indemnification policy to the extent that it provides coverage for events
occurring prior to the Effective Time for those persons who are directors and
officers as of the date of the Merger Agreement (and, to the extent covered by
the existing policy, persons who were directors or officers prior to the date of
the Merger Agreement) in their capacity as such, so long as the annual premium
would not be in excess of 150% of the last annual premium paid prior to the date
of the Merger Agreement (the "Maximum Premium") and, to the extent the annual
premium would exceed the Maximum Premium, Symantec will cause to be maintained
the maximum amount of insurance that can be procured for the Maximum Premium. If
the existing insurance expires, is terminated or is canceled during such three
year period, Symantec will use all reasonable efforts to cause to be obtained as
much insurance as can be obtained for the remainder of the period for an
annualized premium not in excess of the amount indicated above, on terms and
conditions no less advantageous than the existing insurance. In lieu of
maintaining the Company's current insurance, Symantec may elect to add the
directors and officers of the Company on the date of the Merger Agreement to its
own insurance policy, provided that such election does not diminish the rights
provided to such persons under the Company's existing insurance.
The Merger Agreement provides that, upon the terms and subject to the
conditions set forth in the Merger Agreement and the Ancillary Agreements, each
of the parties thereto agrees to use all reasonable efforts to take, or cause to
be taken, all actions, and to do, or cause to be done, and to use all reasonable
efforts to assist and cooperate with the other parties in doing, all things
necessary, proper or advisable to consummate and make effective, in an
expeditious manner, the Offer, the Merger and the transactions contemplated by
the Merger Agreement and the Ancillary Agreements. Among other things, the
Merger Agreement specifies the following actions: (i) obtaining all necessary
actions and no actions, waivers, consents and approvals from any federal, state
or local government or any court, administrative or regulatory agency or
commission or other governmental authority or agency, domestic or foreign (a
"Governmental Entity"), and making all necessary registrations and filings and
taking all reasonable steps as may be necessary to obtain an approval or waiver
from, or to avoid an action or proceeding by, any Governmental Entity, (ii)
obtaining all necessary consents, approvals and waivers from third parties,
(iii) defending any lawsuits or other legal proceedings challenging the Merger
Agreement or any Ancillary Agreement or the consummation of any of the
transactions
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contemplated thereby and (iv) the execution and delivery of any additional
instruments necessary to consummate the transactions contemplated by, and fully
to carry out the purposes of, the Merger Agreement and the Ancillary Agreements.
In particular, the Company and the Board of Directors have agreed to take all
action necessary to ensure that no state takeover statute or similar statute or
regulation is or becomes applicable to the Offer, the Merger, the Merger
Agreement, the Ancillary Agreements or any other transaction contemplated
thereby. Further, the Company has agreed that if any state takeover statute or
similar statute or regulation becomes applicable to the Offer, the Merger, the
Merger Agreement or the Ancillary Agreements or any other transaction
contemplated thereby, it will take all action necessary to ensure that the
Offer, the Merger and the other transactions contemplated thereby may be
consummated as promptly as practicable on the terms contemplated by the Merger
Agreement and the Ancillary Agreements and otherwise to minimize the effect of
such statute or regulation on the Offer, the Merger and the other transactions
contemplated thereby.
The Company and Symantec are obligated to give prompt notice to the other
party of any material breach of any representation or warranty made by it in the
Merger Agreement or any Ancillary Agreement. Further, such parties are obligated
to give prompt notice of the failure to comply with or satisfy in any material
respect any covenant, condition or agreement under the Merger Agreement or any
Ancillary Agreement.
Representations and Warranties. The Merger Agreement contains various
customary representations and warranties of the parties thereto including
representations by the Company as to its organization, standing and corporate
power, the absence of certain changes or events concerning the Company's
business, litigation, employee benefit plans, taxes, compliance with laws,
environmental matters, intellectual property, and material contracts.
Conditions to the Merger. Under the Merger Agreement, the respective
obligation of each party to effect the Merger is subject to the satisfaction or
waiver on or prior to the Effective Time of the following conditions: (i) if
required by applicable law, the approval of the Company's stockholders shall
have been obtained; (ii) Purchaser shall have purchased Shares pursuant to the
Offer; and (iii) no statute, rule, regulation, executive order, decree,
injunction, judgment or other order or ruling issued by any court or other
Governmental Entity or other legal restraint or prohibition shall be in effect
which would (a) make the acquisition or holding by Symantec or its affiliates of
Shares or shares of Common Stock of the Surviving Corporation illegal or
otherwise prevent the consummation of the Merger, (b) prohibit Symantec's or
Purchaser's ownership or operation of, or compel Symantec or Purchaser to
dispose of or hold separate, all or a material portion of the business or assets
of Symantec or its subsidiaries taken as a whole, or the Company or its
subsidiaries taken as a whole, (c) compel Symantec, Purchaser or the Company to
dispose of or hold separate all or a material portion of the business or assets
of Symantec or its subsidiaries taken as a whole or the Company or any of its
subsidiaries taken as a whole, (d) impose material limitations on the ability of
Symantec or Purchaser or their affiliates effectively to exercise full ownership
and financial benefits of the Surviving Corporation, or (e) impose any material
condition to the Merger Agreement, any Ancillary Agreements or the Merger which
would be materially adverse to Symantec.
Termination; Fees and Expenses. The Merger Agreement may be terminated at
any time prior to the Effective Time, whether before or after approval of
matters presented in connection with the Merger by the stockholders of the
Company (provided, however, that if Shares are purchased pursuant to the Offer,
Symantec may not terminate the Merger Agreement):
(i) by mutual written consent of Symantec and the Company;
(ii) by Symantec or the Company (a) if, as a result of the failure of
any of the conditions to the Offer, the Purchaser fails to commence the
Offer in the time required by the Merger Agreement, or as a result of the
failure of any of the conditions to the Offer the Offer has terminated or
expired in accordance with its terms (as extended, if applicable) without
the Purchaser having accepted for payment any Shares pursuant to the Offer,
or the Purchaser has not accepted for payment any Shares pursuant to the
Offer by December 31, 1998 as a result of the failure of any of the
conditions to the Offer, provided that the ability to terminate in the
above circumstances is not available to a party whose failure to perform in
any material respect any of its obligations under the Merger Agreement
results in a failure of such condition
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or if the failure of such condition results from facts or circumstances
that constitute a material breach of a representation or warranty under the
Merger Agreement by such party; or (b) if any Governmental Entity has
issued an order, decree or ruling or taken any other action permanently
enjoining, restraining or otherwise prohibiting the acceptance for payment
of, or payment for, the Shares pursuant to the Offer or the Merger and such
order, decree or ruling or other action has become final and nonappealable;
(iii) by the Company, if prior to the purchase of any Shares by the
Purchaser pursuant to the Offer the Company has received any Superior
Proposal;
(iv) by Symantec in the event that (a) the Company's Board of
Directors or any committee thereof has failed to recommend the Offer, the
Merger, or the Merger Agreement, or shall have so resolved; (b) the
Company's Board of Directors or any committee thereof has withdrawn or
modified in a manner adverse to Symantec or Purchaser its approval or
recommendation of the Offer, the Merger, the Merger Agreement and the
Ancillary Agreements, has approved or recommended any takeover proposal,
has authorized the redemption or amendment of the Rights Agreement after
the Company has received a takeover proposal (other than the amendment to
the Rights Agreement required by the Merger Agreement) or shall have so
resolved (provided that a statement that states that a takeover proposal is
under consideration by the Company's Board of Directors or management and
states that the Company will, at a future date, take a position with
respect to such takeover proposal, without making any adverse statements
with respect to the Offer, shall not be deemed to constitute such a
withdrawal, modification, approval or recommendation); or (c) the Company
has entered into any letter of intent, acquisition agreement or similar
agreement with respect to any Superior Proposal or the Company's Board of
Directors or any committee thereof shall have resolved to do so;
(v) by Symantec in the event that (a) any person entity or "group" (as
defined in Section 13(d)(3) of the Exchange Act) other than Symantec or
Purchaser acquires beneficial ownership of 35% or more of the outstanding
Shares; or (b) the Board of Directors of the Company or any committee
thereof upon a request to reaffirm the Company's approval of recommendation
of the Offer, the Merger or the Merger Agreement and the Ancillary
Agreements, shall have failed to do so within three business days after
such request is made or shall have so resolved;
(vi) by Symantec if any of the Company's representations and
warranties set forth in the Merger Agreement are not true and correct in
any manner that either represents or results from a Willful Breach (as
defined below) or has or represents a Material Adverse Effect (as defined
below) or the Company has committed a material breach of any of the
Company's covenants under the Merger Agreement and such breach either
represents or results from a Willful Breach or has a Material Adverse
Effect, and the Company has not cured such material breach within thirty
days after Symantec has given to the Company written notice of the material
breach and its intention to terminate the Merger Agreement; or
(vii) by the Company if the Purchaser has not accepted for payment any
Shares pursuant to the Offer on or prior to December 31, 1998 and (a) any
of Symantec's representations and warranties set forth in Section 4.2 of
the Merger Agreement are not true and correct in any manner that has or
represents a material adverse effect on Symantec or materially adversely
affects the exercise by the Company of its rights under the Merger
Agreement or the License Agreement, or (b) Symantec has committed a
material breach of any of its covenants under the Merger Agreement, which
breach has a Material Adverse Effect or materially adversely affects the
Company's exercise of its rights under the Merger Agreement or the License
Agreement and Symantec has not cured such material breach within thirty
days after the Company has given Symantec written notice of the material
breach and its intention to terminate the Merger Agreement.
"Material Adverse Change" or "Material Adverse Effect" means any change or
effect that (i) materially adversely affects, or is highly likely to materially
adversely affect, the ability of the Company and its subsidiaries to market and
license either its ProComm product or its CleanSweep product (or both), or to
use any of the Company's intellectual property rights or its intellectual
property that is incorporated, embodied or used therein and that is material to
such product or the ownership by the Company and its subsidiaries of any such
intellectual property right or intellectual property, (ii) materially adversely
affects, or is highly likely to
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materially adversely affect, the exercise by Symantec of its material rights
under the Merger Agreement or the License Agreement or (iii) represents or
results in, or is highly likely to result in, a liability, cost or expense of
more than $3.0 million, or the reduction of the fair value of any assets by more
than $3.0 million (in each case after giving effect to the availability of
payments under any insurance policy). For purposes of clause (iii), no change,
event or effect that is demonstrated by the Company to result from any of the
following shall be deemed by itself to constitute a Material Adverse Change or
be taken into account in determining whether there has been or would be a
Material Adverse Change: (a) conditions affecting the U.S. economy generally or
the economy of any nation or region in which the Company or any of its
subsidiaries conducts business that is material to the Company and its
subsidiaries, taken as a whole; (b) conditions generally affecting the utility
software industry or (c) the announcement or pendency of the Offer or the Merger
or the execution of the Merger Agreement or the License Agreement. "Willful
Breach" by the Company means (i) the failure of a representation or warranty of
the Company in this Agreement to be true and correct in all material respects as
a result of any fact or condition of which any of the Company's executive
officers or directors had actual knowledge as of the date of the Merger
Agreement or (ii) a material breach or failure to perform in any material
respect any obligation or to comply in any material respect with any agreement
or covenant to be performed or complied with by it pursuant to the Merger
Agreement, where performance of such obligation, or compliance with such
agreement or covenant was not impossible and (a) in the case of a breach that
can not readily be cured by the Company within thirty days after written notice
of such breach, the action or inaction constituting such breach was taken by or
at the request of or with the express permission of any of the Company's
executive officers or directors and (b) in the case of a breach that can readily
be cured by the Company within thirty days after written notice of such breach,
such period shall expire without the cure of such breach.
The Merger Agreement provides that the Company shall pay to Symantec the
sum of $2.0 million (the "Break-up Fee"), if: (i) the Merger Agreement is
terminated as set forth in subsection (ii)(a) in the first paragraph of this
section as a result of the failure of the following conditions to the Offer: the
Board of Directors of the Company or any committee thereof shall have failed to
recommend the Offer, the Merger or the Merger Agreement, including any failure
to include such recommendation in the Schedule 14D-9, or shall have so resolved,
the Board of Directors of the Company or any committee thereof shall have
withdrawn or modified (including without limitation by amendment of the Schedule
14D-9) in a manner adverse to Symantec or Purchaser its approval or
recommendation of the Offer, the Merger or the Merger Agreement and the
Ancillary Agreements, shall have approved or recommended any takeover proposal,
shall have authorized the redemption or amendment of the Rights Agreement after
the Company has received any takeover proposal (except as described below under
"Rights Agreement") or shall have resolved to do any of the foregoing; (ii) the
Merger Agreement is terminated as set forth in subsections (iii) and (iv) in the
first paragraph of this section or (iii) the Merger Agreement is terminated by
Symantec as set forth in subsection (ii)(a) or (vi) as a result of a Willful
Breach by the Company of its nonsolicitation covenants. The Break-Up Fee may be
applied by the Company dollar for dollar to reduce any royalty obligations of
Symantec to the Company pursuant to the License Agreement (and shall not be
payable to the extent the Break-Up Fee exceeds the amount of such royalties
required to be paid over the term of the License Agreement), except that if,
pursuant to the terms of the License Agreement, Symantec would not be required
at any time after the date of termination of the Merger Agreement to pay any
royalties, the Break-Up Fee shall be payable in cash. In each case described in
subsection (iii), payments of the foregoing amount, together with the exercise
by Parent of its rights under the License Agreement, shall constitute the sole
remedy for Symantec.
Post Merger Employment Benefits. Employees of the Company who become
employed by Symantec or any controlled subsidiary thereof after the Effective
Time will either, at Symantec's election, to the extent permitted under the
terms of the Company's employee benefit plans, continue to be eligible to
participate in such plans, if and for so long as continued, or become eligible
to participate in the same standard employee benefit plans as are generally
available to similarly situated Symantec employees.
Rights Agreement. The Company has entered into an amendment to the Rights
Agreement to (i) exclude Symantec and the Purchaser and their respective
Affiliates and Associates (as such terms are defined in the Rights Agreement)
from the definition of "Acquiring Person" therein, with respect to the
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beneficial ownership of the Shares which Symantec, Purchaser and/or any of their
respective Affiliates and Associates have obtained the right to acquire, or will
acquire, as a result of the transactions contemplated by the Merger Agreement or
any Ancillary Agreement, (ii) provide that no Distribution Date (as such term is
defined in the Rights Agreement) shall result from the Offer and (iii) provide
for the expiration of the Rights Agreement upon the Effective Date.
The License Agreement
The Company has granted to Symantec, pursuant to the License Agreement
entered into concurrently with the Merger Agreement, a non-exclusive license
(the "Distribution License") to use, copy, distribute, display and perform all
of the Company's CleanSweep product and related technology (the "Licensed
Product") and a non-exclusive license (the "Development License") under all of
the Company's intellectual property rights to use, copy and create derivative
works during the term of the License Agreement from the source code of the
Licensed Product or materials and information provided by the Company relating
thereto. In consideration of this grant, Symantec has agreed to pay the Company
royalties equal to 8% of net revenue from the distribution or other revenue
producing exploitation of the Licensed Product, provided that the royalty rate
shall be 6% if the Company is obligated to pay a Break-up Fee as a result of a
Willful Breach of the Company's covenant not to solicit or negotiate a takeover
proposal. The parties have further agreed that, for copies of the Licensed
Products, the royalty per seat shall not be less than $1.25 for stand-alone
sales of the Licensed Product, $0.75 for bundles of the Licensed Product as part
of Norton Systemworks and $0.20 for original equipment manufacturer
transactions. The Development License commences on October 15, 1998 and the
Distribution License commences upon the earlier of either (i) the consummation
of the Offer or (ii) an event giving rise to the Company's obligation to pay the
Break-up Fee under the Merger Agreement. If neither of these events occur, no
right to distribute the CleanSweep product will arise. The Company has deposited
in escrow the source code for its CleanSweep product and related technology to
be released to Symantec upon commencement of the Distribution License. The
License Agreement terminates immediately if, after consummation of the Offer,
Symantec fails to close the Merger in accordance with the Merger Agreement or
the Merger has not occurred by January 31, 1999 and the Company has not been
obligated to pay the Break-up Fee. The License Agreement also terminates for a
material breach of any term of the License Agreement unless such breach is cured
within thirty days of notice of such breach.
The Stockholder Agreements
Concurrently with the execution of the Merger Agreement, Symantec entered
into the Stockholder Agreements with each of the directors and executive
officers of the Company, namely Suzanne Dickson, Frank Greico, Cheri
Kaplan-Smith, Frank W.T. LaHaye, William H. Lane III, King R. Lee, Howard
Morgan, Gadi Navon, John Strosahl and Joyce Wrenn. In the aggregate, these
stockholders beneficially own 2,707,049 Shares, including 316,004 Shares issued
and outstanding or 0.43% of the total Shares issued and outstanding, and
1,500,000 options to purchase Shares with an exercise price of less than $0.52
per share, which, when combined with those Shares beneficially owned that are
issued and outstanding, comprise approximately 2.0% of the outstanding Shares on
a fully diluted basis (i.e., treating all options having an exercise price of
less than $0.52 per share as if exercised) as of October 15, 1998. The following
is a summary of the Stockholder Agreements, a copy of which has been filed with
the Commission as an exhibit to the Schedule 14D-1. Such summary is qualified in
its entirety by reference to the full text of the Stockholder Agreements.
Pursuant to the Stockholder Agreements, each of these stockholders agreed
to validly tender (or cause the record owner of such Shares to validly tender)
and not withdraw, pursuant to and in accordance with the terms of the Offer, as
soon as practicable after commencement of the Offer, all Shares beneficially
owned by such stockholder. Each of such stockholders also has agreed, at any
meeting of the stockholders of the Company, however called, to vote in favor of
the Merger, and against any proposal relating to a takeover proposal and against
any action or agreement that would impede, frustrate, prevent or nullify the
Stockholder Agreement 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
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conditions to the Offer described in Section 15 of the Offer to Purchase or set
forth in Article VII of the Merger Agreement not being fulfilled.
In addition, each of such stockholders covenanted and agreed not to
transfer or consent to any transfer of any or all of his Shares, enter into any
contract, option or other agreement or understanding with respect to any
transfer of any or all of his Shares, grant any proxy, power-of-attorney or
other authorization in or with respect to his Shares, deposit his Shares into a
voting trust or enter into a voting agreement or arrangement with respect to his
Shares or take any other action that would in any way restrict, limit or
interfere with the performance of his obligations under the Stockholder
Agreements or the Merger Agreement. Each of the stockholders also granted
representatives of Symantec an irrevocable proxy to vote his Shares in favor of
the various transactions contemplated by the Merger Agreement and against any
takeover proposal. Each stockholder agreed, in the capacity as a stockholder of
the Company, that neither the stockholder nor any affiliates, representatives or
agents shall, 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 Symantec,
the Purchaser or any of their respective affiliates or representatives)
concerning any proposal relating to a takeover proposal and to immediately cease
any existing activities, discussions or negotiations with any parties conducted
since before the date of the Stockholder Agreements with respect to any proposal
relating to a takeover proposal.
The agreements and obligations contained in each Stockholder Agreement will
terminate on the earlier of payment for the Shares pursuant to the Offer and the
termination of the Merger Agreement in accordance with its terms.
Conversion and/or Repurchase of Series C Convertible Preferred Stock.
The Company has also entered into agreements, dated October 9, 1998, with
each person who held shares of the Company's Series C Convertible Preferred
Stock on such date (the "Preferred Stockholder Agreements"). Pursuant to the
Preferred Stockholder Agreements, the holders of the Series C Convertible
Preferred Stock agreed not to convert any such shares at a conversion price of
less than $0.2650 for a period of six months after October 9, 1998, the date of
the Agreement and that, during the first sixty calendar days following such
date, upon conversion of any shares of the Series C Convertible Preferred Stock
in accordance with their terms, the Company will issue shares of Common Stock at
a conversion price of $0.2650 notwithstanding the actual conversion price then
in effect. At a conversion price of $0.2650, each share of Series C Convertible
Preferred Stock is convertible into 3,774 shares of Common Stock. The Company
has agreed to issue additional shares of Common Stock (or, at the Company's
election, cash) to each holder of the Series C Convertible Preferred Stock, up
to an amount equal to five percent of the original purchase price of such shares
of Series C Convertible Preferred Stock, but only to the extent that such holder
does not realize at least a 50% gross aggregate return upon resale of the shares
of Common Stock received upon conversion of such shares of Series C Convertible
Preferred Stock. During the six months following October 9, 1998, the Company
has the right to repurchase all of the shares of Series C Convertible Preferred
Stock owned by the holders thereof at a price equal to 110% of the original
purchase price. The Company may exercise this repurchase right upon ten (10)
days notice (which may be by press release), during which time period the
holders of the Series C Convertible Preferred Stock will remain entitled to
convert such shares into shares of Common Stock. The holders of the Series C
Convertible Preferred Stock also agreed that upon a "sales event" (as defined
below), the Company may, at its option, repurchase the shares of Series C
Convertible Preferred Stock at a price equal to 110% of the original price or
require such holders to convert their shares of Series C Convertible Preferred
Stock into shares of Common Stock, or to effect a combination of the foregoing.
A "sales event" means the sale of all or substantially all of the assets of the
Company, a consolidation or merger of the Company in which the stockholders of
the Company immediately prior to such event do not retain a majority of the
voting power of the surviving corporation or the sale of more than 50% of the
stock of the Company.
11.PURPOSE OF THE OFFER; PLANS FOR THE COMPANY AFTER THE OFFER AND THE
MERGER; STOCKHOLDER APPROVAL AND APPRAISAL.
Purpose of the Offer. The purpose of the Offer and the Merger is for
Symantec to acquire control of, and a majority of the entire equity interest in,
the Company. The purpose of the Merger is for Symantec to acquire
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all Shares not purchased pursuant to the Offer. Upon consummation of the Merger,
the Company will become a wholly owned subsidiary of Symantec. The Offer is
being made pursuant to the Merger Agreement.
Plans for the Company. As discussed above in Section 10, and subject to
more detailed discussion therein, the Merger Agreement and related agreements
contemplate each of the following: (i) a non-exclusive license pursuant to the
License Agreement related to the Company's CleanSweep product and related
technology in exchange for the payment of certain royalties; and (ii)
restructuring of the Company's Board of Directors following consummation of the
Offer by increasing the size of the board or resignation of incumbent directors
to cause Symantec nominees to hold a number of seats equal to the product of (a)
the total number of members of the Company's Board of Directors and (b) the
percentage that the number of shares of the Company's Common Stock accepted for
payment by Purchaser bears to the total number of shares of Company Common Stock
outstanding, subject to retention of all members of the Company's Board of
Directors who are not employees of the Company until such time as Symantec
acquires a majority of such outstanding shares of the Company's Common Stock on
a fully diluted basis; and (iii) the consummation of the Merger following
satisfaction or waiver of the conditions precedent thereto specified in the
Merger Agreement (including obtaining any necessary shareholder approvals). See
"Section 10. Background of the Offer; Contacts with the Company; the Transaction
Documents." In addition to the foregoing, Symantec intends as soon as
practicable to commence integrating certain manufacturing, marketing, sales and
purchasing functions of Symantec and the Company in order to reduce expenses and
achieve other financial and operational synergies. The Company Common Stock
ceased to be traded on the Nasdaq National Market on October 15, 1998 by reason
of the Company's failure to meet certain quantitative listing criteria therefor.
The Shares currently trade in the OTC Bulletin Board.
Except as indicated in this Offer to Purchase, Symantec does not have any
present plans or proposals which relate to or would result in an extraordinary
corporate transaction, such as a merger, reorganization or liquidation,
involving the Company or its subsidiaries, a sale or transfer of a material
amount of assets of the Company or its subsidiaries or any material change in
the Company's capitalization or dividend policy or any other material changes in
the Company's corporate structure or (except as indicated above in this "Plans
for the Company" section) business, or the composition of the Board of Directors
or the Company's management.
Stockholder Approval and Appraisal. Under Delaware Law, the approval of the
Company Board and, except as 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 transactions contemplated thereby, including the
Merger. The Company Board has unanimously approved and adopted the Merger
Agreement and the transactions contemplated thereby, and, unless the Merger is
consummated pursuant to the short-form merger provisions under Delaware Law
described below, the only remaining required corporate action of the Company is
the approval and adoption of the Merger Agreement and the transactions
contemplated thereby by the affirmative vote of the holders of a majority of the
Shares. Accordingly, if the Minimum Condition is satisfied, Purchaser will have
sufficient voting power to cause the approval and adoption of the Merger
Agreement and the transactions contemplated thereby without the affirmative vote
of any other stockholder.
In the Merger Agreement, the Company has agreed to take all action
necessary to convene a meeting of its stockholders as soon as practicable after
the expiration of the Offer for the purpose of considering and taking action on
the Merger Agreement and the transactions contemplated thereby, if such action
is required. Symantec and Purchaser have agreed that all Shares owned by them
and their subsidiaries will be voted in favor of the Merger Agreement and the
transactions contemplated thereby at any such meeting.
If Purchaser purchases Shares sufficient to satisfy the Minimum Condition
to the Offer, the Merger Agreement provides that Purchaser will be entitled to
designate representatives to serve on the Board in proportion to Purchaser's
ownership of Shares following such purchase. See "Section 10. Background of the
Offer; Contacts with the Company; the Transaction Documents." Purchaser expects
that such representation would permit Purchaser to exercise control over the
Company's conduct of its business and operations.
Under Delaware Law, if Purchaser acquires, pursuant to the Offer or
otherwise, such number of Shares which, when added to the Shares owned of record
by Purchaser on such date, if any, constitutes at least 90% of the then
outstanding Shares, Purchaser will be able to approve and adopt the Merger
Agreement and the
25
<PAGE> 28
transactions contemplated thereby, and effect the Merger pursuant to the
short-form merger provisions of Delaware Law, without a vote of the Company's
stockholders. Symantec, Purchaser and the Company have agreed to use their
reasonable best efforts to take, or cause to be taken, all actions necessary,
proper or advisable to consummate and make effective in the most expeditious
manner possible the Merger and the transactions contemplated by the Merger
Agreement. If Purchaser does not acquire such number of Shares which, when added
to the Shares owned of record by Purchaser on such date, constitutes 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.
No appraisal rights are available in connection with the Offer. However, if
the Merger is consummated, stockholders will have certain rights under Delaware
Law to dissent and demand appraisal of, and to receive payment in cash of the
fair value of, their Shares. Such rights to dissent, if the statutory procedures
are complied with, could lead to a judicial determination of the fair value of
the Shares, as of the day prior to the date on which the stockholders' vote was
taken approving the Merger or similar business combination (excluding any
element of value arising from the accomplishment or expectation of the Merger),
required to be paid in cash to such dissenting holders for their Shares. In
addition, such dissenting stockholders would be entitled to receive payment of a
fair rate of interest from the date of consummation of the Merger on the amount
determined to be the fair value of their Shares. In determining the fair value
of the Shares, the court is required to take into account all relevant factors.
12. DIVIDENDS AND DISTRIBUTIONS. The Merger Agreement provides that the
Company will not, between the date of the Merger Agreement and the Effective
Time, without the prior written consent of Symantec, declare or pay any
dividends on or make any other distributions in respect of any capital stock or
split, combine or reclassify any capital stock or issue or authorize the
issuance of any other securities in respect of, in lieu of or in substitution
for any capital stock.
13. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES, 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 will reduce
the number of holders of Shares, which could adversely affect the liquidity and
market value of the remaining Shares held by the public.
On October 15, 1998, representatives of the Company informed Symantec that
after the close of trading and after the announcement by the Company and
Symantec of the Offer and the execution of the Merger Agreement, Nasdaq notified
the Company that its Shares were delisted from trading on the Nasdaq National
Market by reason of the Company's failure to meet certain quantitative criteria
therefor. The Shares currently trade on the OTC Bulletin Board. As a result of
this delisting, the Shares are no longer "margin securities" under the
regulations of the Board of Governors of the Federal Reserve System, and,
accordingly, can no longer be used as collateral for loans made by brokers. In
addition, as a result of this delisting, information as to the price and volume
of transactions in the Shares may become more difficult to obtain.
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 also would no
longer be "margin securities" or be eligible for reporting on Nasdaq National
Market or the Nasdaq SmallCap Market.
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<PAGE> 29
14. EXTENSION OF TENDER PERIOD; TERMINATION; AMENDMENT. Purchaser reserves
the right, at any time or from time to time, in its sole discretion and
regardless of whether or not any of the conditions specified in Section 15 shall
have been satisfied, to extend the period of time during which the Offer is open
by giving oral or written notice of such extension to the Depositary and by
making a public announcement of such extension or to amend the Offer in any
respect by making a public announcement of such amendment. There can be no
assurance that Purchaser will exercise its right to extend or amend the Offer.
If Purchaser decreases the percentage of Shares being sought or increases
or decreases the consideration to be paid for Shares pursuant to the Offer and
the Offer is scheduled to expire at any time before the expiration of a period
of ten business days from, and including, the date that notice of such increase
or decrease is first published, sent or given in the manner specified below, the
Offer will be extended until the expiration of such period of ten business days.
If Purchaser makes a material change in the terms of the Offer (other than a
change in price or percentage of securities sought) or in the information
concerning the Offer, or waives a material condition of the Offer, Purchaser
will extend the Offer if and to the extent required by Rules 14d-4(c), 14d-6(d)
and 14e-1 under the Exchange Act. The minimum period during which a tender offer
must remain open following material changes in the terms thereof or the
information concerning such tender offer, other than a change in price or a
change in the percentage of securities sought, will depend upon the facts and
circumstances, including the relatively materiality of the terms or information
changes. In a published release, the Commission has stated that in its view an
offer should remain open for a minimum of five business days from the date the
material change is first published, sent or given to securityholders, and that
if material changes are made with respect to information that approaches the
significance of price and share levels, a minimum of ten business days may be
required to allow adequate dissemination and investor response. The term
"business day" shall mean any day other than Saturday, Sunday or a federal
holiday and shall consist of the time period from 12:01 a.m. through 12:00
Midnight, New York City time.
Purchaser also reserves the right, in its sole discretion, in the event any
of the conditions specified in Section 15 shall not have been satisfied and so
long as Shares have not previously been accepted for payment, to delay (except
as otherwise required by applicable law) acceptance for payment of or payment
for Shares or to terminate the Offer and not accept for payment or pay for
Shares.
If Purchaser extends the period of time during which the Offer is open, is
delayed in accepting for payment or paying for Shares or is unable to accept for
payment or pay for Shares pursuant to the Offer for any reason, then, without
prejudice to Purchaser's rights under the Offer, the Depositary may, on behalf
of Purchaser, retain all Shares tendered, and such Shares may not be withdrawn
except as otherwise provided in Section 4. The reservation by Purchaser of the
right to delay acceptance for payment of or payment for Shares is subject to
applicable law, which requires that Purchaser pay the consideration offered or
return the Shares deposited by or on behalf of shareholders promptly after the
termination or withdrawal of the Offer.
Any extension, termination or amendment of the Offer will be followed as
promptly as practicable by a public announcement thereof. Without limiting the
manner in which Purchaser may choose to make any public announcement, Purchaser
will have no obligation (except as otherwise required by applicable law) to
publish, advertise or otherwise communicate any such public announcement other
than by making a release to the Dow Jones News Service. In the case of an
extension of the Offer, Purchaser will make a public announcement of such
extension no later than 9:00 a.m., New York City time, on the next business day
after the previously scheduled Expiration Date.
15. CERTAIN CONDITIONS OF THE OFFER. The Merger Agreement provides that,
notwithstanding any other provision of the Offer or the Merger Agreement, and in
addition to (and not in limitation of) Purchaser's rights to extend and amend
the Offer (subject to certain limitations), Purchaser shall not be required to
accept for payment, purchase or pay for, subject to Rule 14e-1(c) under the
Exchange Act, any Shares tendered pursuant to the Offer and may terminate the
Offer as to any Shares not then paid for unless (i) the Minimum Condition is
satisfied and (ii) any waiting period (and any extension thereof) under the HSR
Act applicable to the purchase of Shares pursuant to the Offer shall have
expired or been terminated. Furthermore, the Merger Agreement provides that
Purchaser shall not be required to commence the Offer or accept for payment,
purchase or pay for any Shares not previously accepted for payment or paid for
and may terminate or
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<PAGE> 30
amend the Offer, if at any time before acceptance of the Shares any of the
following events shall occur or shall be determined by Symantec in good faith to
have occurred which, in the reasonable good faith judgment of Symantec or
Purchaser, and regardless of the circumstances giving rise to any such condition
(other than action or inaction by Symantec or any of its subsidiaries which
constitutes a breach of the Merger Agreement), makes it inadvisable to proceed
with such acceptance for payment or payment:
(a) there shall be pending any suit, action or proceeding brought by
or on behalf of any Governmental Entity (or the staff of the Federal Trade
Commission or the staff of the Antitrust Division of the Department of
Justice shall have recommended the commencement of such), any shareholder
of the Company or any other person or party, directly or indirectly,
(1) challenging the acquisition by Symantec or Purchaser of any of
the Shares, 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 alleging (on
grounds that Purchaser reasonably and in good faith determines are
reasonably likely to result in financial exposure to the Company in
excess of $3 million taking into account available insurance coverage
and/or proceeds) that any such acquisition or other transaction relates
to, involves or constitutes a violation by the Company or its directors
of federal securities law or applicable corporate statutes or
principles,
(2) seeking to prohibit or limit the ownership or operation by the
Company, Symantec or any of their respective subsidiaries of a material
portion of the business or assets of the Company and its subsidiaries,
taken as a whole, or Symantec and its subsidiaries, taken as a whole, or
to compel the Company or Symantec to dispose of or hold separate any
material portion of the business or assets of the Company and its
subsidiaries, taken as a whole, or Symantec and its subsidiaries, taken
as a whole, as a result of the Offer or any of the other transactions
contemplated by the Merger Agreement,
(3) seeking to impose material limitations on the ability of
Symantec or Purchaser to acquire or hold, or exercise full rights of
ownership of, any of the Shares accepted for payment pursuant to the
Offer, including the right to vote any such Shares accepted for payment
by it on all matters properly presented to the stockholders of the
Company,
(4) seeking to prohibit Symantec or any of its subsidiaries from
effectively managing or controlling in any material respect the business
or operations of the Company and its subsidiaries taken as a whole,
(5) which is likely to result in a Material Adverse Effect or
(6) seeking to impose a material condition to the Offer, the Merger
or the Merger Agreement which would be materially adverse to Symantec;
provided that in case of any such suit, action or proceeding by any
person other than a Governmental Entity, such suit, action or proceeding
could reasonably be expected to result in a Material Adverse Effect; or
(b) there shall be any statute, rule, regulation, judgment, order or
injunction enacted, entered, enforced, promulgated or deemed applicable to
the Offer or the Merger, or any other action shall be taken by any
Governmental Entity or court, other than the application to the Offer or
the Merger of applicable waiting periods under the HSR Act, that is
reasonably likely to result, in any of the consequences referred to in
clauses (a)(1) through (a)(6) above;
(c) there shall have occurred since June 30, 1998, any Material
Adverse Change;
(d) either (1) the Board of Directors of the Company or any committee
thereof shall have failed to recommend the Offer, the Merger or the Merger
Agreement, including any failure to include such recommendation in the
Schedule 14D-9, or shall have so resolved, or (2) the Board of Directors of
the Company or any committee thereof shall have withdrawn or modified
(including without limitation by amendment of the Schedule 14D-9) in a
manner adverse to Symantec or Purchaser its approval or recommendation of
the Offer, the Merger or the Merger Agreement and Ancillary Agreements,
shall have approved or recommended any takeover proposal (provided that a
statement that states that a
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<PAGE> 31
takeover proposal is under consideration by the Company's Board of
Directors or management and states that the Company will, at a future date,
take a position with respect to such takeover proposal, without making any
adverse statements with respect to the Offer, shall not be deemed to
constitute such a withdrawal, modification, approval or recommendation), or
shall have authorized the redemption or amendment of the Rights Agreement
after the Company has received any takeover proposal (other than the Rights
Amendment in accordance with the Merger Agreement) or shall have resolved
to do any of the foregoing;
(e) either (1) any person, entity or "group" (as defined in Section
13(d)(3) of the Exchange Act) other than Symantec and Purchaser acquired
beneficial ownership of 35% or more of the outstanding Shares or (2) the
Board of Directors of the Company or any committee thereof upon request to
reaffirm the Company's approval or recommendation of the Offer, the Merger
or the Merger Agreement, shall have failed to do so within three business
days after such request is made or shall have so resolved;
(f) the representations and warranties of the Company in the Merger
Agreement shall not be true and correct in all material respects (without
regard to any qualification therein as to the Company's knowledge) as a
result of any facts or circumstances that have a Material Adverse Effect;
(g) the Company shall have breached or failed to perform in any
material respect any obligation or to comply in any material respect with
any agreement or covenant of the Company to be performed or complied with
by it pursuant to the Merger Agreement and the same shall have a Material
Adverse Effect;
(h) the Merger Agreement shall have been terminated in accordance with
its terms; or
(i) any voluntary, involuntary or ancillary petition in bankruptcy
shall have been instituted under Title 11 to the United States Code with
respect to the Company as a debtor or alleged debtor and not dismissed. The
Merger Agreement provides that the foregoing conditions are for the sole
benefit of Symantec and Purchaser and their respective affiliates and may
be asserted by Symantec or Purchaser regardless of the circumstances giving
rise to such condition (other than any action or inaction by Symantec or
any of its subsidiaries which constitutes a breach of the Merger Agreement)
or may be waived (except for the Minimum Condition, which can only be
waived with the consent of the Company) by Symantec and the Purchaser in
whole or in part at any time and from time to time in their sole
discretion. The failure by Symantec, Purchaser or any other affiliate of
Symantec at any time to exercise any of the foregoing rights shall not be
deemed a waiver of any such right, the waiver of any such right with
respect to particular facts and circumstances shall not be deemed a waiver
of any such rights with respect to any other facts and circumstances and
each such right shall be deemed an ongoing right that may asserted at any
time and from time to time prior to expiration of the Offer.
16. CERTAIN LEGAL MATTERS AND REGULATORY APPROVALS.
General. Based upon its examination of publicly available information with
respect to the Company and the review of certain information furnished by the
Company to Symantec and discussions of representatives of Symantec with
representatives of the Company during Symantec's investigation of the Company,
neither Purchaser nor Symantec is aware of any governmental permit that appears
to be material to the business of the Company and the subsidiaries, taken as a
whole, which might be adversely affected by the acquisition of Shares by
Purchaser pursuant to the Offer or, except as set forth below, of any approval
or other action by any domestic (federal or state) or foreign governmental,
administrative or regulatory authority or agency which would be required prior
to the acquisition of Shares by Purchaser pursuant to the Offer, other than
pursuant to the HSR Act. Should any such approval or other action be required,
it is Purchaser's present intention to seek such approval or action. Purchaser
does not currently intend, however, to delay the purchase of Shares tendered
pursuant to the Offer pending the outcome of any such action or the receipt of
any such approval (subject to Purchaser's right to decline to purchase Shares if
any of the conditions in Section 15 shall have occurred). There can be no
assurance that any such approval or other action, if needed, would be obtained
without substantial conditions or that adverse consequences might not result to
the business of the Company, Purchaser or Symantec or that certain parts of the
businesses of the Company, Purchaser or Symantec might
29
<PAGE> 32
not have to be disposed of or held separate or other substantial conditions
complied with in order to obtain such approval or other action or in the event
that such approval was not obtained or such other action was not taken.
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 16. See "Section 15. Certain Conditions of the
Offer."
State Takeover Laws. The Company is incorporated under the law of the State
of Delaware. In general, Section 203 of Delaware Law prevents an "interested
stockholder" (generally a person who owns or has the right to acquire 15% or
more of a corporation's outstanding voting stock, or an affiliate or associate
thereof) from engaging in a "business combination" (defined to include mergers
and certain other transactions) with a Delaware corporation for a period of
three years following the date such person became an interested stockholder
unless, among other things, prior to such date the board of directors of the
corporation approved either the business combination or the transaction in which
the interested stockholder became an interested stockholder. On October 15,
1998, prior to the execution of the Merger Agreement, the Board of Directors of
the Company, by unanimous vote of all directors present at a meeting held on
such date, (i) approved and adopted the Merger Agreement and the transactions
contemplated thereby, (ii) determined that the Merger Agreement and the
transactions contemplated thereby, including each of the Offer and the Merger,
is fair to and in the best interests of, the Stockholders and (iii) recommended
that the Stockholders accept the Offer and tender their Shares and approve and
adopt the Merger Agreement and the transactions contemplated thereby.
Accordingly, Section 203 is inapplicable to the Offer or the Merger.
A number of other states have adopted laws and regulations applicable to
attempts to acquire securities of corporations which are incorporated, or have
substantial assets, stockholders, principal executive offices or principal
places of business, or whose business operations otherwise have substantial
economic effects, in such states. In Edgar v. MITE Corp., the Supreme Court of
the United States invalidated on constitutional grounds the Illinois Business
Takeover Statute, which, as a matter of state securities law, made takeovers of
corporations meeting certain requirements more difficult. However, in 1987 in
CTS Corp. v. Dynamics Corp. of America, the Supreme Court held that the State of
Indiana may, as a matter of corporate law and, in particular, with respect to
those aspects of corporate law concerning corporate governance, constitutionally
disqualify a potential acquiror from voting on the affairs of a target
corporation without the prior approval of the remaining stockholders. The state
law before the Supreme Court was by its terms applicable only to corporations
that had a substantial number of stockholders in the state and were incorporated
there.
The Company, directly or through subsidiaries, conducts business in a
number of states throughout the United States, some of which have enacted
takeover laws. Purchaser does not know whether any of these laws will, by their
terms, apply to the Offer or the Merger and has not complied with any such laws.
Should any person seek to apply any state takeover law, Purchaser will take such
action as then appears desirable, which may include challenging the validity or
applicability of any such statute in appropriate court proceedings. In the event
it is asserted that one or more state takeover laws is applicable to the Offer
or the Merger, and an appropriate court does not determine that it is
inapplicable or invalid as applied to the Offer, Purchaser might be required to
file certain information with, or receive approvals from, the relevant state
authorities. In addition, if enjoined, Purchaser might be unable to accept for
payment any Shares tendered pursuant to the Offer, or be delayed in continuing
or consummating the Offer, and the Merger. In such case, Purchaser may not be
obligated to accept for payment any Shares tendered. See "Section 15. Certain
Conditions of the Offer."
Except as described herein, Purchaser has not attempted to comply with any
state takeover statutes in connection with the Offer. Purchaser reserves the
right to challenge the validity or applicability of any state law allegedly
applicable to the Offer and nothing in this Offer to Purchase nor any action
taken in connection herewith is intended as a waiver of that right. In the event
that any state takeover statute is found applicable to the Offer, Purchaser
might be unable to accept for payment or purchase Shares tendered pursuant to
the Offer or be delayed in continuing or consummating the Offer. In such case,
Purchaser may not be obligated to accept for purchase, or pay for any Shares
tendered. See "Section 15. Certain Conditions of the Offer."
Antitrust. Under the HSR Act and the rules that have been promulgated
thereunder by the FTC, certain acquisition transactions may not be consummated
until certain information has been furnished to the
30
<PAGE> 33
Antitrust Division and the FTC and certain waiting period requirements have been
satisfied. The acquisition of Shares by Purchaser pursuant to the Offer is
subject to such requirements. See "Section 2. Acceptance for Payment and Payment
for Shares."
Pursuant to the HSR Act, on October 19, 1998, Symantec filed a Pre-merger
Notification and Report Form in connection with the purchase of Shares pursuant
to the Offer with the Antitrust Division and the FTC. Under the provision of the
HSR Act applicable to the Offer, the purchase of Shares pursuant to the Offer
may not be consummated until the expiration of a 15-calendar day waiting period
following the filing by Symantec. The waiting period under the HSR Act
applicable to the purchase of Shares pursuant to the Offer expired at 5:00 p.m.,
New York City time, on November 3, 1998. As a result, the condition to the Offer
that the waiting period applicable under the HSR Act to the Offer expire or be
terminated has been satisfied. See "Section 2. Acceptance for Payment and
Payment for Shares" and "Section 15. Certain Conditions of the Offer."
The FTC and the Antitrust Division frequently scrutinize the legality under
the antitrust laws of transactions such as the proposed acquisition of Shares by
Purchaser pursuant to the Offer. At any time before or after the purchase of
Shares pursuant to the Offer by Purchaser, the FTC or the Antitrust Division
could take such action under the antitrust laws as it deems necessary or
desirable in the public interest, including seeking to enjoin the purchase of
Shares pursuant to the Offer or seeking the divestiture of Shares purchased by
Purchaser or the divestiture of substantial assets of Symantec, the Company or
their respective subsidiaries. Private parties and state attorneys general may
also bring legal action under federal or state antitrust laws under certain
circumstances. Based upon an examination of information available to Symantec
relating to the businesses in which Symantec, the Company and their respective
subsidiaries are engaged, Symantec and Purchaser believe that the Offer and the
Merger will not violate the antitrust laws. Nevertheless, there can be no
assurance that a challenge to the Offer on antitrust grounds will not be made
or, if such a challenge is made, what the result would be. See "Section 15.
Certain Conditions of the Offer."
17. FEES AND EXPENSES. Except as set forth below, Purchaser will not pay
any fees or commissions to any broker, dealer or other person for soliciting
tenders of Shares pursuant to the Offer.
DLJ has been retained on an exclusive basis to render financial advisory
services in connection with the Offer and the Merger. In addition, DLJ has been
engaged to act as Dealer Manager in connection with the Offer. DLJ will be paid
$850,000 in connection with such engagements upon successful completion of the
Offer. DLJ will also be reimbursed for its reasonable fees and expenses and has
been granted customary indemnity for certain liabilities and expenses.
D.F. King & Co., Inc. has been retained to serve as the Information Agent
in connection with the Offer. The Information Agent will be paid a fee of
$10,000 plus certain additional fees for its services, will be reimbursed for
reasonable out-of-pocket expenses and has been provided with customary indemnity
for certain liabilities and expenses. The Information Agent may contact holders
of Shares by mail, telephone, telex,
31
<PAGE> 34
telecopy, telegraph or personal interview and may request banks, brokers,
dealers and other nominee stockholders to forward materials relating to the
Offer to beneficial owners.
State Street Bank and Trust Company has been retained as the Depositary in
connection with the Offer. The Depositary will be paid reasonable and customary
compensation for its services in connection with the Offer, will be reimbursed
for its reasonable out-of-pocket expenses in connection therewith and has been
provided with customary indemnity for certain liabilities and expenses. In
addition, brokers, dealers, commercial banks and trust companies will be
reimbursed for customary handling and mailing expenses incurred by them in
forwarding material to their customers.
18. MISCELLANEOUS. Purchaser is not aware of any jurisdiction where the
making of the Offer is prohibited by any administrative or judicial action
pursuant to any valid state statute. If Purchaser becomes aware of any valid
state statute prohibiting the making of the Offer or the acceptance of Shares
pursuant thereto, Purchaser will make a good faith effort to comply with any
such state statute. If, after such good faith effort, Purchaser cannot comply
with any such state statute, the Offer will not be made to (nor will tenders be
accepted from or on behalf of) the holders of Shares in such state. In any
jurisdiction where the securities, blue sky or other laws require the Offer to
be made by a licensed broker or dealer, the Offer shall be deemed to be made on
behalf of Purchaser by the Dealer Manager or by one or more registered brokers
or dealers licensed under the laws of such jurisdiction.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION ON BEHALF OF SYMANTEC, PURCHASER OR THE COMPANY 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.
Pursuant to Rule 14d-3 of the General Rules and Regulations under the
Exchange Act, Symantec and Purchaser have filed with the Commission the Schedule
14D-1, together with exhibits, furnishing certain additional information with
respect to the Offer. The Schedule 14D-1 and any amendments thereto, including
Exhibits, may be inspected at, and copies may be obtained from, the same places
and in the same manner as set forth in Section 7 with respect to the Company
(except that they will not be available at the regional offices of the
Commission).
OAK ACQUISITION CORPORATION
October 19, 1998
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SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF
PURCHASER AND SYMANTEC
The following tables set forth the name, present principal occupation or
employment and material occupation, positions, offices or employment for the
past five years of each director and executive officer of Purchaser and
Symantec. The business address of each such person is 10201 Torre Avenue,
Cupertino, California 95014-2132.
Unless otherwise indicated, each person listed below (i) has held his
principal occupation for the past five years, (ii) has not been convicted in a
criminal proceeding (excluding traffic violations and similar misdemeanors) and
has not been a party to a civil proceeding of a judicial or administrative body
of competent jurisdiction where, as a result of such proceeding, such person
was, or is, subject to a judgment, decree or final order enjoining future
violations of or prohibiting activities subject to, federal or state securities
laws or finding any violation of such laws or is involved in any other legal
proceeding which is required to be disclosed under Item 401(f) of Regulation S-K
promulgated by the SEC, and (iii) is a citizen of the United States, except
Dieter Giesbrecht, who is a citizen of Germany, Enrique Salem, who is a citizen
of Colombia, and Robert Dykes, who is a citizen of New Zealand.
1. Director and Executive Officer of Purchaser:
<TABLE>
<CAPTION>
NAME PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND FIVE-YEAR EMPLOYMENT HISTORY
---- ---------------------------------------------------------------------------
<S> <C>
Derek Witte Vice President, General Counsel and Secretary. Mr. Witte joined Symantec in
October 1990.
</TABLE>
2. Directors and Executive Officers of Symantec:
<TABLE>
<CAPTION>
NAME PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND FIVE-YEAR EMPLOYMENT HISTORY
---- ---------------------------------------------------------------------------
<S> <C>
Gordon E. Eubanks, Jr. President and Chief Executive Officer since October 1986 and a member of
the Board of Directors since November 1983.
Howard A. Bain III Vice President, Worldwide Operations and Chief Financial Officer. Mr. Bain
jointed Symantec in October 1991 as its Vice President, Finance.
Christopher Calisi Vice President, Remote Productivity Solutions Business Unit. From 1992 to
1996, Mr. Calisi held several positions within Symantec's Remote Access
Business Unit, including Development Manager, Director of Development,
General Manager and most recently, Vice President, Communication Products.
Dieter Giesbrecht Vice President, Europe, Middle East and Africa ("EMEA") since September
1996. From 1995 until joining Symantec, he was Vice President of Attachmate
Europe based in Paris, France and was responsible for the EMEA region. From
1991 to 1995, he held several executive functions within Lotus Development
Europe including Managing Director UK and Managing Director Central Europe
Enrique T. Salem Vice President, Security and Assistance Business Unit and Chief Technical
Officer. Mr. Salem joined Symantec in April 1990 and has held numerous
positions including Director of Development and General Manager of Advanced
Utilities Group.
Dana E. Siebert Executive Vice President, Worldwide Sales. Previously, Mr. Siebert served
as Vice President, Americas and prior to that, Vice President, Worldwide
Services of Symantec. Mr. Siebert joined Symantec in September 1987.
Derek Witte Vice President, General Counsel and Secretary. Mr. Witte joined Symantec in
October 1990.
</TABLE>
<PAGE> 36
<TABLE>
<CAPTION>
NAME PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND FIVE-YEAR EMPLOYMENT HISTORY
---- ---------------------------------------------------------------------------
<S> <C>
Carl D. Carman Director since May 1984, and Chairman of the Board since January 1993. Mr.
Carman has been a partner in Hill, Carman Ventures, a venture capital firm,
since April 1989.
Walter W. Bregman Director since October 1988. Mr. Bregman has been Chairman and co-CEO of
S&B Enterprises, a consulting firm, since March 1988, and since December
1992 has been President and CEO of Golf Scientific, Inc., a company which
produces and sells golf instructional equipment.
Robert S. Miller Director since September 1994. Mr. Miller has been Chairman and CEO of
Waste Management, Inc. since October 1997. He was Chairman of the Board of
Morrison-Knudsen Corporation from April 1995 until September 1996, and is
now Vice Chairman of the Board. From April 1992 until February 1993, he was
a senior partner at James D. Wolfensohn, Inc., a New York investment
banking firm.
Charles M. Boesenberg Director since June 1994, and provided certain consulting services to
Symantec from January 1995 through December 1995. Mr. Boesenberg is
currently the President and Chief Executive Officer of Magellan
Corporation, which was the surviving corporation of a merger with Ashtech,
Inc., a position that he assumed in January 1995 with Ashtech. Mr.
Boesenberg was an Executive Vice President of Symantec from June 1, 1994,
when Symantec acquired Central Point Software, Inc. and continued in that
capacity until December 1994. In February 1992, Mr. Boesenberg joined
Central Point as its President and Chief Operating Officer, and was elected
as its Chief Executive Officer and Chairman in March 1992, and continued in
those positions until the acquisition of Central Point by Symantec.
Robert R.B. Dykes Director since March 1997. Robert R.B. Dykes is the Senior Vice President
of Finance and Administration of Flextronics International Ltd. since
February 1997. Mr. Dykes was Symantec's Executive Vice President of
Worldwide Operations and Chief Financial Officer from October 1988 until
February 1997.
Tania Amochaev Director since October 1997. Ms. Amochaev was Chief Executive Officer of
QRS Corporation, a provider of electronic commerce solutions to the retail
industry, from May 1993 until February 1997. She was President of QRS prior
to her promotion as that company's Chief Executive Officer and has also
been Chairman of the Executive Committee of the QRS Board of Directors
since February 1997.
</TABLE>
2
<PAGE> 1
EXHIBIT (a)(9)
[SYMANTEC LETTERHEAD]
NOVEMBER 5, 1998
TO: Holders of Series C Convertible Preferred Stock (the "Series C Stock") of
Quarterdeck Corporation and Holders of Stock Purchase Warrants ("Warrants")
to Purchase Such Series C Stock:
Ladies and Gentlemen:
Pursuant to the enclosed Offer to Purchase, dated October 19, 1998 (the
"Offer to Purchase"), and a related Letter of Transmittal (which together
constitute the "Offer"), Oak Acquisition Corporation ("Purchaser"), a wholly
owned subsidiary of Symantec Corporation ("Symantec"), has made a tender offer
to purchase all outstanding shares of Common Stock, par value $0.001 per share
(the "Common Stock"), of Quarterdeck Corporation (the "Company"), including
associated preferred stock purchase rights, at a price of $0.52 per share, net
to the seller in cash and without interest thereon, subject to reduction for any
applicable federal back up or other withholding taxes, upon the terms and
subject to the conditions set forth in the Offer. You may participate in the
offer with regard to the shares of Common Stock issuable upon conversion of the
Series C Stock, or upon exercise of Warrants and conversion of the shares of
Series C Stock issued upon such exercise (the "Warrant Shares"). The shares of
Common Stock issued upon conversion pursuant to the Company's Certificate of
Incorporation of the Series C Stock (and the Agreement, dated as of October 9,
1998, by and between the Company and you), including upon conversion of the
Warrant Shares, are referred to as the "Conversion Shares."
Symantec has implemented procedures to facilitate this participation:
With regard to presently outstanding Series C Stock, you may
participate in the Offer by delivering to Symantec: (A) the certificates
for the Series C Stock, properly endorsed to Purchaser, and (B) a duly
completed and signed Letter of Transmittal in the form attached (the
"Letter of Transmittal"). Delivery to the Purchaser pursuant to the Letter
of Transmittal of the duly endorsed certificate(s) representing shares of
Series C Stock will be deemed by Purchaser to constitute tender pursuant to
the Offer of the Conversion Shares issuable upon conversion of such shares
of Series C Stock.
With regard to presently outstanding Warrants, you may participate in
the Offer by delivering to the Purchaser (A) a duly executed Assignment
Form (the form of which is attached to the Warrant), (B) the Warrant, (C)
the exercise price for such Warrant Shares (by certified or cashier's check
payable to the Purchaser), and (D) a duly completed and signed Letter of
Transmittal, on which the table headed "Description of Shares Delivered for
Purchase" is completed by inserting the words "Warrant Exercise" in the
space under the heading "Preferred Stock Certificate Number(s)," and
including under the heading "Total Number of Shares of Preferred Stock
Evidenced by Certificate(s)," the total number of shares of Series C Stock
issuable under the Warrant, and under the heading "Number of Shares of
Common Stock Issuable Upon Conversion of Preferred Stock Evidenced by
Certificate" the number of shares of Common Stock issuable upon conversion
of such Preferred Stock. Delivery to the Purchaser pursuant to the Letter
of Transmittal of the Warrants, executed Assignment Form and check in the
amount of the exercise price will be deemed by Purchaser to constitute
tender pursuant to the Offer of the Common Stock issuable upon conversion
of the Warrant Shares.
In either case, all of the applicable documents (and, for the Warrant
Shares, the check) must be received by the Purchaser NO LATER THAN NOVEMBER 16,
1998, the expiration date of the Offer, at the address specified on the first
page of the Letter of Transmittal.
If shares tendered pursuant to the Offer to Purchase are not accepted for
payment, the Purchaser will return your Series C Stock and Warrants (and the
exercise price therefor) to you without effecting any conversion or exercise.
<PAGE> 2
In closing, we invite you to consider carefully the enclosed Offer and
related documents in making any decision concerning tender of your shares in
response to the Offer. If you have any questions concerning the foregoing,
please call Frank R. Greico (the Company's Chief Financial Officer) at (310)
309-4232 or Daniel Sullivan of D.F. King & Co. (the Information Agent for the
Offer) at (212) 493-6927.
Very truly yours,
2
<PAGE> 1
EXHIBIT (a)(10)
LETTER OF TRANSMITTAL
FOR USE BY HOLDERS OF
SERIES C CONVERTIBLE PREFERRED STOCK
AND WARRANTS TO PURCHASE SUCH PREFERRED STOCK
OF
QUARTERDECK CORPORATION
PURSUANT TO THE OFFER TO PURCHASE DATED OCTOBER 19, 1998
AT
$0.52 NET PER SHARE OF COMMON STOCK
BY
OAK ACQUISITION CORPORATION
A WHOLLY OWNED SUBSIDIARY OF
SYMANTEC CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS WILL
EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME,
ON MONDAY, NOVEMBER 16, 1998, UNLESS THE OFFER IS EXTENDED.
Deliver By Hand, or By Overnight, Certified or Express Delivery to:
Oak Acquisition Corporation
c/o Symantec Corporation
10201 Torre Avenue
Cupertino, California 95014
(408) 253-9600
Attention: David Daetz,
Director, Business Development
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. YOU MUST SIGN THIS LETTER OF
TRANSMITTAL IN THE APPROPRIATE SPACE THEREFOR PROVIDED BELOW AND COMPLETE THE
SUBSTITUTE FORM W-9 SET FORTH BELOW.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
PLEASE COMPLETE THE "DESCRIPTION OF SHARES DELIVERED FOR PURCHASE" BELOW:
- --------------------------------------------------------------------------------
DESCRIPTION OF SHARES DELIVERED FOR PURCHASE
<TABLE>
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S)
(PLEASE FILL IN, IF BLANK, EXACTLY AS NAME(S) APPEAR(S) ON CERTIFICATE(S) AND SHARE(S) DELIVERED FOR PURCHASE
CERTIFICATE(S) OR WARRANTS) (ATTACH ADDITIONAL LIST IF NECESSARY)
- ---------------------------------------------------------------------------------------------------------------------------------
NUMBER OF SHARES OF
COMMON STOCK ISSUABLE
ON
NUMBER OF SHARES OF CONVERSION OF
PREFERRED STOCK PREFERRED STOCK PREFERRED
CERTIFICATE EVIDENCED STOCK EVIDENCED BY
NUMBER(S)* BY CERTIFICATE** CERTIFICATE(S)**
- ---------------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
---------------------------------------------------------------
Total Shares
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* If any Series C Convertible Preferred Stock is being issued pursuant to the
exercise of warrants as described in the Election to Exercise, you should
insert the words "Warrant Exercise" under the heading "Certificate
Number(s)," insert under the heading "Total Number of Shares Evidenced by
Certificate(s)," the total number of shares of Preferred Stock issuable
upon exercise of the warrant and insert under the heading "Number of Shares
of Common Stock issuable on Conversion of Preferred Stock Evidenced by
Certificates" the number of Shares of Common Stock issuable upon conversion
of such Preferred Stock.
** Unless otherwise specified, it will be assumed that the right to convert
all delivered Preferred Stock certificates and to receive all of the shares
of Common Stock issuable upon such conversion are being tendered hereby,
and that upon acceptance by Purchaser, all such Preferred Stock
certificates and rights are transferred hereby.
- --------------------------------------------------------------------------------
<PAGE> 2
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE INSTRUCTIONS SET FORTH IN THIS LETTER OF
TRANSMITTAL CAREFULLY
LADIES AND GENTLEMEN:
The undersigned hereby delivers to Oak Acquisition Corporation
("Purchaser"), a Delaware corporation and a wholly owned subsidiary of Symantec
Corporation, a Delaware corporation, the above-described shares of Series C
Convertible Preferred Stock of the Company and/or warrants to purchase Series C
Convertible Preferred Stock of the Company (such shares and/or warrants being
referred to collectively herein as the "Delivered Shares"), representing the
right to acquire all shares of common stock, par value $0.001 per share
(together with the associated Preferred Stock purchase rights, the "Shares"), of
Quarterdeck Corporation (the "Company"), a Delaware corporation, issuable upon
conversion thereof, pursuant to Purchaser's offer to purchase all Shares at
$0.52 per Share, net to the seller in cash, without interest thereon, subject to
reduction for any applicable federal back up or other withholding taxes, upon
the terms and subject to the conditions set forth in the Offer to Purchase,
dated October 19, 1998 (the "Offer to Purchase"), receipt of which is hereby
acknowledged, and in this Letter of Transmittal ("Letter of Transmittal" which,
together with the Offer to Purchase, constitute the "Offer"). The Shares
constitute all of the Common Stock, par value $0.001 per share issuable upon
conversion of the Delivered Shares (including exercise of any warrants included
therein) and the undersigned hereby delivers and offers the Delivered Shares to
the Purchaser for purchase (upon acceptance for payment) at a price equal to at
$0.52 for each Share issuable to the Purchaser upon the Purchaser's conversion
(and exercise, in the case of warrants) of such Delivered Shares, net to the
seller in cash, without interest thereon, subject to reduction for any
applicable federal back up or other withholding taxes, upon the terms and
subject to the conditions set forth in the Offer. The undersigned represents
that (i) it is presently entitled to acquire all such Shares upon conversion of
the Delivered Shares (and exercise of any warrants included in the Delivered
Shares), without payment to the Company of any additional consideration (other
than the purchase price pursuant to any such warrants), and (ii) it has
delivered the certificates for such Delivered Shares, duly endorsed in favor of
the Purchaser (or, in the case of warrants, the original warrant agreements,
accompanied by a duly executed assignment form in the form attached to such
warrant or otherwise acceptable to Purchaser) to the Purchaser, together, in the
case of any warrants, with the purchase price for the Delivered Shares issuable
upon such exercise (by certified or cashier's check payable to the Purchaser).
The certificates representing shares of Series C Convertible Preferred Stock
delivered herewith, or so issuable upon exercise of such warrants, and the
warrant agreement representing any warrants delivered herewith, are referred to
herein collectively as the "Certificates." The undersigned understands that
Purchaser reserves the right to transfer or assign, in whole or, from time to
time, in part, to one or more of its affiliates, the right to purchase all or
any portion of the Delivered Shares and the Shares tendered pursuant to the
Offer. Subject to, and effective upon, Purchaser's acceptance for payment of the
Delivered Shares, the undersigned hereby irrevocably authorizes and directs the
Company to (i) cause Certificates evidencing such Delivered Shares to be issued,
registered in the name of the Purchaser and (ii) deliver such Certificates,
together with all accompanying evidences of transfer and authenticity, to or
upon the order of Purchaser at the address set forth on the first page of this
letter of transmittal or to such person and address as Purchaser may otherwise
direct in writing.
In furtherance of the tender of the Shares issuable upon conversion of the
Series C Convertible Preferred Stock and the other transactions contemplated in
the Offer, the undersigned hereby assigns to the Purchaser all its rights under
that certain letter agreement, dated October 9, 1998 by and between the Company
and the undersigned regarding conversion of such shares of Series C Convertible
Preferred Stock, effective immediately prior to the acceptance for payment of
the Delivered Shares.
Subject to, and effective upon, acceptance for payment of the Delivered
Shares and the Shares tendered herewith, the undersigned hereby sells, assigns
and transfers to, or upon the order of, Purchaser all right, title and interest
in and to all the Delivered Shares and the Shares, and all dividends,
distributions (including, without limitation, distributions of additional
Shares) and rights declared, paid or distributed in respect of such Delivered
Shares (or on the Shares) on or after the date of the Offer (collectively,
"Distributions"), and irrevocably appoints the Purchaser the true and lawful
agent and attorney-in-fact of the undersigned with respect to such Delivered
Shares and Shares and all Distributions, with full power of substitution (such
power of attorney being deemed to be an irrevocable power coupled with an
interest), to (i) deliver Certificates evidencing such Delivered Shares and all
Distributions, together with all accompanying evidences of transfer and
authenticity, to or upon the order of Purchaser, (ii) present such Delivered
Shares and all Distributions for transfer on the books of the Company and (iii)
receive all benefits and otherwise exercise all rights of beneficial ownership
of such Delivered Shares and all Shares and Distributions, all in accordance
with the terms of the Offer.
The undersigned hereby irrevocably appoints Gordon E. Eubanks, Jr. and
Howard A. Bain III and each of them, as the attorneys and proxies of the
undersigned, each with full power of substitution, to vote in such manner as
each such attorney and proxy or his or her substitute shall, in his or her sole
discretion, deem proper and otherwise act (by written consent or otherwise) with
respect to all the Delivered Shares which have been accepted for payment by
Purchaser prior to the time of such vote or other action and all shares and
other securities issued in Distributions in respect of such Delivered Shares,
which the undersigned is entitled to vote at any meeting of stockholders of the
Company (whether
2
<PAGE> 3
annual or special and whether or not an adjourned or postponed meeting) or
consent in lieu of any such meeting or otherwise. This proxy and power of
attorney is coupled with an interest in the Delivered Shares, is irrevocable and
is granted in consideration of, and is effective upon, the acceptance for
payment of such Delivered Shares by Purchaser in accordance with other terms of
the Offer. Such acceptance for payment shall revoke all other proxies and powers
of attorney granted by the undersigned at any time with respect to such
Delivered Shares and Shares (and all Shares and other securities issued in
Distributions in respect of such Delivered Shares and such Shares), and no
subsequent proxy or power of attorney shall be given or written consent executed
(and if given or executed, shall not be effective) by the undersigned with
respect thereto. The undersigned understands that, in order for Delivered Shares
to be deemed validly delivered, immediately upon Purchaser's acceptance of such
Delivered Shares for payment, Purchaser must be able to exercise full voting and
other rights with respect to such Delivered Shares and all Distributions, and,
upon conversion of the Delivered Shares, all Shares, including, without
limitation, voting at any meeting of the Company's stockholders then scheduled.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to deliver, sell, assign and transfer the Delivered
Shares delivered hereby and all Distributions, that when such Delivered Shares
are accepted for payment by Purchaser, Purchaser will acquire good, marketable
and unencumbered title thereto and to all Distributions, free and clear of all
liens, restriction, charges and encumbrances, and that none of such Shares and
Distributions will be subject to any adverse claim. The undersigned, upon
request, shall execute and deliver all additional documents deemed to be
necessary or advisable to complete the sale, the assignment and transfer of the
Shares tendered hereby and all Distributions. In addition, the undersigned shall
remit and transfer promptly to the Purchaser all Distributions in respect of the
Delivered Shares, accompanied by appropriate documentation of transfer, and
pending such remittance and transfer or appropriate assurance thereof, Purchaser
shall be entitled to all rights and privileges as owner of each such
Distribution and may withhold the entire purchase price of the Shares tendered
hereby, or deduct from such purchase price, the amount or value of such
Distribution as determined by Purchaser in its sole discretion.
No authority herein conferred or agreed to be conferred shall be affected
by, and all such authority shall survive, the death or incapacity of the
undersigned. All obligations of the undersigned hereunder shall be binding upon
the heirs, personal representatives, successors and assigns of the undersigned.
Except as stated in the Offer to Purchase, this tender is irrevocable.
The undersigned understands that delivery of Delivered Shares as provided
herein shall be deemed for purposes of the Offer to constitute valid and
effective tender of the Shares pursuant to the Offer and will constitute the
undersigned's acceptance of the terms and conditions of the Offer. Purchaser's
acceptance of such Delivered Shares for payment will constitute a binding
agreement between the undersigned and Purchaser upon the terms and subject to
the conditions of the Offer.
Unless otherwise indicated herein in the box entitled "Special Payment
Instructions," please issue the check for the purchase price of all Delivered
Shares purchased, and return all Certificates evidencing Delivered Shares not
purchased or not tendered in the name(s) of the registered holder(s) appearing
above under "Description of Shares Delivered." Similarly, unless otherwise
indicated in the box entitled "Special Delivery Instructions," please mail the
check for the purchase price of all Delivered Shares purchased and all
Certificates evidencing Delivered Shares not purchased (and accompanying
documents, as appropriate) to the address(es) of the registered holder(s)
appearing above under "Description of Shares Delivered." In the event that the
boxes entitled "Special Payment Instructions" and "Special Delivery
Instructions" are both completed, please issue the check for the purchase price
of all Shares purchased and return all Certificates evidencing Delivered Shares
not purchased in the name(s) of, and mail such check and Certificates to, the
person(s) so indicated. If Purchaser does not purchase any of such Delivered
Shares, the Purchaser will not transfer any Delivered Shares from the name of
the registered holder(s) thereof and will not convert any Delivered Shares (or
exercise any warrants included in the Delivered Shares).
3
<PAGE> 4
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5 AND 6)
To be completed ONLY if the check for the purchase price of Shares or
Certificates evidencing Shares not tendered or not purchased to be issued
in the name of someone other than the undersigned.
Issue [ ] Check [ ] Certificate(s) to:
Name
----------------------------------------------------
(PLEASE PRINT)
Address
--------------------------------------------------
------------------------------------------------------------
(ZIP CODE)
------------------------------------------------------------
(TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER
(SEE SUBSTITUTE FORM W-9 ON REVERSE SIDE)
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5 AND 6)
To be completed ONLY if the check for the purchase price of Shares
purchased or Certificates evidencing Shares not tendered or not purchased
are to be mailed to someone other than the undersigned, or to the
undersigned at an address other than that shown under "Description of
Shares Delivered."
Issue [ ] Check [ ] Certificate(s) to:
Name
----------------------------------------------------
(PLEASE PRINT)
Address
--------------------------------------------------
------------------------------------------------------------
(ZIP CODE)
------------------------------------------------------------
(TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER
(SEE SUBSTITUTE FORM W-9 ON REVERSE SIDE)
4
<PAGE> 5
IMPORTANT
STOCKHOLDERS: SIGN HERE
(PLEASE COMPLETE SUBSTITUTE FORM W-9 FOLLOWING INSTRUCTIONS)
--------------------------------------------------------------------------
--------------------------------------------------------------------------
SIGNATURE(S) OF HOLDER(S)
Dated:
--------------------------------- , 1998
(Must be signed by registered holder(s) exactly as name(s) appear(s) on
Certificates or on a security position listing or by a person(s)
authorized to become registered holder(s) by certificates and documents
transmitted herewith. If signature is by a trustee, executor,
administrator, guardian, attorney-in-fact, officer of a corporation or
other person acting in a fiduciary or representative capacity, please
provide the following information and see Instruction 5).
Name(s):
--------------------------------------------------------------------------
--------------------------------------------------------------------------
(PLEASE PRINT)
Capacity (full title):
--------------------------------------------------------------------------
Address:
--------------------------------------------------------------------------
--------------------------------------------------------------------------
(INCLUDE ZIP CODE)
Area Code and Telephone No.:
--------------------------------------------------------------------------
Taxpayer Identification or Social Security No.:
---------------------------------------------------------------------------
(SEE SUBSTITUTE FORM W-9 FOLLOWING INSTRUCTIONS)
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 5)
Authorized Signature:
--------------------------------------------------------------------------
Name:
--------------------------------------------------------------------------
--------------------------------------------------------------------------
(PLEASE TYPE OR PRINT)
Title:
--------------------------------------------------------------------------
Name of Firm:
--------------------------------------------------------------------------
Address:
--------------------------------------------------------------------------
--------------------------------------------------------------------------
(INCLUDE ZIP CODE)
Area Code and Telephone No.:
--------------------------------------------------------------------------
Dated:
--------------------------------------------------------------------------
5
<PAGE> 6
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. Guarantee of Signatures. No signature guarantee is required on this
Letter of Transmittal (a) if this Letter of Transmittal is signed by the
registered holder(s) of securities delivered herewith, unless such holder(s) has
completed either the box entitled "Special Payment Instructions" or the box
entitled "Special Delivery Instructions" above, or (b) if such securities are
delivered for the account of a firm which is a bank, broker, dealer, credit
union, savings association or other entity which is a member in good standing of
a recognized Medallion Signature Guarantee Program (each of the foregoing being
referred to as an "Eligible Institution"). In all other cases, all signatures on
this Letter of Transmittal must be guaranteed by an Eligible Institution.
2. Delivery of Letter of Transmittal and Certificates. This Letter of
Transmittal is to be used if Certificates representing shares of Series C
Convertible Preferred Stock (or warrants to purchase such shares) are being
delivered in tender of the Shares issuable upon conversion of such Series C
Convertible Preferred Stock. Certificates representing all Series C Convertible
Preferred Stock evidencing Shares to be tendered pursuant to the Offer, as well
as a properly completed and duly executed Letter of Transmittal (or facsimile
thereof), with any required signature guarantees, and any other documents
required by this Letter of Transmittal, must be received by the Purchaser at its
address set forth on the reverse hereof prior to the Expiration Date (as defined
in Section 1 of the Offer to Purchase), except as set forth in this Letter of
Transmittal in the case of shares issuable upon exercise of warrants. If
Certificates are forwarded in multiple deliveries, a properly completed and duly
executed Letter of Transmittal must accompany each such delivery. Stockholders
whose Certificates are not immediately available and who cannot deliver their
Certificates and all other required documents to the Purchaser prior to the
Expiration Date may also delivery their securities pursuant to the guaranteed
delivery procedure described in Section 3 of the Offer to Purchase. Pursuant to
such procedure: (i) such tender must be made by or through an Eligible
Institution; (ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form made available by Purchaser, must be
received by the Depositary prior to the Expiration Date; and (iii) the
Certificates evidencing all physically delivered shares of Series C Convertible
Preferred Stock, representing Shares to be tendered pursuant to the Offer, in
proper form for transfer by delivery, together with a Letter of Transmittal (or
a facsimile thereof), properly completed and duly executed, with any required
signature guarantees, and any other documents required by this Letter of
Transmittal, must be received by the Purchaser within three National Association
of Securities Dealers Automated Quotation-National Market System trading days
after the Expiration Date.
The method of delivery of this Letter of Transmittal, Certificates and all
other required documents is at the option and risk of the tendering stockholder,
including delivery of shares of Series C Convertible Preferred Stock issuable
upon exercise of any warrants, and the delivery will be deemed made only when
actually received by the Purchaser. If delivery is by mail, registered mail with
return receipt requested, properly insured, is recommended. In all cases,
sufficient time should be allowed to ensure timely delivery.
No alternative, conditional or contingent tenders will be accepted and no
fractional Shares will be purchased. By execution of this Letter of Transmittal
(or a facsimile hereof), all tendering stockholders waive any right to receive
any notice of the acceptance of their Shares for payment.
3. Inadequate Space. If the space provided herein under "Description of
Shares Delivered" is inadequate, the number of Delivered Shares evidenced by
such Certificates and the number of Shares represented by such Delivered Shares
should be listed on a separate schedule and attached hereto.
4. Signatures on Letter of Transmittal; Stock Powers and Endorsements. If
this Letter of Transmittal is signed by the registered holder(s) of the
Certificates delivered hereby, the signature(s) must correspond with the name(s)
as written on the face of such Certificates without alteration, enlargement or
any other change whatsoever.
If any Certificate delivered hereby is owned of record by two or more
persons, all such persons must sign this Letter of Transmittal.
If any of the Certificates are registered in the names of different
holders, it will be necessary to complete, sign and submit as many separate
Letters of Transmittal as there are different registrations of such shares.
If this Letter of Transmittal is signed by the registered holder(s) of the
Certificates delivered hereby, no endorsements of Certificates or separate stock
powers are required, unless payment is to be made to, or Certificates evidencing
any Shares not purchased are to be issued in the name of, a person other than
the registered holder(s), in which case the Certificate(s) evidencing Delivered
Shares must be endorsed or accompanied by appropriate stock powers,
6
<PAGE> 7
in either case signed exactly as the name(s) of the registered holder(s)
appear(s) on such Certificate(s). Signatures on such Certificate(s) and stock
powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Certificates delivered hereby, the Certificate(s)
evidencing the Delivered Shares must be endorsed or accompanied by appropriate
stock powers, in either case signed exactly as the name(s) of the registered
holder(s) appear(s) on such Certificate(s). Signatures on such Certificate(s)
and stock powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal or any Certificate or stock power is signed
by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation or other person acting in a fiduciary or representative capacity,
such person should so indicate when signing, and proper evidence satisfactory to
Purchaser of such person's authority so to act must be submitted.
5. Stock Transfer Taxes. Except as otherwise provided in this instruction
5, Purchaser will pay all stock transfer taxes with respect to the sale and
transfer of any Delivered Shares to it or its order pursuant to the Offer. If,
however, payment of the purchase price of any Delivered Shares purchased is to
be made to, or Certificate(s) evidencing Delivered Shares not purchased are to
be issued in the name of, a person other than the registered holder(s), the
amount of any stock transfer taxes (whether imposed on the registered holder(s),
such other person or otherwise) payable on account of the transfer to such other
person will be deducted from the purchase price of such Delivered Shares
purchased, unless evidence satisfactory to Purchaser of the payment of such
taxes, or exemption therefrom, is submitted. Except as provided in this
Instruction 5, it will not be necessary for transfer tax stamps to be affixed to
the Certificates evidencing the Delivered Shares.
6. Special Payment and Delivery Instructions. If a check for the purchase
price of any Delivered Shares is to be issued, or Certificate(s) evidencing
Delivered Shares not purchased are to be issued, in the name of a person other
than the person(s) signing this Letter of Transmittal or if such check or any
such Certificate is to be sent to someone other than the person(s) signing this
Letter of Transmittal or to the person(s) signing this Letter of Transmittal but
at an address other than that shown in the box entitled "Description of Shares
Delivered" on the reverse hereof, the appropriate boxes on the reverse of this
Letter of Transmittal must be completed.
7. Questions and Requests for Assistance or Additional Copies. Questions
and requests for assistance may be directed to the Information Agent at its
address or telephone numbers set forth below or to the Dealer Manager at its
address or telephone number set forth below. Additional copies of the Offer to
Purchase, this Letter of Transmittal and the Notice of Guaranteed Delivery may
be obtained from the Information Agent.
8. Substitute Form W-9. Under the federal income tax law, a stockholder
whose Delivered Shares are accepted for payment is required by law to provide
the Depositary (as Payer) with such stockholder's correct TIN on Substitute Form
W-9 below. If such stockholder is an individual, the TIN is such stockholder's
social security number. If the Depositary is not provided with the correct TIN,
the stockholder may be subject to a $50 penalty imposed by the Internal Revenue
Service. In addition, payments that are made to such stockholder with respect to
Delivered Shares purchased pursuant to the Offer may be subject to backup
withholding. If backup withholding applies, the Depositary is required to
withhold 31% of any payments made to the stockholder. Backup withholding is not
an additional tax. Rather, the tax liability of persons subject to backup
withholding will be reduced by the amount of tax withheld. If withholding
results in an overpayment of taxes, a refund may be obtained from the Internal
Revenue Service.
Certain stockholders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. In order for a foreign individual to qualify as an exempt
recipient, such individual must submit an Internal Revenue Service Form W-8,
signed under penalties of perjury, attesting to such individual's exempt status.
A form W-8 can be obtained from the Depositary. See the enclosed Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9 for
additional instructions.
To prevent backup withholding on payments that are made to a stockholder
with respect to Delivered Shares purchased pursuant to the Offer, the
stockholder is required to notify the Depositary of such stockholder's correct
TIN by completing the form below certifying that the TIN provided on Substitute
Form W-9 is correct (or that such stockholder is awaiting a TIN), and that (i)
such stockholder has not been notified by the Internal Revenue Service that he
is subject to backup withholding as a result of a failure to report all interest
or dividends or (ii) the Internal Revenue Service has notified such stockholder
that such stockholder is no longer subject to backup withholding.
See the enclosed "Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9" for additional instructions.
7
<PAGE> 8
- --------------------------------------------------------------------------------
PAYER'S NAME
- --------------------------------------------------------------------------------
-----------------------------------------------------
- --------------------------------------------------------------------------------
SUBSTITUTE
FORM W-9
DEPARTMENT OF THE TREASURY
INTERNAL REVENUE SERVICE
PAYER'S REQUEST FOR TAXPAYER
IDENTIFICATION NUMBER (TIN)
PART II -- For Payees exempt from backup withholding, see the enclosed
Guidelines and complete as instructed therein.
PART III -- Social Security
Number OR
Employer Identification
Number
----------------------------
(If awaiting TIN write
"Applied For")
CERTIFICATION -- Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct Taxpayer Identification Number
(or I am waiting for a number to be issued to me), and
(2) I am not subject to backup withholding either because I have not been
notified by the Internal Revenue Service (the "IRS") that I am subject to
backup withholding as a result of failure to report all interest or
dividends, or the IRS has notified me that I am no longer subject to
backup withholding.
CERTIFICATION INSTRUCTIONS -- You must cross out item (2) above if you have
been notified by the IRS that you are subject to backup withholding because of
underreporting interest or dividends on your tax return. However, if after
being notified by the IRS that you were subject to backup withholding, you
received another notification from the IRS that you are no longer subject to
backup withholding, do not cross out item (2). (Also see instructions in the
enclosed Guidelines.)
- --------------------------------------------------------------------------------
SIGNATURE DATE , 1998
- --------------------------------------------------------------------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. FOR ADDITIONAL
DETAILS, PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF
TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9.
PART I -- Taxpayer Identification Number -- For all
accounts, enter
taxpayer identification
number in the box at
right. (For most
individuals, this is
your social security
number. If you do not
have a number, see
OBTAINING A NUMBER in
the enclosed
Guidelines.) Certify by
signing and dating
below.
NOTE: If the account is in more than one name, see
chart in the enclosed
Guidelines to determine
which number to give
the payer.
8
<PAGE> 9
IMPORTANT: THE LETTER OF TRANSMITTAL OR FACSIMILE THEREOF, PROPERLY
COMPLETED AND DULY EXECUTED, (TOGETHER WITH ANY REQUIRED SIGNATURE GUARANTEES
AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DULY ENDORSED CERTIFICATES FOR THE
SECURITIES BEING DELIVERED) MUST BE RECEIVED BY THE PURCHASER PRIOR TO THE
EXPIRATION DATE (AS DEFINED IN THE OFFER TO PURCHASE). THEY MUST BE DELIVERED BY
HAND, OR BY OVERNIGHT, CERTIFIED OR EXPRESS DELIVERY TO:
Oak Acquisition Corporation
c/o Symantec Corporation
10201 Torre Avenue
Cupertino, California 95014
(408) 253-9600
Attention: David Daetz,
Director, Business Development
Questions and requests for assistance may be directed to the Information
Agent at its address and telephone number listed below. Additional copies of the
Offer to Purchase, the Letter of Transmittal and other tender offer materials
may be obtained from the Information Agent as set forth below and will be
furnished promptly at Purchaser's expense. You may also contact your broker,
dealer, commercial bank, trust company or other nominee for assistance
concerning the Offer.
The Information Agent for the Offer is:
D.F. KING & CO., INC.
77 Water Street
New York, NY 10005
Call Toll Free (800) 488-8095
Call Collect (212) 269-5550
The Dealer Manager for the Offer is:
DONALDSON, LUFKIN & JENRETTE
277 Park Avenue
New York, NY 10172
Call Collect (212) 892-7700
9
