- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------
SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO SECTION 14(D)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 3)
-------------------
LOTUS DEVELOPMENT CORPORATION
(Name of Subject Company)
WHITE ACQUISITION CORP.
(Bidder)
COMMON STOCK, PAR VALUE $.01 PER SHARE
(INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
(Title of Class of Securities)
545700106
(CUSIP Number of Class of Securities)
-------------------
LAWRENCE R. RICCIARDI, ESQ.
INTERNATIONAL BUSINESS MACHINES CORPORATION
OLD ORCHARD ROAD
ARMONK, NY 10504
(914) 765-1900
(Name, Address and Telephone Number of Persons Authorized to
Receive Notices and Communications on Behalf of Bidder)
-------------------
COPY TO:
ALLEN FINKELSON, ESQ.
CRAVATH, SWAINE & MOORE
WORLDWIDE PLAZA
825 EIGHTH AVENUE
NEW YORK, NY 10019
(212) 474-1000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Page 1 of Pages
Exhibit Index is located on Page 4
<PAGE>
White Acquisition Corp. hereby amends and supplements its Tender Offer
Statement on Schedule 14D-1 (the "Statement"), originally filed on June 6, 1995,
as amended by Amendments No. 1 and 2, with respect to its offer to purchase all
outstanding shares of Common Stock, par value $.01 per share, of Lotus
Development Corporation, a Delaware corporation, together with the associated
preferred share purchase rights, as set forth in this Amendment No. 3.
Capitalized terms not defined herein have the meanings assigned thereto in the
Statement.
ITEM 1. SECURITY AND SUBJECT COMPANY
(b) The Purchaser has amended and supplemented the Offer to Purchase and is
now offering to purchase all outstanding Shares, together with the associated
Rights, at a price of $64 per Share (and associated Right), net to the seller in
cash, without interest thereon, upon the terms and subject to the conditions set
forth in the Offer to Purchase, as amended and supplemented by the Supplement
dated June 13, 1995 (the "Supplement"), and in the related Letter of
Transmittal (which, together with any amendments or supplements thereto,
collectively constitute the "Offer"). A copy of the Supplement is attached
hereto as Exhibit (a)(13) and is incorporated herein by reference. The
information set forth in the Introduction and Section 1 of the Supplement is
incorporated herein by reference.
(c) The information set forth in Section 3 of the Supplement is incorporated
herein by reference.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY
(b) The information set forth in Section 5 of the Supplement is incorporated
herein by reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
(a) The Purchaser estimates that the total amount of funds required to
purchase pursuant to the Offer the number of Shares that are outstanding on a
fully diluted basis and to pay fees and expenses related to the Offer is
approximately $3.6 billion.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER
(a)-(c); (e) The information set forth in the Introduction and Section 6 of
the Supplement is incorporated herein by reference.
ITEM 10. ADDITIONAL INFORMATION
(a) The information set forth in Section 6 of the Supplement is incorporated
herein by reference.
(b); (e) The information set forth in Section 8 of the Supplement is
incorporated herein by reference.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS
(a)(13) Supplement to the Offer to Purchase dated June 13, 1995.
(14) Revised Letter of Transmittal.
(15) Revised Letter to Brokers, Dealers, Banks, Trust Companies and Other
Nominees.
(16) Revised Letter to Clients for use by Brokers, Dealers, Banks,
Trust Companies and Other Nominees.
(17) Revised Notice of Guaranteed Delivery.
Page 2 of Pages
Exhibit Index is located on Page 4
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify that
the information set forth in this statement is true, complete and correct.
Dated: June 13, 1995
WHITE ACQUISITION CORP.
By: /s/ LEE A. DAYTON
_____________________________________________
Name: Lee A. Dayton
Title: President
Page 3 of Pages
Exhibit Index is located on Page 4
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NO. EXHIBIT PAGE
- -------- ----------------------------------------------------------------------- ------------
<C> <S> <C>
(a)(13) Supplement to the Offer to Purchase dated June 13, 1995................
(14) Revised Letter of Transmittal..........................................
(15) Revised Letter to Brokers, Dealers, Banks, Trust Companies and Other
Nominees.............................................................
(16) Revised Letter to Clients for use by Brokers, Dealers, Banks, Trust
Companies and Other Nominees.........................................
(17) Revised Notice of Guaranteed Delivery..................................
</TABLE>
Page 4 of Pages
Exhibit Index is located on Page 4
Exhibit (a)(13)
Supplement to the Offer to Purchase Dated June 6, 1995
WHITE ACQUISITION CORP.
a Wholly Owned Subsidiary of
INTERNATIONAL BUSINESS MACHINES CORPORATION
Has Increased the Price of its Offer to Purchase for Cash
All Outstanding Shares of Common Stock
(Including the Associated Preferred Share Purchase Rights)
of
LOTUS DEVELOPMENT CORPORATION
to
$64 NET PER SHARE
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON MONDAY, JULY 3, 1995,
UNLESS THE OFFER IS EXTENDED.
--------------
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY TENDERED
AND NOT WITHDRAWN PRIOR TO THE EXPIRATION DATE SUCH NUMBER OF SHARES THAT WOULD
CONSTITUTE A MAJORITY OF THE OUTSTANDING SHARES (DETERMINED ON A FULLY DILUTED
BASIS) ON THE DATE OF PURCHASE. SEE THE INTRODUCTION AND SECTIONS 1 AND 7.
--------------
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE OFFER, HAS DETERMINED
THAT THE TERMS OF THE OFFER AND THE MERGER ARE FAIR TO, AND IN THE BEST
INTERESTS OF, THE COMPANY'S STOCKHOLDERS AND RECOMMENDS THAT STOCKHOLDERS ACCEPT
THE OFFER AND TENDER THEIR SHARES.
--------------
IMPORTANT
Any stockholder desiring to tender all or any portion of such stockholder's
Shares (and the associated Rights) should either (i) complete and sign the
Letter of Transmittal (or a facsimile thereof) in accordance with the
instructions in the Letter of Transmittal, have such stockholder's signature
thereon guaranteed if required by Instruction 1 to the Letter of Transmittal,
mail or deliver the Letter of Transmittal (or such facsimile), or, in the case
of a book-entry transfer effected pursuant to the procedure set forth in Section
2 of the Offer to Purchase, an Agent's Message (as defined in the Offer to
Purchase), and any other required documents to the Depositary and either deliver
the certificates for such Shares and, if separate, the certificate(s)
representing the associated Rights to the Depositary along with the Letter of
Transmittal (or facsimile) or deliver such Shares (and Rights, if applicable)
pursuant to the procedure for book-entry transfer set forth in Section 2 of the
Offer to Purchase or (ii) request such stockholder's broker, dealer, bank, trust
company or other nominee to effect the transaction for such stockholder. A
stockholder having Shares and, if applicable, Rights registered in the name of a
broker, dealer, bank, trust company or other nominee must contact such broker,
dealer, bank, trust company or other nominee if such stockholder desires to
tender such Shares and, if applicable, Rights. The Company has executed an
amendment to the Rights Agreement (as defined herein) that renders the Rights
inapplicable to the Offer. Unless separate certificates for the Rights are
issued, a tender of Shares will also constitute a tender of the associated
Rights.
If a stockholder desires to tender Shares and Rights and such stockholder's
certificates for Shares (or Rights, if applicable) are not immediately available
or the procedure for book-entry transfer cannot be completed on a timely basis,
or time will not permit all required documents to reach the Depositary prior to
the Expiration Date, such stockholder's tender may be effected by following the
procedure for guaranteed delivery set forth in Section 2 of the Offer to
Purchase.
Questions and requests for assistance or for additional copies of this
Supplement, the Offer to Purchase, the Letter of Transmittal and the Notice of
Guaranteed Delivery may be directed to the Information Agent or to the Dealer
Manager at their respective addresses and telephone numbers set forth on the
back cover of this Supplement.
--------------
The Dealer Manager for the Offer is:
CS First Boston
June 13, 1995
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<C> <S> <C>
Introduction............................................................................ 1
The Amended Offer....................................................................... 2
1. Amended Terms of the Offer........................................................ 2
2. Procedure for Tendering Shares and Rights......................................... 2
3. Price Range of the Shares......................................................... 3
4. Certain Information Concerning the Company........................................ 3
5. Contacts and Transactions with the Company; Background of the Amended Offer....... 4
6. Purpose of the Offer; The Merger Agreement........................................ 4
7. Amended Conditions of the Offer................................................... 12
8. Certain Legal Matters............................................................. 13
9. Miscellaneous..................................................................... 14
</TABLE>
<PAGE>
To the Holders of Common Stock (including
the Associated Preferred Share Purchase Rights)
of Lotus Development Corporation:
INTRODUCTION
The following information amends and supplements the Offer to Purchase dated
June 6, 1995 (the "Offer to Purchase") of White Acquisition Corp., a New York
corporation (the "Purchaser"), which is a wholly owned subsidiary of
International Business Machines Corporation, a New York corporation ("IBM").
Pursuant to this Supplement, the Purchaser is now offering to purchase all
outstanding shares of Common Stock, par value $.01 per share (the "Shares"), of
Lotus Development Corporation, a Delaware corporation (the "Company"), together
with the associated preferred share purchase rights (the "Rights") issued
pursuant to the Rights Agreement dated as of November 7, 1988, as amended (the
"Rights Agreement"), between the Company and The First National Bank of Boston,
as Rights Agent, at a price of $64 per Share (and associated Right), net to the
seller in cash, without interest thereon (the "Offer Price"), upon the terms and
subject to the conditions set forth in the Offer to Purchase, as amended and
supplemented by this Supplement, and in the related Letter of Transmittal
(which, together with any amendments or supplements hereto or thereto,
collectively constitute the "Offer"). All references herein to Rights shall
include all benefits that may inure to holders of the Rights pursuant to the
Rights Agreement and, unless the context otherwise requires, all references
herein to the Shares shall include the Rights. Capitalized terms used and not
defined herein have the meanings set forth in the Offer to Purchase.
Except as otherwise set forth in this Supplement and in the revised Letter
of Transmittal, the terms and conditions previously set forth in the Offer to
Purchase remain applicable in all respects to the Offer.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION DATE SUCH NUMBER OF SHARES
(THE "MINIMUM NUMBER OF SHARES") THAT WOULD CONSTITUTE A MAJORITY OF THE
OUTSTANDING SHARES (DETERMINED ON A FULLY DILUTED BASIS) ON THE DATE OF
PURCHASE (THE "MINIMUM TENDER CONDITION"). SUBJECT TO OBTAINING THE CONSENT OF
THE COMPANY, THE PURCHASER RESERVES THE RIGHT (SUBJECT TO THE APPLICABLE RULES
AND REGULATIONS OF THE COMMISSION), WHICH IT PRESENTLY HAS NO INTENTION OF
EXERCISING, TO WAIVE OR REDUCE THE MINIMUM TENDER CONDITION AND TO ELECT TO
PURCHASE, PURSUANT TO THE OFFER, FEWER THAN THE MINIMUM NUMBER OF SHARES. SEE
SECTIONS 1 AND 7 OF THIS SUPPLEMENT.
Based on representations and warranties of the Company contained in the
Merger Agreement, there were 46,810,778 Shares issued and outstanding and
9,053,432 Shares under option as of the date of the Merger Agreement. Assuming
that there has been no change in the number of shares or options outstanding
from the amounts shown above, there presently are 55,864,210 Shares outstanding
on a fully diluted basis and the Minimum Number of Shares is 27,932,106.
However, the actual Minimum Number of Shares will depend on the facts as they
exist on the date of purchase.
THE OFFER IS NO LONGER SUBJECT TO THE RIGHTS CONDITION, THE BUSINESS
COMBINATION CONDITION OR THE CONTROL SHARE CONDITION DESCRIBED IN THE OFFER TO
PURCHASE. THE OFFER REMAINS SUBJECT TO CERTAIN OTHER TERMS AND CONDITIONS
DESCRIBED HEREIN IN ADDITION TO THE MINIMUM TENDER CONDITION. SEE SECTION 7 OF
THIS SUPPLEMENT.
IBM, the Purchaser and the Company have entered into an Agreement and Plan
of Merger dated as of June 11, 1995 (the "Merger Agreement"), which provides
for, among other things, (i) an increase in the price per Share to be paid
pursuant to the Offer from $60 per Share to $64 per Share, net to the seller in
cash, without interest thereon, (ii) the amendment of the conditions to the
Offer to eliminate the Rights Condition, the Business Combination Condition and
the Control Share Condition, (iii) the amendment and restatement of certain
other conditions to the Offer as set forth in their entirety in
1
<PAGE>
Section 7 of this Supplement and (iv) the merger of the Purchaser with and into
the Company (the "Merger") following the purchase of Shares pursuant to the
Offer. In the Merger, each Share (other than Shares held in the treasury of the
Company, Shares owned by IBM, the Purchaser or any other subsidiary of IBM or of
the Company, or Shares held by stockholders who properly exercise their
dissenters' rights under Delaware law) will be converted into the right to
receive $64 per Share in cash.
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE OFFER, HAS DETERMINED
THAT THE TERMS OF THE OFFER AND THE MERGER ARE FAIR TO, AND IN THE BEST
INTERESTS OF, THE COMPANY'S STOCKHOLDERS AND RECOMMENDS THAT STOCKHOLDERS ACCEPT
THE OFFER AND TENDER THEIR SHARES.
Lazard Freres & Co. LLC has delivered to the Board of Directors of the
Company its opinion that the consideration to be received by holders of
Shares pursuant to the Offer and the Merger, taken as a whole, is fair to
such holders (other than IBM and its affiliates) from a financial point of
view.
THIS SUPPLEMENT SHOULD BE READ IN CONJUNCTION WITH THE OFFER TO PURCHASE AND
THE RELATED LETTER OF TRANSMITTAL, COPIES OF WHICH MAY BE OBTAINED AT THE
PURCHASER'S EXPENSE IN THE MANNER SET FORTH ON THE BACK COVER OF THIS
SUPPLEMENT. THE OFFER TO PURCHASE AND THIS SUPPLEMENT CONTAIN IMPORTANT
INFORMATION THAT SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER.
THE AMENDED OFFER
1. AMENDED TERMS OF THE OFFER
The price per Share to be paid pursuant to the Offer has been increased from
$60 per Share to $64 per Share, net to the seller in cash, without interest
thereon. Upon the terms and subject to the conditions of the Offer, the
Purchaser will accept for payment and pay for all Shares validly tendered prior
to the Expiration Date and not theretofore withdrawn in accordance with Section
3 of the Offer to Purchase. All stockholders whose Shares are accepted for
payment pursuant to the Offer will receive the increased Offer Price in respect
of each Share so accepted. All references to the Offer and the Offer Price in
the Offer to Purchase, this Supplement and any letter of transmittal are deemed
to refer to the Offer as amended as described above and the foregoing increased
Offer Price, respectively.
THE OFFER IS CONDITIONED UPON SATISFACTION OF THE MINIMUM TENDER CONDITION,
THE EXPIRATION OR TERMINATION OF ALL WAITING PERIODS IMPOSED BY THE
HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED, AND THE
REGULATIONS THEREUNDER (THE "HSR ACT") AND THE SATISFACTION OF THE OTHER
CONDITIONS SET FORTH IN SECTION 7 OF THIS SUPPLEMENT.
2. PROCEDURE FOR TENDERING SHARES AND RIGHTS
Procedures for tendering Shares and Rights are set forth in Section 2 of the
Offer to Purchase, as amended and supplemented hereby.
Tendering stockholders may continue to use the original YELLOW Letter of
Transmittal and the original GREEN Notice of Guaranteed Delivery previously
circulated with the Offer to Purchase, or the revised PINK Letter of Transmittal
and the revised BLUE Notice of Guaranteed Delivery circulated with this
Supplement. Although the Letter of Transmittal previously circulated with the
Offer to Purchase refers only to the Offer to Purchase, stockholders using such
document to tender their Shares will nevertheless receive $64 per Share for each
Share validly tendered and not properly withdrawn and accepted for payment
pursuant to the Offer, subject to the conditions of the Offer.
In the Merger Agreement, the Company represented that an amendment to the
Rights Agreement (the "Rights Agreement Amendment") has been duly authorized by
the Board of Directors of the Company and duly executed by the Company, which
Rights Agreement Amendment renders the Rights Agreement inapplicable to the
Offer and the Merger by providing, among other things, that the execution of the
Merger Agreement, the announcement or making of the Offer that was originally
announced on June 5, 1995 (the "Original Offer"), the announcement or making
of the Offer as amended, the acquisition of Shares
2
<PAGE>
pursuant to the Offer and the Merger, the execution of the Merger Agreement, and
the other transactions contemplated in the Merger Agreement will not, among
other things, (a) result in either IBM or the Purchaser or any of their
affiliates being considered an Acquiring Person or (b) cause the occurrence of a
Distribution Date. Accordingly, the Distribution Date will not occur as a result
of the announcement or commencement of the Original Offer or the commencement of
the Offer or as a result of the Merger. The Rights will continue to be evidenced
by the certificates for Shares and the requirement for a separate tender of
Rights described in the Offer to Purchase will not apply unless a Distribution
Date occurs for reasons unrelated to the Offer and the Merger. Unless separate
certificates for Rights are issued, a tender of Shares will also constitute
a tender of the associated Rights. See Section 2 of the Offer to Purchase for a
discussion of the procedures for tendering Rights in the event that a
Distribution Date occurs and separate certificates for Rights are distributed to
stockholders prior to the date of tender pursuant to the Offer.
STOCKHOLDERS WHO HAVE PREVIOUSLY VALIDLY TENDERED AND NOT PROPERLY WITHDRAWN
THEIR SHARES PURSUANT TO THE OFFER ARE NOT REQUIRED TO TAKE ANY FURTHER ACTION,
EXCEPT AS MAY BE REQUIRED BY THE PROCEDURE FOR GUARANTEED DELIVERY IF SUCH
PROCEDURE WAS UTILIZED. IF SHARES ARE ACCEPTED FOR PAYMENT AND PAID FOR BY THE
PURCHASER PURSUANT TO THE OFFER, SUCH STOCKHOLDERS WILL RECEIVE, SUBJECT TO THE
CONDITIONS OF THE OFFER, THE INCREASED TENDER PRICE OF $64 PER SHARE, WITHOUT
INTEREST THEREON, LESS ANY APPLICABLE WITHHOLDING TAXES.
SEE SECTION 3 OF THE OFFER TO PURCHASE FOR THE PROCEDURES FOR WITHDRAWING
SHARES TENDERED PURSUANT TO THE OFFER.
3. PRICE RANGE OF THE SHARES
From June 6, 1995, the date of the Offer to Purchase, through June 9, 1995,
the high and low last reported sales quotations per Share as reported by
the Nasdaq National Market were $63 1/2 and $61 13/16, respectively. On
June 9, 1995, the last full trading day prior to the public announcement of
the execution of the Merger Agreement, the last reported sale quotation for the
Shares on the Nasdaq National Market was $62 7/8 per Share. For information
about Share prices during earlier periods, see the Offer to Purchase.
STOCKHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE SHARES.
4. CERTAIN INFORMATION CONCERNING THE COMPANY
The Rights. Prior to the execution of the Merger Agreement, the Board of
Directors of the Company authorized, and the Company executed, the Rights
Agreement Amendment, which Rights Agreement Amendment renders the Rights
Agreement inapplicable to the Offer and the Merger by providing, among other
things, that the announcement or making of the Original Offer, the announcement
or making of the Offer, the acquisition of Shares pursuant to the Offer and the
Merger, the execution of the Merger Agreement, and the other transactions
contemplated in the Merger Agreement will not, among other things, (a) result in
either IBM or the Purchaser or any of their affiliates being considered an
Acquiring Person or (b) cause the occurrence of a Distribution Date. The Company
has also agreed in the Merger Agreement that it will not redeem the Rights,
amend the Rights Agreement (other than to delay the Distribution Date or to
render the Rights inapplicable to the Offer and the Merger) or terminate the
Rights Agreement prior to the effectiveness of the Merger unless required to do
so by order of a court of competent jurisdiction. See Section 6 of this
Supplement.
Except as amended by the Rights Agreement Amendment, the Rights Agreement
remains as described in Section 8 of the Offer to Purchase. The foregoing
description of the Rights Agreement is qualified in its entirety by reference to
the text of the Rights Agreement, as amended and the other documents included in
the Company 8-A and the Rights Agreement Amendment. The Company 8-A should be
available for inspection and copies should be obtainable in the manner set forth
in Section 8 of the Offer to Purchase.
3
<PAGE>
5. CONTACTS AND TRANSACTIONS WITH THE COMPANY; BACKGROUND OF THE AMENDED OFFER
On Tuesday, June 6, 1995, the day after the initial announcement of the
Offer, Jim P. Manzi, Chairman of the Board, President and Chief Executive
Officer of the Company, met with Louis V. Gerstner, Jr., Chairman of the Board
and Chief Executive Officer of IBM to ask for more information about the Offer
and to determine IBM's intentions for the Company if the Offer were to be
consummated. That initial meeting led to further conversations about the
possibility of a modified offer on terms that the Company's management might be
willing to recommend to the Company's Board of Directors.
Throughout the period from June 6, 1995 through June 9, 1995, IBM and the
Company and their respective financial and legal advisors discussed the
possibility of a modified offer on terms, including an increased price per
Share, that management might be prepared to recommend to the Board of Directors
and pursuant to which the Company might be willing to enter into a merger
agreement with IBM.
On the evening of June 9, 1995, representatives of IBM and the Company
agreed to definitive terms for the amended Offer and Merger, subject to approval
by their respective Boards of Directors. On June 10, 1995, the Board of
Directors of the Company approved the Merger Agreement. The Board of Directors
of IBM approved the Merger Agreement on June 11, 1995. On June 11, 1995, the
Merger Agreement was executed and the parties issued a joint press release with
respect thereto.
6. PURPOSE OF THE OFFER; THE MERGER AGREEMENT
Purpose. The purpose of the Offer and the Merger is to enable IBM to acquire
control of, and the entire equity interest in, the Company. In the Merger
Agreement, the Purchaser and the Company have agreed to effect the Merger in
accordance with the provisions of the Merger Agreement as promptly as
practicable following expiration of the Offer. Set forth below is a summary of
the material provisions of the Merger Agreement, a copy of which was filed as
Exhibit (a)(12) to Amendment No. 2 to the Tender Offer Statement on Schedule
14D-1 of the Purchaser filed with the Commission in connection with the
amendment to the Offer. Such Exhibit should be available for inspection and
copies should be obtainable, in the manner set forth in Section 8 of the Offer
to Purchase (except that it will not be available at the regional offices of the
Commission). The following summary is qualified in its entirety by reference to
the Merger Agreement.
The Offer. In the Merger Agreement, the Purchaser has agreed, subject to
certain conditions, among other things, to amend the Offer (a) to increase the
purchase price offered from $60 per Share to $64 per Share and (b) to amend and
restate the conditions to the Offer to those set forth in Section 7 of this
Supplement. The Merger Agreement provides that, without the consent of the
Company, the Purchaser will not (a) reduce the number of Shares sought in the
Offer, (b) amend the Offer so that it is at a price less than $64 per Share,
(c) modify or add to the conditions set forth in Section 7 of this
Supplement, (d) except as provided in the next sentence, extend the Offer, (e)
change the form of consideration payable in the Offer or (f) make any other
change in the terms or conditions of the Offer that is in any manner adverse to
the holders of Shares. Notwithstanding the foregoing, the Purchaser may, without
the consent of the Company (a) extend the Offer if, at the scheduled expiration
date of the Offer, any of the conditions to the Purchaser's obligation to
purchase the Shares shall not be satisfied or waived, until such time as such
conditions are satisfied or waived, (b) extend the Offer for any period required
by any rule, regulation, interpretation or position of the Commission applicable
to the Offer and (c) extend the Offer for any reason on one or more occasions
for an aggregate period of not more than 25 business days (for all such
extensions) beyond the latest expiration date that would otherwise be permitted
under clause (a) or (b) of this sentence.
The Merger. The Merger Agreement provides that, following the satisfaction
or waiver of the conditions set forth therein, the Purchaser will be merged with
and into the Company, with the Company continuing as the surviving corporation
(the "Surviving Corporation"), and each then outstanding Share (other than
Shares held in the treasury of the Company, Shares owned by IBM, the
4
<PAGE>
Purchaser or any other subsidiary of IBM or of the Company, or Shares held by
stockholders who properly exercise their dissenters' rights under Delaware law)
will be converted into the right to receive $64 per Share in cash, without
interest.
For a description of certain rights available to stockholders upon
consummation of the Offer, see Section 12 of the Offer to Purchase.
Representations and Warranties. The Merger Agreement contains
representations and warranties by the Company with respect to, among other
things, its organization, its capitalization, its authority to enter into the
Merger Agreement, its filings with the Commission and its financial statements,
the absence of certain changes in its business, the information supplied by the
Company in connection with the Offer, the Company's employee benefit plans and
other compensation arrangements, the absence of certain litigation with respect
to the Company, compliance by the Company with applicable law, the
inapplicability of the Rights Agreement to the Offer and the Merger, tax matters
relating to the Company, the inapplicability of state anti-takeover statutes,
including Section 203 and the Massachusetts Control Share Acquisition Statute,
and intellectual property matters.
The Merger Agreement also contains representations and warranties by IBM and
the Purchaser with respect to, among other things, their organization, their
authority to enter into the Merger Agreement, the information supplied by them
in connection with the Offer and their ability to finance the purchase of the
Shares.
Covenants of the Company. In the Merger Agreement, the Company has
covenanted and agreed that, among other things, during the period from the date
of the Merger Agreement until the time that IBM's designees constitute a
majority of the Board of Directors of the Company, except as expressly
contemplated by the Merger Agreement or to the extent that IBM shall otherwise
consent in writing, (a) the Company and its subsidiaries will, subject
to certain exceptions set forth in the Merger Agreement, carry on their
respective businesses in the ordinary course in substantially the same
manner as conducted through the date of the Merger Agreement; (b) the Company
will not, and will not permit any of its non-U.S. subsidiaries to, (i) declare
or pay any dividends on, or make other distributions in respect of, any of its
capital stock, (ii) split, combine or reclassify any of its capital stock or
issue or authorize, redeem or propose the issuance of any other securities in
respect of, in lieu of or in substitution for shares of capital stock of the
Company or (iii) repurchase, redeem or otherwise acquire, or permit any of its
subsidiaries to repurchase, redeem or otherwise acquire, any shares of its
capital stock; (c) the Company will not, and will not permit any of its
subsidiaries to, issue, deliver or sell, or authorize the issuance, delivery or
sale of, any shares of its capital stock of any class or any securities
convertible into, or rights, warrants, calls, subscriptions or options to
acquire, any such shares or convertible securities, or any other ownership
interest in the Company, other than (i) the issuance of Shares upon the exercise
of employee stock options or other awards granted under stock option plans of
the Company and outstanding on the date of the Merger Agreement in accordance
with their terms or (ii) issuances by a wholly owned subsidiary of the Company
of its capital stock to the Company; (d) the Company will not amend its
certificate of incorporation or its by-laws; (e) the Company will not, and it
will not permit any of its subsidiaries to, acquire or agree to acquire (by
merger, consolidation, acquisition of stock or assets, or by any other manner)
any business, corporation, partnership, association or other business
organization or division thereof; (f) the Company will not, and it will not
permit any of its subsidiaries to, sell, lease, license, encumber or otherwise
dispose of, or agree to sell, lease, license, encumber or otherwise dispose of,
any of its assets, except in the ordinary course of business consistent with
past practice; (g) the Company will not, and it will not permit any of its
subsidiaries to, incur or guarantee indebtedness for borrowed money or issue or
sell any debt securities or warrants or rights to acquire any debt securities of
the Company (or any of its subsidiaries), or guarantee any debt securities of
others, except in the ordinary course of business consistent with prior
practice; (h) the Company will confer on a regular basis with IBM, report on
operational matters, and promptly advise IBM of any material adverse change, and
will promptly provide to IBM (or its counsel) copies of all filings made by the
Company with any governmental entity in connection with the Merger Agreement
5
<PAGE>
and the transactions contemplated thereby; (i) the Company will not make any tax
election that would have a material adverse effect or settle or compromise any
income tax liability of the Company or any of its subsidiaries that would have a
material adverse effect; (j) the Company will not, and it will not permit
any of its subsidiaries to, discharge any claims, liabilities or obligations,
other than the discharge of certain liabilities of the Company in the
ordinary course of business consistent with past practice or in accordance
with their terms and (k) the Company will not, and it will not permit any
of its subsidiaries to, modify, amend or terminate any material contract
or agreement to which the Company or such subsidiary is a party, or waive,
release or assign any material rights or claims.
In addition to the foregoing, the Company has agreed that it will not take
any action, or permit any of its subsidiaries to take any action, that would
result in (a) any of the representations and warranties of the Company set forth
in the Merger Agreement that are qualified as to materiality becoming untrue,
(b) any of such representations and warranties that are not so qualified
becoming untrue in any material respect or (c) any of the conditions to the
Merger set forth in the Merger Agreement not being satisfied.
Prohibition on Solicitation. Pursuant to the Merger Agreement, the Company
has agreed that the Company and its officers, directors, employees,
representatives and agents will cease any discussions or negotiations with any
parties with respect to any Takeover Proposal (as defined below) and the Company
will not, nor will it authorize or permit any officer, director or employee of,
or any investment banker, attorney, accountant or other representative retained
by, the Company or any of its subsidiaries to, (a) solicit, initiate, encourage
or take any other action to facilitate any inquiries or the making of any
proposal which constitutes, or may reasonably be expected to lead to, any
Takeover Proposal or (b) participate in any discussions or negotiate regarding
any Takeover Proposal.
The Merger Agreement provides that, notwithstanding the foregoing, if at any
time prior to the acceptance for payment of Shares pursuant to the Offer, the
Board of Directors of the Company determines in good faith, after consultation
with counsel, that it is necessary to do so in order to comply with its
fiduciary duties to the Company's stockholders under applicable law, the Company
may, in response to an unsolicited Takeover Proposal, (a) furnish information
with respect to the Company to any person pursuant to a confidentiality
agreement in a form approved by IBM and (b) participate in negotiations
regarding such Takeover Proposal.
The Merger Agreement provides further that neither the Board of Directors of
the Company nor any committee thereof will (a) withdraw or modify, or propose to
withdraw or modify, in a manner adverse to IBM, the approval or recommendation
by such Board of Directors or such committee of the Offer, the Merger Agreement
or the Merger, (b) approve or recommend, or propose to approve or recommend, any
Takeover Proposal or (c) cause the Company to enter into any agreement with
respect to any Takeover Proposal. Notwithstanding the foregoing, in the event
that prior to the time of acceptance for payment of Shares in the Offer the
Board of Directors of the Company determines in good faith, after consultation
with counsel, that it is necessary to do so in order to comply with its
fiduciary duties to the Company's stockholders under applicable law, the Merger
Agreement provides that the Board of Directors of the Company may withdraw or
modify its approval or recommendation of the Offer, the Merger Agreement and the
Merger, approve or recommend a Superior Proposal (as defined below), or cause
the Company to enter into an agreement with respect to a Superior Proposal, but
in each case only at a time that is after the second business day following
IBM's receipt of written notice advising IBM that the Board of Directors of the
Company has received a Superior Proposal, specifying the material terms and
conditions of such Superior Proposal and identifying the person making such
Superior Proposal.
Pursuant to the Merger Agreement, and in addition to the obligations of the
Company described above, the Company has agreed that (a) it will immediately
advise IBM orally and in writing of any request for information or of any
Takeover Proposal, or any inquiry with respect to or which could lead to any
Takeover Proposal, the material terms and conditions of such request, Takeover
Proposal or
6
<PAGE>
inquiry and the identity of the person making such request, Takeover Proposal or
inquiry, (b) it will keep IBM fully informed of the status and details
(including amendments or proposed amendments) of any such request, Takeover
Proposal or inquiry and (c) it will concurrently with entering into an agreement
with respect to any Takeover Proposal, pay, or cause to be paid, to IBM the
Expenses and the Termination Fee (each as defined below).
The Merger Agreement does not prohibit the Company from taking and
disclosing to its stockholders a position contemplated by Rule 14e-2(a)
promulgated under the Exchange Act or from making any disclosure to the
Company's stockholders if, in the opinion of the Board of Directors of the
Company, after consultation with counsel, failure so to disclose would be
inconsistent with its fiduciary duties to the Company's stockholders under
applicable law, except that neither the Company nor its Board of Directors nor
any committee thereof may (other than as described above) withdraw or modify, or
propose to withdraw or modify, its position with respect to the Merger or
approve or recommend, or propose to approve or recommend, a Takeover Proposal.
As used herein, the term "Takeover Proposal" means any inquiry, proposal or
offer (other than the transactions contemplated by the Merger Agreement) from
any person relating to any direct or indirect acquisition of a substantial
amount of assets of the Company or any of its subsidiaries or of more than 20%
of any class of equity securities of the Company or any of its subsidiaries, or
any tender offer or exchange offer that if consummated would result in any
person beneficially owning 20% or more of any class of equity securities of the
Company or any of its subsidiaries, any merger, consolidation, business
combination, sale of substantially all the assets, recapitalization,
liquidation, dissolution or similar transaction involving the Company or any of
its subsidiaries, any other transaction the consummation of which could
reasonably be expected to impede, interfere with, prevent or materially delay
the Offer or the Merger or which would reasonably be expected to dilute
materially the benefits to IBM of the transactions contemplated by the Merger
Agreement, and the term "Superior Proposal" means any bona fide Takeover
Proposal to acquire, directly or indirectly, for consideration consisting of
cash and/or securities, more than 50% of the shares of common stock of the
Company then outstanding or all or substantially all the assets of the Company
and otherwise on terms which the Board of Directors of the Company determines in
its good faith judgment (based on the advice of a financial advisor of
nationally recognized reputation) to be more favorable to the Company's
stockholders than the Merger.
Stockholder Approval; Preparation of Proxy Statement. The Merger Agreement
provides that the Company, shall, at IBM's request and if required in accordance
with applicable law, (a) duly call, give notice of, convene and hold a special
meeting of its stockholders as soon as practicable following the expiration of
the Offer for the purpose of approving and adopting the Merger Agreement and the
transactions contemplated thereby and (b) prepare and file with the Commission
under the Exchange Act a proxy statement with respect to the meeting of
shareholders described above (the "Proxy Statement").
The Company has agreed in the Merger Agreement to use its best efforts to
respond to any comments of the Commission or its staff and to cause the Proxy
Statement to be mailed to the Company's stockholders as promptly as practicable
after responding to all such comments to the satisfaction of the staff, and to
keep IBM informed of all its correspondence with the Commission with respect to
the Proxy Statement.
Pursuant to the Merger Agreement, the Company, through its Board of
Directors, will recommend to its stockholders that the Merger Agreement be
approved.
For a description of the short-form merger provisions of the Delaware
General Corporation Law, which, under certain circumstances, could be applicable
to the Merger, see Section 12 of the Offer to Purchase.
Access to Information. Pursuant to the Merger Agreement, from the date of
the Merger Agreement to the effectiveness of the Merger, subject to the
appropriate provisions of confidentiality
7
<PAGE>
agreements applicable to the Company, the Company will, upon reasonable notice
to the Company, afford to IBM and its officers, employees, independent
accountants, counsel and other representatives (each of whom shall agree to be
bound by the confidentiality provisions of the Merger Agreement), access to all
of the Company's properties, books, contracts, commitments and records, and will
promptly furnish to IBM a copy of each document filed or received by it during
such period pursuant to the requirements of the Federal securities laws or the
Federal tax laws, and such other information as IBM may reasonably request.
Reasonable Efforts. Each of IBM, the Purchaser and the Company has agreed in
the Merger Agreement to use its reasonable efforts to take all actions necessary
to comply promptly with all legal requirements which may be imposed on itself
with respect to the Offer and the Merger, to cooperate with and furnish
information to each other in connection with any such requirements imposed upon
any of them in connection with the Offer and the Merger and to (subject to
certain limitations) use its reasonable efforts to take all reasonable actions
necessary to obtain (and to cooperate with each other in obtaining) any consent,
authorization, order or approval of, or any exemption by, any governmental
entity or other public or private third party required to be obtained or made by
IBM, the Purchaser, the Company or any of their subsidiaries in connection with
the Offer and the Merger.
The Rights Agreement. The Company has agreed in the Merger Agreement that it
will not redeem the Rights, amend the Rights Agreement (other than to delay
the Distribution Date or to render the Rights inapplicable to the Offer and the
Merger) or terminate the Rights Agreement prior to the effectiveness of the
Merger unless required to do so by order of a court of competent jurisdiction.
Certain Litigation. In the Merger Agreement, each of IBM, the Purchaser and
the Company has agreed to use reasonable efforts to obtain a dismissal without
prejudice of International Business Machines Corporation and White Acquisition
Corp. v. Lotus Development Corporation and Jim P. Manzi, with each party bearing
its own costs and attorneys' fees therefor. The Company has also agreed that
it will not, without the prior written consent of IBM, settle any litigation
against the Company or any of its directors (other than litigation relating to
software piracy matters or human resources or employment matters). In addition,
the Company has agreed that it will not voluntarily cooperate with any third
party which has sought or may seek to restrain or prohibit or otherwise oppose
the Offer or the Merger and that it will cooperate with IBM and the Purchaser to
resist any such effort to restrain or prohibit or otherwise oppose the Offer
or the Merger, unless either such action would constitute a breach of the
Company's Board of Directors' fiduciary duties under applicable law.
Board of Directors; Corporate Governance. The Merger Agreement provides
that, upon the Purchaser's acceptance for payment and payment for, Shares
pursuant to the Offer, the Purchaser will be entitled to designate such number
of directors on the Company's Board of Directors as will give the Purchaser,
subject to compliance with Section 14(f) of the Exchange Act, a majority of such
directors. The Merger Agreement further provides that, notwithstanding the
foregoing, until the effectiveness of the Merger, the Company shall have on the
Board of Directors of the Company at least two directors who were directors of
the Company as of the date of the Merger Agreement and who are not officers of
the Company (such two directors, the "Independent Directors"). Subject to
applicable law, the Company has agreed to take all action necessary to effect
the election of the Purchaser's designees to the Board of Directors and in
connection therewith, the Company will promptly, at the option of IBM, either
increase the size of the Company's Board of Directors and/or obtain the
resignation of such number of its current directors as is necessary to enable
the Purchaser's designees to be elected to the Company's Board of Directors as
provided above.
Following the election or appointment of the Purchaser's designated
directors, the affirmative vote of a majority of the Independent Directors then
in office will be required by the Company to (a) amend or terminate the Merger
Agreement by the Company, (b) exercise or waive any of the Company's rights or
remedies under the Merger Agreement or (c) extend the time for performance of
IBM's and the Purchaser's respective obligations under the Merger Agreement.
8
<PAGE>
IBM, the Purchaser and the Company have reached a general understanding as
to certain matters relating to corporate governance of the Company, the
objective of which is to achieve a balance between the independence of the
Company and its integration with IBM. Jim P. Manzi, Chief Executive Officer of
the Company, will continue in that position after consummation of the Merger and
will become a Senior Vice President of IBM.
Treatment of Stock Options; Certain Benefits. Pursuant to the Merger
Agreement, the Company has agreed to amend each of the Company's stock option
plans to provide that each outstanding option to purchase common stock of the
Company issued pursuant to such a stock option plan, whether vested or unvested,
shall remain outstanding after the effectiveness of the Merger and shall be
assumed by IBM (except as described below). IBM has agreed to assume such stock
options (a) such that IBM is a corporation "assuming a stock option in a
transaction to which Section 424(a) applied" within the meaning of Section 424
of the Internal Revenue Code of 1986, as amended (the "Code"), or (b) to the
extent that Section 424 of the Code does not apply to any such stock options,
such that IBM would be such a corporation were Section 424 of the Code
applicable to such option. Under the Merger Agreement, each such stock option
assumed by IBM shall be exercisable upon the same terms and conditions as under
the applicable stock option plan of the Company and the applicable option
agreement issued thereunder, except that (a) such option shall be exercisable
for that number of shares of common stock of IBM equal to the product of (i) the
number of shares of common stock of the Company for which such option was
exercisable and (ii) the Offer Price divided by the average closing price of
common stock of IBM on the New York Stock Exchange Composite Tape for the 30
consecutive trading days prior to the effectiveness of the Merger (such
quotient, the "Conversion Number"), and (b) the exercise price of such option
shall be equal to the exercise price of such option as of the date of the Merger
Agreement divided by the Conversion Number.
The foregoing paragraph notwithstanding, in the Merger Agreement, the
Company has agreed to amend its stock option plans to provide holders of stock
options issued pursuant thereto, whether or not then exercisable or vested, the
opportunity to elect to receive cash in an amount equal to the Option Amount (as
defined below) in exchange for such stock option, and in accordance therewith,
IBM and the Company have agreed to take all actions necessary to provide that,
as to those holders who so elect, on the day after the date on which the
Purchaser accepts Shares for payment and purchase pursuant to the Offer, (a)
each such stock option, so surrendered for cash, whether or not then exercisable
or vested, shall become fully exercisable and vested, (b) each such stock option
shall be cancelled and (c) in consideration of such cancellation, and except to
the extent that IBM or the Purchaser and the holder of any such stock option
otherwise agree, the Company shall pay to each such holder of such stock options
an amount in cash in respect thereof equal to the product of (i) the excess of
the Offer Price over the exercise price thereof and (ii) the number of Shares
subject thereto (such product, the "Option Amount").
The Merger Agreement provides that if it is determined that compliance with
any of the provisions described above would cause any individual subject to
Section 16 of the Exchange Act to become subject to the profit recovery
provisions thereof, any options with respect to common stock of the Company held
by such individual will be cancelled or purchased, as the case may be, at the
effectiveness of the Merger or at such later time as may be necessary to avoid
application of such profit recovery provisions, and such individual will be
entitled to receive from the Company or the Surviving Corporation an amount
equal to the excess, if any, of (a) the Offer Price over (b) the per Share
exercise price of such stock option multiplied by the number of Shares subject
thereto, and IBM, the Purchaser and the Company have agreed to cooperate so as
to achieve the intent of such provisions without giving rise to such profit
recovery.
IBM, the Purchaser and the Company have reached a general understanding as
to the continuation of the Company's other existing employee compensation and
benefit plans.
9
<PAGE>
In addition, IBM has agreed to an enhanced severance program for employees
of the Company and executives for a two-year period after the acquisition. Any
persons who were employees of the Company as of the date of the Merger Agreement
and who are terminated other than for cause, or who leave the Company as a
result of constructive termination, will be entitled to a separation benefit
equaling 16 weeks of base salary plus an additional two weeks for each six
months of service and, in the case of employees at the level of director and
higher and other senior managers, other than those who are eligible for the
executive severance plan, 24 weeks of base salary and target bonus, plus an
additional two weeks for each six months of service. Health and welfare
benefits will continue for the payout period and outplacement counseling will
be provided. No mitigation is required nor reduction made if other employment
is obtained. The separation benefit is payable in installments.
The executive severance plan provides a separation benefit based on total
annual compensation (then current base and management incentive plan target) and
is computed based on one year plus four weeks for every six months of tenure,
subject to a cap of two years for senior vice presidents and above. Health and
welfare benefits will continue for the payout period and outplacement and
financial counseling will be provided. Those eligible for the executive
severance plan are each corporate vice president, each senior vice president and
the president of the Company. Each such executive will also be entitled to a
gross-up payment for any excise taxes imposed on any parachute payments under
the Code and any income or excise taxes relating to the gross up payment. No
mitigation is required nor reduction made if other employment is obtained. The
separation benefit is payable in installments. The executive severance plan
provides that the recipient (other than corporate staff) shall not render
services for any organizations or engage directly or indirectly in any business
which is competitive with the relevant business units of the Company.
Indemnification and Insurance. In the Merger Agreement, IBM and the
Purchaser have agreed that all rights to indemnification for acts or omissions
occurring prior to the effectiveness of the Merger that are in existence as of
the date of the Merger Agreement in favor of the current or former directors or
officers of the Company and its subsidiaries as provided in their respective
Certificates of Incorporation or By-laws or contractual arrangements or as
otherwise provided by applicable law shall survive the Merger and shall continue
in full force and effect in accordance with their terms. Pursuant to the Merger
Agreement, IBM will, for a period of six years (or the period of the applicable
statute of limitations, if longer) from the effectiveness of the Merger, unless
IBM agrees in writing to guarantee the indemnification obligations set forth
above, maintain in effect the Company's current directors' and officers'
liability insurance covering those persons who are currently covered by the
Company's directors' and officers' liability insurance policy except that, to
the extent that such coverage is not obtainable at less than or equal to 150% of
the current per annum cost, IBM will be obligated to purchase only so much
coverage as may then be obtained for such amount.
Consent Solicitation. Pursuant to the Merger Agreement, IBM and the
Purchaser have agreed to terminate the Consent Solicitation, to withdraw the
filings made by the Purchaser with the Commission in connection therewith and
to cease soliciting written consents from the stockholders of the Company.
Conditions to Merger. The respective obligation of each party to the Merger
Agreement to effect the Merger shall be subject to the satisfaction, prior to
the closing of the transactions contemplated by the Merger Agreement, of the
following conditions: (a) if required by applicable law, the Merger Agreement
and the transactions contemplated thereby shall have been approved by the
affirmative vote of the stockholders of the Company; (b) no statute, rule,
regulation, executive order, decree, temporary restraining order, preliminary or
permanent injunction or other order issued by any court of competent
jurisdiction or other governmental entity or other legal restraint or
prohibition preventing the consummation of the Merger shall be in effect; and
(c) the Purchaser shall have previously accepted for payment and paid for Shares
pursuant to the Offer. For a description of the conditions to the Offer, see
Section 7 of this Supplement.
10
<PAGE>
Termination. The Merger Agreement may be terminated at any time prior to the
effective time of the Merger, whether before or after approval of the terms of
the Merger Agreement by the stockholders of the Company (a) by mutual written
consent of IBM and the Company; (b) by either IBM or the Company (i) if (A) as
result of the failure of any of the conditions to the Offer set forth in Section
7 of this Supplement, the Offer shall have terminated or expired in accordance
with its terms without the Purchaser's having accepted for payment any Shares
pursuant to the Offer or (B) the Purchaser shall not have accepted for payment
any Shares pursuant to the Offer within 180 days following the date of the
Merger Agreement; provided, however, that such right to terminate the Merger
Agreement by either of IBM or the Company shall not be available to any party
the failure of which (or the failure of the affiliates of which) to perform any
of its obligations under the Merger Agreement results in the failure of any such
condition, or if the failure of such condition results from facts or
circumstances that constitute a breach of any representation or warranty under
the Merger Agreement by such party, or (ii) if any governmental entity shall
have issued an order, decree or ruling or taken any other action permanently
enjoining, restraining or otherwise prohibiting the acceptance for payment of,
or payment for, the Shares pursuant to the Offer or the Merger and such order,
decree or ruling or other action shall have become final and nonappealable; (c)
by IBM or the Purchaser prior to the purchase of the Shares pursuant to the
Offer in the event of a breach by the Company of any representation, warranty,
covenant or other agreement contained in the Merger Agreement which (i) would
give rise to the failure of a condition set forth in paragraph (e) or (f) under
the heading "Amended Conditions of the Offer" below and (ii) cannot be or has
not been cured within 20 days after the giving of written notice to the Company;
(d) by IBM or the Purchaser if either IBM or the Purchaser is entitled to
terminate the Offer as a result of the occurrence of any event set forth in
paragraph (d) under the heading "Amended Conditions of the Offer" below; (e) by
the Company in connection with its entering into a definitive agreement in
connection with a Superior Proposal as described above under the heading
"Prohibition on Solicitation", provided it has complied with all the
requirements in connection therewith and that it makes a simultaneous payment of
the Expenses and the Termination Fee; or (f) by the Company, if IBM or the
Purchaser shall have breached in any material respect any of their respective
representations, warranties, covenants or other agreements contained in the
Merger Agreement, which breach is incapable of being cured or has not been cured
within 20 days after the giving of written notice to IBM or the Purchaser, as
applicable, except, in any case, such breaches which are not reasonably likely
to adversely affect IBM's or the Purchaser's ability to complete the Offer or
the Merger.
In the event of the termination of the Merger Agreement, the Merger
Agreement shall forthwith become void and there shall be no liability on the
part of any party thereto except as described under "Fees and Expenses" below or
as otherwise expressly provided for in the Merger Agreement; provided, however,
that nothing in the Merger Agreement will relieve any party from liability for
any breach thereof.
Fees and Expenses. The Merger Agreement provides that, except as provided in
the following paragraph, all fees and expenses incurred in connection with the
Offer, the Merger, the Merger Agreement and the transactions contemplated
thereby will be paid by the party incurring such fees or expenses, whether or
not the Offer or the Merger is consummated.
Under the Merger Agreement the Company will pay, or cause to be paid, to IBM
the sum of (a) all of IBM's out-of-pocket fees and expenses incurred or paid by
or on behalf of IBM in connection with the Offer, the Merger or the consummation
of any of the transactions contemplated by the Merger Agreement, including all
fees and expenses of counsel, commercial banks, investment banking firms,
accountants, experts and consultants to IBM in an amount not to exceed
$20,000,000 (the "Expenses") and (b) $100,000,000 (the "Termination Fee") upon
demand if (i) IBM or the Purchaser terminates the Merger Agreement in accordance
with clause (d) under the heading "Termination" above; (ii) the Company
terminates the Merger Agreement in accordance with clause (e) under the heading
"Termination" above; or (iii) prior to any termination of the Merger Agreement
(other than by the Company in accordance with clause (f) under the heading
"Termination" above), a Takeover Proposal shall have
11
<PAGE>
been made and, within 12 months of such termination, a transaction constituting
a Takeover Proposal is consummated or the Company enters into an agreement with
respect to, approves or recommends or takes any action to facilitate such
Takeover Proposal.
Amendment. The Merger Agreement may be amended by the parties thereto, by
action taken or authorized by their respective Boards of Directors, provided,
however, that after any approval of the Merger Agreement by the stockholders of
the Company, no amendment will be made to the Merger Agreement which by law
requires further approval by such stockholders without such further approval.
The foregoing description of the Merger Agreement is qualified in its
entirety by reference to the text of the Merger Agreement, which has been filed
by the Purchaser as Exhibit (a)(12) to Amendment No. 2 to the Tender Offer
Statement on Schedule 14D-1 of the Purchaser filed with the Commission. Such
Exhibit should be available for inspection, and copies should be obtainable, in
the manner set forth in Section 8 of the Offer to Purchase (except that it will
not be available at the regional offices of the Commission).
7. AMENDED CONDITIONS OF THE OFFER
Notwithstanding any other term of the Offer or the Merger Agreement, the
Purchaser shall not be required to accept for payment or, subject to any
applicable rules and regulations of the Commission, including Rule 14e-1(c)
under the Exchange Act (relating to the Purchaser's obligation to pay for or
return tendered shares after the termination or withdrawal of the Offer), to
pay for any Shares tendered pursuant to the Offer unless, (i) the Minimum
Tender Condition shall have been satisfied and (ii) any waiting period under
the HSR Act applicable to the purchase of Shares pursuant to the Offer shall
have expired or been terminated. Furthermore, notwithstanding any other
term of the Offer or the Merger Agreement, the Purchaser shall not be required
to accept for payment or, subject as aforesaid, to pay for any Shares not
theretofore accepted for payment or paid for, and may terminate the Offer if,
at any time on or after the date of the Merger Agreement and before the
acceptance of such shares for payment or the payment therefor, any of the
following conditions exists (other than as a result of any action or inaction
of IBM or any of its subsidiaries that constitutes a breach of the Merger
Agreement):
(a) there shall be instituted or pending by any governmental entity any
suit, action or proceeding, (i) challenging the acquisition by IBM or the
Purchaser of any Shares under the Offer or seeking to restrain or prohibit
the making or consummation of the Offer or the Merger, (ii) seeking to
prohibit or materially limit the ownership or operation by the Company, IBM
or any of their respective subsidiaries of a material portion of the
software business or assets of the Company and its subsidiaries, taken as a
whole, or IBM and its subsidiaries, taken as a whole, or to compel the
Company or IBM to dispose of or hold separate any material portion of the
software business or assets of the Company and its subsidiaries, taken as a
whole, or IBM and its subsidiaries, taken as a whole, as a result of the
Offer or any of the other transactions contemplated by the Merger Agreement,
(iii) seeking to impose material limitations on the ability of IBM or the
Purchaser to acquire or hold, or exercise full rights of ownership of, any
Shares accepted for payment pursuant to the Offer including, without
limitation, the right to vote such Shares on all matters properly presented
to the stockholders of the Company or (iv) seeking to prohibit IBM or any of
its subsidiaries from effectively controlling in any material respect any
material portion of the software business or operations of the Company and
its subsidiaries;
(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, directly or indirectly, in any of the consequences
referred to in clauses (i) through (iv) of paragraph (a) above;
12
<PAGE>
(c) any material adverse change (or any development that, insofar as
reasonably can be foreseen, is reasonably likely to result in any material
adverse change) in the financial condition (other than attributable to a
change in results of operations) or business of the Company and its
subsidiaries, taken as a whole;
(d) (i) the Board of Directors of the Company or any committee thereof
shall have withdrawn or modified in a manner adverse to IBM or the Purchaser
its approval or recommendation of the Offer, the Merger or the Merger
Agreement, or approved or recommended any Takeover Proposal, (ii) the
Company shall have entered into any agreement with respect to any Superior
Proposal in accordance with the terms of the Merger Agreement or (iii) the
Board of Directors of the Company or any committee thereof shall have
resolved to take any of the foregoing actions;
(e) any of the representations and warranties of the Company set forth
in the Merger Agreement that are qualified as to materiality shall not be
true and correct or any such representations and warranties that are not so
qualified shall not be true and correct in any material respect, in each
case at the date of the Merger Agreement and at the scheduled expiration of
the Offer;
(f) the Company shall have failed to perform in any material respect any
material obligation or to comply in any material respect with any material
agreement or material covenant of the Company to be performed or complied
with by it under the Merger Agreement;
(g) there shall have occurred and continued to exist for at least three
business days (i) any general suspension of trading in, or limitation on
prices for, securities on a national securities exchange in the United
States (excluding any coordinated trading halt triggered solely as a result
of a specified decrease in a market index), (ii) a declaration of a banking
moratorium or any suspension of payments in respect of banks in the United
States, (iii) any limitation (whether or not mandatory) by any governmental
entity on, or other event that materially adversely affects, the extension
of credit by banks or other lending institutions or (iv) in case of any of
the foregoing existing on the date of the Merger Agreement, material
acceleration or worsening thereof;
(h) the Merger Agreement shall have been terminated in accordance with
its terms.
The foregoing conditions are for the sole benefit of the Purchaser and IBM
and may, subject to the terms of the Merger Agreement, be waived by the
Purchaser and IBM in whole or in part at any time and from time to time in their
sole discretion. The failure by IBM or the Purchaser 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 with respect to any other facts and circumstances
and each such right shall be deemed an ongoing right that may be asserted at any
time and from time to time.
8. CERTAIN LEGAL MATTERS
State Takeover Statutes. The Board of Directors of the Company adopted
resolutions on June 10, 1995, which have the effect of exempting the Merger from
the provisions of Section 203 and the Massachusetts Control Share Acquisition
Statute.
Litigation. Pursuant to the Merger Agreement, each of IBM, the Purchaser and
the Company have agreed to use reasonable efforts to obtain a dismissal without
prejudice of International Business Machines Corporation and White Acquisition
Corp. v. Lotus Development Corporation and Jim P. Manzi, with each party bearing
its own costs and attorneys' fees therefor.
Between June 5, 1995 and June 9, 1995, 10 stockholder actions were commenced
against the Company and its directors in the Delaware Chancery Court, one
stockholder action was commenced
13
<PAGE>
against the Company and its directors in United States District Court for the
District of Delaware and one stockholder action was commenced against the
Company and its directors in the Superior Court Department of the Trial Court
of Massachusetts.
Plaintiffs in all such actions generally seek, among other things, a
judgment: (a) declaring their action to be a proper class action, (b) ordering
each individual defendant to carry out his fiduciary duties to plaintiffs and
plaintiffs' respective classes by announcing his intention to (i) undertake an
appropriate evaluation of the Offer or any other bona fide offer, (ii) act
independently so that the interests of the Company's shareholders will be
protected and (iii) adequately ensure that no conflicts of interest exist
between his own interests and his fiduciary obligation to maximize stockholder
value or, if such conflicts exist, to ensure that all conflicts are resolved in
the best interests of the Company's public stockholders, (c) invalidating and/or
redeeming the Rights, (d) ordering individual defendants, jointly
and severally, to account to plaintiffs and plaintiffs' respective classes for
all damages suffered and to be suffered by them as a result of various acts and
transactions enumerated within plaintiffs' complaints and (e) granting such
other and further relief as may be just and proper in the premises.
9. MISCELLANEOUS
For purposes of the Offer, the Purchaser will be deemed to have accepted for
payment, and thereby purchased, Shares properly tendered to the Purchaser and
not withdrawn as, if and when the Purchaser gives oral or written notice to the
Depositary of the Purchaser's acceptance for payment of such Shares. Payment for
Shares accepted for payment pursuant to the Offer will be made by payment by IBM
to tendering stockholders or 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 payment from the Purchaser and transmitting payment
to tendering stockholders. UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE
PURCHASE PRICE OF THE SHARES TO BE PAID BY THE PURCHASER, REGARDLESS OF ANY
EXTENSION OF THE OFFER OR ANY DELAY IN MAKING SUCH PAYMENT.
This document has been approved by CS First Boston Limited, which is
regulated by the Securities and Futures Authority Limited, solely for the
purposes of the United Kingdom Financial Services Act 1986.
CS First Boston Limited is acting for the Purchaser in connection with the
Offer and no one else, and will not be responsible to anyone other than the
Purchaser for providing the protections afforded to customers of CS First
Boston Limited nor for providing advice in relation to the Offer.
No person has been authorized to give any information or to make any
representation on behalf of the Purchaser or IBM not contained herein, in the
Offer to Purchase or in any Letter of Transmittal and, if given or made, such
information or representation must not be relied upon as having been authorized.
The Purchaser has filed with the Commission the Schedule 14D-1 pursuant
to Rule 14d-3 under the Exchange Act, together with exhibits, furnishing certain
additional information with respect to the Offer, has filed certain amendments
thereto and may file additional amendments thereto. Such Schedule 14D-1 and any
amendments thereto, including exhibits, should be available for inspection and
copies should be obtainable, in the manner set forth in Section 8 of the Offer
to Purchase (except that they will not be available at the regional offices of
the Commission).
EXCEPT AS AMENDED AND SUPPLEMENTED HEREBY AND BY THE REVISED LETTER OF
TRANSMITTAL, ALL PROVISIONS OF THE OFFER TO PURCHASE REMAIN UNAFFECTED.
WHITE ACQUISITION CORP.
June 13, 1995
14
<PAGE>
Manually signed facsimile copies of the Letter of Transmittal will be
accepted. The Letter of Transmittal, certificates for Shares and/or Rights and
any other required documents should be sent or delivered by each stockholder of
the Company or such stockholder's broker, dealer, bank, trust company or other
nominee to the Depositary at one of its addresses set forth below.
The Depositary for the Offer is:
THE CHASE MANHATTAN BANK, N.A.
(800) 355-2663
<TABLE>
<S> <C> <C>
By Mail: By Overnight Delivery: By Hand:
Box 3032 c/o Chase Securities (9:00 a.m.-5:00 p.m.
4 Chase MetroTech Center Processing Corp. New York City time)
Brooklyn, NY 11245 Ft. Lee Executive Park 1 Chase Manhattan Plaza
1 Executive Drive Floor 1-B
(6th Floor) Nassau and Liberty Streets
Ft. Lee, NJ 07024 New York, NY 10081
By Facsimile Transmission:
(201) 592-4372
Confirm by Telephone:
(201) 592-4370
</TABLE>
--------------
Questions and requests for assistance or for additional copies of the Offer
to Purchase, this Supplement, the Letter of Transmittal and the Notice of
Guaranteed Delivery may be directed to the Information Agent or the Dealer
Manager at their respective telephone numbers and locations listed below. You
may also contact your broker, dealer, bank, trust company or other nominee for
assistance concerning the Offer.
The Information Agent for the Offer is:
[MORROW & CO., INC. LOGO]
909 Third Avenue
20th Floor
New York, NY 10022
Toll Free (800) 566-9061
Banks and Brokerage
Firms please call:
(800) 662-5200
The Dealer Manager for the Offer is:
CS First Boston
Park Avenue Plaza
55 East 52nd Street
New York, NY 10055
(212) 909-2000 (Call Collect)
Exhibit (a)(14)
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
OF
LOTUS DEVELOPMENT CORPORATION
Pursuant to the Offer to Purchase
Dated June 6, 1995
and the Supplement thereto
dated June 13, 1995
by
WHITE ACQUISITION CORP.
a Wholly Owned Subsidiary of
INTERNATIONAL BUSINESS MACHINES CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON MONDAY, JULY 3, 1995,
UNLESS THE OFFER IS EXTENDED.
TO: THE CHASE MANHATTAN BANK, N.A., DEPOSITARY
(800) 355-2663
<TABLE>
<S> <C> <C>
By Mail: By Overnight Delivery: By Hand:
Box 3032 c/o Chase Securities (9:00 a.m. -- 5:00 p.m.
4 Chase MetroTech Center Processing Corp. New York City time)
Brooklyn, NY 11245 Ft. Lee Executive Park 1 Chase Manhattan Plaza
1 Executive Drive Floor 1-B
(6th Floor) Nassau and Liberty Streets
Ft. Lee, NJ 07024 New York, NY 10081
By Facsimile Transmission:
(201) 592-4372
Confirm by Telephone:
(201) 592-4370
</TABLE>
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS, OR TRANSMISSION OF
INSTRUCTIONS VIA A FACSIMILE NUMBER, OTHER THAN AS SET FORTH ABOVE DOES NOT
CONSTITUTE A VALID DELIVERY.
<PAGE>
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This revised Letter of Transmittal or the previously circulated original
YELLOW Letter of Transmittal is to be used either if certificates for Shares
and/or Rights are to be forwarded herewith or, unless an Agent's Message (as
defined in Section 2 of the Offer to Purchase) is utilized, if delivery of
Shares and/or Rights is to be made by book-entry transfer (in the case of
Rights, if available) to an account maintained by the Depositary at a Book-Entry
Transfer Facility as defined in and pursuant to the procedures set forth in
Section 2 of the Offer to Purchase. Unless the Distribution Date (as defined in
the Offer to Purchase) occurs, a tender of Shares will also constitute a tender
of the associated Rights. Stockholders who deliver Shares and/or Rights by
book-entry transfer are referred to herein as "Book-Entry Stockholders" and
other stockholders are referred to herein as "Certificate Stockholders".
Stockholders whose certificates for Shares and/or Rights are not immediately
available or who cannot deliver either the certificates for, or a Book-Entry
Confirmation (as defined in Section 2 of the Offer to Purchase) with respect to,
their Shares and/or Rights and all other documents required hereby to the
Depositary prior to the Expiration Date (as defined in Section 1 of the Offer to
Purchase) must tender their Shares and/or Rights in accordance with the
guaranteed delivery procedures set forth in Section 2 of the Offer to Purchase.
See Instruction 2. DELIVERY OF DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY DOES
NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
<TABLE>
<CAPTION>
DESCRIPTION OF SHARES TENDERED
NAME(S) AND ADDRESS(ES) OF REGISTERED OWNER(S)
(PLEASE FILL IN, IF BLANK, EXACTLY AS NAME(S) APPEAR(S) ON SHARES TENDERED
CERTIFICATE(S)) (ATTACH ADDITIONAL LIST IF NECESSARY)
TOTAL NUMBER OF
SHARES REPRESENTED NUMBER
CERTIFICATE BY OF SHARES
NUMBER(S)(1) CERTIFICATE(S)(1) TENDERED(2)
<S> <C> <C> <C>
Total Shares
</TABLE>
(1) Need not be completed by Book-Entry Stockholders.
(2) Unless otherwise indicated, it will be assumed that all Shares
described herein are being tendered. See Instruction 4.
<TABLE>
<CAPTION>
DESCRIPTION OF RIGHTS TENDERED (1)
NAME(S) AND ADDRESS(ES) OF REGISTERED OWNER(S) RIGHTS TENDERED
(PLEASE FILL IN, IF BLANK) (ATTACH ADDITIONAL LIST IF NECESSARY)
TOTAL NUMBER OF
RIGHTS REPRESENTED NUMBER
CERTIFICATE BY OF RIGHTS
NUMBER(S)(2)(3) CERTIFICATE(S)(3) TENDERED(4)
<S> <C> <C> <C>
Total Rights
</TABLE>
(1) Need not be completed if the Distribution Date has not occurred.
(2) If the tendered Rights are represented by separate certificates,
complete using the certificate numbers of such certificates for
Rights. If the tendered Rights are not represented by separate
certificates, or if such certificates have not been distributed,
complete using the certificate numbers of the Shares with respect to
which the Rights were issued. Stockholders tendering Rights that are
not represented by separate certificates should retain a copy of this
description in order to accurately complete the Notice of Guaranteed
Delivery if the Distribution Date occurs.
(3) Need not be completed by Book-Entry Stockholders who are delivering
Rights by book-entry transfer.
(4) Unless otherwise indicated, it will be assumed that all Rights described
herein are being tendered. See Instruction 4.
<PAGE>
<TABLE>
<S> <C>
/ / CHECK HERE IF TENDERED SHARES AND/OR RIGHTS ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO AN ACCOUNT
MAINTAINED BY THE DEPOSITARY WITH A BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING (ONLY
PARTICIPANTS IN A BOOK-ENTRY TRANSFER FACILITY MAY DELIVER SHARES AND/OR RIGHTS BY BOOK-ENTRY
TRANSFER):
Name of Tendering Institution _____________________________________________________________________________
Check box of Book-Entry Transfer Facility:
/ / The Depository Trust Company / / Midwest Securities Trust Company / / Philadelphia Depository Trust
Company
Account Number ____________________________________________________________________________________________
Transaction Code Number ___________________________________________________________________________________
/ / CHECK HERE IF TENDERED SHARES AND/OR RIGHTS ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY
PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING:
Name(s) of Registered Owner(s) ____________________________________________________________________________
Date of Execution of Notice of Guaranteed Delivery ________________________________________________________
Name of Institution that Guaranteed Delivery ______________________________________________________________
If delivered by book-entry transfer check box:
/ / The Depository Trust Company / / Midwest Securities Trust Company / / Philadelphia Depository Trust
Company
Account Number ____________________________________________________________________________________________
Transaction Code Number ___________________________________________________________________________________
</TABLE>
<PAGE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
The undersigned hereby tenders to White Acquisition Corp., a New York
corporation (the "Purchaser"), which is a wholly owned subsidiary of
International Business Machines Corporation, a New York corporation, the
above-described shares of Common Stock, par value $.01 per share (the "Shares"),
of Lotus Development Corporation, a Delaware corporation (the "Company"),
together with an equal number of the associated preferred share purchase rights
(the "Rights") issued pursuant to the Rights Agreement (the "Rights Agreement")
dated as of November 7, 1988, as amended, between the Company and The
First National Bank of Boston, as Rights Agent (the "Rights Agent"), upon
the terms and subject to the conditions set forth in the Purchaser's
Offer to Purchase dated June 6, 1995, as amended and supplemented by
the Supplement thereto dated June 13, 1995 (the "Supplement") and the related
Letter of Transmittal (which, together with any amendments or supplements
thereto or hereto, collectively constitute the "Offer"), receipt of which is
hereby acknowledged.
Upon the terms of the Offer, subject to, and effective upon, acceptance for
payment of, and payment for, the Shares and Rights tendered herewith in
accordance with the terms of the Offer, the undersigned hereby sells, assigns
and transfers to, or upon the order of, the Purchaser all right, title and
interest in and to all the Shares and Rights that are being tendered hereby (and
any and all other Shares, Rights or other securities or rights issued or
issuable in respect thereof on or after June 5, 1995), and irrevocably
constitutes and appoints The Chase Manhattan Bank, N.A. (the "Depositary"), the
true and lawful agent and attorney-in-fact of the undersigned, with full power
of substitution (such power of attorney being deemed to be an irrevocable power
coupled with an interest), to the full extent of the undersigned's rights with
respect to such Shares and Rights (and any such other Shares, Rights or
securities or rights), to (a) deliver certificates for such Shares and Rights
(and any such other Shares, Rights or securities or rights) or transfer
ownership of such Shares and Rights (and any such other Shares, Rights or
securities or rights) on the account books maintained by a Book-Entry Transfer
Facility together, in any such case, with all accompanying evidences of transfer
and authenticity to, or upon the order of, the Purchaser, (b) present such
Shares and Rights (and any such other Shares, Rights or securities or rights)
for transfer on the Company's books and (c) receive all benefits and otherwise
exercise all rights of beneficial ownership of such Shares and Rights (and any
such other Shares, Rights or securities or rights), all in accordance with the
terms of the Offer.
The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender, sell, assign and transfer the tendered Shares and
Rights (and any and all other Shares, Rights or other securities or rights
issued or issuable in respect of such Shares or Rights on or after June 5, 1995)
and, when the same are accepted for payment by the Purchaser, the Purchaser will
acquire good title thereto, free and clear of all liens, restrictions, claims
and encumbrances, and the same will not be subject to any adverse claim. The
undersigned will, upon request, execute any additional documents deemed by the
Depositary or the Purchaser to be necessary or desirable to complete the sale,
assignment and transfer of the tendered Shares and Rights (and any and all other
Shares, Rights or other securities or rights issued or issuable in respect
thereof on or after June 5, 1995).
The Company has executed an amendment to the Rights Agreement that renders
the Rights inapplicable to the Offer. Accordingly, the Distribution Date (as
defined in the Offer to Purchase) will not occur as a result of the announcement
or commencement of the Original Offer (as defined in the Supplement) or the
Offer or as a result of the Merger (as defined in the Supplement). The Rights
will continue to be evidenced by certificates for the Shares and the requirement
for a separate tender of Rights described in the Offer to Purchase will not
apply unless a Distribution Date occurs for reasons unrelated to the Offer and
the Merger. Unless the Distribution Date occurs, a tender of Shares will also
constitute a tender of the associated Rights.
If the Distribution Date occurs and separate certificates representing the
Rights are distributed to holders of Shares prior to the time Shares are
tendered herewith, certificates representing a number of Rights equal to the
number of Shares being tendered herewith must be delivered to the Depositary or,
if available, a Book-Entry Confirmation must be received by the Depositary with
respect thereto, in order for such Shares tendered herewith to be validly
tendered. If the Distribution Date occurs and separate certificates representing
the Rights are not distributed prior to the time Shares are tendered herewith,
Rights may be tendered prior to a stockholder receiving separate certificates
for Rights by use of the guaranteed delivery procedures described in Section 2
of the Offer to Purchase. A tender of Shares constitutes an agreement by the
tendering stockholder to deliver certificates representing a number of Rights
equal to the number of Shares tendered pursuant to the Offer to the Depositary
prior to expiration of the period permitted by such guaranteed delivery
procedures for delivery of certificates for, or a Book-Entry Confirmation with
respect to, Rights (the "Rights Delivery Period"). However, after expiration of
the Rights Delivery Period, the Purchaser may elect to reject as invalid a
tender of Shares with respect to which certificates for, or a Book-Entry
Confirmation with respect to, an equal number of Rights has not been received by
the Depositary. Nevertheless, the Purchaser will be entitled to accept for
payment Shares tendered by the undersigned prior to the receipt of the
certificates for the Rights required to be tendered with such Shares, or a
Book-Entry Confirmation with respect to such Rights, and either (a), subject to
complying with the applicable rules and regulations of the Securities and
Exchange Commission, withhold payment for such Shares pending receipt of the
certificates for, or a Book-Entry Confirmation with respect to, such Rights or
(b) make payment for Shares accepted for payment pending receipt of the
certificates for, or a Book-Entry Confirmation with respect to, such Rights in
reliance upon the agreement of a tendering stockholder to deliver Rights and
such guaranteed delivery procedures. Any determination by the Purchaser to make
payment for Shares in reliance upon such agreement and such guaranteed delivery
procedures or, after the expiration of the Rights Delivery Period, to reject a
tender as invalid will be made in the sole and absolute discretion of the
Purchaser.
All authority conferred or agreed to be conferred pursuant to this Letter of
Transmittal shall be binding upon the successors, assigns, heirs, executors,
administrators and legal representatives of the undersigned and shall not be
affected by, and shall survive, the death or incapacity of the undersigned.
Except as stated in the Offer to Purchase, this tender is irrevocable.
<PAGE>
The undersigned hereby irrevocably appoints Lee A. Dayton, Archie W. Colburn
and Donald D. Westfall, and each of them, and any other designees of the
Purchaser, the attorneys-in-fact and proxies of the undersigned, each with full
power of substitution, to vote at any annual, special or adjourned meeting of
the Company's stockholders or otherwise in such manner as each such
attorney-in-fact and proxy or his substitute shall in his sole discretion deem
proper with respect to, to execute any written consent concerning any matter as
each such attorney-in-fact and proxy or his substitute shall in his sole
discretion deem proper with respect to, and to otherwise act as each such
attorney-in-fact and proxy or his substitute shall in his sole discretion deem
proper with respect to, the Shares and Rights tendered hereby that have been
accepted for payment by the Purchaser prior to the time any such action is taken
and with respect to which the undersigned is entitled to vote (and any and all
other Shares, Rights or other securities or rights issued or issuable in respect
of such Shares and Rights on or after June 5, 1995). This appointment is
effective when, and only to the extent that, the Purchaser accepts for payment
such Shares as provided in the Offer to Purchase, as amended and supplemented by
the Supplement. This power of attorney and proxy are irrevocable and are granted
in consideration of the acceptance for payment of such Shares and Rights in
accordance with the terms of the Offer. Upon such acceptance for payment, all
prior powers of attorney, proxies and consents given by the undersigned with
respect to such Shares, Rights or other securities or rights will, without
further action, be revoked and no subsequent powers of attorney, proxies,
consents or revocations may be given (and, if given, will not be deemed
effective) by the undersigned.
The undersigned understands that the valid tender of Shares and, if
applicable, Rights pursuant to any of the procedures described in Section 2 of
the Offer to Purchase, as amended and supplemented by the Supplement, and in the
Instructions hereto will constitute a binding agreement between the undersigned
and the Purchaser upon the terms and subject to the conditions of the Offer.
Without limiting the foregoing, if the price to be paid in the Offer is amended
in accordance with the Offer, the price to be paid to the undersigned will be
the amended price notwithstanding the fact that a different price is stated in
this Letter of Transmittal.
Unless otherwise indicated herein under "Special Payment Instructions",
please issue the check for the purchase price and/or return any certificates for
Shares or Rights not tendered or accepted for payment in the name(s) of the
registered holder(s) appearing under "Description of Shares Tendered" and
"Description of Rights Tendered", respectively. Similarly, unless otherwise
indicated under "Special Delivery Instructions", please mail the check for the
purchase price and/or return any certificates for Shares or Rights not tendered
or accepted for payment (and accompanying documents, as appropriate) to the
address(es) of the registered holder(s) appearing under "Description of Shares
Tendered" and "Description of Rights Tendered", respectively. In the event that
both the Special Delivery Instructions and the Special Payment Instructions are
completed, please issue the check for the purchase price and/or return any
certificates for Shares or Rights not tendered or accepted for payment (and any
accompanying documents, as appropriate) in the name of, and deliver such check
and/or return such certificates (and any accompanying documents, as appropriate)
to, the person or persons so indicated. Unless otherwise indicated herein under
"Special Payment Instructions", please credit any Shares and Rights tendered
herewith by book-entry transfer that are not accepted for payment by crediting
the account at the Book-Entry Transfer Facility (as defined herein) designated
above. The undersigned recognizes that the Purchaser has no obligation pursuant
to the Special Payment Instructions to transfer any Shares or Rights from the
name of the registered holder thereof if the Purchaser does not accept for
payment any of the Shares or Rights, respectively, so tendered.
/ / CHECK HERE IF ANY OF THE CERTIFICATES REPRESENTING SHARES
THAT YOU OWN HAVE BEEN LOST OR DESTROYED AND SEE INSTRUCTION 11.
Number of Shares represented by the lost or destroyed
certificates: _________
<PAGE>
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 5, 6 AND 7)
To be completed ONLY if certificates for Shares or Rights not tendered or not
accepted for payment and/or the check for the purchase price of Shares or Rights
accepted for payment are to be issued in the name of someone other than the
undersigned, or if Shares or Rights delivered by book-entry transfer that are
not accepted for payment are to be returned by credit to an account maintained
at a Book-Entry Transfer Facility other than the account indicated above.
Issue: / / Check / / Certificate(s) to:
Name............................................................................
(PLEASE PRINT)
Address.........................................................................
...............................................................................
(INCLUDE ZIP CODE)
...............................................................................
(EMPLOYER IDENTIFICATION OR SOCIAL SECURITY NUMBER)
/ / Credit unpurchased Shares or Rights delivered by book-entry transfer to the
Book-Entry Transfer Facility account set forth below:
Check appropriate Box:
/ / The Depository Trust Company
/ / Midwest Securities Trust Company
/ / Philadelphia Depository Trust Company
...............................................................................
(ACCOUNT NUMBER)
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 5, 6 AND 7)
To be completed ONLY if certificates for Shares or Rights not tendered or not
accepted for payment and/or the check for the purchase price of Shares or Rights
accepted for payment are to be sent to someone other than the undersigned, or to
the undersigned at an address other than that above.
Mail: / / Check / / Certificate(s) to:
Name............................................................................
(PLEASE PRINT)
Address.........................................................................
...............................................................................
(INCLUDE ZIP CODE)
...............................................................................
(EMPLOYER IDENTIFICATION OR SOCIAL SECURITY NUMBER)
<PAGE>
SIGN SIGN HERE
HERE (Also Complete Substitute Form W-9 Below)
................................................................
................................................................
(SIGNATURE(S) OF STOCKHOLDER(S))
Dated:........................, 1995
(Must be signed by registered holder(s) as name(s) appear(s) on
the certificate(s) for the Shares or Rights or on a security
position listing or by person(s) authorized to become registered
holder(s) by certificates and documents transmitted herewith. If
signature is by trustees, executors, administrators, guardians,
attorneys-in-fact, officers of corporations or others acting
in a fiduciary or representative capacity, please provide the
following information and see Instruction 5.)
Dated:........................, 1995
Name(s).........................................................
................................................................
(PLEASE PRINT)
Capacity (Full Title)...........................................
Address.........................................................
................................................................
(INCLUDE ZIP CODE)
Daytime Area Code and
Telephone No. ( ).......................................
Employer Identification or
Social Security Number..........................................
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 5)
Authorized Signature............................................
Name............................................................
................................................................
(PLEASE PRINT)
Name of Firm....................................................
Address.........................................................
................................................................
(INCLUDE ZIP CODE)
AREA CODE AND TELEPHONE NO. ( )...........................
Dated:........................, 1995
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. No signature guarantee is required on this
Letter of Transmittal (a) if this Letter of Transmittal is signed by the
registered holder(s) (which term, for purposes of this Section, includes any
participant in any of the Book-Entry Transfer Facilities' systems whose name
appears on a security position listing as the owner of the Shares) of Shares and
Rights tendered herewith, unless such registered holder(s) has completed either
the box entitled "Special Payment Instructions" or the box entitled "Special
Delivery Instructions" on the Letter of Transmittal or (b) if such Shares and
Rights 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 Security Transfer Agents Medallion Program, the New York
Stock Exchange Medallion Signature Guarantee Program or the Stock Exchange
Medallion Program (an "Eligible Institution"). In all other cases, all
signatures on this Letter of Transmittal must be guaranteed by an Eligible
Institution. See Instruction 5.
2. REQUIREMENTS OF TENDER. This Letter of Transmittal is to be completed by
stockholders either if certificates are to be forwarded herewith or, unless an
Agent's Message (as defined below) is utilized, if delivery of Shares and/or
Rights is to be made pursuant to the procedures for book-entry transfer set
forth in Section 2 of the Offer to Purchase. For a stockholder validly to tender
Shares and Rights pursuant to the Offer, either (a) a properly completed and
duly executed Letter of Transmittal (or facsimile thereof), together with any
required signature guarantees, or, in the case of a book-entry transfer, an
Agent's Message, and any other required documents, must be received by the
Depositary at one of its addresses set forth herein prior to the Expiration Date
and either certificates for tendered Shares and Rights must be received by the
Depositary at one of such addresses or Shares and Rights must be delivered
pursuant to the procedures for book-entry transfer set forth herein (and a
Book-Entry Confirmation received by the Depositary), in each case prior to the
Expiration Date, or (b) the tendering stockholder must comply with the
guaranteed delivery procedures set forth below and in Section 2 of the Offer to
Purchase.
The Company has executed an amendment to the Rights Agreement that renders
the Rights inapplicable to the Offer. Accordingly, the Distribution Date (as
defined in the Offer to Purchase) will not occur as a result of the announcement
or commencement of the Original Offer or the Offer or as a result of the Merger
(as such terms are defined in the Supplement). The Rights will continue to be
evidenced by certificates for the Shares and the requirement for a separate
tender of Rights described in the Offer to Purchase will not apply unless a
Distribution Date occurs for reasons unrelated to the Offer and the Merger.
Unless the Distribution Date occurs, a tender of Shares will also constitute a
tender of the associated Rights.
If the Distribution Date occurs and separate certificates representing the
Rights are distributed prior to the time Shares are tendered herewith,
certificates representing a number of Rights equal to the number of Shares being
tendered herewith must be delivered to the Depositary or, if available, a
Book-Entry Confirmation must be received by the Depositary with respect thereto,
in order for such Shares tendered herewith to be validly tendered. If the
Distribution Date occurs and separate certificates representing the Rights are
not distributed prior to the time Shares are tendered herewith, Rights may be
tendered prior to a stockholder receiving separate certificates for Rights by
use of the guaranteed delivery procedures described below.
Stockholders whose certificates for Shares or Rights are not immediately
available (including because certificates for Rights have not yet been
distributed by the Company or the Rights Agent following the occurrence of a
Distribution Date) or who cannot deliver their certificates and all other
required documents to the Depositary or complete the procedures for book-entry
transfer prior to the Expiration Date may tender their Shares and Rights by
properly completing and duly executing the Notice of Guaranteed Delivery
pursuant to the guaranteed delivery procedures set forth in Section 2 of
the Offer to Purchase. Pursuant to such procedures, (a) such tender must
be made by or through an Eligible Institution, (b) a properly completed and
duly executed Notice of Guaranteed Delivery, substantially in the form provided
by the Purchaser, must be received by the Depositary prior to the Expiration
Date and (c) the certificates for all tendered Shares and/or Rights, in proper
form for transfer (or a Book-Entry Confirmation with respect to all such Shares
and/or Rights), together with a properly completed and duly executed Letter of
Transmittal (or facsimile thereof), with any required signature guarantees, or,
in the case of a book-entry transfer, an Agent's Message, and any other required
documents are received by the Depositary within (a), in the case of Shares,
three trading days after the date of execution of such Notice of Guaranteed
Delivery or (b), in the case of Rights, a period ending on the later of (1)
three trading days after the date of execution of such Notice of Guaranteed
Delivery or (2) three business days (as defined in the Offer to Purchase) after
the date certificates for Rights are distributed to stockholders by the Company
or the Rights Agent, all as provided in Section 2 of the Offer to Purchase. A
"trading day" is any day on which the Nasdaq National Market operated by the
National Association of Securities Dealers, Inc. is open for business.
Stockholders may not extend the foregoing time period for delivery of Rights to
the Depositary by providing a second Notice of Guaranteed Delivery with respect
to such Rights.
The term "Agent's Message" means a message, transmitted by a Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that such Book-Entry Transfer Facility has
received an express acknowledgement from the participant in such Book-Entry
Transfer Facility tendering the Shares that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that the
Purchaser may enforce such agreement against the participant.
The signatures on this Letter of Transmittal cover the Shares and the Rights
tendered hereby whether or not such Rights are delivered simultaneously with
such Shares.
THE METHOD OF DELIVERY OF SHARES, RIGHTS, THE LETTER OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY TRANSFER
FACILITY, IS AT THE ELECTION AND RISK OF THE TENDERING STOCKHOLDER. SHARES WILL
BE DEEMED DELIVERED ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY (INCLUDING, IN
THE CASE OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION). IF DELIVERY IS
BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS
RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY
DELIVERY.
<PAGE>
No alternative, conditional or contingent tenders will be accepted and no
fractional Shares or Rights will be purchased. All tendering stockholders, by
execution of this Letter of Transmittal (or facsimile thereof), waive any right
to receive any notice of the acceptance of their Shares or Rights for payment.
3. INADEQUATE SPACE. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares or Rights should be listed on a
separate schedule attached hereto.
4. PARTIAL TENDERS (APPLICABLE TO CERTIFICATE STOCKHOLDERS ONLY). If fewer
than all the Shares or Rights evidenced by any certificate submitted are to be
tendered, fill in the number of Shares or Rights that are to be tendered in the
box entitled "Number of Shares Tendered" or "Number of Rights Tendered", as
appropriate. In any such case, new certificate(s) for the remainder of the
Shares or Rights that were evidenced by the old certificate(s) will be sent to
the registered holder, unless otherwise provided in the appropriate box on this
Letter of Transmittal, as soon as practicable after the acceptance for payment
of, and payment for, the Shares and Rights tendered herewith. All Shares and
Rights represented by certificates delivered to the Depositary will be deemed
to have been tendered unless otherwise indicated.
5. SIGNATURES ON LETTER OF TRANSMITTAL, STOCK POWERS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered holder of the Shares and
Rights tendered hereby, the signature must correspond with the name as written
on the face of the certificate(s) without any change whatsoever.
If any of the Shares or Rights tendered hereby are owned of record by two or
more joint owners, all such owners must sign this Letter of Transmittal.
If any tendered Shares or Rights are registered in different names on
several certificates, it will be necessary to complete, sign and submit as many
separate Letters of Transmittal as there are different registrations of
certificates.
If this Letter of Transmittal or any certificates or stock powers are signed
by trustees, executors, administrators, guardians, attorneys-in-fact, officers
of corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing, and proper evidence satisfactory to the
Purchaser of their authority so to act must be submitted.
When this Letter of Transmittal is signed by the registered owner(s) of the
Shares and Rights listed and transmitted hereby, no endorsements of certificates
or separate stock powers are required unless payment or certificates for Shares
or Rights not tendered or accepted for payment are to be issued to a person
other than the registered owner(s). Signatures on such certificates or stock
powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered owner(s) of the certificates listed, the certificates must be
endorsed or accompanied by appropriate stock powers, in either case signed
exactly as the name or names of the registered owner or owners appear on the
certificates. Signatures on such certificates or stock powers must be guaranteed
by an Eligible Institution.
6. STOCK TRANSFER TAXES. The Purchaser will pay any stock transfer taxes
with respect to the transfer and sale of Shares or Rights to it or its order
pursuant to the Offer. If, however, payment of the purchase price is to be made
to, or if certificates for Shares or Rights not tendered or accepted for payment
are to be registered in the name of, any person(s) other than the registered
holder(s), or if tendered certificates are registered in the name(s) of any
person(s) other than the person(s) signing this Letter of Transmittal, the
amount of any stock transfer taxes (whether imposed on the registered holder(s)
or such person(s)) payable on account of the transfer to such person(s) will be
deducted from the purchase price unless satisfactory evidence of the payment of
such taxes or exemption therefrom is submitted.
EXCEPT AS PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY FOR
TRANSFER TAX STAMPS TO BE AFFIXED TO THE CERTIFICATES LISTED IN THIS LETTER OF
TRANSMITTAL.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check is to be issued in
the name of, and/or certificates for Shares or Rights not accepted for payment
are to be returned to, a person other than the signer of this Letter of
Transmittal or if a check is to be sent and/or such certificates are to be
returned to a person other than the signer of this Letter of Transmittal or to
an address other than that shown above, the appropriate boxes on this Letter of
Transmittal should be completed. Any stockholder(s) delivering Shares or Rights
by book-entry transfer may request that Shares or Rights not accepted for
payment be credited to such account maintained at a Book-Entry Transfer Facility
as such stockholder(s) may designate.
8. WAIVER OF CONDITIONS. The Purchaser reserves the absolute right in its
sole discretion to waive any of the specified conditions of the Offer, in whole
or in part, in the case of any Shares or Rights tendered.
9. 31% BACKUP WITHHOLDING. In order to avoid "backup withholding" of Federal
income tax on payments of cash pursuant to the Offer, a stockholder surrendering
shares in the Offer must, unless an exemption applies, provide the Depositary
with such stockholder's correct taxpayer identification number ("TIN") on
Substitute Form W-9 in this Letter of Transmittal and certify under penalties of
perjury that such TIN is correct and that such stockholder is not subject to
backup withholding. If a stockholder does not provide such stockholder's correct
TIN or fails to provide the certifications described above, the Internal Revenue
Service (the "IRS") may impose a $50 penalty on such stockholder and payment of
cash to such stockholder pursuant to the Offer may be subject to backup
withholding of 31%.
Backup withholding is not an additional income 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 stockholder is required to give the Depositary the TIN (i.e., social
security number or employer identification number) of the record owner of the
Shares. If the Shares are held in more than one name or are not in the name of
the actual owner, consult the enclosed "Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9" for additional guidance on which
number to report.
<PAGE>
The box in Part 3 of the Substitute Form W-9 may be checked if the tendering
stockholder has not been issued a TIN and has applied for a TIN or intends to
apply for a TIN in the near future. If the box in Part 3 is checked, the
stockholder or other payee must also complete the Certificate of Awaiting
Taxpayer Identification Number below in order to avoid backup withholding.
Notwithstanding that the box in Part 3 is checked and the Certificate of
Awaiting Taxpayer Identification Number is completed, the Depositary will
withhold 31% on all payments made prior to the time a properly certified TIN is
provided to the Depositary. However, such amounts will be refunded to such
stockholder if a TIN is provided to the Depositary within 60 days.
Certain stockholders (including, among others, all corporations and certain
foreign individuals and entities) are not subject to backup withholding.
Noncorporate foreign stockholders should complete and sign the main signature
form and a Form W-8, Certificate of Foreign Status, a copy of which may be
obtained from the Depositary, in order to avoid backup withholding. See the
enclosed "Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9" for more instructions.
10. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and requests for
assistance or additional copies of the Offer to Purchase, the Supplement, the
Letter of Transmittal, the Notice of Guaranteed Delivery and the Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9 may be
directed to the Information Agent or the Dealer Manager at their respective
addresses set forth below.
11. LOST, DESTROYED OR STOLEN CERTIFICATES. If any certificate representing
Shares or Rights has been lost, destroyed or stolen, the stockholder should
promptly notify the Depositary by checking the box immediately preceding the
special payment/special delivery instructions and indicating the number of
Shares or Rights lost. The stockholder will then be instructed as to the steps
that must be taken in order to replace the certificate. This Letter of
Transmittal and related documents cannot be processed until the procedures for
replacing lost or destroyed certificates have been followed.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE THEREOF), TOGETHER WITH
ANY REQUIRED SIGNATURE GUARANTEES, OR, IN THE CASE OF A BOOK-ENTRY TRANSFER, AN
AGENT'S MESSAGE, AND ANY OTHER REQUIRED DOCUMENTS, MUST BE RECEIVED BY THE
DEPOSITARY PRIOR TO THE EXPIRATION DATE AND EITHER CERTIFICATES FOR TENDERED
SHARES AND RIGHTS MUST BE RECEIVED BY THE DEPOSITARY OR SHARES AND RIGHTS MUST
BE DELIVERED PURSUANT TO THE PROCEDURES FOR BOOK-ENTRY TRANSFER, IN EACH CASE
PRIOR TO THE EXPIRATION DATE, OR THE TENDERING STOCKHOLDER MUST COMPLY WITH THE
PROCEDURES FOR GUARANTEED DELIVERY.
<PAGE>
<TABLE>
<S> <C> <C>
PAYER'S NAME: WHITE ACQUISITION CORP.
SUBSTITUTE PART 1--PLEASE PROVIDE YOUR TIN IN THE BOX
FORM W-9 AT RIGHT AND CERTIFY BY SIGNING AND DATING Social Security Number(s)
BELOW OR
Employer Identification
Number(s)
Part 2--Certification--Under penalties of Part 3--
perjury, I certify that: Awaiting TIN
(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
because (a) I am exempt from backup
withholding or (b) I have not been
notified by the Internal Revenue
Service (the
"IRS") that I am subject to backup Part 4--
withholding as a result of a failure to Exempt TIN
report all interest or dividends or (c) / /
the IRS has notified me that I am no
longer subject to backup withholding.
Department of the Certification instructions--You must cross out item (2) in Part 2 above
Treasury Internal if you have been notified by the IRS that you are subject to backup
Revenue Service withholding because of under reporting interest or dividends on your tax
returns. However, if after being notified by the IRS that you were
Payer's Request for subject to backup withholding you received another notification from the
Taxpayer Identification IRS stating that you are no longer subject to backup withholding, do not
Number (TIN) cross out such item (2). If you are exempt from backup withholding,
check the box in Part 4 above.
SIGNATURE DATE , 1995
</TABLE>
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 3 OF
SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (a) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or (b)
I intend to mail or deliver an application in the near future. I understand
that, if I do not provide a taxpayer identification number to the Depositary,
31% of all reportable payments made to me will be withheld, but will be refunded
if I provide a certified taxpayer identification number within 60 days.
<TABLE>
<S> <C>
Signature Date
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS SUBSTITUTE FORM W-9 MAY RESULT IN
BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE
OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL INFORMATION.
<PAGE>
The Information Agent for the Offer is:
[MORROW & CO., INC. LOGO]
909 Third Avenue
20th Floor
New York, NY 10022
Toll Free (800) 566-9061
Banks and Brokerage
Firms please call:
(800) 662-5200
The Dealer Manager for the Offer is:
CS First Boston
Park Avenue Plaza
55 East 52nd Street
New York, NY 10055
(212) 909-2000 (Call Collect)
Exhibit (a)(15)
[CS FIRST BOSTON LOGO]
CS First Boston
Corporation
55 East 52nd Street
New York, New York 10055
Tel: (212) 909-2000
Supplement to the Offer to Purchase Dated June 6, 1995
WHITE ACQUISITION CORP.
a Wholly Owned Subsidiary of
INTERNATIONAL BUSINESS MACHINES CORPORATION
Has Increased the Price of its Offer to Purchase for Cash
All Outstanding Shares of Common Stock
(Including the Associated Preferred Share Purchase Rights)
of
LOTUS DEVELOPMENT CORPORATION
to
$64 NET PER SHARE
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON MONDAY, JULY 3, 1995,
UNLESS THE OFFER IS EXTENDED.
June 13, 1995
To Brokers, Dealers, Banks,
Trust Companies and other Nominees:
We have been engaged by White Acquisition Corp., a New York corporation
(the "Purchaser"), which is a wholly owned subsidiary of International
Business Machines Corporation, a New York corporation ("IBM"), to act as
Dealer Manager in connection with the Purchaser's offer to purchase all
outstanding shares of Common Stock, par value $.01 per share (the "Shares"),
of Lotus Development Corporation, a Delaware corporation (the "Company"),
together with the associated preferred share purchase rights (the "Rights")
issued pursuant to the Rights Agreement (the "Rights Agreement") dated as of
November 7, 1988, as amended, between the Company and The First National
Bank of Boston, as Rights Agent, at $64 per Share (and associated Right),
net to the seller in cash, without interest thereon, upon the terms and
subject to the conditions set forth in the Purchaser's Offer to Purchase
dated June 6, 1995 (the "Offer to Purchase"), as amended and supplemented by
the Supplement thereto dated June 13, 1995 (the "Supplement") and in the
related Letter of Transmittal (which, together with any amendments or
supplements thereto, collectively constitute the "Offer"). Please furnish
copies of the enclosed materials to those of your clients for whom you hold
Shares registered in your name or in the name of your nominee. The Company
has executed an amendment to the Rights Agreement that renders the Rights
inapplicable to the Offer. Accordingly, the Distribution Date (as defined in
the Offer to Purchase) will not occur as a result of the announcement or
commencement of the Original Offer (as defined in the Supplement) or the
Offer or as a result of the Merger (as defined in the Supplement). The
Rights will continue to be evidenced by certificates for the Shares and the
requirement for a separate tender of Rights described in the Offer to
Purchase will not apply unless a Distribution Date occurs for reasons
unrelated to the Offer and the Merger. UNLESS THE DISTRIBUTION DATE OCCURS,
A TENDER OF SHARES WILL ALSO CONSTITUTE A TENDER OF THE ASSOCIATED RIGHTS.
Enclosed herewith are copies of the following documents:
1. The Supplement dated June 13, 1995;
<PAGE>
2. The revised PINK Letter of Transmittal to be used by stockholders
of the Company in accepting the Offer;
3. A printed form of letter that may be sent to your clients for
whose account you hold Shares or Rights in your name or in the name of a
nominee, with space provided for obtaining such clients' instructions
with regard to the Offer;
4. The revised BLUE Notice of Guaranteed Delivery;
5. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9; and
6. Return envelope addressed to The Chase Manhattan Bank, N.A., the
Depositary.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION DATE THAT NUMBER OF
SHARES THAT WOULD REPRESENT A MAJORITY OF ALL OUTSTANDING SHARES ON A FULLY
DILUTED BASIS ON THE DATE OF PURCHASE. THE OFFER IS NO LONGER SUBJECT TO THE
RIGHTS CONDITION, THE BUSINESS COMBINATION CONDITION OR THE CONTROL SHARE
CONDITION (EACH AS DEFINED IN THE OFFER TO PURCHASE).
We urge you to contact your clients promptly. Please note that the Offer
and withdrawal rights will expire at 12:00 Midnight, New York City time, on
Monday, July 3, 1995, unless extended.
Neither the Purchaser nor IBM will pay any fees or commissions to any
broker or dealer or other person (other than the Dealer Manager and the
Information Agent as described in the Offer to Purchase) in connection with
the solicitation of tenders of Shares and Rights pursuant to the Offer. You
will be reimbursed upon request for customary mailing and handling expenses
incurred by you in forwarding the enclosed offering materials to your
customers.
Additional copies of the enclosed material may be obtained by contacting
the Information Agent or the Dealer Manager at their respective addresses
and telephone numbers set forth on the back cover of the enclosed
Supplement.
Very truly yours,
CS FIRST BOSTON CORPORATION
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL RENDER YOU
OR ANY OTHER PERSON THE AGENT OF THE PURCHASER, IBM, THE DEPOSITARY, THE
INFORMATION AGENT OR THE DEALER MANAGER OR AUTHORIZE YOU OR ANY OTHER PERSON
TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATION ON BEHALF OF ANY OF THEM
WITH RESPECT TO THE OFFER NOT CONTAINED IN THE OFFER TO PURCHASE, THE
SUPPLEMENT OR THE LETTER OF TRANSMITTAL.
2
Exhibit (a)(16)
Supplement to the Offer to Purchase Dated June 6, 1995
WHITE ACQUISITION CORP.
a Wholly Owned Subsidiary of
INTERNATIONAL BUSINESS MACHINES CORPORATION
Has Increased the Price of its Offer to Purchase for Cash
All Outstanding Shares of Common Stock
(Including the Associated Preferred Share Purchase Rights)
of
LOTUS DEVELOPMENT CORPORATION
to
$64 NET PER SHARE
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON MONDAY, JULY 3, 1995,
UNLESS THE OFFER IS EXTENDED.
To Our Clients:
Enclosed for your consideration is a Supplement dated June 13, 1995 (the
"Supplement") to the Offer to Purchase dated June 6, 1995 (the "Offer to
Purchase") and the related Letter of Transmittal (which, together with any
amendments or supplements thereto, collectively constitute the "Offer")
relating to the Offer by White Acquisition Corp., a New York corporation
(the "Purchaser"), which is a wholly owned subsidiary of International
Business Machines Corporation, a New York corporation ("IBM"), to purchase
for cash all outstanding shares of Common Stock, par value $.01 per share
(the "Shares"), of Lotus Development Corporation, a Delaware corporation
(the "Company"), together with the associated preferred share purchase
rights (the "Rights") issued pursuant to the Rights Agreement (the "Rights
Agreement") dated as of November 7, 1988, as amended, between the Company
and The First National Bank of Boston, as Rights Agent. The Company has
executed an amendment to the Rights Agreement that renders the Rights
inapplicable to the Offer. Accordingly, the Distribution Date (as defined in
the Offer to Purchase) will not occur as a result of the announcement or
commencement of the Original Offer (as defined in the Supplement) or the
Offer or as a result of the Merger (as defined in the Supplement). The
Rights will continue to be evidenced by certificates for the Shares and the
requirement for a separate tender of Rights described in the Offer to
Purchase will not apply unless a Distribution Date occurs for reasons
unrelated to the Offer and the Merger. UNLESS THE DISTRIBUTION DATE OCCURS,
A TENDER OF SHARES WILL ALSO CONSTITUTE A TENDER OF THE ASSOCIATED RIGHTS.
We are the holder of record of Shares and Rights held by us for your
account. A TENDER OF SUCH SHARES AND RIGHTS CAN BE MADE ONLY BY US AS THE
HOLDER OF RECORD AND PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF
TRANSMITTAL IS FURNISHED TO YOU FOR YOUR INFORMATION ONLY AND CANNOT BE USED
TO TENDER SHARES OR RIGHTS HELD BY US FOR YOUR ACCOUNT.
We request instructions as to whether you wish to tender any of or all
the Shares and Rights held by us for your account, pursuant to the terms and
conditions set forth in the Offer.
Your attention is directed to the following:
1. The offer price is $64 per Share (and associated Right), net to
the seller in cash, without interest thereon, upon the terms and subject
to the conditions of the Offer.
<PAGE>
2. The Offer is being made for all outstanding Shares and Rights.
3. THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON MONDAY, JULY 3, 1995, UNLESS THE OFFER IS EXTENDED BY THE
PURCHASER.
4. The Offer is conditioned upon, among other things, there being
validly tendered and not withdrawn prior to the Expiration Date (as
defined in the Offer to Purchase) that number of Shares that would
represent a majority of all outstanding Shares on a fully diluted basis
on the date of purchase.
5. Any stock transfer taxes applicable to a sale of Shares or Rights
to the Purchaser will be borne by the Purchaser, except as otherwise
provided in Instruction 6 of the Letter of Transmittal.
Your instructions to us should be forwarded promptly to permit us to
submit a tender on your behalf prior to the expiration of the Offer.
If you wish to have us tender any of or all the Shares and Rights held
by us for your account, please so instruct us by completing, executing,
detaching and returning to us the instruction form on the detachable part
hereof. An envelope to return your instructions to us is enclosed. If you
authorize the tender of your Shares and Rights, all such Shares and Rights
will be tendered unless otherwise specified on the detachable part hereof.
Your instructions should be forwarded to us in ample time to permit us to
submit a tender on your behalf prior to the expiration of the Offer.
Payment for Shares accepted for payment pursuant to the Offer will in
all cases be made only after timely receipt by The Chase Manhattan Bank,
N.A. (the "Depositary"), of (a) certificates for (or a timely Book-Entry
Confirmation (as defined in the Offer to Purchase) with respect to) such
Shares and, if the Distribution Date occurs, certificates for (or a timely
Book-Entry Confirmation, if available, with respect to) the associated
Rights (unless the Purchaser elects to make payment for such Shares pending
receipt of the certificates for, or a Book-Entry Confirmation with respect
to, such Rights as described in Section 2 of the Offer to Purchase), (b) a
Letter of Transmittal (or facsimile thereof), properly completed and duly
executed, with any required signature guarantees, or, in the case of a
book-entry transfer effected pursuant to the procedure set forth in Section
2 of the Offer to Purchase, an Agent's Message, and (c) any other documents
required by the Letter of Transmittal. Accordingly, tendering stockholders
may be paid at different times depending upon when certificates for Shares
(or Rights) or Book-Entry Confirmations with respect to Shares (or Rights,
if available) are actually received by the Depositary. UNDER NO
CIRCUMSTANCES WILL INTEREST BE PAID ON THE PURCHASE PRICE OF THE SHARES TO
BE PAID BY THE PURCHASER, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY
DELAY IN MAKING SUCH PAYMENT.
Stockholders who have previously validly tendered and not properly
withdrawn their Shares pursuant to the Offer are not required to take any
further action, except as may be required by the procedure for guaranteed
delivery if such procedure was utilized. If Shares are accepted for payment
and paid for by the Purchaser pursuant to the Offer, such stockholders will
receive, subject to the conditions of the Offer, the increased price of $64
per Share. See Section 3 of the Offer to Purchase for the procedures for
withdrawing Shares tendered pursuant to the Offer.
The Offer is not being made to, nor will tenders be accepted from, or on
behalf of, holders of Shares and Rights in any jurisdiction in which the
making or acceptance of the Offer would not be in compliance with the laws
of such jurisdiction.
2
<PAGE>
INSTRUCTIONS WITH RESPECT TO
THE OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
OF
LOTUS DEVELOPMENT CORPORATION
The undersigned acknowledge(s) receipt of your letter, the Offer to Purchase
of White Acquisition Corp. dated June 6, 1995 (the "Offer to Purchase"), as
amended and supplemented by the Supplement thereto dated June 13, 1995 (the
"Supplement") and the related Letter of Transmittal relating to shares of Common
Stock, par value $.01 per share (the "Shares"), of Lotus Development
Corporation, a Delaware corporation (the "Company"), together with the
associated preferred share purchase rights (the "Rights").
This will instruct you to tender the number of Shares and Rights indicated
below held by you for the account of the undersigned, on the terms and subject
to the conditions set forth in such Offer to Purchase, Supplement and Letter of
Transmittal.
SIGN HERE
Number of Shares to be Tendered:*
____________________________ Shares ___________________________________________
___________________________________________
SIGNATURE(S)
Number of Rights to be Tendered:*
____________________________ Rights
___________________________________________
___________________________________________
Dated: _______________________, 1995 (PLEASE PRINT NAME(S) AND ADDRESS(ES))
- ------------
* Unless the Distribution Date (as defined in the Offer to Purchase) occurs, a
tender of Shares will also constitute a tender of the associated Rights.
Unless otherwise indicated, it will be assumed that all your Shares and Rights
are to be tendered.
Exhibit (a)(17)
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
OF
LOTUS DEVELOPMENT CORPORATION
As set forth in Section 2 of the Offer to Purchase (as defined below), this
form or one substantially equivalent hereto must be used to accept the Offer (as
defined below) if certificates for shares of Common Stock, par value $.01 per
share (the "Shares"), of Lotus Development Corporation, a Delaware corporation
(the "Company"), and/or certificates for the associated preferred share purchase
rights (the "Rights") issued pursuant to the Rights Agreement dated as of
November 7, 1988, as amended, between the Company and The First National Bank of
Boston, as Rights Agent (the "Rights Agent"), are not immediately available
(including because certificates for Rights have not yet been distributed by the
Company or the Rights Agent following the occurrence of a Distribution Date (as
defined in the Offer to Purchase)) or if the procedure for book-entry transfer
cannot be completed on a timely basis or time will not permit all required
documents to reach the Depositary prior to the Expiration Date (as defined in
the Offer to Purchase). This form may be delivered by hand to the Depositary or
transmitted by telegram, facsimile transmission or mail to the Depositary and
must include a guarantee by an Eligible Institution (as defined in the Offer to
Purchase). See Section 2 of the Offer to Purchase.
TO: THE CHASE MANHATTAN BANK, N.A., DEPOSITARY
(800) 355-2663
<TABLE>
<S> <C> <C>
By Mail: By Overnight Delivery: By Hand:
Box 3032 c/o Chase Securities (9:00 a.m. -- 5:00 p.m.
4 Chase MetroTech Center Processing Corp. New York City time)
Brooklyn, NY 11245 Ft. Lee Executive Park 1 Chase Manhattan Plaza
1 Executive Drive Floor 1-B
(6th Floor) Nassau and Liberty Streets
Ft. Lee, NJ 07024 New York, NY 10081
By Facsimile Transmission:
(201) 592-4372
Confirm by Telephone:
(201) 592-4370
</TABLE>
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS, OR TRANSMISSION OF INSTRUCTIONS
VIA A FACSIMILE NUMBER, OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A
VALID DELIVERY.
This form is not to be used to guarantee signatures. If a signature on a
Letter of Transmittal is required to be guaranteed by an Eligible Institution
under the instructions thereto, such signature guarantee must appear in the
applicable space provided in the signature box on the Letter of Transmittal.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to White Acquisition Corp., a New York
corporation (the "Purchaser"), which is a wholly owned subsidiary of
International Business Machines Corporation, a New York corporation, upon the
terms and subject to the conditions set forth in the Purchaser's Offer to
Purchase dated June 6, 1995 (the "Offer to Purchase"), as amended and
supplemented by the Supplement thereto dated June 13, 1995 (the "Supplement")
and the related Letter of Transmittal (which together constitute the "Offer"),
receipt of which is hereby acknowledged, the number of Shares and Rights set
forth below, all pursuant to the guaranteed delivery procedures set forth in
Section 2 of the Offer to Purchase.
Number of Shares.................... Name(s) of Record Holder(s):
Number of Rights.................... .......................................
Certificate Nos. (if available): .......................................
PLEASE PRINT
...................................
Address(es):............................
...................................
.......................................
(Check one box if Shares or Rights ZIP CODE
will be tendered by book-entry Area Code and
transfer) Tel. No.:...............................
/ / The Depository Trust Company
/ / Midwest Securities Trust Company
/ / Philadelphia Depository Trust
Company Signature(s):...........................
Account Number......................
.......................................
Dated:..................................
2
<PAGE>
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a participant in the Security Transfer Agent's Medallion
Program, the New York Stock Exchange Medallion Signature Guarantee Program or
the Stock Exchange Medallion Program, hereby guarantees to deliver to the
Depositary either the certificates representing the Shares and/or Rights
tendered hereby, in proper form for transfer, or a Book-Entry Confirmation with
respect to such Shares and/or Rights, in any such case together with a properly
completed and duly executed Letter of Transmittal (or facsimile thereof), with
any required signature guarantees, or an Agent's Message, and any other required
documents (a) in the case of Shares, within three trading days after the date
hereof and (b) in the case of Rights, within a period ending on the later of (i)
three trading days after the date hereof or (ii) three business days after the
date certificates for Rights are distributed to stockholders by the Company or
the Rights Agent.
The Eligible Institution that completes this form must communicate the
guarantee to the Depositary and must deliver the Letter of Transmittal and
certificates for Shares and/or Rights to the Depositary within the time period
shown herein. Failure to do so could result in a financial loss to such Eligible
Institution. All terms used herein have the meanings set forth in the Offer to
Purchase.
<TABLE>
<S> <C>
Name of Firm: .................................... ..................................................
AUTHORIZED SIGNATURE
Address: ......................................... Name: ............................................
PLEASE PRINT
.................................................. Title: ...........................................
ZIP CODE
Area Code and
Tel No.: ......................................... Dated: .........................................
</TABLE>
NOTE: DO NOT SEND CERTIFICATES FOR SHARES AND/OR RIGHTS WITH THIS NOTICE;
CERTIFICATES FOR SHARES AND/OR RIGHTS SHOULD BE SENT WITH YOUR LETTER OF
TRANSMITTAL.
