<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-1
TENDER OFFER STATEMENT
PURSUANT TO SECTION 14(D)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
AND
SCHEDULE 13D
(AMENDMENT NO. 5)
UNDER THE SECURITIES EXCHANGE ACT OF 1934
----------------
PYRAMID TECHNOLOGY CORPORATION
(NAME OF SUBJECT COMPANY)
----------------
SIEMENS NIXDORF MID-RANGE ACQUISITION CORP.
SIEMENS NIXDORF INFORMATIONSSYSTEME AG
SIEMENS AKTIENGESELLSCHAFT
(BIDDERS)
----------------
COMMON STOCK, $.01 PAR VALUE
(TITLE OF CLASS OF SECURITIES)
----------------
747236107
(CUSIP NUMBER OF CLASS OF SECURITIES)
----------------
E. ROBERT LUPONE, ESQ.
SIEMENS CORPORATION
1301 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10019-6022
(212) 258-4000
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO
RECEIVE NOTICES AND COMMUNICATIONS ON BEHALF OF BIDDER)
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COPY TO:
PETER D. LYONS, ESQ.
SHEARMAN & STERLING
599 LEXINGTON AVENUE
NEW YORK, NEW YORK 10022
TELEPHONE: (212) 848-4000
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JANUARY 20, 1995
[DATE OF EVENT WHICH REQUIRES FILING OF THE STATEMENT]
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CALCULATION OF FILING FEE
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<TABLE>
<CAPTION>
TRANSACTION VALUATION AMOUNT OF FILING FEE
<S> <C>
$261,772,336.00* $52,354.46**
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</TABLE>
* Note: The Transaction Value is calculated by multiplying $16.00, the per
share tender offer price, by 16,360,771, the sum of the number of shares of
Common Stock outstanding not already owned by the Bidders and the 3,449,923
shares of Common stock subject to options outstanding.
** 1/50 of 1% of Transaction Value.
[_]Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form
or Schedule and the date of its filing.
Amount Previously Paid: Filing Party:
Form or Registration No.: Date Filed:
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<PAGE>
CUSIP NO. 747236107
1. Name of Reporting Person S.S. or I.R.S. Identification
No. of Above Person
Siemens Nixdorf Mid-Range Acquisition Corp.
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2. Check the Appropriate Box if a Member of Group (a) [_]
(b) [_]
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3. SEC Use only
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4. Sources of Funds AF
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5.
Check if Disclosure of Legal Proceedings is Required Pursuant to Item [_]
2(d) or 2(f)
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6. Citizen or Place of Organization
Delaware
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7. Aggregate Amount Beneficially Owned by Each Reporting
Person
4,047,743
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8.
Check if the Aggregate Amount in Row (7) Excludes [_]
Certain Shares
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9. Percent of Class Represented by Amount in Row (7)
23.9%
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10. Type of Reporting Person
CO
Page 2 of 9
<PAGE>
CUSIP NO. 747236107
1. Name of Reporting Person S.S. or I.R.S. Identification
No. of Above Person
Siemens Nixdorf Informationssysteme AG
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2.
Check the Appropriate Box if a Member of Group (a) [_]
(b) [_]
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3.
SEC Use only
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4. Sources of Funds AF
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5.
Check if Disclosure of Legal Proceedings is Required Pursuant to Item [_]
2(d) or 2(f)
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6. Citizen or Place of Organization
Federal Republic of Germany
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7. Aggregate Amount Beneficially Owned by Each Reporting
Person
4,047,743
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8.
Check if the Aggregate Amount in Row (7) Excludes [_]
Certain Shares
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9. Percent of Class Represented by Amount in Row (7)
23.9%
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10. Type of Reporting Person
CO
Page 3 of 9
<PAGE>
CUSIP NO. 747236107
1. Name of Reporting Person S.S. or I.R.S. Identification
No. of Above Person
Siemens Aktiengesellschaft
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2.
Check the Appropriate Box if a Member of Group (a) [_]
(b) [_]
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3.
SEC Use only
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4. Sources of Funds WC
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5.
Check if Disclosure of Legal Proceedings is Required Pursuant to Item [_]
2(d) or 2(f)
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6. Citizen or Place of Organization
Federal Republic of Germany
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7. Aggregate Amount Beneficially Owned by Each Reporting
Person
4,047,743
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8.
Check if the Aggregate Amount in Row (7) Excludes [_]
Certain Shares
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9. Percent of Class Represented by Amount in Row (7)
23.9%
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10. Type of Reporting Person
CO
Page 4 of 9
<PAGE>
This Tender Offer Statement on Schedule 14D-1 and Amendment No. 5 to Schedule
13D (this "Statement") relates to the offer by Siemens Nixdorf Mid-Range
Acquisition Corp., a Delaware corporation ("Purchaser") and an indirect wholly
owned subsidiary of Siemens Nixdorf Informationssysteme AG, a corporation
organized under the laws of the Federal Republic of Germany ("SNI AG") and a
direct wholly owned subsidiary of Siemens Aktiengesellschaft, a corporation
organized under the laws of the Federal Republic of Germany ("Siemens AG"), to
purchase all outstanding shares of Common Stock, par value $.01 per share (the
"Shares"), of Pyramid Technology Corporation, a Delaware corporation (the
"Company") at a price of $16.00 per Share, net to the seller in cash, upon the
terms and subject to the conditions set forth in Purchaser's Offer to Purchase
dated January 27, 1995 (the "Offer to Purchase") and in the related Letter of
Transmittal (which together constitute the "Offer"), copies of which are
attached hereto as Exhibits (a)(1) and (a)(2), respectively.
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is Pyramid Technology Corporation, a
Delaware corporation (the "Company"), which has its principal executive offices
at 3860 N. First Street, San Jose, California 95134.
(b) The class of equity securities being sought is all the outstanding shares
of Common Stock, par value $.01 per share, of the Company. The information set
forth in the Introduction and Section 1 ("Terms of the Offer; Expiration Date")
of the Offer to Purchase is incorporated herein by reference.
(c) The information concerning the principal market in which the Shares are
traded and certain high and low sales prices for the Shares in such principal
market set forth in Section 6 ("Price Range of Shares; Dividends") of the Offer
to Purchase is incorporated herein by reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(d) and (g) This Statement is filed by Purchaser, SNI AG and Siemens AG.
The information concerning the name, state or other place of organization,
principal business and address of the principal office of each of Purchaser,
SNI AG and Siemens AG, and the information concerning the name, business
address, present principal occupation or employment and the name, principal
business and address of any corporation or other organization in which such
employment or occupation is conducted, material occupations, positions, offices
or employments during the last five years and citizenship of each of the
executive officers and directors of Purchaser, SNI AG and Siemens AG are set
forth in the Introduction, Section 8 ("Certain Information Concerning
Purchaser, SNI AG and Siemens AG") and Schedule I of the Offer to Purchase and
are incorporated herein by reference.
(e) and (f) During the last five years, none of Purchaser, SNI AG or Siemens
AG, and, to the best knowledge of Purchaser, SNI AG and Siemens AG, none of the
persons listed in Schedule I of the Offer to Purchase has been (i) convicted in
a criminal proceeding (excluding traffic violations or similar misdemeanors) or
(ii) a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding was or is subject to
a judgment, decree or final order enjoining future violations of, or
prohibiting activities subject to, federal or state securities laws or finding
any violation of such laws.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
(a) The information set forth in Section 8 ("Certain Information Concerning
Purchaser, SNI AG and Siemens AG") and Section 10 ("Background of the Offer;
Contacts with the Company; the Merger Agreement") of the Offer to Purchase is
incorporated herein by reference.
(b) The information set forth in the Introduction, Section 7 ("Certain
Information Concerning the Company"), Section 8 ("Certain Information
Concerning Purchaser, SNI AG and Siemens AG"), Section 10
Page 5 of 9
<PAGE>
("Background of the Offer; Contacts with the Company; the Merger Agreement")
and Section 11 ("Purpose of the Offer; Plans for the Company After the Offer
and the Merger") of the Offer to Purchase is incorporated herein by reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a)-(c) The information set forth in Section 9 ("Financing of the Offer and
the Merger") of the Offer to Purchase is incorporated herein by reference.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER.
(a)-(e) The information set forth in the Introduction, Section 10
("Background of the Offer; Contacts with the Company; the Merger Agreement")
and Section 11 ("Purpose of the Offer; Plans for the Company After the Offer
and the Merger") of the Offer to Purchase is incorporated herein by reference.
(f) and (g) The information set forth in Section 13 ("Effect of the Offer on
the Market for Shares, Exchange Listing and Exchange Act Registration") of the
Offer to Purchase is incorporated herein by reference.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a) and (b) The information set forth in Section 8 ("Certain Information
Concerning Purchaser, SNI AG and Siemens AG") of the Offer to Purchase is
incorporated herein by reference.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE SUBJECT COMPANY'S SECURITIES.
The information set forth in the Introduction, Section 8 ("Certain
Information Concerning Purchaser, SNI AG and Siemens AG"), Section 10
("Background of the Offer; Contacts with the Company; the Merger Agreement")
and Section 11 ("Purpose of the Offer; Plans for the Company After the Offer
and the Merger") of the Offer to Purchase is incorporated herein by reference.
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in the Introduction and Section 16 ("Fees and
Expenses") of the Offer to Purchase is incorporated herein by reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
The information set forth in Section 8 ("Certain Information Concerning
Purchaser, SNI AG and Siemens AG") of the Offer to Purchase is incorporated
herein by reference.
ITEM 10. ADDITIONAL INFORMATION.
(a) Not applicable.
(b) and (c) The information set forth in Section 15 ("Certain Legal Matters
and Regulatory Approvals") of the Offer to Purchase is incorporated herein by
reference.
(d) Not applicable.
(e) The information set forth in Section 15 ("Certain Legal Matters and
Regulatory Approvals") of the Offer to Purchase is incorporated herein by
reference.
(f) The information set forth in the Offer to Purchase is incorporated herein
by reference.
Page 6 of 9
<PAGE>
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
<TABLE>
<C> <S>
(a)(1) Form of Offer to Purchase dated January 27, 1995.
(a)(2) Form of Letter of Transmittal.
(a)(3) Form of Notice of Guaranteed Delivery.
(a)(4) Form of Letter from Goldman, Sachs & Co. to Brokers, Dealers,
Commercial Banks, Trust Companies and Nominees.
(a)(5) Form of Letter from Brokers, Dealers, Commercial Banks, Trust
Companies and Nominees to Clients.
(a)(6) Form of Guidelines for Certification of Taxpayer Identification Number
on Substitute Form W-9.
(a)(7) Summary Advertisement as published in The Wall Street Journal on
January 27, 1995.
(a)(8) Press Release issued by SNI AG and the Company on January 23, 1995.
(a)(9) Press Release issued by SNI AG and the Company on January 27, 1995.
(a)(10) Consolidated Financial Statements of Siemens AG for the fiscal year
ended September 30, 1994.*
(b) None.
(c)(1) Agreement and Plan of Merger, dated as of January 20, 1995, among SNI
AG, Purchaser and the Company.
(c)(2) Management Retention Agreement, dated as of January 20, 1995, between
John S. Chen and the Company.
(d) None.
(e) Not applicable.
(f) None.
</TABLE>
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* To be filed as an exhibit to an amendment to this Statement.
Page 7 of 9
<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.
January 27, 1995
Siemens Nixdorf Mid-Range
Acquisition Corp.
/s/ Gerhard Schulmeyer
By: _________________________________
Name: Gerhard Schulmeyer
Title: President
Siemens Nixdorf Informationssysteme
AG
/s/ Gerhard Schulmeyer
By: _________________________________
Name: Gerhard Schulmeyer
Title: President, CEO
Siemens Aktiengesellschaft
/s/ Adrienne Whitehead
By: _________________________________
Name: Adrienne Whitehead
Title: Attorney-in-Fact
Page 8 of 9
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. EXHIBIT NAME PAGE NO.
------- ------------ --------
<C> <S> <C>
(a)(1) Form of Offer to Purchase dated January 27, 1995............
(a)(2) Form of Letter of Transmittal...............................
(a)(3) Form of Notice of Guaranteed Delivery.......................
(a)(4) Form of Letter from Goldman, Sachs & Co. to Brokers,
Dealers, Commercial Banks, Trust Companies and Nominees....
(a)(5) Form of Letter from Brokers, Dealers, Commercial Banks,
Trust Companies and Nominees to Clients....................
(a)(6) Form of Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9...............
(a)(7) Summary Advertisement as published in The Wall Street
Journal on January 27, 1995................................
(a)(8) Press Release issued by SNI AG and the Company on January
23, 1995...................................................
(a)(9) Press Release issued by SNI AG and the Company on January
27, 1995...................................................
(a)(10) Consolidated Financial Statements of Siemens AG for the
fiscal year ended September 30, 1994*......................
(c)(1) Agreement and Plan of Merger, dated as of January 20, 1995,
among SNI AG, Purchaser and the Company....................
(c)(2) Management Retention Agreement, dated as of January 20,
1995, between John S. Chen and the Company.................
</TABLE>
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* To be filed as an exhibit to an amendment to this Statement.
Page 9 of 9
<PAGE>
EXHIBIT 99.(A)(1)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
PYRAMID TECHNOLOGY CORPORATION
AT
$16.00 NET PER SHARE
BY
SIEMENS NIXDORF MID-RANGE ACQUISITION CORP.
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
SIEMENS NIXDORF INFORMATIONSSYSTEME AG
A DIRECT WHOLLY OWNED SUBSIDIARY OF
SIEMENS AKTIENGESELLSCHAFT
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON FRIDAY, FEBRUARY 24, 1995, UNLESS THE OFFER IS EXTENDED.
THE OFFER IS CONDITIONED UPON (I) THERE BEING VALIDLY TENDERED AND NOT
WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER AT LEAST THAT NUMBER OF SHARES
THAT, WHEN ADDED TO THE SHARES OWNED OF RECORD BY SIEMENS NIXDORF
INFORMATIONSSYSTEME AG OR ANY OF ITS SUBSIDIARIES ON THE DATE HEREOF (OTHER
THAN SHARES ISSUABLE UPON EXERCISE OF THE WARRANT (AS DEFINED BELOW)), SHALL
CONSTITUTE A MAJORITY OF THE THEN OUTSTANDING SHARES ON A FULLY DILUTED BASIS
(OTHER THAN ANY SHARES ISSUABLE UPON THE EXERCISE OF THE WARRANT AND OTHER
THAN THE RIGHTS (AS DEFINED BELOW)) AND (II) THE EXPIRATION OR TERMINATION OF
ALL WAITING PERIODS IMPOSED UPON CONSUMMATION OF THE OFFER BY THE HART-SCOTT-
RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED (THE "HSR ACT"), AND THE
REGULATIONS THEREUNDER AND ANY APPLICABLE FOREIGN COMPETITION AND ANTITRUST
STATUTES AND REGULATIONS, AS WELL AS THE OTHER CONDITIONS DESCRIBED HEREIN.
THE BOARD OF DIRECTORS OF PYRAMID TECHNOLOGY CORPORATION HAS DETERMINED THAT
EACH OF THE OFFER AND THE MERGER IS FAIR TO, AND IN THE BEST INTERESTS OF, THE
STOCKHOLDERS OF PYRAMID TECHNOLOGY CORPORATION, AND RECOMMENDS THAT
STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER.
--------------
IMPORTANT
Any stockholder desiring to tender all or any portion of such stockholder's
shares of common stock, par value $.01 per share (the "Shares"), of Pyramid
Technology Corporation should either (1) complete and sign the Letter of
Transmittal (or a facsimile thereof) in accordance with the instructions in
the Letter of Transmittal and mail or deliver it together with the
certificate(s) evidencing tendered Shares, and any other required documents,
to the Depositary or tender such Shares pursuant to the procedure for book-
entry transfer set forth in Section 3 or (2) request such stockholder's
broker, dealer, commercial bank, trust company or other nominee to effect the
transaction for such stockholder. Any stockholder whose Shares are registered
in the name of a broker, dealer, commercial bank, trust company or other
nominee must contact such broker, dealer, commercial bank, trust company or
other nominee if such stockholder desires to tender such Shares.
A stockholder who desires to tender Shares and whose certificates evidencing
such Shares are not immediately available, or who cannot comply with the
procedure for book-entry transfer on a timely basis, may tender such Shares by
following the procedure for guaranteed delivery set forth in Section 3.
Questions or requests for assistance may be directed to the Information
Agent at its address and telephone numbers set forth on the back cover of this
Offer to Purchase. Questions or requests for assistance may also be directed
to the Dealer Managers at their address on the back cover of this Offer to
Purchase. Additional copies of this Offer to Purchase, the Letter of
Transmittal and the Notice of Guaranteed Delivery may also be obtained from
the Information Agent or from brokers, dealers, commercial banks or trust
companies.
--------------
The Dealer Managers for the Offer are:
GOLDMAN, SACHS & CO.
--------------
January 27, 1995
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<C> <S> <C>
INTRODUCTION............................................................ 1
1. Terms of the Offer; Expiration Date............................... 4
2. Acceptance for Payment and Payment for Shares..................... 5
3. Procedures for Accepting the Offer and Tendering Shares........... 6
4. Withdrawal Rights................................................. 9
5. Certain Federal Income Tax Consequences........................... 9
6. Price Range of Shares; Dividends.................................. 10
7. Certain Information Concerning the Company........................ 10
8. Certain Information Concerning Purchaser, SNI AG and Siemens AG... 12
9. Financing of the Offer and the Merger............................. 14
10. Background of the Offer; Contacts with the Company; the Merger
Agreement......................................................... 14
11. Purpose of the Offer; Plans for the Company After the Offer and
the Merger........................................................ 27
12. Dividends and Distributions....................................... 29
13. Effect of the Offer on the Market for Shares, Exchange Listing and
Exchange Act Registration......................................... 30
14. Certain Conditions of the Offer................................... 31
15. Certain Legal Matters and Regulatory Approvals.................... 33
16. Fees and Expenses................................................. 38
17. Miscellaneous..................................................... 38
Schedule I. Directors and Executive Officers of Siemens AG, SNI AG and
Purchaser.............................................................. I-1
</TABLE>
<PAGE>
To the Holders of Common Stock of
Pyramid Technology Corporation:
INTRODUCTION
Siemens Nixdorf Mid-Range Acquisition Corp. ("Purchaser"), a Delaware
corporation and an indirect wholly owned subsidiary of Siemens Nixdorf
Informationssysteme AG ("SNI AG"), a company organized under the laws of the
Federal Republic of Germany and a direct wholly owned subsidiary of Siemens
Aktiengesellschaft ("Siemens AG"), a company organized under the laws of the
Federal Republic of Germany, hereby offers to purchase all outstanding shares
of common stock, par value $.01 per share (the "Common Stock"), of Pyramid
Technology Corporation, a Delaware corporation (the "Company"), at a price of
$16.00 per Share, net to the seller in cash, upon the terms and subject to the
conditions set forth in this Offer to Purchase and in the related Letter of
Transmittal (which together constitute the "Offer"). Purchaser is a direct
wholly owned subsidiary of Siemens Nixdorf Information Systems, Inc., a
Massachusetts corporation ("SNI U.S."), which is itself a direct wholly owned
subsidiary of SNI AG.
Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, except as otherwise provided in Instruction 6 of the Letter of
Transmittal, stock transfer taxes with respect to the purchase of Shares by
Purchaser pursuant to the Offer. Purchaser will pay all charges and expenses
of Goldman, Sachs & Co. ("Goldman Sachs"), which are acting as Dealer Managers
for the Offer (in such capacity, the "Dealer Managers"), Chemical Bank (the
"Depositary") and Georgeson & Company, Inc. (the "Information Agent") incurred
in connection with the Offer. See Section 16.
THE BOARD OF DIRECTORS OF THE COMPANY (THE "BOARD") UNANIMOUSLY (WITH ONE
DIRECTOR RECUSING HIMSELF) HAS DETERMINED THAT EACH OF THE OFFER AND THE
MERGER (AS DEFINED BELOW) IS FAIR TO, AND IN THE BEST INTERESTS OF, THE
STOCKHOLDERS OF THE COMPANY, AND RECOMMENDS THAT STOCKHOLDERS ACCEPT THE OFFER
AND TENDER THEIR SHARES PURSUANT TO THE OFFER.
Dr. Rudolf Bodo, a director of the Company, recused himself from the Board
meetings in which the Board discussed the Merger Agreement (as defined below)
and the transactions contemplated thereby. Dr. Bodo is SNI AG's designee on
the Board pursuant to the Purchase Agreement (as defined below). See Section
10.
Smith Barney Inc. ("Smith Barney"), the Company's financial advisor, has
delivered to the Board its written opinion to the effect that, as of the date
of such opinion, the consideration to be received by the stockholders of the
Company pursuant to each of the Offer and the Merger is fair from a financial
point of view. A copy of the opinion of Smith Barney is contained in the
Company's Solicitation/Recommendation Statement on Schedule 14D-9 (the
"Schedule 14D-9"), which is being mailed to stockholders herewith.
THE OFFER IS CONDITIONED UPON (I) THERE BEING VALIDLY TENDERED AND NOT
WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER AT LEAST THAT NUMBER OF SHARES
THAT, WHEN ADDED TO THE SHARES OWNED OF RECORD BY SNI AG OR ANY OF ITS
SUBSIDIARIES ON THE DATE HEREOF (OTHER THAN SHARES ISSUABLE UPON EXERCISE OF
THE WARRANT (AS DEFINED BELOW)), SHALL CONSTITUTE A MAJORITY OF THE THEN
OUTSTANDING SHARES ON A FULLY DILUTED BASIS (INCLUDING, WITHOUT LIMITATION,
ALL SHARES ISSUABLE UPON THE EXERCISE OF ANY OPTIONS, WARRANTS OR RIGHTS
(OTHER THAN ANY SHARES ISSUABLE UPON THE EXERCISE OF THE WARRANT AND OTHER
THAN THE RIGHTS (AS DEFINED BELOW))) (THE "MINIMUM CONDITION") AND (II) THE
EXPIRATION OR TERMINATION OF ALL WAITING PERIODS IMPOSED UPON CONSUMMATION OF
THE OFFER BY THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS
<PAGE>
AMENDED, AND THE REGULATIONS THEREUNDER AND ANY APPLICABLE FOREIGN COMPETITION
AND ANTITRUST STATUTES AND REGULATIONS, AS WELL AS THE OTHER CONDITIONS
DESCRIBED HEREIN. SEE SECTION 14, WHICH SETS FORTH IN FULL THE CONDITIONS TO
THE OFFER.
The Offer is being made pursuant to an Agreement and Plan of Merger dated as
of January 20, 1995 (the "Merger Agreement") among SNI AG, Purchaser and the
Company. The Merger Agreement provides that, among other things, as soon as
practicable after the purchase of Shares pursuant to the Offer and the
satisfaction of the other conditions set forth in the Merger Agreement and in
accordance with the relevant provisions of the General Corporation Law of the
State of Delaware ("Delaware Law"), Purchaser will be merged with and into the
Company (the "Merger"). Following consummation of the Merger, the Company will
continue as the surviving corporation (the "Surviving Corporation") and will
become an indirect wholly owned subsidiary of SNI AG. At the effective time of
the Merger (the "Effective Time"), each Share issued and outstanding
immediately prior to the Effective Time (other than Shares held in the
treasury of the Company or owned by Purchaser, SNI AG or any direct or
indirect wholly owned subsidiary of SNI AG or the Company, and other than
Shares held by stockholders who shall have demanded and perfected appraisal
rights, if any, under Delaware Law) will be cancelled and converted
automatically into the right to receive $16.00 in cash, or any higher price
that may be paid per Share in the Offer, without interest (the "Merger
Consideration"). The Merger Agreement is more fully described in Section 10.
The Merger Agreement provides that, promptly upon the purchase by Purchaser
of Shares pursuant to the Offer and from time to time thereafter, Purchaser
shall be entitled to designate up to such number of directors, rounded up to
the next whole number, on the Board as will give Purchaser representation on
the Board equal to the product of the number of directors on the Board
multiplied by the percentage that the aggregate number of Shares then
beneficially owned by Purchaser and its affiliates following such purchase
bears to the total number of Shares then outstanding. In the Merger Agreement,
the Company has agreed to take all actions necessary to cause Purchaser's
designees to be elected as directors of the Company, including increasing the
size of the Board or securing the resignations of incumbent directors or both.
The consummation of the Merger is subject to the satisfaction or waiver of
certain conditions, including the approval and adoption of the Merger
Agreement by the requisite vote of the stockholders of the Company, if such
vote is required under Delaware Law. See Section 11. Under the Company's
Certificate of Incorporation and Delaware Law, the affirmative vote of the
holders of a majority of the outstanding Shares is required to approve and
adopt the Merger Agreement and the Merger. Consequently, if Purchaser acquires
(pursuant to the Offer or otherwise) at least a majority of the outstanding
Shares, Purchaser will have sufficient voting power to approve and adopt the
Merger Agreement and the Merger without the vote of any other stockholder.
As described below, SNI AG intends to transfer the 2,717,743 Shares it owns
on the date hereof to Purchaser prior to, or concurrently with, the purchase
of Shares by Purchaser pursuant to the Offer. Under Delaware Law, if Purchaser
acquires, pursuant to the Offer or otherwise, such number of Shares which,
when added to the Shares owned of record by Purchaser on such date,
constitutes at least 90% of the then outstanding Shares, Purchaser will be
able to approve and adopt the Merger Agreement and the transactions
contemplated thereby, including the Merger, without a vote of the Company's
stockholders. In such event, SNI AG, Purchaser and the Company have agreed to
take, at the request of Purchaser, all necessary and appropriate action to
cause the Merger to become effective as soon as reasonably practicable after
such acquisition, without a meeting of the Company's stockholders. If,
however, Purchaser does not acquire such number of Shares which, when added to
the Shares owned of record by Purchaser on such date, constitutes at least 90%
of the then outstanding Shares pursuant to the Offer or otherwise and a vote
of the Company's stockholders is
2
<PAGE>
required under Delaware Law, a significantly longer period of time will be
required to effect the Merger. See Section 11.
The Company has advised Purchaser that as of January 18, 1995, 15,628,591
Shares were issued and outstanding. The Company has advised Purchaser that as
of January 18, 1995, the Company had duly reserved a total of 3,449,923 Shares
for future issuance pursuant to outstanding employee stock options or stock
incentive rights granted pursuant to the Company's Stock Option and Purchase
Plans (as defined below), 405,034 Shares were reserved for future issuance
pursuant to future grants of employee stock options or stock incentive rights
pursuant to the Company's Stock Option and Purchase Plans, and a total of
1,330,000 Shares were reserved for issuance upon exercise of the Warrant (as
defined below). SNI AG currently owns 2,717,743 Shares, which it acquired in a
series of transactions. In 1985, the Company entered into a Convertible
Subordinated and Preferred Stock Purchase Agreement (the "Nixdorf Stock
Agreement") with Nixdorf Computer AG ("Nixdorf"). Under the Nixdorf Stock
Agreement, Nixdorf purchased approximately 5% of the Company's Shares. The
Nixdorf Stock Agreement also gave Nixdorf the right to purchase its pro rata
share of certain equity financings of the Company as long as Nixdorf held a
minimum 5% stock interest. In March 1990, Nixdorf exercised its right to
purchase approximately 140,000 Shares as part of the Company's secondary
public offering of its common stock, to maintain Nixdorf's pro rata equity
ownership at approximately 5% of the Company's Shares. In 1990, Nixdorf became
majority-owned by Siemens AG, which renamed Nixdorf as Siemens Nixdorf
Informationssysteme AG ("SNI AG" herein). Subsequently, on August 21, 1994,
the Company and SNI U.S. entered into the Common Stock and Warrant Purchase
Agreement (the "Purchase Agreement") pursuant to which, on September 13, 1994,
SNI U.S. purchased (i) 2,000,000 Shares and (ii) a warrant (the "Warrant") to
purchase up to 1,330,000 Shares, for an aggregate purchase price of
$17,250,000. Subsequently, SNI U.S. transferred to SNI AG the 2,000,000 Shares
and the Warrant. In connection with such transfer, SNI AG assumed all of SNI
U.S.'s rights and obligations under the Purchase Agreement and the
Registration Rights Agreement, dated as of September 13, 1994, between the
Company and SNI U.S. The Shares beneficially owned by SNI AG on the date
hereof (excluding any Shares issuable upon exercise of the Warrant) constitute
17.38% of the issued and outstanding Shares as of January 18, 1995. SNI AG
intends to transfer the 2,717,743 Shares it owns on the date hereof to
Purchaser prior to, or concurrently with, the purchase of Shares by Purchaser
pursuant to the Offer. SNI AG does not currently intend to exercise the
Warrant in connection with the Offer and the Merger. Consequently, as of the
date hereof, the Minimum Condition would be satisfied if Purchaser acquired
6,821,515 Shares.
Pursuant to the Merger Agreement, the Company has amended the Common Shares
Rights Agreement dated as of December 12, 1988, as amended (the "Rights
Agreement"), between the Company and Bank of America, NT & SA, as Rights
Agent, so that none of the execution of the Merger Agreement, the making of
the Offer, the purchase of Shares pursuant to the Offer, the Merger or any
other transaction contemplated by the Merger Agreement will cause or in any
way trigger the obligation of the Company to issue the common share purchase
rights (the "Rights") to its stockholders. Additionally, the amendment to the
Rights Agreement provides that the Rights Agreement will terminate immediately
prior to the purchase of Shares by Purchaser pursuant to the Offer.
The Securities and Exchange Commission (the "Commission") has adopted Rule
13e-3 under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), which is applicable to certain "going private" transactions. Rule 13e-3
requires, among other things, that certain financial information concerning
the Company and certain information relating to the fairness of the proposed
transaction and the consideration offered to minority stockholders in such
transaction be filed with the Commission and disclosed to stockholders prior
to consummation of the transaction. Purchaser believes that Rule 13e-3 will
not be applicable to the Offer or the Merger. However, no assurances can be
given that the Commission will not take the position that Rule 13e-3 is
applicable to the Offer or the Merger.
3
<PAGE>
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ IN ITS ENTIRETY BEFORE ANY DECISION
IS MADE WITH RESPECT TO THE OFFER.
1. Terms of the Offer; Expiration Date. Upon the terms and subject to the
conditions of the Offer (including, if the Offer is extended or amended, the
terms and conditions of such extension or amendment), Purchaser will accept
for payment and pay for all Shares validly tendered prior to the Expiration
Date (as hereinafter defined) and not withdrawn as permitted by Section 4. The
term "Expiration Date" means 12:00 midnight, New York City time, on Friday,
February 24, 1995, unless and until Purchaser, in its sole discretion (but
subject to the terms and conditions of the Merger Agreement), shall have
extended the period during which the Offer is open, in which event the term
"Expiration Date" shall mean the latest time and date at which the Offer, as
so extended by Purchaser, shall expire.
Purchaser expressly reserves the right, in its sole discretion (but subject
to the terms and conditions of the Merger Agreement), at any time and from
time to time, to extend for any reason the period of time during which the
Offer is open, including the occurrence of any of the conditions specified in
Section 14, by giving oral or written notice of such extension to the
Depositary. During any such extension, all Shares previously tendered and not
withdrawn will remain subject to the Offer, subject to the rights of a
tendering stockholder to withdraw his or her Shares. See Section 4.
Subject to the applicable regulations of the Commission, Purchaser also
expressly reserves the right, in its sole discretion (but subject to the terms
and conditions of the Merger Agreement), at any time and from time to time,
(i) to delay acceptance for payment of, or, regardless of whether such Shares
were theretofore accepted for payment, payment for, any Shares pending receipt
of any regulatory approval specified in Section 15, (ii) to terminate the
Offer and not accept for payment any Shares upon the occurrence of any of the
conditions specified in Section 14 and (iii) to waive any condition or
otherwise amend the Offer in any respect (subject to the limitations described
below), by giving oral or written notice of such delay, termination, waiver or
amendment to the Depositary and by making a public announcement thereof.
However, the Merger Agreement provides that Purchaser will not (i) decrease
the price per Share payable pursuant to the Offer, (ii) reduce the maximum
number of Shares to be purchased in the Offer, (iii) impose conditions to the
Offer in addition to those set forth in Section 14, (iv) change the form of
consideration payable in the Offer or (v) amend any other terms of the Offer
in a manner adverse to the Company's stockholders. Purchaser acknowledges that
(i) Rule 14e-1(c) under the Exchange Act requires Purchaser to pay the
consideration offered or return the Shares tendered promptly after the
termination or withdrawal of the Offer and (ii) Purchaser may not delay
acceptance for payment of, or payment for (except as provided in clause (i) of
the first sentence of this paragraph), any Shares upon the occurrence of any
of the conditions specified in Section 14 without extending the period of time
during which the Offer is open.
Any such extension, delay, termination, waiver or amendment will be followed
as promptly as practicable by public announcement thereof, such announcement
in the case of an extension to be made no later than 9:00 a.m., New York City
time, on the next business day after the previously scheduled Expiration Date.
Subject to applicable law (including Rules 14d-4(c) and 14d-6(d) under the
Exchange Act, which require that material changes be promptly disseminated to
stockholders in a manner reasonably designed to inform them of such changes)
and without limiting the manner in which Purchaser may choose to make any
public announcement, Purchaser shall have no obligation to publish, advertise
or otherwise communicate any such public announcement other than by issuing a
press release to the Dow Jones News Service.
If Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer, or if it waives a material condition of the
Offer, Purchaser will extend the Offer to the extent required by Rules 14d-
4(c) and 14d-6(d) under the Exchange Act.
4
<PAGE>
Subject to the terms of the Merger Agreement, if, prior to the Expiration
Date, Purchaser should decide to increase the consideration being offered in
the Offer, such increase in the consideration being offered will be applicable
to all stockholders whose Shares are accepted for payment pursuant to the
Offer and, if at the time notice of any such increase in the consideration
being offered is first published, sent or given to holders of such Shares, the
Offer is scheduled to expire at any time earlier than the period ending on the
tenth business day from and including the date that such notice is first so
published, sent or given, the Offer will be extended at least until the
expiration of such ten business day period. For purposes of the Offer, a
"business day" means any day other than a Saturday, Sunday or federal holiday
and consists of the time period from 12:01 a.m. through 12:00 midnight, New
York City time.
The Company has provided Purchaser with the Company's stockholder list and
security position listings for the purpose of disseminating the Offer to
holders of Shares. This Offer to Purchase and the related Letter of
Transmittal will be mailed to record holders of Shares whose names appear on
the Company's stockholder list and will be furnished, for subsequent
transmittal to beneficial owners of Shares, to brokers, dealers, commercial
banks, trust companies and similar persons whose names, or the names of whose
nominees, appear on the stockholder list or, if applicable, who are listed as
participants in a clearing agency's security position listing.
2. Acceptance for Payment and Payment for Shares. Upon the terms and subject
to the conditions of the Offer (including, if the Offer is extended or
amended, the terms and conditions of any such extension or amendment),
Purchaser will accept for payment, and will pay for, all Shares validly
tendered prior to the Expiration Date and not properly withdrawn promptly
after the later to occur of (i) the Expiration Date, (ii) the expiration or
termination of any applicable waiting periods under the HSR Act and any
applicable foreign competition and antitrust statutes and regulations, and
(iii) the satisfaction or waiver of the conditions to the Offer set forth in
Section 14. Subject to applicable rules of the Commission, Purchaser expressly
reserves the right to delay acceptance for payment of, or payment for, Shares
pending receipt of any regulatory approvals specified in Section 15 or in
order to comply in whole or in part with any other applicable law.
In all cases, payment for Shares tendered and accepted for payment pursuant
to the Offer will be made only after timely receipt by the Depositary of (i)
the certificates evidencing such Shares (the "Share Certificates") or timely
confirmation (a "Book-Entry Confirmation") of a book-entry transfer of such
Shares into the Depositary's account at The Depository Trust Company, the
Midwest Securities Trust Company or the Philadelphia Depository Trust Company
(each, a "Book-Entry Transfer Facility" and, collectively, the "Book-Entry
Transfer Facilities") pursuant to the procedures set forth in Section 3, (ii)
the Letter of Transmittal (or a facsimile thereof), properly completed and
duly executed, with any required signature guarantees, or an Agent's Message
(as defined below) in connection with a book-entry transfer and (iii) any
other documents required by the Letter of Transmittal.
The term "Agent's Message" means a message, transmitted by 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 acknowledgment from the participant in such Book-Entry
Transfer Facility tendering the Shares, that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that the
Purchaser may enforce such agreement against such participant.
On January 24, 1995, SNI AG filed with the Federal Trade Commission (the
"FTC") and the Antitrust Division of the Department of Justice (the "Antitrust
Division") a Pre-merger Notification and Report Form under the HSR Act with
respect to the Offer. Accordingly, it is anticipated that the waiting period
under the HSR Act applicable to the Offer will expire at 11:59 p.m., New York
City time, on Wednesday, February 8, 1995. Prior to the expiration or
termination of such waiting period, the FTC or the Antitrust Division may
extend such waiting period by requesting additional information from SNI
5
<PAGE>
AG with respect to the Offer. If such a request is made with respect to the
purchase of Shares in the Offer, the waiting period will expire at 11:59 p.m.,
New York City time, on the tenth calendar day after substantial compliance by
SNI AG with such a request. Thereafter, the waiting period may only be
extended by court order. The waiting period under the HSR Act may be
terminated prior to its expiration by the FTC and the Antitrust Division. SNI
AG has requested early termination of the waiting period, although there can
be no assurance that this request will be granted. See Section 15 for
additional information regarding the HSR Act.
On January 24, 1995, SNI AG filed with the German Federal Cartel office (the
"FCO") a pre-merger notification (a "Pre-Merger Notification"). Under German
law, the Offer may not be consummated until antitrust review has been
completed and no objections raised. See Section 15 for additional information
regarding the German Pre-Merger Notification requirements and other regulatory
filings.
For purposes of the Offer, Purchaser will be deemed to have accepted for
payment (and thereby purchased) Shares validly tendered and not properly
withdrawn as, if and when Purchaser gives oral or written notice to the
Depositary of Purchaser's acceptance for payment of such Shares pursuant to
the Offer. Upon the terms and subject to the conditions of the Offer, payment
for Shares accepted for payment pursuant to the Offer will be made by deposit
of the purchase price therefor with the Depositary, which will act as agent
for tendering stockholders for the purpose of receiving payments from
Purchaser and transmitting such payments to tendering stockholders whose
Shares have been accepted for payment. Under no circumstances will interest on
the purchase price for Shares be paid, regardless of any delay in making such
payment.
If any tendered Shares are not accepted for payment for any reason pursuant
to the terms and conditions of the Offer, or if Share Certificates are
submitted evidencing more Shares than are tendered, Share Certificates
evidencing unpurchased Shares will be returned, without expense to the
tendering stockholder (or, in the case of Shares tendered by book-entry
transfer into the Depositary's account at a Book-Entry Transfer Facility
pursuant to the procedure set forth in Section 3, such Shares will be credited
to an account maintained at such Book-Entry Transfer Facility), as promptly as
practicable following the expiration or termination of the Offer.
Purchaser reserves the right to transfer or assign, in whole or from time to
time in part, to one or more of its affiliates, the right to purchase all or
any portion of the Shares tendered pursuant to the Offer, but any such
transfer or assignment will not relieve Purchaser of its obligations under the
Offer and will in no way prejudice the rights of tendering stockholders to
receive payment for Shares validly tendered and accepted for payment pursuant
to the Offer.
3. Procedures for Accepting the Offer and Tendering Shares. In order for a
holder of Shares validly to tender Shares pursuant to the Offer, the Letter of
Transmittal (or a facsimile thereof), properly completed and duly executed,
together with any required signature guarantees, or an Agent's Message in
connection with a book-entry delivery of Shares, and any other documents
required by the Letter of Transmittal, must be received by the Depositary at
one of its addresses set forth on the back cover of this Offer to Purchase and
either (i) the Share Certificates evidencing tendered Shares must be received
by the Depositary at such address or such Shares must be tendered pursuant to
the procedure for book-entry transfer described below and a Book-Entry
Confirmation must be received by the Depositary, in each case prior to the
Expiration Date, or (ii) the tendering stockholder must comply with the
guaranteed delivery procedures described below.
THE METHOD OF DELIVERY OF SHARE CERTIFICATES AND ALL OTHER REQUIRED
DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY TRANSFER FACILITY, IS AT
THE OPTION AND RISK OF THE TENDERING STOCKHOLDER, AND THE DELIVERY WILL BE
DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF DELIVERY IS BY
MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS
RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY
DELIVERY.
6
<PAGE>
Book-Entry Transfer. The Depositary will establish accounts with respect to
the Shares at the Book-Entry Transfer Facilities for purposes of the Offer
within two business days after January 27, 1995. Any financial institution
that is a participant in the system of any Book-Entry Transfer Facility may
make a book-entry delivery of Shares by causing such Book-Entry Transfer
Facility to transfer such Shares into the Depositary's account at such Book-
Entry Transfer Facility in accordance with such Book-Entry Transfer Facility's
procedures for such transfer. However, although delivery of Shares may be
effected through book-entry transfer at a Book-Entry Transfer Facility, the
Letter of Transmittal (or a facsimile thereof), properly completed and duly
executed, together with any required signature guarantees, or an Agent's
Message in connection with a book-entry transfer, and any other required
documents, must, in any case, be received by the Depositary at one of its
addresses set forth on the back cover of this Offer to Purchase prior to the
Expiration Date, or the tendering stockholder must comply with the guaranteed
delivery procedure described below. DELIVERY OF DOCUMENTS TO A BOOK-ENTRY
TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
Signature Guarantees. Signatures on all Letters of Transmittal must be
guaranteed by a firm which is a member of a registered national securities
exchange or of the National Association of Securities Dealers, Inc., or by a
commercial bank or trust company having an office or correspondent in the
United States (each of the foregoing being referred to as an "Eligible
Institution"), except in cases where Shares are tendered (i) by a registered
holder of Shares who has not completed either the box entitled "Special
Payment Instructions" or the box entitled "Special Delivery Instructions" on
the Letter of Transmittal or (ii) for the account of an Eligible Institution.
If a Share Certificate is registered in the name of a person other than the
signer of the Letter of Transmittal, or if payment is to be made, or a Share
Certificate not accepted for payment or not tendered is to be returned, to a
person other than the registered holder(s), then the Share Certificate must be
endorsed or accompanied by appropriate stock powers, in either case signed
exactly as the name(s) of the registered holder(s) appear on the Share
Certificate, with the signature(s) on such Share Certificate or stock powers
guaranteed by an Eligible Institution. See Instructions 1 and 5 of the Letter
of Transmittal.
Guaranteed Delivery. If a stockholder desires to tender Shares pursuant to
the Offer and such stockholder's Share Certificates evidencing such Shares are
not immediately available or such stockholder cannot deliver the Share
Certificates and all other required documents to the Depositary prior to the
Expiration Date, or such stockholder cannot complete the procedure for
delivery by book-entry transfer on a timely basis, such Shares may
nevertheless be tendered, provided that all the following conditions are
satisfied:
(i) such tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form made available by Purchaser, is
received prior to the Expiration Date by the Depositary as provided below;
and
(iii) the Share Certificates (or a Book-Entry Confirmation) evidencing
all tendered Shares, in proper form for transfer, in each case together
with the Letter of Transmittal (or a facsimile thereof), properly completed
and duly executed, with any required signature guarantees (or, in the case
of a book-entry transfer, an Agent's Message), and any other documents
required by the Letter of Transmittal are received by the Depositary within
five National Association of Securities Dealers Automated Quotation--
National Market System ("NASDAQ") trading days after the date of execution
of such Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand or mail or
transmitted by telegram, telex or facsimile transmission to the Depositary and
must include a guarantee by an Eligible Institution in the form set forth in
the form of Notice of Guaranteed Delivery made available by Purchaser.
In all cases, payment for Shares tendered and accepted for payment pursuant
to the Offer will be made only after timely receipt by the Depositary of the
Share Certificates evidencing such Shares, or a
7
<PAGE>
Book-Entry Confirmation of the delivery of such Shares, and the Letter of
Transmittal (or a facsimile thereof), properly completed and duly executed,
with any required signature guarantees (or, in the case of a book-entry
transfer, an Agent's Message), and any other documents required by the Letter
of Transmittal.
Determination of Validity. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance for payment of any
tender of Shares will be determined by Purchaser in its sole discretion, which
determination shall be final and binding on all parties. Purchaser reserves
the absolute right to reject any and all tenders determined by it not to be in
proper form or the acceptance for payment of which may, in the opinion of its
counsel, be unlawful. Purchaser also reserves the absolute right to waive any
condition of the Offer or any defect or irregularity in the tender of any
Shares of any particular stockholder, whether or not similar defects or
irregularities are waived in the case of other stockholders. No tender of
Shares will be deemed to have been validly made until all defects and
irregularities have been cured or waived. None of Purchaser, SNI AG, the
Dealer Manager, the Depositary, the Information Agent or any other person will
be under any duty to give notification of any defects or irregularities in
tenders or incur any liability for failure to give any such notification.
Purchaser's interpretation of the terms and conditions of the Offer (including
the Letter of Transmittal and the instructions thereto) will be final and
binding.
Other Requirements. By executing the Letter of Transmittal as set forth
above, a tendering stockholder irrevocably appoints designees of Purchaser as
such stockholder's proxies, each with full power of substitution, in the
manner set forth in the Letter of Transmittal, to the full extent of such
stockholder's rights with respect to the Shares tendered by such stockholder
and accepted for payment by Purchaser (and with respect to any and all other
Shares or other securities issued or issuable in respect of such Shares on or
after January 20, 1995). All such proxies shall be considered coupled with an
interest in the tendered Shares. Such appointment will be effective when, and
only to the extent that, Purchaser accepts such Shares for payment. Upon such
acceptance for payment, all prior proxies given by such stockholder with
respect to such Shares (and such other Shares and securities) will be revoked
without further action, and no subsequent proxies may be given nor any
subsequent written consent executed by such stockholder (and, if given or
executed, will not be deemed to be effective) with respect thereto. The
designees of Purchaser will, with respect to the Shares (and such other Shares
and securities) for which the appointment is effective, be empowered to
exercise all voting and other rights of such stockholder as they in their sole
discretion may deem proper at any annual or special meeting of the Company's
stockholders or any adjournment or postponement thereof, by written consent in
lieu of any such meeting or otherwise. Purchaser reserves the right to require
that, in order for Shares to be deemed validly tendered, immediately upon
Purchaser's payment for such Shares, Purchaser must be able to exercise full
voting rights with respect to such Shares (and such other Shares and
securities).
8
<PAGE>
The acceptance for payment by Purchaser of Shares pursuant to any of the
procedures described above will constitute a binding agreement between the
tendering stockholder and Purchaser upon the terms and subject to the
conditions of the Offer.
TO PREVENT BACKUP FEDERAL INCOME TAX WITHHOLDING WITH RESPECT TO PAYMENT TO
CERTAIN STOCKHOLDERS OF THE PURCHASE PRICE OF SHARES PURCHASED PURSUANT TO THE
OFFER, EACH SUCH STOCKHOLDER MUST PROVIDE THE DEPOSITARY WITH SUCH
STOCKHOLDER'S CORRECT TAXPAYER IDENTIFICATION NUMBER AND CERTIFY THAT SUCH
STOCKHOLDER IS NOT SUBJECT TO BACKUP FEDERAL INCOME TAX WITHHOLDING BY
COMPLETING THE SUBSTITUTE FORM W-9 IN THE LETTER OF TRANSMITTAL. SEE
INSTRUCTION 9 OF THE LETTER OF TRANSMITTAL.
4. Withdrawal Rights. Tenders of Shares made pursuant to the Offer are
irrevocable except that tendered Shares may be withdrawn by the tendering
stockholder at any time prior to the Expiration Date and, unless theretofore
accepted for payment by Purchaser pursuant to the Offer, may also be withdrawn
by such stockholder at any time after March 27, 1995. If Purchaser extends the
Offer, is delayed in its acceptance for payment of Shares or is unable to
accept Shares for payment pursuant to the Offer for any reason, then, without
prejudice to Purchaser's rights under the Offer, the Depositary may,
nevertheless, on behalf of Purchaser, retain tendered Shares, and such Shares
may not be withdrawn except to the extent that tendering stockholders are
entitled to withdrawal rights as described in this Section 4. Any such delay
will be by an extension of the Offer to the extent required by law.
For a withdrawal to be effective, a written, telegraphic, telex or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
one of its addresses set forth on the back cover page of this Offer to
Purchase. Any such notice of withdrawal must specify the name of the person
who tendered the Shares to be withdrawn, the number of Shares to be withdrawn
and the name of the registered holder of such Shares, if different from that
of the person who tendered such Shares. If Share Certificates evidencing
Shares to be withdrawn have been delivered or otherwise identified to the
Depositary, then, prior to the physical release of such Share Certificates,
the serial numbers shown on such Share Certificates must be submitted to the
Depositary and the signature(s) on the notice of withdrawal must be guaranteed
by an Eligible Institution, unless such Shares have been tendered for the
account of an Eligible Institution. If Shares have been tendered pursuant to
the procedure for book-entry transfer as set forth in Section 3, any notice of
withdrawal must specify the name and number of the account at the Book-Entry
Transfer Facility to be credited with the withdrawn Shares, in which case a
notice of withdrawal will be effective if delivered to the Depositary by any
method of delivery described in the first sentence of this paragraph.
All questions as to the form and validity (including time of receipt) of any
notice of withdrawal will be determined by Purchaser, in its sole discretion,
whose determination will be final and binding. None of Purchaser, SNI AG,
Siemens AG, the Dealer Managers, the Depositary, the Information Agent or any
other person will be under any duty to give notification of any defects or
irregularities in any notice of withdrawal or incur any liability for failure
to give any such notification.
Any Shares properly withdrawn will thereafter be deemed not to have been
validly tendered for purposes of the Offer. However, withdrawn Shares may be
re-tendered at any time prior to the Expiration Date by following one of the
procedures described in Section 3.
5. Certain Federal Income Tax Consequences. The receipt of cash for Shares
pursuant to the Offer or in the Merger will be a taxable transaction for
federal income tax purposes and may also be a taxable transaction under
applicable state, local or foreign tax laws. In general, a stockholder will
recognize gain or loss for federal income tax purposes equal to the difference
between the amount of cash received in exchange for the Shares sold and such
stockholder's adjusted tax basis in such
9
<PAGE>
Shares. Assuming the Shares constitute capital assets in the hands of the
stockholder, such gain or loss will be capital gain or loss. If, at the time
of the Offer or the Merger, the Shares then exchanged have been held for more
than one year, such gain or loss will be long-term capital gain or loss. Under
current law, long-term capital gains of individuals are, under certain
circumstances, taxed at lower rates than items of ordinary income including
short-term capital gains.
THE FOREGOING DISCUSSION MAY NOT BE APPLICABLE TO CERTAIN TYPES OF
STOCKHOLDERS, INCLUDING STOCKHOLDERS WHO ACQUIRED SHARES PURSUANT TO THE
EXERCISE OF EMPLOYEE STOCK OPTIONS OR OTHERWISE AS COMPENSATION, INDIVIDUALS
WHO ARE NOT CITIZENS OR RESIDENTS OF THE UNITED STATES AND FOREIGN
CORPORATIONS.
THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL
INFORMATION ONLY AND IS BASED UPON PRESENT LAW. STOCKHOLDERS ARE URGED TO
CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE SPECIFIC TAX CONSEQUENCES
OF THE OFFER AND THE MERGER TO THEM, INCLUDING THE APPLICATION AND EFFECT OF
THE ALTERNATIVE MINIMUM TAX, AND STATE, LOCAL AND FOREIGN TAX LAWS.
6. Price Range of Shares; Dividends. The Shares are listed and principally
traded on NASDAQ. The following table sets forth, for the quarters indicated,
the high and low sales prices per Share on NASDAQ as reported by the Dow Jones
News Service.
<TABLE>
<CAPTION>
HIGH LOW
---- ----
<S> <C> <C>
Fiscal Year ending September 30, 1993:
First Quarter............................................ $ 11 $ 6
Second Quarter........................................... 17 9 3/4
Third Quarter............................................ 20 3/4 11 1/4
Fourth Quarter........................................... 23 1/4 17 1/2
Fiscal Year ending September 30, 1994:
First Quarter............................................ $21 1/4 $12 3/4
Second Quarter........................................... 16 1/4 7 7/8
Third Quarter............................................ 9 5 5/8
Fourth Quarter........................................... 9 3/16 5 1/2
Fiscal Year ending September 30, 1995:
First Quarter (through December 31, 1994)................. $13 1/4 $ 8 1/8
</TABLE>
The Company historically does not declare dividends.
On January 6, 1995, the last full trading day prior to the announcement of
discussions between SNI AG and the Company concerning a possible merger
transaction, the closing price per Share as reported on NASDAQ was $12 1/4. On
January 20, 1995, the last full trading day prior to the announcement of the
execution of the Merger Agreement and of Purchaser's intention to commence the
Offer, the closing price per Share as reported on NASDAQ was $14 7/8. On
January 26, 1995, the last full trading day prior to the commencement of the
Offer, the closing price per Share as reported on NASDAQ was $15 3/4.
STOCKHOLDERS ARE URGED TO OBTAIN A CURRENT MARKET QUOTATION FOR THE SHARES.
7. Certain Information Concerning the Company. Except as otherwise set forth
herein, the information concerning the Company contained in this Offer to
Purchase, including financial information, has been furnished by the Company
or has been taken from or based upon publicly available documents and records
on file with the Commission and other public sources. Neither Purchaser, SNI
AG, Siemens AG nor any of their respective affiliates assumes any
responsibility for the accuracy or completeness of the information concerning
the Company furnished by the Company or
10
<PAGE>
contained in such documents and records or for any failure by the Company to
disclose events which may have occurred or may affect the significance or
accuracy of any such information but which are unknown to Purchaser, SNI AG,
Siemens AG or their respective affiliates.
General. The Company is a Delaware corporation with its principal executive
offices located at 3860 N. First Street, San Jose, California 95134. The
Company designs, manufactures, markets, and supports high-end, large-scale
servers that deliver mainframe-class performance for the open enterprise
client/server environment. These servers are aimed at the global 2000
marketplace which is comprised of certain Fortune 2000 businesses in the
United States, representative corporations in other countries, and government
agencies worldwide. The Company's high-availability, fault-resilient systems
run large UNIX relational databases, and are based on a symmetrical
multiprocessing (SMP) architecture that combines an enhanced UNIX operating
system with reduced instruction set computing (RISC) processor technology. The
Company's systems support up to 2,160 MIPS (millions of instructions-per-
second), thousands of transactions-per-second, and more than 10,000 concurrent
users in clustered configurations.
Financial Information. Set forth below is certain selected consolidated
financial information relating to the Company and its subsidiaries which has
been excerpted or derived from the audited financial statements contained in
the Company's Annual Report on Form 10-K for the fiscal year ended September
30, 1994 (the "Form 10-K"). More comprehensive financial information is
included in the Form 10-K and other documents filed by the Company with the
Commission. The financial information that follows is qualified in its
entirety by reference to such reports and other documents, including the
financial statements and related notes contained therein. Such reports and
other documents may be examined and copies may be obtained from the offices of
the Commission in the manner set forth below.
PYRAMID TECHNOLOGY CORPORATION
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
FISCAL YEAR ENDED SEPTEMBER 30,
---------------------------------
1994 1993 1992
---------- ---------- ----------
<S> <C> <C> <C>
INCOME STATEMENT DATA:
Revenues.................................. 218,515 233,698 192,226
Gross Profit.............................. 79,932 101,577 68,697
Operating Income (Loss)................... (19,300) 9,335 (66,495)
Income (Loss) Before Income Taxes......... (19,478) 9,593 (66,636)
Net Income (Loss)......................... (22,413) 8,634 (59,707)
Average Number of Shares Outstanding (as
adjusted to give effect to stock
dividends or stock splits)............... 13,467 12,890 11,962
Net Income (Loss) Per Share............... (1.66) 0.67 (4.99)
</TABLE>
<TABLE>
<CAPTION>
AT SEPTEMBER 30,
-----------------
1994 1993
-------- --------
<S> <C> <C>
BALANCE SHEET DATA:
Current Assets.............................................. 132,629 130,335
Total Assets................................................ 190,713 191,658
Current Liabilities......................................... 50,712 53,555
Deferred Income Taxes....................................... 2,400 --
Noncurrent Portion of Long-Term Debt........................ 1,563 487
Stockholders' Equity........................................ 136,038 137,616
</TABLE>
11
<PAGE>
On January 18, 1995, the Company issued a press release in which it reported
revenues of $62,119,000, and net income and net income per share of $1,300,000
and $.08, respectively, for its first fiscal quarter ended December 31, 1994.
Results reported for the comparable period in fiscal year 1994 are revenues of
$60,018,000, net income of $635,000 and net income per share of $.05.
In connection with SNI AG's review of the Company and in the course of the
negotiations between the Company and SNI AG described in Section 10, the
Company provided SNI AG with certain business and financial information which
SNI AG and Purchaser believe is not publicly available. The Company provided
SNI AG with financial forecasts in which the Company projected that it would
record total sales of approximately $280 million, $337 million and $424
million in the fiscal years ending September 30, 1995, 1996 and 1997,
respectively, operating income of approximately $9 million, $18 million and
$32 million in the same periods, respectively, net income of approximately $10
million, $15 million and $27 million in the same periods, respectively, and
earnings per Share of $0.61, $0.85 and $1.35 in the same periods,
respectively.
PROJECTED INFORMATION OF THIS TYPE IS BASED ON ESTIMATES AND ASSUMPTIONS
THAT ARE INHERENTLY SUBJECT TO SIGNIFICANT ECONOMIC AND COMPETITIVE
UNCERTAINTIES AND CONTINGENCIES, ALL OF WHICH ARE DIFFICULT TO PREDICT AND
MANY OF WHICH ARE BEYOND THE COMPANY'S CONTROL. ACCORDINGLY, THERE CAN BE NO
ASSURANCE THAT THE PROJECTED RESULTS WOULD BE REALIZED OR THAT ACTUAL RESULTS
WOULD NOT BE SIGNIFICANTLY HIGHER OR LOWER THAN THOSE SET FORTH ABOVE. IN
ADDITION, THESE PROJECTIONS WERE NOT PREPARED WITH A VIEW TO PUBLIC DISCLOSURE
OR COMPLIANCE WITH THE PUBLISHED GUIDELINES OF THE COMMISSION OR THE
GUIDELINES ESTABLISHED BY THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC
ACCOUNTANTS REGARDING PROJECTIONS AND FORECASTS AND ARE INCLUDED IN THIS OFFER
TO PURCHASE ONLY BECAUSE SUCH INFORMATION WAS MADE AVAILABLE TO SNI AG BY THE
COMPANY. NONE OF SIEMENS AG, SNI AG, PURCHASER, THE COMPANY, ANY OF THEIR
RESPECTIVE AFFILIATES OR ANY OTHER PARTY ASSUMES ANY RESPONSIBILITY FOR THE
ACCURACY OR VALIDITY OF THE FOREGOING PROJECTIONS. MOREOVER, NEITHER SIEMENS
AG, SNI AG, PURCHASER NOR ANY OF THEIR AFFILIATES RELIED UPON THE FOREGOING
FORECASTS PREPARED BY THE COMPANY IN ANY WAY IN FORMULATING THEIR OFFER TO
ACQUIRE THE COMPANY.
The Company is subject to the informational filing requirements of the
Exchange Act and, in accordance therewith, is required to file periodic
reports, proxy statements and other information with the Commission relating
to its business, financial condition and other matters. Information as of
particular dates concerning the Company's directors and officers, their
remuneration, stock options granted to them, the principal holders of the
Company's securities and any material interest of such persons in transactions
with the Company is required to be disclosed in proxy statements distributed
to the Company's stockholders and filed with the Commission. Such reports,
proxy statements and other information should be available for inspection at
the public reference facilities maintained by the Commission at Room 1024, 450
Fifth Street, N.W., Washington, D.C. 20549, and also should be available for
inspection at the Commission's regional offices located at 7 World Trade
Center, Suite 1300, New York, New York 10048 and Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such materials
may also be obtained by mail, upon payment of the Commission's customary fees,
by writing to its principal office at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549. The information should also be available for
inspection at the National Association of Securities Dealers, Inc., 1735 K
Street N.W., Washington, D.C. 20006.
8. Certain Information Concerning Purchaser, SNI AG and Siemens
AG. Purchaser is a newly incorporated Delaware corporation organized in
connection with the Offer and the Merger and has not carried on any activities
other than in connection with the Offer and the Merger. The principal offices
of Purchaser are located at 1301 Avenue of the Americas, New York, New York
10019-6022. Purchaser is a direct wholly owned subsidiary of SNI U.S., which
is direct wholly owned subsidiary of SNI AG. SNI AG is a direct wholly owned
subsidiary of Siemens AG.
12
<PAGE>
Until immediately prior to the time that Purchaser will purchase Shares
pursuant to the Offer, it is not anticipated that Purchaser will have any
significant assets or liabilities or engage in activities other than those
incident to its formation and capitalization and the transactions contemplated
by the Offer and the Merger. Because Purchaser is newly formed and has minimal
assets and capitalization, no meaningful financial information regarding
Purchaser is available.
SNI AG is a company organized under the laws of the Federal Republic of
Germany, with its principal office at Heinz-Nixdorf-Ring 1, 33102 Paderborn,
Federal Republic of Germany. SNI AG's principal business is the design,
development, manufacture, purchase, marketing, leasing and selling of a wide
range of information technology equipment.
Siemens AG is a company organized under the laws of the Federal Republic of
Germany, with its principal office at Wittelsbacherplatz 2, D-80333 Munich,
Federal Republic of Germany. Siemens AG's principal business is the design,
development, manufacture and marketing of a wide range of electrical and
electronics products and systems.
The name, citizenship, business address, principal occupation or employment,
and five-year employment history for each of the directors and executive
officers of Purchaser, SNI AG and Siemens AG and certain other information are
set forth in Schedule I hereto.
Based upon the consolidated financial statements of Siemens AG for the
fiscal year ended September 30, 1994 (the "Siemens AG Financial Statements"),
Siemens AG had (i) at September 30, 1994, consolidated total assets of 78.4
billion Deutschmarks ("DM") (including DM 24 billion in liquid assets),
consolidated total liabilities of DM 56.6 billion and consolidated
shareholders' equity of DM 21.8 billion and (ii) for the fiscal year ended
September 30, 1994, consolidated sales of DM 84.6 billion and net income of DM
1,993 million. The exchange rate for DM into U.S. dollars (as determined from
publicly available sources) was DM 1.55 per U.S. dollar on September 30, 1994
and DM 1.51 per U.S. dollar on January 25, 1995, and the average daily
exchange rate for the fiscal year ended September 30, 1994 was DM 1.65 per
U.S. dollar.
More comprehensive financial information is included in the Siemens AG
Financial Statements. The summary of such financial information included above
is qualified in its entirety by reference to the Siemens AG Financial
Statements, a copy of which has been filed as an exhibit to the Tender Offer
Statement on Schedule 14D-1/13D (the "Schedule 14D-1") filed by Purchaser, SNI
AG and Siemens AG with the Commission in connection with the Offer.
As of the date hereof, SNI AG owns 2,717,743 Shares, which it acquired in a
series of transactions. In 1985, the Company entered into a Convertible
Subordinated and Preferred Stock Purchase Agreement (the "Nixdorf Stock
Agreement") with Nixdorf Computer AG ("Nixdorf"). Under the Nixdorf Stock
Agreement, Nixdorf purchased approximately 5% of the Shares. The Nixdorf Stock
Agreement also gave Nixdorf the right to purchase its pro rata share of
certain equity financings of the Company as long as Nixdorf held a minimum of
5% of the Shares. In March 1990, Nixdorf exercised its right to purchase
approximately 140,000 Shares as part of the Company's secondary public
offering of Shares, to maintain Nixdorf's pro rata equity ownership at
approximately 5% of the Shares. In 1990, Nixdorf became majority-owned by
Siemens AG, which renamed Nixdorf as SNI AG. Subsequently, on September 13,
1994, SNI U.S. purchased pursuant to the Purchase Agreement (i) 2,000,000
Shares and (ii) the Warrant to purchase up to 1,330,000 Shares, for an
aggregate purchase price of $17,250,000. Subsequently, SNI U.S. transferred to
SNI AG the 2,000,000 Shares and the Warrant. In connection with such transfer,
SNI AG assumed all of SNI U.S.'s rights and obligations under the Purchase
Agreement and the Registration Rights Agreement, both dated as of September
13, 1994, between the Company and SNI U.S. If SNI AG were to exercise the
Warrant so as to acquire all of the 1,330,000 shares subject to the Warrant,
it would then beneficially own 4,047,743 Shares, or approximately 23.9% of the
then outstanding Shares. However, SNI AG does not currently intend to exercise
the Warrant in connection with the Offer and the Merger.
13
<PAGE>
Except as described in this Offer to Purchase, (i) none of Siemens AG, SNI
AG or Purchaser nor, to the best knowledge of Purchaser and Siemens AG, any of
the persons listed in Schedule I to this Offer to Purchase or any associate or
majority-owned subsidiary of Purchaser, SNI AG, Siemens AG or any of the
persons so listed beneficially owns or has any right to acquire, directly or
indirectly, any Shares and (ii) none of Siemens AG, SNI AG or Purchaser nor,
to the best knowledge of Purchaser and Siemens AG, any of the persons or
entities referred to above nor any director, executive officer or subsidiary
of any of the foregoing has effected any transaction in the Shares during the
past 60 days.
Pursuant to the terms of the Purchase Agreement, SNI AG agreed to vote all
Shares owned by it, except with respect to certain extraordinary corporate
transactions, in accordance with the recommendations of the Board of Directors
of the Company on all matters to be voted on by holders of Shares in not less
than the same proportion as the votes cast by the other holders of Shares with
respect to such matters. Except as provided in the Merger Agreement and as
otherwise described in this Offer to Purchase, none of Siemens AG, SNI AG,
Purchaser, any other subsidiary of Siemens AG nor, to the best knowledge of
SNI AG, Purchaser and Siemens AG, any of the persons listed in Schedule I to
this Offer to Purchase, has any contract, arrangement, understanding or
relationship with any other person with respect to any securities of the
Company, including, but not limited to, any contract, arrangement,
understanding or relationship concerning the transfer or voting of such
securities, finder's fees, joint ventures, loan or option arrangements, puts
or calls, guarantees of loans, guarantees against loss, guarantees of profits,
division of profits or loss or the giving or withholding of proxies. Except as
set forth in this Offer to Purchase, since October 1, 1992, neither Purchaser,
SNI AG nor Siemens AG nor, to the best knowledge of SNI AG, Purchaser and
Siemens AG, any of the persons listed on Schedule I hereto, has had any
business relationship or transaction with the Company or any of its executive
officers, directors or affiliates that is required to be reported under the
rules and regulations of the Commission applicable to the Offer. Except as set
forth in this Offer to Purchase, since October 1, 1992, there have been no
contacts, negotiations or transactions between any of Purchaser, SNI AG,
Siemens AG, or any of their respective subsidiaries or, to the best knowledge
of SNI AG, Purchaser and Siemens AG, any of the persons listed in Schedule I
to this Offer to Purchase, on the one hand, and the Company or its affiliates,
on the other hand, concerning a merger, consolidation or acquisition, tender
offer or other acquisition of securities, an election of directors or a sale
or other transfer of a material amount of assets.
9. Financing of the Offer and the Merger. The total amount of funds required
by Purchaser to consummate the Offer and the Merger is estimated to be
approximately $221 million, including approximately $3 million to pay related
fees and expenses. Purchaser will obtain all of such funds from Siemens AG or
one of Siemens AG's affiliates. Siemens AG and its affiliates will provide
such funds from working capital.
10. Background of the Offer; Contacts with the Company; the Merger
Agreement.
Between 1985 and 1990, Nixdorf Computer AG (the predecessor to SNI AG)
acquired 717,743 Shares. On August 21, 1994, the Company and SNI U.S. entered
into the Purchase Agreement pursuant to which, on September 13, 1994, SNI
purchased for an aggregate purchase price of $17,250,000 (i) 2,000,000 Shares
and (ii) the Warrant, which permits the holder to purchase up to 1,330,000
Shares for $10 per Share. In connection with the transactions contemplated by
the Purchase Agreement, SNI AG and the Company entered into Licensing and OEM
Agreements pursuant to which SNI AG agreed to license the Company's UNIX
operating system for massively parallel processing ("MPP") and was enabled to
purchase the related MPP hardware product known as MESHine. Pursuant to the
Purchase Agreement, the Company appointed Dr. Rudolf Bodo, Vice President and
General Manager of SNI AG's Mid-Range Systems Unit, to the Company's Board of
Directors. On November 22, 1994, SNI U.S. transferred to SNI AG 2,000,000
Shares and the Warrant, and in connection therewith, SNI AG assumed all of SNI
U.S.'s rights and obligations under the Purchase Agreement.
Following the closing of the transactions under the Purchase Agreement, the
parties began to explore possible commercial arrangements designed to
intensify the cooperation between SNI AG and the Company. In this context,
representatives of the management of SNI AG and the Company met at
14
<PAGE>
various times between late September and early December to discuss, among
other things, the requirements of the high-end UNIX market, the high-end SMP
systems of SNI AG and the Company, their respective mid-range systems product
lines, marketing and sales strategies, and possible cooperative commercial
arrangements relating to their mid-range businesses.
On December 4, 1994, Gerhard Schulmeyer, President and Chief Executive
Officer of SNI AG, and Dr. Bodo met in London with Richard Lussier, Chairman
and Chief Executive Officer of the Company, John Chen, President of the
Company, Kent Robertson, Chief Financial Officer of the Company, and David
Martin, a consultant to the Company, to continue the discussion of possible
commercial arrangements between SNI AG and the Company. During that meeting,
the parties discussed on a preliminary basis the form that such arrangements
might take, either on the basis of SNI AG continuing in its current ownership
position in the Company or under a possible scenario where SNI AG would
increase its ownership level. On December 15, 1994, Dr. Bodo and Mr. Martin
had further discussions of the possible commercial arrangements to be entered
into on the basis of SNI AG continuing in its current ownership position in
the Company.
On December 21, 1994, Mr. Schulmeyer informed Mr. Lussier in a telephone
call that the Managing Board of Siemens AG had authorized Mr. Schulmeyer to
engage in exploratory discussions with the Company in order to determine the
feasibility of acquiring the Company. The next day, Mr. Lussier and Mr.
Schulmeyer agreed to meet on December 28, 1994 to begin those discussions. On
December 23, Mr. Schulmeyer telephoned Mr. Lussier to cancel the scheduled
meeting, stating that such discussions would not be feasible in light of the
then volatile market trading of the Shares.
Early in the evening of January 6, 1995, SNI AG delivered to the Company the
following letter:
Gerhard Schulmeyer President and Chief Executive Officer Siemens Nixdorf
Informations Systems AG
January 6, 1995
VIA FACSIMILE AND COURIER
Mr. Richard H. Lussier Chairman and Chief Executive Officer Pyramid
Technology Corporation 3860 N. First Street San Jose, California 95134
Dear Richard:
Since our additional investment and related agreements concluded in the
summer of 1994, we have discussed different options for enhancing the
cooperation between our companies. Based on these discussions, it is my
understanding that Pyramid Technology Corporation ("Pyramid" or the
"Company") believes a 100% acquisition by Siemens Nixdorf to be the
preferred option for achieving the potential synergies that we all
recognize exist. Having carefully considered the matter further, we have
now concluded that the combination of Siemens Nixdorf's mid-range
activities with the Company maximizes these synergies and results in a much
more effective competitor than either could be on a stand-alone basis.
Accordingly, we are writing to request the written consent of the Company
to permit Siemens Nixdorf to make an offer to acquire Pyramid in a merger
transaction in which your stockholders
15
<PAGE>
would receive $15 in cash for each outstanding Share of the Company's
common stock. As you know, Section 7.1 of the Common Stock and Warrant
Purchase Agreement dated as of August 21, 1994 between Pyramid and Siemens
Nixdorf prohibits the making of an acquisition offer by Siemens Nixdorf
without the prior written consent of Pyramid. More importantly, we are only
interested in pursuing a transaction that has the endorsement of the
Company's Board of Directors.
Based on our familiarity with the Company and our knowledge of the
industry and the marketplace, we believe, and our financial advisors
concur, that such a $15 offer price would represent a full and fair value
for the Company and should be enthusiastically supported by both your Board
of Directors and stockholders. In fact, such an offer price would represent
a premium of over 40% above the weighted average closing price of the
Company's common stock both for the last calendar quarter and calendar year
1994.
If the Company's Board of Directors were to grant its consent, our offer
would not be conditioned upon our obtaining financing (although, of course,
it would be subject to required regulatory approvals and other customary
conditions).
We would like very much to enter into immediate discussions with both you
and John Chen concerning our request. I stand ready to meet with the two of
you and your advisors over this weekend in Chicago to begin these
discussions. Our legal and financial advisors will also be available as
necessary.
As part of these discussions, we look forward to exploring ways to
preserve the Company's strong entrepreneurial culture and to recognize the
past and future contribution of your talented engineering team and other
key employees to the Company's success. We have given some thought to the
kinds of compensation plans that would create the right incentives for your
employees and preserve the Company's culture of innovation and excellence.
Obviously, we will want to work together with the Company's management in
formulating suitable compensation plans and targets.
If you and John think it would be helpful, I would also be pleased to
meet on short notice with members of your engineering team and other key
employees to discuss our vision for the combined operation and their role
in it.
Although we would have preferred not to disclose publicly the contents of
this letter, our lawyers advise us that we are obligated under applicable
securities laws to do so. As a result, we will be filing a copy of this
letter on Monday with the Securities and Exchange Commission.
We ask that you and your Board of Directors consider our request promptly
so that we may also make our offer, which we believe would position the
Company and its employees for an exciting future while maximizing value for
its stockholders.
Sincerely,
/s/ Gerhard Schulmeyer
Later that evening, Mr. Lussier informed Mr. Schulmeyer that the Board of
Directors of the Company would meet on Sunday, January 8 to consider the
request of SNI AG set forth in the letter.
Subsequent to that meeting of the Board of Directors, Mr. Lussier, together
with other representatives of the Company and the Company's legal and
financial advisors, telephoned
16
<PAGE>
Mr. Schulmeyer, who was meeting with other representatives of SNI AG and SNI
AG's financial and legal advisors, to inform Mr. Schulmeyer that the Board of
Directors of the Company had consented to SNI AG's making an offer to the
Company solely for the purpose of allowing the parties to engage in
discussions concerning a negotiated merger transaction, but had not agreed to
the terms of the January 6 letter. On January 9, the Company and SNI AG
jointly issued a press release describing those events, and counsel to SNI AG
delivered to the Company's counsel a preliminary draft of the Merger
Agreement.
Between January 11 and January 14, various representatives of SNI AG and the
Company and their respective financial and legal advisors had a number of
meetings and telephone conversations to discuss financial valuation issues and
the draft Merger Agreement.
On January 16, the Company's Board of Directors met to review the proposed
transaction and received presentations from the Company's management and its
legal and financial advisors. Subsequent to that meeting, Mr. Lussier advised
Mr. Schulmeyer that the Board of Directors had instructed the Company's
management to continue the discussions with SNI AG but to seek a higher price.
On January 17, representatives of SNI AG and the Company and their
respective financial advisors met to continue discussions of financial
valuation issues. During the evening of January 17, Mr. Schulmeyer telephoned
Mr. Lussier and informed him that SNI AG was prepared to increase marginally
its original $15.00 per Share price. The Company's Board of Directors had a
meeting the following morning to continue their review of the transaction.
During the course of a conversation between Mr. Schulmeyer and Mr. Lussier
later that day, Mr. Schulmeyer indicated that he would be willing to increase
the price to $16.00 per Share, subject to satisfactory resolution of the
outstanding issues under the proposed Merger Agreement and the negotiation of
satisfactory employment arrangements with key members of the Company's
management. Mr. Lussier indicated to Mr. Schulmeyer that he was prepared to
recommend to the Company's Board of Directors an acquisition at that price,
subject to satisfactory resolution of the outstanding issues under the proposed
Merger Agreement.
On January 19 and 20, various representatives of SNI AG and the Company and
their respective legal advisors had telephone conversations to resolve various
issues relating to the proposed Merger Agreement and representatives of SNI AG
met with certain key employees of the Company to discuss employment
arrangements in the event that SNI AG were to acquire the Company. Late in the
afternoon of January 20, the Company's Board of Directors met to review the
terms of the proposed transaction and received presentations from the
Company's management and legal and financial advisors. At that meeting, Smith
Barney delivered to the Company's Board of Directors its written opinion dated
January 20, 1995 that, as of such date, the consideration to be received by
the stockholders in the Offer and the Merger was fair from a financial point
of view. The Company's Board of Directors was advised that SNI AG's proposal
to acquire the Company at $16.00 per Share was conditioned on a satisfactory
employment contract with John Chen to serve as chief executive officer of the
Company following the consummation of the proposed transaction. At that
meeting, the Board of Directors approved the Merger Agreement, the Offer and
the Merger, subject to the satisfaction of the foregoing condition imposed by
SNI AG. On January 21, representatives of SNI AG and its legal advisors met
with Mr. Chen and his attorney to finalize the terms of his employment
agreement and with Mr. Lussier to discuss the terms of his future employment.
Later that day, Mr. Chen entered into an employment agreement with the
Company, which will become effective at the Effective Time; SNI AG, Purchaser
and the Company entered into the Merger Agreement; and the Company and Mr.
Lussier had discussions regarding the terms of Mr. Lussier's employment within
the Siemens group after the consummation of the Merger. On January 23, the
Company and SNI AG jointly issued a press release relating to these events. On
January 27, Purchaser commenced the Offer.
17
<PAGE>
Dr. Rudolf Bodo, a director of the Company, recused himself from those Board
meetings or portions of meetings in which the Company's Board discussed the
Merger Agreement. Dr. Bodo is SNI AG's designee on the Company's Board of
Directors pursuant to Section 6.2 of the Purchase Agreement.
THE MERGER AGREEMENT
The following is a summary of the Merger Agreement, a copy of which is filed
as an Exhibit to the Tender Offer Statement on Schedule 14D-1 (the "Schedule
14D-1") filed by Purchaser, Siemens AG and SNI AG with the Commission in
connection with the Offer. Such summary is qualified in its entirety by
reference to the Merger Agreement. Capitalized terms not otherwise defined in
the following description of the Merger Agreement have the respective meanings
ascribed to them in the Merger Agreement.
The Offer. The Merger Agreement provides for the commencement of the Offer
as promptly as reasonably practicable, but in no event later than five
business days after the initial public announcement of Purchaser's intention
to commence the Offer. The obligation of Purchaser to accept for payment
Shares tendered pursuant to the Offer is subject to the satisfaction of the
Minimum Condition and certain other conditions that are described in Section
14 hereof. Purchaser and SNI AG have agreed that no change in the Offer may be
made which decreases the price per Share payable in the Offer, reduces the
maximum number of Shares to be purchased in the Offer, imposes conditions to
the Offer in addition to those set forth in Section 14 hereof, changes the
form of consideration payable in the Offer or amends any other terms of the
Offer in a manner adverse to the Company's stockholders.
The Merger. The Merger Agreement provides that, upon the terms and subject
to the conditions thereof, and in accordance with Delaware Law, at the
Effective Time, Purchaser shall be merged with and into the Company. As a
result of the Merger, the separate corporate existence of Purchaser will cease
and the Company will continue as the Surviving Corporation (the "Surviving
Corporation") and will become an indirect wholly owned subsidiary of SNI AG.
Upon consummation of the Merger, each issued and then outstanding Share (other
than any Shares held in the treasury of the Company, or owned by Purchaser,
SNI AG or any direct or indirect wholly owned subsidiary of SNI AG or of the
Company and any Shares which are held by stockholders who have not voted in
favor of the Merger or consented thereto in writing and who shall have
demanded properly in writing appraisal for such Shares in accordance with
Delaware Law) shall be automatically converted into, and exchanged for, the
right to receive the Merger Consideration.
Pursuant to the Merger Agreement, each share of common stock, par value $.01
per share, of Purchaser issued and outstanding immediately prior to the
Effective Time shall be converted into and exchanged for one share of common
stock, par value $.01 per share, of the Surviving Corporation.
The Merger Agreement provides that the directors of Purchaser immediately
prior to the Effective Time will be the initial directors of the Surviving
Corporation and that the officers of the Company immediately prior to the
Effective Time will be the initial officers of the Surviving Corporation. The
Merger Agreement provides that, at the Effective Time, unless otherwise
determined by SNI AG prior to the Effective Time, the Certificate of
Incorporation of Purchaser will be the Certificate of Incorporation of the
Surviving Corporation. The Merger Agreement also provides that the By-laws of
Purchaser, as in effect immediately prior to the Effective Time, will be the
By-laws of the Surviving Corporation.
Agreements of SNI AG, Purchaser and the Company. Pursuant to the Merger
Agreement, the Company will, if required by applicable law in order to
consummate the Merger, duly call, give notice of, convene and hold an annual
or special meeting of its stockholders as soon as practicable following
consummation of the Offer for the purpose of considering and taking action on
the Merger Agreement and the Transactions (the "Stockholders' Meeting"). If
Purchaser acquires at least a majority of the
18
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outstanding Shares, Purchaser will have sufficient voting power to approve the
Merger, even if no other stockholder votes in favor of the Merger.
The Merger Agreement provides that the Company will, if required by
applicable law, as soon as practicable following consummation of the Offer,
file with the Commission under the Exchange Act, and use its best efforts to
have cleared by the Commission, a proxy statement and related proxy materials
(the "Proxy Statement") with respect to the Stockholders' Meeting and will
cause the Proxy Statement to be mailed to stockholders of the Company at the
earliest practicable time. The Company has agreed, subject to its fiduciary
duties under applicable law as advised by counsel, to include in the Proxy
Statement the recommendation of the Board that the stockholders of the Company
approve and adopt the Merger Agreement and the transactions contemplated
thereby and to use its best efforts to obtain such approval and adoption. SNI
AG and Purchaser have agreed to cause all Shares then owned by them and their
subsidiaries to be voted in favor of approval and adoption of the Merger
Agreement and the transactions contemplated thereby. The Merger Agreement
provides that, in the event that Purchaser shall acquire at least 90 percent
of the then outstanding Shares, SNI AG, Purchaser and the Company agree, at
the request of Purchaser, to take all necessary and appropriate action to
cause the Merger to become effective as promptly as reasonably practicable
after such acquisition, without a meeting of the Company's stockholders, in
accordance with Delaware Law.
Pursuant to the Merger Agreement, the Company has covenanted and agreed
that, between the date of the Merger Agreement and the Effective Time, unless
SNI AG shall otherwise agree in writing, the businesses of the Company and its
subsidiaries (the "Subsidiaries" and, individually, a "Subsidiary") will be
conducted only in, and the Company and the Subsidiaries will not take any
action except in, the ordinary course of business and in a manner consistent
with past practice; and the Company will use its reasonable best efforts to
preserve substantially intact the business organization of the Company and the
Subsidiaries, to keep available the services of the current officers,
employees and consultants of the Company and the Subsidiaries and to preserve
the current relationships of the Company and the Subsidiaries with customers,
suppliers and other persons with which the Company or any Subsidiary has
significant business relations. The Merger Agreement provides that by way of
amplification and not limitation, and except as contemplated therein, neither
the Company nor any Subsidiary will, between the date of the Merger Agreement
and the Effective Time, directly or indirectly do, or propose to do, any of
the following, without the prior written consent of SNI AG: (a) amend or
otherwise change its Certificate of Incorporation or By-laws or equivalent
organizational documents; (b) issue, sell, pledge, dispose of, grant,
encumber, or authorize the issuance, sale, pledge, disposition, grant or
encumbrance of (i) any shares of capital stock of any class of the Company or
any Subsidiary, or any options, warrants, convertible securities or other
rights of any kind to acquire any shares of such capital stock, or any other
ownership interest (including, without limitation, any phantom interest), of
the Company or any Subsidiary (except for the issuance of a maximum of
3,449,923 Shares issuable pursuant to employee stock options outstanding on
the date of the Merger Agreement, and except for the grant of stock options
under the Company's Stock Option and Purchase Plans (and the resulting
issuance of shares thereunder) consistent with established practice to certain
new employees of the Company hired after December 7, 1994 or (ii) any assets
of the Company or any Subsidiary, except for sales of products in the ordinary
course of business and in a manner consistent with past practice; (c) declare,
set aside, make or pay any dividend or other distribution, payable in cash,
stock, property or otherwise, with respect to any of its capital stock; (d)
reclassify, combine, split, subdivide or redeem, purchase or otherwise
acquire, directly or indirectly, any of its capital stock; (e) (i) acquire
(including, without limitation, by merger, consolidation, or acquisition of
stock or assets) any corporation, partnership, other business organization or
any division thereof or any material amount of assets, (ii) incur any
indebtedness for borrowed money or issue any debt securities or assume,
guarantee or endorse, or otherwise as an accommodation become responsible for,
the obligations of any person, or make any loans or advances, except in the
ordinary course of business and consistent with past practice, (iii) enter
into any contract or agreement other than in the
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ordinary course of business, consistent with past practice, (iv) other than in
the ordinary course of business, consistent with past practice, authorize any
single capital expenditure which is in excess of $250,000 or capital
expenditures which are, in the aggregate, in excess of $500,000 for the
Company and the Subsidiaries taken as a whole, or (v) enter into or amend any
contract, agreement, commitment or arrangement with respect to any of the
foregoing matters; (f) other than pursuant to disclosed policies or agreements
of the Company or any of its Subsidiaries in effect on or prior to the date of
the Merger Agreement increase the compensation payable or to become payable to
its officers or employees, except for increases in accordance with past
practices in salaries or wages of employees of the Company or any Subsidiary
who are not officers of the Company, or grant any severance or termination pay
to, or enter into any employment or severance agreement with, any director,
officer or other employee of the Company or any Subsidiary, or establish,
adopt, enter into or amend any collective bargaining, bonus, profit/sharing,
thrift, compensation, stock option, restricted stock, pension, retirement,
deferred compensation, employment, termination, severance or other plan,
agreement, trust, fund, policy or arrangement for the benefit of any director,
officer or employee; (g) take any action, other than reasonable and usual
actions in the ordinary course of business and consistent with past practice,
with respect to accounting policies or procedures; (h) make any tax election
or settle or compromise any material federal, state, local or foreign income
tax liability; (i) pay, discharge or satisfy any claim, liability or
obligation (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction, in the ordinary
course of business and consistent with past practice, of liabilities incurred
in the ordinary course of business and consistent with past practice;
(j) adopt a plan of complete or partial liquidation, dissolution, merger,
consolidation, restructuring, recapitalization or other reorganization of the
Company or any of its subsidiaries (other than the Merger); (k) settle or
compromise any pending or threatened suit, action or claim which is material
or which relates to any of the Transactions; or (l) take or offer or propose
to take, or agree to take in writing, or otherwise, any of the actions
described above or any action which would make any of the representations or
warranties of the Company contained in this Agreement untrue or incorrect as
of the date when made if such action had then been taken, or would result in
any of the offer conditions not being satisfied.
The Merger Agreement provides that, promptly upon the purchase by Purchaser
of Shares pursuant to the Offer, and from time to time thereafter, Purchaser
will be entitled to designate up to such number of directors, rounded up to
the next whole number, on the Board as shall give Purchaser representation on
the Board equal to the product of the total number of directors on the Board
(giving effect to the directors elected pursuant to this sentence), multiplied
by the percentage that the aggregate number of Shares beneficially owned by
Purchaser or any affiliate of Purchaser following such purchase bears to the
total number of Shares then outstanding, and the Company will, at such time,
promptly take all actions necessary to cause Purchaser's designees to be
elected as directors of the Company, including increasing the size of the
Board or securing the resignations of incumbent directors, or both. The Merger
Agreement also provides that, at such times, the Company will cause persons
designated by Purchaser to constitute the same percentage as persons
designated by Purchaser shall constitute of the Board of (i) each committee of
the Board, (ii) each board of directors of each domestic Subsidiary and (iii)
each committee of each such board, in each case only to the extent permitted
by applicable law. Until the earlier of (i) the time Purchaser acquires a
majority of the then outstanding Shares on a fully diluted basis and (ii) the
Effective Time, the Company has agreed to use its best efforts to ensure that
all the members of the Board and each committee of the Board and such boards
and committees of the domestic Subsidiaries as of the date of the Merger
Agreement who are not employees of the Company shall remain members of the
Board and of such boards and committees.
The Merger Agreement provides that following the election or appointment of
Purchaser's designees in accordance with the immediately preceding paragraph
and prior to the Effective Time, any amendment of the Merger Agreement or the
Certificate of Incorporation or By-laws of the
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Company, any termination of the Merger Agreement by the Company, any extension
by the Company of the time for the performance of any of the obligations or
other acts of SNI AG or Purchaser or waiver of any of the Company's rights
thereunder, will require the concurrence of a majority of those directors of
the Company then in office who were neither designated by Purchaser nor are
employees of the Company.
Pursuant to the Merger Agreement, from the date of the Merger Agreement
until the Effective Time, the Company will, and will cause the Subsidiaries
and the officers, directors, employees, auditors and agents of the Company and
the Subsidiaries to, afford the officers, employees and agents of SNI AG and
Purchaser complete access at all reasonable times to the officers, employees,
agents, properties, offices, plants and other facilities, books and records of
the Company and each Subsidiary, and will furnish SNI AG and Purchaser with
all financial, operating and other data and information as SNI AG or
Purchaser, through its officers, employees or agents, may reasonably request
and SNI AG and Purchaser have agreed to keep such information confidential,
except in certain circumstances.
The Company has agreed that neither it nor any Subsidiary will, and neither
the Company nor any Subsidiary will permit any officer, director or agent to
solicit, initiate or encourage the submission of any proposal or offer from
any person relating to any acquisition or purchase of all or (other than in
the ordinary course of business) any portion of the assets of, or any equity
interest in, the Company or any Subsidiary or any business combination with
the Company or any Subsidiary (whether by a tender offer, exchange offer,
merger, consolidation or otherwise), participate in any negotiations
regarding, or furnish to any other person any information with respect to, any
of the foregoing (an "Acquisition Proposal"). The Merger Agreement requires
the Company immediately to cease and cause to be terminated any existing
discussions or negotiations with any parties conducted prior to the date of
the Merger Agreement with respect to any of the foregoing. The Company has
also agreed to notify SNI AG promptly if any such proposal or offer, or any
inquiry or contact with any person with respect thereto, is made and, in any
such notice to SNI AG, to indicate in reasonable detail the identity of the
person making such proposal, offer, inquiry or contact and the terms and
conditions of such proposal, offer, inquiry or contact. The Company has also
agreed not to release any third party from, or waive any provision of, any
confidentiality or standstill agreement to which the Company is a party,
except to the extent required by fiduciary obligations under applicable law as
advised by independent counsel.
Notwithstanding the foregoing, the Merger Agreement provides that, to the
extent required by fiduciary obligations under applicable law as advised by
independent counsel, the Company may, in response to an Acquisition Proposal
which was not solicited after the date of this Agreement, participate in
discussions or negotiations with, or furnish information with respect to the
Company pursuant to a confidentiality agreement in reasonably customary form,
to any person. The Merger Agreement further provides that following the
receipt of an Acquisition Proposal, which the Board of Directors of the
Company, after consultation with and based on the advice of independent legal
counsel and its financial advisor, determines in good faith to be more
favorable to the Company's stockholders than the Offer and the Merger (a
"Superior Proposal"), the Company may, upon payment of the Fee and Expenses
(as defined hereafter) as required by Section 8.01(d)(ii) of the Merger
Agreement, terminate the Merger Agreement and accept such Superior Proposal,
and the Board of Directors of the Company may approve or recommend such
Superior Proposal and, in connection therewith, withdraw or modify its
approval or recommendation of the Offer, the Merger Agreement or the Merger.
None of the foregoing shall prohibit the Company or its Board of Directors
from (i) taking, and disclosing to the Company's stockholders, a position with
respect to an Acquisition Proposal pursuant to Rules 14d-9 and 14e-2(a) under
the Exchange Act or (ii) making any disclosure to the Company's stockholders
that, in the judgment of the Board of Directors of the Company, is required
under applicable law.
The Merger Agreement provides that, in accordance with the terms of the
Company's Executive Officers Nonstatutory Stock Option Plan and Amended and
Restated Directors' Option Plan and Share Option Scheme for U.K. Executives
(collectively, the "non-1982 Stock Option Plans"), each
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outstanding employee or director stock option to purchase Shares granted under
any non-1982 Stock Option Plan will be made exercisable on the date this
Merger Agreement is signed, regardless of whether they would otherwise be
exercisable under the terms of such non-1982 Stock Option Plan. Any non-1982
Plan Option not exercised by the Effective Time will be cancelled by the
Company and no payment shall be made therefor. The Merger Agreement provides
that each outstanding employee or director stock option to purchase Shares (a
"1982 Plan Option") granted under the Company's amended 1982 Incentive Stock
Option Plan will be made exercisable on the date that Purchaser accepts for
payment Shares tendered pursuant to the Offer regardless of whether such stock
options would otherwise be exercisable under the terms of the Amended 1982
Incentive Stock Option Plan. The Merger Agreement provides further that, on
such date, each 1982 Plan Option, other than any 1982 Plan Option that was
granted to any "officer" (as that term is defined in Rule 16a-1(f) promulgated
by the SEC) of the Company (a "Section 16 Insider Option") will be cancelled
without further action required on the part of the holder of such option, in
exchange for the right to receive, as soon as practicable following
Purchaser's acceptance for payment of Shares tendered pursuant to the Offer, a
cash payment by the Purchaser to the holder in an amount equal to the excess,
if any, of $16.00 over the exercise price per share of the 1982 Plan Option
minus applicable withholding. Each outstanding Section 16 Insider Option shall
be treated in one of two ways. First, with respect to Section 16 Insider
Options that were granted at any time before the date that is six months prior
to the Effective Time (the "Old Insider Options"), such options must be
exercised immediately following their vesting acceleration; to the extent that
such Old Insider Options are not so exercised, they will be cancelled by the
Company and no payment will be made therefor. Second, with respect to Section
16 Insider Options that were granted at any time on or after the date that is
six months prior to the Effective Time (the "Recent Insider Options"), such
options will remain outstanding in accordance with their terms (amended as
provided below) and will not be affected in any way by the consummation of the
Merger, except for their becoming exercisable in full pursuant to the first
sentence of this subsection. As soon as practicable following the Effective
Time, but at least six months after the grant date of any Recent Insider
Option, Parent, in its capacity as sole stockholder of the Surviving
Corporation, will approve amendments to the Amended 1982 Incentive Stock
Option Plan to provide (a) that upon exercise of a Recent Insider Option, the
holder will receive an amount in cash per Share equal to the excess, if any,
of $16.00 over the exercise price per share of the Recent Insider Option,
minus applicable withholding, and (b) that each Recent Insider Option that has
not been exercised as of July 31, 1995 will be cancelled by the Surviving
Corporation on such date and no payment shall be made therefor.
With respect to the Company's 1987 Employee Stock Purchase Plan (the
"Purchase Plan"), the Merger Agreement provides that the offering period
currently in progress will be shortened by setting a new exercise date which
will be the date immediately preceding the Effective Time (the "New Exercise
Date"). The Purchase Plan will terminate immediately following the purchase of
Shares on the New Exercise Date.
The Merger Agreement provides that SNI AG will cause the Surviving
Corporation, for a period of at least two years following the acceptance of
Shares by Purchaser pursuant to the Offer, to continue to provide the
employees of the Surviving Corporation with the employee pension, welfare and
fringe benefits currently in effect (except that as soon as practicable
following the Effective Time, SNI AG will cause the Surviving Corporation to
amend the Surviving Corporation 401(k) plan to effect an appropriate increase
to the rate of employer matching contributions and/or discretionary
contributions so as to compensate the employees for the termination of the
Purchase Plan) or substitute benefits that are substantially comparable to,
and in the aggregate no less favorable than, such employee pension, welfare
and fringe benefits.
Pursuant to the Merger Agreement, as soon as practicable following the
Effective Time, SNI AG will cause the Surviving Corporation to implement a
phantom equity or long-term incentive program instead of the stock option
plans as currently in effect to reward revenue growth and profitability over a
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three year period, which program will be designed by SNI AG following good
faith consultation with the Surviving Corporation's senior management and
under which program potential payments shall be at a level consistent with the
objective of preserving the entrepreneurial character of the Surviving
Corporation. Such program will also contain provisions providing for the
conversion of awards into common equity of the Surviving Corporation in the
event of an initial public offering of the common equity of the Surviving
Corporation.
The Merger Agreement provides that SNI AG will cause the Surviving
Corporation to retain the Management Incentive Plan (the "MIP") until
September 30, 1995, as modified as provided below, with the same employees
remaining eligible for bonuses thereunder. The amounts payable to each of the
Surviving Corporation's executive officers participating in the MIP will be
increased by 30%. Each other participant in the MIP will be given the right to
elect, no later than 30 days following the Effective Time, either (i) the 30%
increase described in the immediately proceeding sentence or (ii) a guaranteed
minimum bonus equal to 50% of such participant's bonus at 100% target
performance. The Merger Agreement provides further that appropriate
adjustments will be made to the plan target levels to eliminate the effect of
legal, investment banking and other extraordinary fees and expenses incurred
by the Surviving Corporation as a consequence of the transactions effected
pursuant to the Merger Agreement and the preparation and negotiations leading
thereto.
Pursuant to the Merger Agreement, SNI AG will cause the Surviving
Corporation to establish a bonus system for selected non-MIP, non-sales
employees which will reward milestones, for example, in the development of
products. As soon as practicable following the Effective Time, SNI AG will
cause the Surviving Corporation to enter into retention bonus agreements with
up to 30 employees of the Surviving Corporation to be identified by mutual
agreement of SNI AG and senior management of the Company. Such retention bonus
agreements will be in a form to be established by SNI AG following good faith
consultation with senior management of the Surviving Corporation and will
provide each covered employee with the opportunity to receive a retention
bonus (in addition to any bonus payable under the MIP or other annual bonus
plan) of up to 100% of such employee's base salary on the second anniversary
of the Effective Time, subject to such employee being employed by the
Surviving Corporation on such anniversary date.
Pursuant to the Merger Agreement, the Surviving Corporation and SNI AG agree
that for a period ending not sooner than the sixth anniversary of the
Effective Time, the Surviving Corporation will maintain all rights to
indemnification (including with respect to the advancement of expenses
incurred in the defense of any action or suit) existing on the date of this
Agreement in favor of the present and the former directors, officers,
employees and agents of the Company as provided in the Company's Certificate
of Incorporation and Bylaws and as set forth in the Indemnification Agreements
listed in Section 6.07 of the Disclosure Schedule to the Merger Agreement
(true and correct copies of which have been made available to Purchaser), in
each case as in effect on the date of the Merger Agreement, and that during
such period, the Certificate of Incorporation and Bylaws of the Surviving
Corporation will not be amended to reduce or limit the rights of indemnity
afforded to the present and former directors, officers, employees and agents
of the Company, or the ability of the Surviving Corporation to indemnify them,
nor to hinder, delay or make more difficult the exercise of such rights or
indemnity or the ability to indemnify.
The Merger Agreement provides that SNI AG and the Surviving Corporation will
use their respective reasonable best efforts to maintain in effect for three
years from the Effective Time, if available, the current directors' and
officers' liability insurance policies maintained by the Company (provided
that the Surviving Corporation may substitute therefor policies of at least
the same coverage containing terms and conditions which are not materially
less favorable) with respect to matters occurring prior to the Effective Time;
provided, however, that in no event will the Surviving Corporation
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be required to expend more than an amount per year equal to 150% of the
current annual premiums paid by the Company for such insurance (which premiums
the Company has represented to SNI AG and Purchaser to be $533,000 in the
aggregate).
The Merger Agreement provides that, subject to its terms and conditions,
each of the parties thereto will (i) make promptly its respective filings, and
thereafter make any other required submissions, under the HSR Act and any
other applicable statutes or regulations with respect to the Transactions and
(ii) use all reasonable best efforts to take, or cause to be taken, all
appropriate action, and to do or cause to be done, all things necessary,
proper or advisable under applicable laws and regulations to consummate and
make effective the transactions contemplated by the Merger Agreement,
including, without limitation, using all reasonable best efforts to obtain all
licenses, permits (including, without limitation, Environmental Permits),
consents, approvals, authorizations, qualifications and orders of governmental
authorities and parties to contracts with the Company and the Subsidiaries as
are necessary for the consummation of the Transactions and to fulfill the
conditions to the Offer and the Merger. SNI AG will give notice promptly to
the Chairman of the Committee on Foreign Investment in the United States
pursuant to Section 721 of the Defense Production Act of 1950, as amended, and
the regulations promulgated thereunder (the "Exon-Florio Provision") of the
Transactions, and each of the parties to the Merger Agreement agree to make
additional filings and submissions as may be reasonably necessary under the
Exon-Florio Provision in respect of the Transactions. Pursuant to the Merger
Agreement, SNI AG and the Company agree to consult and cooperate with one
another, and consider in good faith the views of one another, in connection
with any analyses, appearances, presentations, memoranda, briefs, arguments,
opinions or proposals made or submitted by or on behalf of any party hereto in
connection with proceedings under or relating to the HSR Act, the Exon-Florio
Provision, the pre-notification requirements of any foreign jurisdiction, or
any other federal or state antitrust or fair trade law.
In case at any time after the Effective Time any further action is necessary
or desirable to carry out the purposes of the Merger Agreement, the proper
officers and directors of each party to the Merger Agreement are required to
use their reasonable best efforts to take all such action.
The Merger Agreement provides that, no later than five days after the
execution of the Merger Agreement, the Company will notify the New Jersey
Department of Environmental Protection and Energy (the "NJDEPE") of the Offer
and the other Transactions (including, without limitation, the Merger)
pursuant to the requirements of ISRA. Immediately thereafter, the Company will
make application to the NJDEPE for a negative declaration or a remediation
agreement as appropriate under ISRA. SNI AG will cooperate with and assist the
Company in any reasonable manner in connection with obtaining such negative
declaration or remediation agreement. The Company shall not enter into any
remediation agreement without the prior written consent of SNI AG. SNI AG and
Purchaser agree to offer to enter into any remediation agreement with the
NJDEPE pursuant to the requirements of ISRA as may be necessary to permit the
consummation of the Transactions unless such remediation agreement would have
a Material Adverse Effect. See Section 15.
Representations and Warranties. The Merger Agreement contains various
customary representations and warranties of the parties thereto including
representations by the Company and Seller as to the absence of certain changes
or events concerning the Company's business, compliance with law, litigation,
employee benefit plans, real property and leases, trademarks, patents and
copyrights, environmental matters, material contracts and insurance.
Conditions to the Merger. Under the Merger Agreement, the respective
obligations of each party to effect the Merger are subject to the satisfaction
at or prior to the Effective Time of the following conditions: (a) the Merger
Agreement and the transactions contemplated thereby shall have been approved
and adopted by the affirmative vote of the stockholders of the Company to the
extent
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required by Delaware Law and the Company's Certificate of Incorporation; (b)
any waiting period (and any extension thereof) applicable to the consummation
of the Merger under the HSR Act and any other applicable statutes or
regulations shall have expired or been terminated and the Company shall have
obtained a negative declaration or executed a remediation agreement with the
NJDEPE pursuant to the requirements of ISRA; (c) no foreign, United States or
state governmental authority or other agency or commission or foreign, United
States or state court of competent jurisdiction shall have enacted, issued,
promulgated, enforced or entered any law, rule, regulation, executive order,
decree, injunction or other order (whether temporary, preliminary or
permanent) which is then in effect and has the effect of making the
acquisition of Shares by SNI AG or Purchaser or any affiliate of either of
them illegal or otherwise restricting, preventing or prohibiting consummation
of the Transactions; and (d) Purchaser or its permitted assignee shall have
purchased all Shares validly tendered and not withdrawn pursuant to the Offer;
provided, however, that this condition shall not be applicable to the
obligations of SNI AG or Purchaser if, in breach of the Merger Agreement or
the terms of the Offer, Purchaser fails to purchase any Shares validly
tendered and not withdrawn pursuant to the Offer.
Termination; Fees and Expenses. The Merger Agreement provides that it may be
terminated and the Merger and the other Transactions may be abandoned at any
time prior to the Effective Time, notwithstanding any requisite approval and
adoption of the Merger Agreement and the Transactions by the stockholders of
the Company (provided, however, that if Shares are purchased pursuant to the
Offer, SNI AG or Purchaser may not in any event terminate the Merger
Agreement): (a) by mutual written consent duly authorized by the Boards of
Directors of SNI AG, Purchaser and the Company; (b) by SNI AG, Purchaser or
the Company if (i) the Effective Time shall not have occurred on or before
July 31, 1995; provided, however, that the right to terminate the Merger
Agreement shall not be available to any party whose failure to fulfill any
obligation under the Merger Agreement has been the cause of, or resulted in,
the failure of the Effective Time to occur on or before such date, or (ii) any
court of competent jurisdiction or other governmental authority shall have
issued an order, decree or ruling or shall have taken any other action
restraining, enjoining or otherwise prohibiting the Merger and such order,
decree, ruling or other action shall have become final and nonappealable; (c)
by SNI AG if (i) as the result of a failure of any condition set forth in
Section 14 hereof, (A) Purchaser shall have failed to commence the Offer
within 60 days following the date of the Merger Agreement, (B) the Offer shall
have terminated or expired in accordance with its terms without Purchaser
having accepted any Shares for payment thereunder or (C) Purchaser shall have
failed to pay for Shares pursuant to the Offer within 90 days following the
commencement of the Offer (or where applicable under the conditions to the
Offer set forth in Section 14, within the 120-day period specified therein),
unless the occurrence of the event set forth in any of clause (A), (B) or (C)
above shall have been caused by or resulted from the failure of SNI AG or
Purchaser to perform in any material respect any material covenant or
agreement of either of them contained in the Merger Agreement or the material
breach by SNI AG or Purchaser of any material representation or warranty of
either of them contained in the Merger Agreement (including where such
occurrence results from an action by the Company permitted under the Merger
Agreement's non-solicitation provision that results from such failure or
material breach by SNI AG or Purchaser) or (ii) prior to the purchase of
Shares pursuant to the Offer, the Board or any committee thereof shall have
withdrawn or modified in a manner adverse to Purchaser or SNI AG its approval
or recommendation of the Offer, the Merger Agreement, the Merger or any other
Transaction or shall have recommended another Acquisition Proposal, or shall
have resolved to do any of the foregoing; or (d) by the Company, upon approval
of the Board, if (i) as the result of the failure of any of the conditions set
forth in Section 14 hereof, (A) Purchaser shall have failed to commence the
Offer within 60 days following the date of the Merger Agreement, (B) the Offer
shall have terminated or expired in accordance with its terms without
Purchaser having accepted any Shares for payment thereunder or (C) Purchaser
shall have failed to pay for Shares pursuant to the Offer within 90 days
following the commencement of the Offer (or where applicable under the
conditions to the Offer set forth in Section 14, within the 120-day period
specified therein), unless the occurrence of the event set forth in any of
clauses (A), (B), or (C) above shall have been caused by or resulted from the
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failure of the Company to perform in any material respect any material
covenant or agreement of it contained in the Merger Agreement or the material
breach by the Company of any material representation or warranty of it
contained in the Merger Agreement, (ii) prior to the purchase of Shares
pursuant to the Offer, the Board shall have determined to accept a Superior
Proposal pursuant to Section 6.05(b) of the Merger Agreement and the Company
has complied with all the provisions of Section 6.05(b) of the Merger
Agreement; provided, that such termination under the foregoing provisions will
not be effective until the Company has made payment of the full fee required
by Section 8.03(a) of the Merger Agreement and has deposited with a mutually
acceptable escrow agent $2 million for reimbursement of Expenses (as defined
in the Merger Agreement) in accordance with Section 8.03 of the Merger
Agreement, or (iii) prior to the purchase of Shares pursuant to the Offer,
there has been a willful breach by SNI AG or Purchaser of any representation,
warranty, covenant or agreement set forth in the Merger Agreement which breach
is not reasonably capable of being cured within 40 business days after the
date of the commencement of the Offer.
In the event of the termination of the Merger Agreement, the Merger
Agreement provides that it will forthwith become void and there will be no
liability thereunder on the part of any party thereto except under the
provisions of the Merger Agreement related to fees and expenses described
below and under certain other provisions of the Merger Agreement which survive
termination.
The Merger Agreement provides that in the event that (a) any person
(including, without limitation, the Company or any affiliate thereof), other
than SNI AG or any affiliate of SNI AG, shall have become the beneficial owner
of more than 50% of the then outstanding Shares and the Merger Agreement shall
have been terminated pursuant to the provisions described in the second
preceding paragraph above; (b) any person shall have commenced, publicly
proposed or communicated to the Company a proposal that is publicly disclosed
for a tender or exchange offer for 50% or more (or which, assuming the maximum
amount of securities which could be purchased, would result in any person
beneficially owning 50% or more) of the then outstanding Shares or otherwise
for the direct or indirect acquisition of the Company or all or a substantial
portion of its assets for per Share consideration having a value greater than
$16.00 and (i) the Offer shall have remained open for at least 20 business
days, (ii) the Minimum Condition shall not have been satisfied, and (iii) the
Agreement shall have been terminated pursuant to the provisions described
above, and (iv) within 12 months of such termination a Third Party Acquisition
(as defined hereafter) shall occur; or (c) the Merger Agreement is terminated
pursuant to the provisions described in clause (c)(ii) or clause (d)(ii) of
the second preceding paragraph; then, in any such event, the Company will pay
SNI AG promptly (but in no event later than five business days after the first
of such events shall have occurred) a fee of $7 million (the "Fee"), which
amount will be payable in immediately available funds, plus all Expenses (as
defined below); provided, however, that neither the Fee nor any Expenses shall
be paid if either SNI AG or Purchaser shall be in material breach of its
representations and warranties or obligations under the Merger Agreement.
The Merger Agreement provides that if it is terminated by SNI AG or
Purchaser pursuant to the provisions described in clause (c)(ii) of the third
preceding paragraph and neither SNI AG nor Purchaser is in material breach of
their respective material covenants and agreements contained in the Merger
Agreement or their respective representations and warranties contained in the
Merger Agreement, the Company will, whether or not any payment is made
pursuant to the provisions described in the immediately preceding paragraph,
reimburse each of SNI AG, Purchaser and their affiliates (not later than five
business days after submission of statements therefor) for all out-of-pocket
expenses and fees up to $2 million in the aggregate (including, without
limitation, fees and expenses payable to all banks, investment banking firms,
other financial institutions and other persons and their respective agents and
counsel for arranging, committing to provide or providing any financing for
the Transactions or structuring such transactions and all fees of counsel,
accountants, experts and consultants to SNI AG, Purchaser and their
affiliates, and all printing and advertising expenses) actually incurred or
accrued by either of them or on their behalf in connection with the
Transactions, including,
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without limitation, the financing thereof, and actually incurred or accrued by
banks, investment banking firms, other financial institutions and other
persons and assumed by SNI AG, Purchaser or their affiliates in connection
with the negotiation, preparation, execution and performance of the Merger
Agreement, the structuring and financing of the Transactions, and any
financing commitments or agreements relating thereto (all of the foregoing
being referred to herein collectively as the "Expenses"). Except as set forth
in this paragraph, all costs and expenses incurred in connection with the
Merger Agreement and the Transactions will be paid by the party incurring such
expenses, whether or not any such transaction is consummated.
"Third Party Acquisition" means the occurrence of any of the following
events: (i) the acquisition of the Company by merger, tender offer, exchange
offer, consolidation or otherwise by any person other than SNI AG, Purchaser
or any affiliate thereof (a "Third Party"); (ii) the acquisition by any Third
Party of all or substantially all of the total assets of the Company and its
Subsidiaries, taken as a whole; (iii) the acquisition by a Third Party of 50%
or more of the outstanding Shares; (iv) the adoption by the Company of a plan
of liquidation or the declaration or payment of an extraordinary dividend; or
(v) the repurchase by the Company or any of its Subsidiaries of 50% or more of
the outstanding Shares.
11. Purpose of the Offer; Plans for the Company After the Offer and the
Merger.
Purpose of the Offer. The purpose of the Offer and the Merger is for Siemens
AG indirectly to acquire control of, and the entire equity interest in, the
Company. The purpose of the Merger is for Siemens AG indirectly to acquire all
Shares not purchased pursuant to the Offer. Upon consummation of the Merger,
the Company will become an indirect wholly owned subsidiary of Siemens AG. The
Offer is being made pursuant to the Merger Agreement.
Under Delaware Law, the approval of the Board and the affirmative vote of
the holders of a majority of the outstanding Shares is required to approve and
adopt the Merger Agreement and the transactions contemplated thereby,
including the Merger. The Board of Directors of the Company has unanimously
approved and adopted the Merger Agreement and the transactions contemplated
thereby (with one director recusing himself), and, unless the Merger is
consummated pursuant to the short-form merger provisions under Delaware Law
described below, the only remaining required corporate action of the Company
is the approval and adoption of the Merger Agreement and the transactions
contemplated thereby by the affirmative vote of the holders of a majority of
the Shares. Accordingly, if the Minimum Condition is satisfied, Purchaser will
have sufficient voting power to cause the approval and adoption of the Merger
Agreement and the transactions contemplated thereby without the affirmative
vote of any other stockholder.
In the Merger Agreement, the Company has agreed to take all action necessary
to convene a meeting of its stockholders as soon as practicable after the
consummation of the Offer for the purpose of considering and taking action on
the Merger Agreement and the transactions contemplated thereby, if such action
is required by Delaware Law. SNI AG and Purchaser have agreed that all Shares
owned by them and their subsidiaries will be voted in favor of the Merger
Agreement and the transactions contemplated thereby at any such meeting.
If Purchaser purchases Shares pursuant to the Offer, the Merger Agreement
provides that Purchaser will be entitled to designate representatives to serve
on the Board in proportion to Purchaser's ownership of Shares following such
purchase. See Section 10. Purchaser expects that such representation would
permit Purchaser to exert control over the Company's conduct of its business
and operations.
SNI AG intends to transfer the 2,717,743 Shares it beneficially owns on the
date hereof to Purchaser prior to, or concurrently with, the purchase of
Shares by Purchaser pursuant to the Offer. Under Delaware Law, if Purchaser
acquires, pursuant to the Offer or otherwise, such number of Shares
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which, when added to the Shares owned of record by Purchaser on such date,
constitutes at least 90% of the then outstanding Shares, Purchaser will be
able to approve and adopt the Merger Agreement and the transactions
contemplated thereby, including the Merger, without a vote of the Company's
stockholders. In such event, SNI AG, Purchaser and the Company have agreed to
take, at the request of Purchaser, all necessary and appropriate action to
cause the Merger to become effective as soon as reasonably practicable after
such acquisition, without a meeting of the Company's stockholders. If,
however, Purchaser does not acquire such number of Shares which, when added to
the Shares owned of record by Purchaser on such date, constitutes at least 90%
of the then outstanding Shares pursuant to the Offer or otherwise and a vote
of the Company's stockholders is required under Delaware Law, a significantly
longer period of time will be required to effect the Merger.
No appraisal rights are available in connection with the Offer. However, if
the Merger is consummated, stockholders will have certain rights under
Delaware Law to dissent and demand appraisal of, and to receive payment in
cash of the fair value of, their Shares. Such rights to dissent, if the
statutory procedures are complied with, could lead to a judicial determination
of the fair value of the Shares, as of the day prior to the date on which the
stockholders' vote was taken approving the Merger or similar business
combination (excluding any element of value arising from the accomplishment or
expectation of the Merger), required to be paid in cash to such dissenting
holders for their Shares. In addition, such dissenting stockholders would be
entitled to receive payment of a fair rate of interest from the date of
consummation of the Merger on the amount determined to be the fair value of
their Shares. In determining the fair value of the Shares, the court is
required to take into account all relevant factors. Accordingly, such
determination could be based upon considerations other than, or in addition
to, the market value of the Shares, including, among other things, asset
values and earning capacity. In Weinberger v. UOP, Inc., the Delaware Supreme
Court stated, among other things, that "proof of value by any techniques or
methods which are generally considered acceptable in the financial community
and otherwise admissible in court" should be considered in an appraisal
proceeding. Therefore, the value so determined in any appraisal proceeding
could be the same, more or less than the purchase price per Share in the Offer
or the Merger Consideration.
In addition, several decisions by Delaware courts have held that, in certain
circumstances, a controlling stockholder of a company involved in a merger has
a fiduciary duty to other stockholders which requires that the merger be fair
to such other stockholders. In determining whether a merger is fair to
minority stockholders, Delaware courts have considered, among other things,
the type and amount of consideration to be received by the stockholders and
whether there was fair dealing among the parties. The Delaware Supreme Court
stated in Weinberger and Rabkin v. Philip A. Hunt Chemical Corp. that the
remedy ordinarily available to minority stockholders in a cash-out merger is
the right to appraisal described above. However, a damages remedy or
injunctive relief may be available if a merger is found to be the product of
procedural unfairness, including fraud, misrepresentation or other misconduct.
The Commission has adopted Rule 13e-3 under the Exchange Act which is
applicable to certain "going private" transactions. Rule 13e-3 requires, among
other things, that certain financial information concerning the Company and
certain information relating to the fairness of the proposed transaction and
the consideration offered to minority stockholders in such transaction be
filed with the Commission and disclosed to stockholders prior to consummation
of the transaction. Purchaser believes that Rule 13e-3 will not be applicable
to the Offer or the Merger. However, no assurances can be given that the
Commission will not take the position that Rule 13e-3 is applicable to the
Offer or the Merger.
The Company and Pyramid Technology Australia PTY, Ltd., a wholly owned
subsidiary of the Company ("Pyramid Australia"), are parties to a Partnership
Agreement dated June 10, 1994 (the "Partnership Agreement") between the
Company, Pyramid Australia, Fujitsu Data Centre Systems PTY Limited and
Fujitsu Australia Limited. Section 13.2 of the Partnership Agreement provides
that if there is a change in the ownership of, or control of a controlling
interest in, the Company or Pyramid Australia,
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then the other parties may terminate the Partnership Agreement by notice in
writing to the Company or Pyramid Australia, respectively. No assurances can
be given that the consummation of the Offer or the Merger will not result in
the termination of the Partnership Agreement pursuant to the aforementioned
termination provisions.
Plans for the Company. It is expected that, initially following the Merger,
the business and operations of the Company will, except as set forth in this
Offer to Purchase, be continued by the Company substantially as they are
currently being conducted. SNI AG will continue to evaluate the business and
operations of the Company during the pendency of the Offer and after the
consummation of the Offer and the Merger, and will take such actions as it
deems appropriate under the circumstances then existing. SNI AG intends to
seek additional information about the Company during this period. Thereafter,
SNI AG intends to review such information as part of a comprehensive review of
the Company's business, operations, capitalization and management with a view
to optimizing realization of the Company's potential in conjunction with SNI
AG's businesses. It is expected that the business and operations of the
Company would form an important part of SNI AG's future business plans.
As more fully described in the Company's Schedule 14D-9, the Management
Retention Agreement dated January 20, 1995, between John S. Chen and the
Company provides that Mr. Chen will serve as a member of the Board during the
term of his employment thereunder. Except as indicated in this Offer to
Purchase, SNI AG does not have any present plans or proposals which relate to
or would result in an extraordinary corporate transaction, such as a merger,
reorganization or liquidation, involving the Company or any Subsidiary, a sale
or transfer of a material amount of assets of the Company or any Subsidiary or
any material change in the Company's capitalization or dividend policy or any
other material changes in the Company's corporate structure or business, or
the composition of the Board or the Company's management.
12. Dividends and Distributions. The Merger Agreement provides that the
Company will not, between the date of the Merger Agreement and the Effective
Time, without the prior written consent of SNI AG, (a) issue, sell, pledge,
dispose of, grant, encumber, or authorize the issuance, sale, pledge,
disposition, grant or encumbrance of any shares of capital stock of any class
of the Company or any options, warrants, convertible securities or other
rights of any kind to acquire any shares of such capital stock, or any other
ownership interest (including, without limitation, any phantom interest), of
the Company (except for the issuance of a maximum of 3,449,923 Shares issuable
pursuant to employee stock options outstanding on the date hereof) or (b)
reclassify, combine, split, subdivide or redeem, purchase or otherwise
acquire, directly or indirectly, any of its capital stock. See Section 10. If,
however, the Company should, during the pendency of the Offer, (i) split,
combine or otherwise change the Shares or its capitalization, (ii) acquire or
otherwise cause a reduction in the number of outstanding Shares or (iii) issue
or sell any additional Shares, shares of any other class or series of capital
stock, other voting securities or any securities convertible into, or options,
rights, or warrants, conditional or otherwise, to acquire, any of the
foregoing, then, without prejudice to Purchaser's rights under Section 14,
Purchaser may (subject to the provisions of the Merger Agreement) make such
adjustments to the purchase price and other terms of the Offer (including the
number and type of securities to be purchased) as it deems appropriate to
reflect such split, combination or other change.
If, on or after January 20, 1995, the Company should declare or pay any
dividend on the Shares or make any other distribution (including the issuance
of additional shares of capital stock pursuant to a stock dividend or stock
split, the issuance of other securities or the issuance of rights for the
purchase of any securities) with respect to the Shares that is payable or
distributable to stockholders of record on a date prior to the transfer to the
name of Purchaser or its nominee or transferee on the Company's stock transfer
records of the Shares purchased pursuant to the Offer, then, without prejudice
to Purchaser's rights under Section 14, (i) the purchase price per Share
payable by the Purchaser pursuant to the Offer will be reduced (subject to the
Merger Agreement) to the extent any such dividend or distribution is payable
in cash and (ii) any non-cash dividend, distribution or right shall be
received and held by the tendering stockholder for the account of Purchaser
and will be required to be promptly
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remitted and transferred by each tendering stockholder to the Depositary for
the account of Purchaser, accompanied by appropriate documentation of
transfer. Pending such remittance and subject to applicable law, Purchaser
will be entitled to all the rights and privileges as owner of any such non-
cash dividend, distribution or right and may withhold the entire purchase
price or deduct from the purchase price the amount or value thereof, as
determined by Purchaser in its sole discretion.
13. Effect of the Offer on the Market for the Shares, Exchange Listing and
Exchange Act Registration. The purchase of Shares by Purchaser pursuant to the
Offer will reduce the number of Shares that might otherwise trade publicly and
will reduce the number of holders of Shares, which could adversely affect the
liquidity and market value of the remaining Shares held by the public.
SNI AG intends to cause the delisting of the Shares by NASDAQ following
consummation of the Offer.
Depending upon the number of Shares purchased pursuant to the Offer, the
Shares may no longer meet the standards for continued inclusion in the NASDAQ
National Market System. According to the NASDAQ National Market System's
published guidelines, the Shares would not be eligible to be included for
listing if, among other things, the number of Shares falls below 200,000
publicly held Shares, the number of holders of Shares falls below 400 or the
aggregate market value of such publicly held Shares does not exceed
$1,000,000. If these standards are not met, quotations might continue to be
published in the over-the-counter "additional list" or in one of the "local
lists", but if the number of holders of the Shares falls below 300, or if the
number of publicly held Shares falls below 100,000, or there is not at least
one market maker for the Shares, NASD rules provide that the securities would
no longer be "authorized" for NASDAQ reporting, and NASDAQ would cease to
provide any quotations. Shares held directly or indirectly by an officer or
director of the Company or by any beneficial owner of more than 10% of the
Shares will ordinarily not be considered as being publicly held for this
purpose. In the event the Shares were no longer eligible for NASDAQ quotation,
quotations might still be available from other sources. The extent of the
public market for the Shares and the availability of such quotations would,
however, depend upon the number of holders of such Shares remaining at such
time, the interest in maintaining a market in such Shares on the part of
securities firms, the possible termination of registration of such Shares
under the Exchange Act as described below and other factors.
The Shares are currently "margin securities," as such term is defined under
the rules of the Board of Governors of the Federal Reserve System (the
"Federal Reserve Board"), which has the effect, among other things, of
allowing brokers to extend credit on the collateral of such securities.
Depending upon factors similar to those described above regarding listing and
market quotations, following the Offer it is possible that the Shares might no
longer constitute "margin securities" for purposes of the margin regulations
of the Federal Reserve Board, in which event such Shares could no longer be
used as collateral for loans made by brokers.
The Shares are currently registered under the Exchange Act. Such
registration may be terminated upon application by the Company to the
Commission if the Shares are not listed on a national securities exchange and
there are fewer than 300 record holders. The termination of the registration
of the Shares under the Exchange Act would substantially reduce the
information required to be furnished by the Company to holders of Shares and
to the Commission and would make certain provisions of the Exchange Act, such
as the short-swing profit recovery provisions of Section 16(b), the
requirement of furnishing a proxy statement in connection with shareholders'
meetings and the requirements of Rule 13e-3 under the Exchange Act with
respect to "going private" transactions, no longer applicable to the Shares.
In addition, "affiliates" of the Company and persons holding "restricted
securities" of the Company may be deprived of the ability to dispose of such
securities pursuant to Rule 144 promulgated under the Securities Act of 1933,
as amended. If registration of the Shares under the Exchange Act were
terminated, the Shares would no longer be "margin securities" or be eligible
for NASDAQ reporting. Purchaser currently intends to seek to cause the Company
to terminate the
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registration of the Shares under the Exchange Act as soon after consummation
of the Offer as the requirements for termination of registration are met.
14. Certain Conditions of the Offer. Notwithstanding any other provision of
the Offer, subject to the terms of the Merger Agreement (including Purchaser's
obligation to extend the Offer as provided in the Merger Agreement), Purchaser
will not be required to accept for payment or pay for any Shares tendered
pursuant to the Offer, and may terminate or amend the Offer and may postpone
the acceptance for payment of and payment for Shares tendered, if (i) the
Minimum Condition shall not have been satisfied, (ii) any applicable waiting
period under the HSR Act and the other regulatory provisions listed in Section
3.05 of the Merger Agreement shall not have expired or been terminated prior
to the expiration of the Offer, (iii) the Company shall not have obtained a
negative declaration or executed a remediation agreement with the NJDEPE
pursuant to the requirements of ISRA or (iv) (A) the applicable waiting period
under the Exon-Florio Provision shall not have expired, (B) the Committee on
Foreign Investment in the United States ("CFIUS") shall have initiated an
investigation of the Transactions or (C) if CFIUS initiates an investigation,
the applicable waiting period under the Exon-Florio Provision relating to such
investigation shall not have expired, or such investigation shall have been
completed and the President shall have announced a decision to take action
pursuant to the Exon-Florio Provision before the expiration of the period
ending on the 15th day (or if such day is not a business day, the next
business day) following the completion of such investigation, which has a
substantial likelihood of resulting, directly or indirectly, in any of the
consequences referred to in clauses (i) through (v) of paragraph (a) below or
such 15 day waiting period shall not have expired; provided, however, that
prior to the expiration of 120 days following the date of the Merger
Agreement, Purchaser will not terminate the Offer by reason of the non-
satisfaction of either of the conditions set forth in clauses (ii), (iii) or
(iv) above and will extend the Offer and will use its reasonable best efforts
to cause the satisfaction of such conditions (it being understood that this
proviso will not prohibit Purchaser from terminating the Offer or failing to
extend the Offer by reason of the non-satisfaction of any other condition of
the Offer). Furthermore, notwithstanding any other term of the Offer, subject
to the terms of the Merger Agreement, Purchaser will not be required to accept
for payment or pay for any Shares tendered pursuant to the Offer, and may
terminate or amend the Offer and may postpone the acceptance for payment of
and payment for Shares tendered, if, at any time on or after the date of the
Merger Agreement, and prior to the acceptance for payment of Shares, any of
the following conditions exist:
(a) there shall be pending any action or proceeding instituted by any
governmental authority before any court or governmental, administrative or
regulatory authority or agency, domestic or foreign, (i) challenging or
seeking to make illegal, materially delay or otherwise directly or
indirectly restrain or prohibit or make materially more costly the making
of the Offer, the acceptance for payment of, or payment for, any Shares by
SNI AG, Purchaser or any other affiliate of SNI AG, or the consummation of
any other Transaction, or seeking to obtain material damages in connection
with any Transaction; (ii) seeking to prohibit or limit materially the
ownership or operation by the Company, SNI AG or any of their subsidiaries
of all or any material portion of the business or assets of the Company,
SNI AG or any of their subsidiaries, or to compel the Company, SNI AG or
any of their subsidiaries to dispose of or hold separate all or any
material portion of the business or assets of the Company, SNI AG or any of
their subsidiaries, as a result of the Transactions; (iii) seeking to
impose or confirm limitations on the ability of SNI AG, Purchaser or any
other affiliate of SNI AG to exercise effectively full rights of ownership
of any Shares, including, without limitation, the right to vote any Shares
acquired by Purchaser pursuant to the Offer or otherwise on all matters
properly presented to the Company's stockholders, including, without
limitation, the approval and adoption of this Agreement and the
transactions contemplated hereby; (iv) seeking to require divestiture by
SNI AG, Purchaser or any other affiliate of SNI AG of any Shares; or (v)
which otherwise has a Material Adverse Effect or which is reasonably likely
to materially adversely affect the business, operations, properties,
condition (financial or otherwise), assets or liabilities (including,
without
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limitation, contingent liabilities) of SNI AG; provided, however, that
prior to the expiration of 120 days following the date hereof, Purchaser
will not terminate the Offer by reason of the non-satisfaction of the
conditions set forth in this paragraph (a) and will extend the Offer and
use its reasonable best efforts to cause the satisfaction of such condition
unless there shall be in effect any permanent injunction or other order,
decree, judgment or ruling that has become final and nonappealable by any
court or governmental, administrative or regulatory authority or agency,
domestic or foreign, which in any case shall have an effect specified in
any of clauses (i) through (v) above (it being understood that this proviso
will not prohibit Purchaser from terminating the Offer or failing to extend
the Offer by reason of the non-satisfaction of any other condition of the
Offer);
(b) there shall have been any action taken, or any statute, rule,
regulation, legislation, interpretation, judgment, order or injunction
enacted, entered, enforced, promulgated, amended, issued or deemed
applicable to (i) SNI AG, the Company or any subsidiary or affiliate of SNI
AG or the Company or (ii) any Transaction, by any legislative body, court,
government or governmental, administrative or regulatory authority or
agency, domestic or foreign, which has a substantial likelihood of
resulting, directly or indirectly, in any of the consequences referred to
in clauses (i) through (v) of paragraph (a) above;
(c) except as set forth in the Disclosure Schedule to the Merger
Agreement, there shall have occurred any change, condition, event or
development that has a Material Adverse Effect;
(d) there shall have occurred (i) any general suspension of, or
limitation on prices for, trading in securities of the Company on the
NASDAQ National Market System, (ii) any extraordinary or material adverse
change in the market price of the Shares or in the United States securities
markets or financial markets generally, including, without limitation, a
decline, measured from the date hereof, in the Standard & Poor's 500 Index
by an amount in excess of 25%, (iii) any material adverse change in United
States currency exchange rates or a suspension of, or limitation on,
currency exchange markets, (iv) a declaration of a banking moratorium or
any suspension of payments in respect of banks in the United States or
Germany, (v) any limitation (whether or not mandatory) by any government or
governmental, administrative or regulatory authority or agency, domestic or
foreign, on, or other event that, in the reasonable judgment of Purchaser,
might affect, the extension of credit by banks or other lending
institutions, (vi) a commencement of a war or armed hostilities or other
national or international calamity directly or indirectly involving the
armed forces of the United States or Germany which could reasonably be
expected to have a Material Adverse Effect or materially adversely affect
(or materially delay) the consummation of the Offer or (vii) in the case of
any of the foregoing existing on the date hereof, a material acceleration
or worsening thereof;
(e) (i) it shall have been publicly disclosed or Purchaser shall have
otherwise learned that beneficial ownership (determined for the purposes of
this paragraph as set forth in Rule 13d-3 promulgated under the Exchange
Act) of 50% or more of the then outstanding Shares has been acquired by any
person, other than SNI AG or any of its affiliates or (ii) (A) the Board or
any committee thereof shall have withdrawn or modified in a manner adverse
to SNI AG or Purchaser the approval or recommendation of the Offer, the
Merger or the Merger Agreement or approved or recommended any takeover
proposal or any other acquisition of Shares other than the Offer and the
Merger or (B) the Board or any committee thereof shall have resolved to do
any of the foregoing (except for such action under (A) or (B) that results
from the failure of Parent or Purchaser to perform in any material respect
any material covenant or agreement of either of them contained in the
Merger Agreement or the material breach by Parent or Purchaser of any
material representation or warranty of either of them contained in the
Merger Agreement);
(f) any representation or warranty of the Company in the Merger Agreement
which is qualified as to materiality shall not be true and correct or any
such representation or warranty that is not so
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qualified shall not be true and correct in any material respect, in each
case as if such representation or warranty was made as of such time on or
after the date of the Merger Agreement;
(g) the Company shall have failed to perform in any material respect any
obligation or to comply in any material respect with any agreement or
covenant of the Company to be performed or complied with by it under the
Merger Agreement;
(h) the Merger Agreement shall have been terminated in accordance with
its terms; or
(i) Purchaser and the Company shall have agreed that Purchaser shall
terminate the Offer or postpone the acceptance for payment of or payment
for Shares thereunder;
which, in the reasonable judgment of Purchaser in any such case, and
regardless of the circumstances (including any action or inaction by SNI AG or
any of its affiliates) giving rise to any such condition, makes it inadvisable
to proceed with such acceptance for payment or payment.
The foregoing conditions are for the sole benefit of Purchaser and SNI AG
and may be asserted by Purchaser or SNI AG regardless of the circumstances
giving rise to any such condition or may be waived by Purchaser or SNI AG in
whole or in part at any time and from time to time in their sole discretion,
except that the Minimum Condition may not be waived by SNI AG or Purchaser
without the prior written consent of the Company. The failure by SNI AG or
Purchaser at any time to exercise any of the foregoing rights will not be
deemed a waiver of any such right; the waiver of any such right with respect
to particular facts and other circumstances will not be deemed a waiver with
respect to any other facts and circumstances; and each such right will be
deemed an ongoing right that may be asserted at any time and from time to
time.
15. Certain Legal Matters and Regulatory Approvals.
General. Based upon its examination of publicly available information with
respect to the Company and the review of certain information furnished by the
Company to SNI AG and discussions of representatives of SNI AG with
representatives of the Company during SNI AG's investigation of the Company
(see Section 10), neither Purchaser nor SNI AG is aware of any license or
other regulatory permit that appears to be material to the business of the
Company and the Subsidiaries, taken as a whole, which might be adversely
affected by the acquisition of Shares by Purchaser pursuant to the Offer or,
except as set forth below, of any approval or other action by any domestic
(federal or state) or foreign governmental, administrative or regulatory
authority or agency which would be required prior to the acquisition of Shares
by Purchaser pursuant to the Offer. Should any such approval or other action
be required, it is Purchaser's present intention to seek such approval or
action. Purchaser does not currently intend, however, to delay the purchase of
Shares tendered pursuant to the Offer pending the outcome of any such action
or the receipt of any such approval (subject to Purchaser's right to decline
to purchase Shares if any of the conditions in Section 14 shall have
occurred). There can be no assurance that any such approval or other action,
if needed, would be obtained without substantial conditions or that adverse
consequences might not result to the business of the Company, Purchaser or SNI
AG or that certain parts of the businesses of the Company, Purchaser or SNI AG
might not have to be disposed of or held separate or other substantial
conditions complied with in order to obtain such approval or other action or
in the event that such approval was not obtained or such other action was not
taken. Purchaser's obligation under the Offer to accept for payment and pay
for Shares is subject to certain conditions, including conditions relating to
the legal matters discussed in this Section 15. See Section 14.
State Takeover Laws. The Company is incorporated under the laws of the State
of Delaware. In general, Section 203 of Delaware Law prevents an "interested
stockholder" (generally a person who owns or has the right to acquire 15% or
more of a corporation's outstanding voting stock, or an affiliate or associate
thereof) from engaging in a "business combination" (defined to include mergers
and certain other transactions) with a Delaware corporation for a period of
three years following the date
33
<PAGE>
such person became an interested stockholder unless, among other things, prior
to such date the board of directors of the corporation approved either the
business combination or the transaction in which the interested stockholder
became an interested stockholder. Prior to the execution of the Purchase
Agreement, the Board of Directors of the Company, by unanimous vote of all
directors present at a meeting held on such date, approved the execution by
the Company of the Purchase Agreement and the purchase by Siemens U.S. of
2,000,000 Shares and the Warrant pursuant to the Purchase Agreement. In
addition, on January 20, 1995, prior to the execution of the Merger Agreement,
the Board of Directors of the Company, by unanimous vote of all directors
present at a meeting held on such date (with Dr. Bodo, the SNI AG designee to
the Board, recusing himself), approved the Merger Agreement and determined
that each of the Offer and the Merger is fair to, and in the best interest of,
the stockholders of the Company. Accordingly, Section 203 is inapplicable to
the Offer and the Merger.
A number of other states have adopted laws and regulations applicable to
attempts to acquire securities of corporations which are incorporated, or have
substantial assets, stockholders, principal executive offices or principal
places of business, or whose business operations otherwise have substantial
economic effects, in such states. In Edgar v. MITE Corp., the Supreme Court of
the United States invalidated on constitutional grounds the Illinois Business
Takeover Statute, which, as a matter of state securities law, made takeovers
of corporations meeting certain requirements more difficult. However, in 1987
in CTS Corp. v. Dynamics Corp. of America, the Supreme Court held that the
State of Indiana may, as a matter of corporate law and, in particular, with
respect to those aspects of corporate law concerning corporate governance,
constitutionally disqualify a potential acquiror from voting on the affairs of
a target corporation without the prior approval of the remaining stockholders.
The state law before the Supreme Court was by its terms applicable only to
corporations that had a substantial number of stockholders in the state and
were incorporated there.
The Company, directly or through subsidiaries, conducts business in a number
of states throughout the United States, some of which have enacted takeover
laws. Purchaser does not know whether any of these laws will, by their terms,
apply to the Offer or the Merger and has not complied with any such laws.
Should any person seek to apply any state takeover law, Purchaser will take
such action as then appears desirable, which may include challenging the
validity or applicability of any such statute in appropriate court
proceedings. In the event it is asserted that one or more state takeover laws
is applicable to the Offer or the Merger, and an appropriate court does not
determine that it is inapplicable or invalid as applied to the Offer,
Purchaser might be required to file certain information with, or receive
approvals from, the relevant state authorities. In addition, if enjoined,
Purchaser might be unable to accept for payment any Shares tendered pursuant
to the Offer, or be delayed in continuing or consummating the Offer, and the
Merger. In such case, Purchaser may not be obligated to accept for payment any
Shares tendered. See Section 14.
Antitrust. Under the HSR Act and the rules that have been promulgated
thereunder by the FTC, certain acquisition transactions may not be consummated
unless certain information has been furnished to the Antitrust Division and
the FTC and certain waiting period requirements have been satisfied. The
acquisition of Shares by Purchaser pursuant to the Offer is subject to such
requirements. See Section 2.
Pursuant to the HSR Act, on January 24, 1995, SNI AG filed a Pre-merger
Notification and Report Form in connection with the purchase of Shares
pursuant to the Offer with the Antitrust Division and the FTC. Under the
provisions of the HSR Act applicable to the Offer, the purchase of Shares
pursuant to the Offer may not be consummated until the expiration of a 15-
calendar day waiting period following the filing by SNI AG. Accordingly, the
waiting period under the HSR Act applicable to the purchase of Shares pursuant
to the Offer will expire at 11:59 p.m., New York City time, on Wednesday,
February 8, 1995, unless such waiting period is earlier terminated by the FTC
and the Antitrust Division or extended by a request from the FTC or the
Antitrust Division for additional information or documentary material
34
<PAGE>
prior to the expiration of the waiting period. Pursuant to the HSR Act, SNI AG
has requested early termination of the waiting period applicable to the Offer.
There can be no assurance, however, that the 15-day HSR Act waiting period
will be terminated early. If either the FTC or the Antitrust Division were to
request additional information or documentary material from SNI AG with
respect to the Offer, the waiting period with respect to the Offer would
expire at 11:59 p.m., New York City time, on the tenth calendar day after the
date of substantial compliance by SNI AG with such request. Thereafter, the
waiting period could be extended only by court order. If the acquisition of
Shares is delayed pursuant to a request by the FTC or the Antitrust Division
for additional information or documentary material pursuant to the HSR Act,
the Offer may, but need not, be extended and, in any event, the purchase of
and payment for Shares will be deferred until 10 days after the request is
substantially complied with, unless the extended period expires on or before
the date when the initial 15-day period would otherwise have expired, or
unless the waiting period is sooner terminated by the FTC and the Antitrust
Division. Only one extension of such waiting period pursuant to a request for
additional information is authorized by the HSR Act and the rules promulgated
thereunder, except by court order. Any such extension of the waiting period
will not give rise to any withdrawal rights not otherwise provided for by
applicable law. See Section 4. It is a condition to the Offer that the waiting
period applicable under the HSR Act to the Offer expire or be terminated. See
Section 2 and Section 14.
The FTC and the Antitrust Division frequently scrutinize the legality under
the antitrust laws of transactions such as the proposed acquisition of Shares
by Purchaser pursuant to the Offer. At any time before or after the purchase
of Shares pursuant to the Offer by Purchaser, the FTC or the Antitrust
Division could take such action under the antitrust laws as it deems necessary
or desirable in the public interest, including seeking to enjoin the purchase
of Shares pursuant to the Offer or seeking the divestiture of Shares purchased
by Purchaser or the divestiture of substantial assets of SNI AG, the Company
or their respective subsidiaries. Private parties and state attorneys general
may also bring legal action under federal or state antitrust laws under
certain circumstances. Based upon an examination of information available to
SNI AG relating to the businesses in which SNI AG, the Company and their
respective subsidiaries are engaged, SNI AG and Purchaser believe that the
Offer will not violate the antitrust laws. Nevertheless, there can be no
assurance that a challenge to the Offer on antitrust grounds will not be made
or, if such a challenge is made, what the result would be. See Section 14 for
certain conditions to the Offer, including conditions with respect to
litigation.
Exon-Florio Amendment. Section 721 of the Defense Production Act of 1950, as
amended (the "Exon-Florio Provision") authorizes the President or his designee
to make an investigation to determine the effects on national security of
mergers, acquisitions and takeovers by or with foreign persons which could
result in foreign control of persons engaged in interstate commerce in the
United States. The President has delegated authority to investigate proposed
transactions to the Committee on Foreign Investment in the United States
("CFIUS").
Reviews under the Exon-Florio Provision are made in accordance with the
following timetable: (i) within 30 days following the receipt by CFIUS of
written notification of a proposed acquisition, CFIUS must determine whether
to commence an investigation, (ii) if CFIUS commences an investigation, it
must complete the investigation and submit a report and recommendation to the
President within 45 days following the determination to commence an
investigation; and (iii) the President has 15 days following the completion of
the investigation to take action to suspend or prohibit the relevant
acquisition.
In order for the President to exercise his authority to suspend or prohibit
an acquisition, the President must make two findings: (i) that there is
credible evidence that leads the President to believe that the foreign
interests exercising control might take action that threatens to impair the
national security and (ii) that provisions of law other than the Exon-Florio
Provision do not provide adequate and appropriate authority for the President
to protect the national security in connection with the acquisition. Such
findings are not subject to judicial review. If the President makes such
findings, he
35
<PAGE>
may take action for such time as he considers appropriate to suspend or
prohibit the relevant acquisition. The President may direct the Attorney
General to seek appropriate relief, including divestment relief, in the
District Courts of the United States in order to implement and enforce the
Exon-Florio Provision.
The Exon-Florio Provision does not obligate the parties to an acquisition to
notify CFIUS of a proposed transaction. However, if notice of a proposed
acquisition is not submitted to CFIUS, then the transaction remains
indefinitely subject to review by the President under the Exon-Florio
Amendment.
Purchaser and the Company filed with CFIUS a joint notice of the
transactions contemplated by the Merger Agreement on January 24, 1995.
Although Purchaser believes that the transactions contemplated by the Merger
Agreement should not raise any national security concerns, there can be no
assurance that CFIUS will not determine to conduct an investigation of the
proposed transaction and, if an investigation is commenced, there can be no
assurance regarding the outcome of such investigation. If the results of such
investigation are adverse to Purchaser, Purchaser may not be obligated to
accept for payment or pay for any Shares tendered pursuant to the Offer. See
Section 14.
German Merger Control. According to the German law against restraints of
competition, the acquisition of Shares by Purchaser pursuant to the Offer is
subject to German pre-merger control. Notice of a transaction subject to
German pre-merger control must be provided before consummation to the
Bundeskartellamt, the German Federal Cartel Office ("FCO"), and may not be
effected until antitrust review has been completed and no objections raised.
On January 24, 1995, SNI AG filed a Pre-Merger Notification with the FCO in
connection with the purchase of Shares pursuant to the Offer. During a
statutory one-month period following the filing, the FCO must either come to a
final decision as to the compatibility of the transaction with the German
market, or inform the parties in writing that it has initiated an in-depth
review of the transaction. Since SNI AG effected the filing on January 24,
1995, the one-month period applicable to the purchase of Shares pursuant to
the Offer will expire on February 24, 1995. In most instances to date, the FCO
has completed antitrust review and given clearance to the respective
transactions before the end of the one-month period. However, there can be no
assurance that the review of the purchase of Shares pursuant to the Offer will
also be completed within one month following the filing.
If the FCO is not in a position to come to a final decision within the one-
month period, it will have to inform the parties before the end of such period
in writing that it has initiated an in-depth review of the transaction. Should
the FCO fail to give such information to the parties before the end of the
one-month period, the transaction is treated as if it had been given
clearance. Provided that the FCO has informed the parties about the initiation
of the in-depth review within such period, a review period of four months in
total (beginning with the original filing) becomes applicable to the
transaction. Regarding the purchase of Shares pursuant to the Offer, the four-
month review period will expire on May 24, 1995, unless that period is
extended with the consent of the parties involved. In most instances to date,
where a four-month review period became applicable to a transaction, the FCO
has completed antitrust review and given clearance to the respective
transaction before the end of such period. There can be no assurance, however,
that if the four-month period becomes applicable to the purchase of Shares
pursuant to the Offer, antitrust review by the FCO will be completed before
the end of such period.
According to the German law against restraints of competition, the purchase
of Shares pursuant to the Offer may not be consummated before the end of the
one-month period, and, provided that the FCO has informed the parties about
the initiation of an in-depth review within such period, before the end of the
four-month period or its agreed-upon extension, unless the FCO has given its
clearance to the transaction in writing before the end of such periods.
36
<PAGE>
In the course of its reviews, the FCO will examine whether the proposed
acquisition of Shares by Purchaser pursuant to the Offer would create a
dominant market position or strengthen an already-existing dominant position
in Germany. If the FCO makes such a finding, it will act to prohibit the
transaction. Based upon an examination of information available to SNI AG
relating to the businesses in which SNI AG, the Company and their respective
subsidiaries are engaged, SNI AG and Purchaser believe that there is no ground
for such a finding. Nevertheless, there can be no assurance that the FCO will
not take a different point of view.
It is a condition to the Offer that all waiting periods applicable under any
applicable foreign competition and antitrust statutes and regulations
(including the German law against restraints of competition) expire or be
terminated. See Section 2 and Section 14.
Certain Litigation. On January 9, 1995, an action was filed as a class
action in the Court of Chancery of the State of Delaware in and for New Castle
County (Pohli v. Pyramid Technology, et al., C.A. No. 13961) (the "Pohli
Complaint") against the Company and its directors alleging that the Company
had entered into talks with SNI AG for the purchase and sale of the Company
for $15 per Share, that the Company had thereby evidenced the intent of its
Board of Directors to have the Company consider a change of control
transaction, that the directors are obligated to explore all alternatives to
maximize shareholder value, that the directors must neutralize SNI AG's
bargaining position by establishing bidding procedures or otherwise taking
affirmative steps to actively encourage and solicit competing offers for the
Company to assure that the highest value will be obtained, that the directors
have a conflict of interest between their desire to retain their offices in
the Company and their fiduciary obligation to maximize shareholder value in a
change of control transaction and consequently will not be able to represent
the interests of the Company's public stockholders, and that the directors
have embarked upon a negotiating process with SNI AG which will preclude
opportunities for other potential purchasers to express interest in acquiring
the Company. The Pohli Complaint asks for equitable relief and damages, as
well as awarding plaintiff his costs and disbursements, including attorneys'
fees. The Company has advised Purchaser that it believes that the Pohli
Complaint is without merit and intends to contest the matter vigorously.
On January 11, 1995, a purported class action complaint entitled John S.
Meade v. Pyramid Technology et al., C.V. No. 746621 (the "Meade Complaint")
was filed against the Company and its directors in the Superior Court of
California in and for the County of Santa Clara. The Meade Complaint alleges,
among other things, that the defendants have breached their fiduciary duties
to the Company by failing to conduct an active auction designed to maximize
shareholder value and by failing to form an independent committee of
unaffiliated directors to consider the Offer or other possible business
combinations or alternative transactions. Among other things, the Meade
Complaint seeks an order directing the Company's directors to carry out their
fiduciary duties to the Company's stockholders by exploring third party
interest in alternative business combinations with the Company and conducting
an open and fair auction of the Company, as well as damages and costs. The
Company has advised Purchaser that it believes that the Meade Complaint is
without merit and intends to contest the matter vigorously.
On January 12, 1995 and January 13, 1995, respectively, two purported class
action complaints entitled, respectively, John Velonis v. Pyramid Technology
et al., C.V. No. 746669 (the "Velonis Complaint") and Vincent Defeo v. Pyramid
Technology et al., C.V. No. 746801 (the "Defeo Complaint") were filed against
the Company, its directors and SNI AG in the Superior Court of California in
and for the County of Santa Clara. The Velonis Complaint and the Defeo
Complaint allege, among other things, that the defendants have breached their
fiduciary duties to the Company's stockholders by failing and refusing to
attempt in good faith to maximize shareholder value in connection with the
sale of the Company by failing to put the Company up for auction and failing
to consider offers by other companies
37
<PAGE>
to acquire the Company. Among other things, the Velonis Complaint and the
Defeo Complaint seek an order directing the Company's directors to carry out
their fiduciary duties to the Company's stockholders by cooperating fully with
any entity or person having a bona fide interest in proposing any transaction
that would maximize shareholder value, including a buy-out or takeover of the
Company, and taking all steps necessary to create an active auction of the
Company, as well as damages and costs. The Company has advised Purchaser that
it believes, and SNI AG believes, that the Velonis Complaint and the Defeo
Complaint are without merit and each of the Company and SNI AG intends to
contest the matters vigorously.
16. Fees and Expenses. Except as set forth below, Purchaser will not pay any
fees or commissions to any broker, dealer or other person for soliciting
tenders of Shares pursuant to the Offer.
Goldman Sachs are acting as Dealer Managers in connection with the Offer and
have provided certain financial advisory services in connection with the
acquisition of the Company. Siemens Corporation ("Siemens"), a Delaware
corporation and an indirect wholly owned subsidiary of Siemens AG, has paid
Goldman Sachs a fee of $250,000, has agreed to pay an additional fee of
$250,000 and has agreed to pay a transaction fee of $1,250,000 when the Offer
and the Merger are consummated. Siemens has also agreed to reimburse Goldman
Sachs for all reasonable out-of-pocket expenses incurred by Goldman Sachs,
including the reasonable fees and expenses of legal counsel, and to indemnify
Goldman Sachs against certain liabilities and expenses in connection with its
engagement, including certain liabilities under the federal securities laws.
Purchaser and SNI AG have retained Georgeson & Company Inc., as the
Information Agent, and Chemical Bank, as the Depositary, in connection with
the Offer. The Information Agent may contact holders of Shares by mail,
telephone, telex, telecopy, telegraph and personal interview and may request
banks, brokers, dealers and other nominee stockholders to forward materials
relating to the Offer to beneficial owners.
As compensation for acting as Information Agent in connection with the
Offer, Georgeson & Company Inc. will be paid a fee of $10,000 and will also be
reimbursed for certain out-of-pocket expenses and may be indemnified against
certain liabilities and expenses in connection with the Offer, including
certain liabilities under the federal securities laws. Purchaser will pay the
Depositary reasonable and customary compensation for its services in
connection with the Offer, plus reimbursement for out-of-pocket expenses, and
will indemnify the Depositary against certain liabilities and expenses in
connection therewith, including under federal securities laws. Brokers,
dealers, commercial banks and trust companies will be reimbursed by Purchaser
for customary handling and mailing expenses incurred by them in forwarding
material to their customers.
17. Miscellaneous. Purchaser is not aware of any jurisdiction where the
making of the Offer is prohibited by any administrative or judicial action
pursuant to any valid state statute. If Purchaser becomes aware of any valid
state statute prohibiting the making of the Offer or the acceptance of Shares
pursuant thereto, Purchaser will make a good faith effort to comply with any
such state statute. If, after such good faith effort, Purchaser cannot comply
with any such state statute, the Offer will not be made to (nor will tenders
be accepted from or on behalf of) the holders of Shares in such state. In any
jurisdiction where the securities, blue sky or other laws require the Offer to
be made by a licensed broker or dealer, the Offer shall be deemed to be made
on behalf of Purchaser by the Dealer Managers or by one or more registered
brokers or dealers licensed under the laws of such jurisdiction.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION ON BEHALF OF PURCHASER OR THE COMPANY NOT CONTAINED IN THIS
38
<PAGE>
OFFER TO PURCHASE OR IN THE LETTER OF TRANSMITTAL, AND IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED.
Pursuant to Rule 14d-3 of the General Rules and Regulations under the
Exchange Act, SNI AG, Siemens AG and Purchaser have filed with the Commission
the Schedule 14D-1, together with exhibits, furnishing certain additional
information with respect to the Offer. The Schedule 14D-1 and any amendments
thereto, including exhibits, may be inspected at, and copies may be obtained
from, the same places and in the same manner as set forth in Section 7 (except
that they will not be available at the regional offices of the Commission).
Siemens Nixdorf Mid-Range
Acquisition Corp.
January 27, 1995
39
<PAGE>
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF
SIEMENS AG, SNI AG AND PURCHASER
1. Directors and Executive Officers of Siemens AG. The following table sets
forth the name, current business address, citizenship and present principal
occupation or employment, and material occupations, positions, offices or
employments and business addresses thereof for the past five years, of each
member of the Managing Board of Directors and executive officer of Siemens AG.
Unless otherwise indicated, each such person has held his present position as
set forth below for the past five years. Unless otherwise noted, each of the
following persons is a citizen of the Federal Republic of Germany.
<TABLE>
<CAPTION>
POSITION WITH
SIEMENS AG
NAME AND PRINCIPAL OCCUPATION BUSINESS ADDRESS
- ---- ------------------------ ----------------
<S> <C> <C>
Dr. Heinrich von Siemens AG, President and Wittelsbacherplatz 2
Pierer*................ CEO, Corporate Executive 80333 Munich
Committee (10/92--present) Federal Republic of Germany
Siemens AG, Executive Vice
President, Corporate
Executive Committee (10/90--
9/92)
Siemens Power Generation,
Vice President,
Freyeslebenstr., 1, 91088
Erlangen, Federal Republic
of Germany (10/89--6/91)
Dr. Karl-Hermann Siemens AG, Executive Vice Wittelsbacherplatz 2
Baumann*............... President, Corporate 80333 Munich
Executive Committee and Federal Republic of Germany
Group President Finance
Professor Dr. Hans
Gunter Danielmeyer..... Siemens AG, Group President Otto-Hahn-Ring 6
Research and Development 81739 Munich
(10/88--present) Federal Republic of Germany
Siemens AG, Senior Vice
President, Managing Board
(11/87--present)
Siemens AG, Vice President
Research and Development
Group (10/86--9/88)
Dr. Erwin Hardt......... Siemens AG, Senior Vice Hofmannstrasse 51
President, Managing Board 81359 Munich
and Group President of Federal Republic of Germany
Siemens Public
Communications Networks
</TABLE>
- --------
* Member of the Executive Committee of the Managing Board of Directors of
Siemens AG.
I-1
<PAGE>
<TABLE>
<CAPTION>
POSITION WITH
SIEMENS AG
NAME AND PRINCIPAL OCCUPATION BUSINESS ADDRESS
- ---- ------------------------ ----------------
<S> <C> <C>
Adolf Huttl*............ Siemens AG, Nuclear Power Freyeslebenstr. 1
Generation, Group President 91058 Erlangen
(7/91--present) Federal Republic of Germany
Siemens AG, Senior Vice
President and Member of the
Managing Board (7/91--
present)
Siemens Nuclear Power
Generation, Vice President
(10/89--6/91)
Volker Jung............. Siemens AG, Executive Vice Wittelsbacherplatz 2
President, Corporate 80333 Munich
Executive Committee (10/92-- Federal Republic of Germany
present)
Siemens Communication
Systems, Inc., President &
CEO (1/90--present)
Siemens AG, Senior Vice
President Corporate
International Regions Office
(7/91--9/92)
Siemens Communications
Systems, Inc., Senior Vice
President, 900 Broken Sound
Parkway, Boca Raton, Fl.
33487 (9/84--6/91)
Eberhard Kill........... Siemens AG, Senior Vice Schuhstr. 60
President, Managing Board 91052 Erlangen
and Group President of Federal Republic of Germany
Siemens Industrial and
Building Systems
Jurgen Knorr............ Siemens AG, Senior Vice Balanstrasse 73
President, Managing Board 81541 Munich
and Group President of Federal Republic of Germany
Siemens Semiconductors
Professor Dr. Walter Siemens Production and Wittelsbacherplatz 2
Kunerth*............... Logistics, Group President 80333 Munich
(10/93--present) Federal Republic of Germany
Siemens AG, Executive Vice
President, Corporate
Executive Committee (3/93--
present)
Siemens Automotive Systems,
Vice President, Im
Gewerbepark D80 93059
Regensburg Federal Republic
of Germany (10/89--3/93)
Siemens AG, Senior Vice
President, Corporate
Executive Committee (11/92--
2/93)
</TABLE>
- --------
* Member of the Executive Committee of the Managing Board of Directors of
Siemens AG.
I-2
<PAGE>
<TABLE>
<CAPTION>
POSITION WITH
SIEMENS AG
NAME AND PRINCIPAL OCCUPATION BUSINESS ADDRESS
- ---- ------------------------ ----------------
<S> <C> <C>
Dr. Horst Langer*.... Siemens AG, Executive Vice Werner-von-Siemens-Str. 50
President, Corporate 91052 Erlangen
Executive Committee (7/90-- Federal Republic of Germany
present)
Siemens AG, Senior Vice
President, Corporate
Executive Committee (10/89--
6/90)
Wolfram Martinsen.... Siemens AG, Senior Vice Elsenstr. 87-96
President, Managing Board 12435 Berlin
(10/94--present) Federal Republic of Germany
Siemens Transportation
Systems, Group President
(10/89--present)
Werner Maly*......... Siemens AG, Executive Vice Wittelsbacherplatz 2
President Corporate 80333 Munich
Executive Committee and Federal Republic of Germany
Group President of Human
Resources (4/94--present)
Siemens AG, Senior Vice
President, Corporate
Executive Committee and
Group President of Siemens
Medical Engineering,
Henkestr. 127, 91052
Erlangen, Federal Republic
of Germany (10/89--3/94)
Peter Pribilla....... Siemens AG, Senior Vice Hofmannstrasse 51
President, Managing Board 81359 Munich
(4/94--present) Federal Republic of Germany
Rolm Company, President &
CEO, 4900 Old Ironsides
Drive, Santa Clara, CA
95052-8075 (8/90--present)
Siemens Private
Communication Systems, Group
President (10/89--present)
Jurgen Radomski*..... Siemens AG, Executive Vice Werner-von-Siemens Str. 50
President, Corporate 91052 Erlangen
Executive Committee (11/94-- Federal Republic of Germany
present)
Siemens AG, Senior Vice
President, Henkestr. 127,
91052 Erlangen, Federal
Republic of Germany (6/94--
10/94)
</TABLE>
- --------
* Member of the Executive Committee of the Managing Board of Directors of
Siemens AG.
I-3
<PAGE>
<TABLE>
<CAPTION>
POSITION WITH
SIEMENS AG
NAME AND PRINCIPAL OCCUPATION BUSINESS ADDRESS
- ---- ------------------------ ----------------
<S> <C> <C>
Siemens Medical Engineering,
Vice President (9/91--9/94)
Siemens AG, Corporate
Department Finance,
Statements and Corporate
Controlling, Vice President,
Siemens AG, Wittelsbacher
Platz 2, 80333 Munich,
Federal Republic of Germany
(10/88--8/91)
Gunter Wilhelm*...... Siemens AG, Executive Vice Werner-von-Siemens-Str. 50
President, Corporate 91052 Erlangen
Executive Committee (10/92-- Federal Republic of Germany
Present)
Siemens Automation, Group
President, Gleiwitzer Str.
555, 90475 Nurnberg, Federal
Republic of Germany (10/89--
9/92)
</TABLE>
- --------
* Member of the Executive Committee of the Managing Board of Directors of
Siemens AG.
2. Directors and Executive Officers of SNI AG. The following table sets
forth the name, current business address, citizenship and present principal
occupation or employment, and material occupations, positions, offices or
employments and business addresses thereof for the past five years, of each
member of the Managing Board of Directors and executive officer of SNI AG.
Unless otherwise indicated, each such person has held his present position as
set forth below for the past five years. Unless otherwise noted, each of the
following persons is a citizen of the Federal Republic of Germany.
<TABLE>
<CAPTION>
POSITION WITH SNI AG AND
NAME PRINCIPAL OCCUPATION BUSINESS ADDRESS
- ---- ------------------------ ----------------
<S> <C> <C>
Gerhard Schulmeyer... SNI AG, President & CEO Otto-Hahn-Ring 6
(10/94--present) 81739 Munich
Federal Republic of Germany
SNI AG, Member of the
Managing Board (7/94--9/94)
Massachusetts Institute of
Technology, Visiting Senior
Lecturer, Sloan School of
Management (1/94--6/94)
ABB Inc., President & CEO
(8/93--1/94)
ABB Inc., Executive Vice
President, Stamford,
Connecticut (4/90--7/93)
Asea Brown Boveri Ltd.
(ABB), Executive Vice
President and Member of the
Group Executive Management,
Zurich, Switzerland (9/89--
3/90)
</TABLE>
I-4
<PAGE>
<TABLE>
<CAPTION>
POSITION WITH SNI AG AND
NAME PRINCIPAL OCCUPATION BUSINESS ADDRESS
- ---- ------------------------ ----------------
<S> <C> <C>
Robert Felix Hoogstraten
Citizen of the SNI AG, Executive Vice Otto-Hahn-Ring 6
Netherlands............ President, Member of the 81739 Munich
Managing Board responsible Federal Republic of Germany
for Corporate Sales and
Marketing (10/93--present)
Tandem Computers, Vice
President and Managing
Director Europe, Amsterdam,
Netherlands (10/86--9/93)
Dr. Horst Nasko
Austrian Citizen....... SNI AG, Executive Vice Otto-Hahn-Ring 6
President and Deputy 81739 Munich
Chairman of the Managing Federal Republic of Germany
Board responsible for
Application Software and
Projects, Systems Strategy
(10/90--present)
Nixdorf AG, CEO (11/89--9/90)
Nixdorf AG, Executive Vice
President, Member of the
Managing Board and Group
President of
Telecommunications/External
Relations, Berliner Str. 95,
80805 Munich, Federal
Republic of Germany (1/83--
9/90)
Dr. Hartwig Rogge....... SNI AG, Executive Vice Otto-Hahn-Ring 6
President, Member of the 81739 Munich
Managing Board responsible Federal Republic of Germany
for Development and
Production (10/90--present)
Siemens AG, Vice President
Data and Information Systems
Group (10/89--9/90)
Alfred Nowosad.......... SNI AG, Executive Vice Otto-Hahn-Ring 6
President, Member of the 81739 Munich
Managing Board and CFO Federal Republic of Germany
(10/90--present)
Siemens AG, Vice President,
Peripherals and Terminals
Group, Hofmannstr. 51, 81359
Munich, Federal Republic of
Germany (10/89--9/90)
</TABLE>
I-5
<PAGE>
3. Directors and Executive Officers of Purchaser. The following table sets
forth the name, current business address, citizenship and present principal
occupation or employment, and material occupations, positions, offices or
employments and business addresses thereof for the past five years, of each
director and executive officer of Purchaser. The current business address of
each person is Otto-Hahn-Ring 6, 81739 Munich, Federal Republic of Germany.
Each such person is a citizen of the Federal Republic of Germany.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
MATERIAL POSITIONS HELD DURING THE PAST
NAME FIVE YEARS AND BUSINESS ADDRESSES THEREOF
- ---- -------------------------------------------
<S> <C>
Gerhard Schulmeyer.......... Siemens Nixdorf Mid-Range Acquisition Corp.,
Director, President and CEO (1/95--present)
SNI AG, President & CEO (10/94--present)
SNI AG, Member of the Managing Board (7/94--9/94)
Massachusetts Institute of Technology, Visiting
Senior Lecturer, Sloan School of Management (1/94--
6/94)
ABB Inc., President & CEO (8/93--1/94)
ABB Inc., Executive Vice President, Stamford,
Connecticut (4/90--7/93)
Asea Brown Boveri Ltd. (ABB), Executive Vice
President and Member of the Group Executive
Management, Zurich, Switzerland (9/89--3/90)
Dr. Adrian v. Hammerstein... Siemens Nixdorf Mid-Range Acquisition Corp.,
Director, Vice President and Secretary (1/95--
present)
SNI AG, Director, Strategic Alliances (11/91--
present)
Digital Equipment GmbH, Systems Business Finance
Manager and a variety of other positions (1/86--
10/91)
</TABLE>
I-6
<PAGE>
Facsimiles of the Letter of Transmittal will be accepted. The Letter of
Transmittal and certificates evidencing Shares and any other required
documents should be sent or delivered by each stockholder or his broker,
dealer, commercial bank, trust company or other nominee to the Depositary at
one of its addresses set forth below.
The Depositary for the Offer is:
CHEMICAL BANK
By Mail: By Facsimile: By Hand:
(for Eligible Institutions only) or Overnight Courier:
Chemical Bank
Reorganization Dept. (212) 629-8015 or Chemical Bank
P.O. Box 3085 (212) 629-8016 55 Water Street
G.P.O. Station Second Floor-Room 234
New York, NY 10116-3085 Confirm by Telephone: New York, NY 10041
(212) 946-7137 Attention:
Reorganization
Department
Questions or requests for assistance may be directed to the Information
Agent at its address and telephone numbers listed below or to the Dealer
Managers at their address listed below. Additional copies of this Offer to
Purchase, the Letter of Transmittal and the Notice of Guaranteed Delivery may
be obtained from the Information Agent. A stockholder may also contact
brokers, dealers, commercial banks or trust companies for assistance
concerning the Offer.
The Information Agent for the Offer is:
GEORGESON & COMPANY INC.
Wall Street Plaza
New York, New York 10005
(212) 509-6240 (COLLECT)
BANKS AND BROKERS CALL COLLECT (212) 440-9800
CALL TOLL FREE: 1-800-223-2064
The Dealer Managers for the Offer are:
GOLDMAN, SACHS & CO.
85 Broad Street
New York, New York 10004
<PAGE>
EXHIBIT 99(A)(2)
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
OF
PYRAMID TECHNOLOGY CORPORATION
PURSUANT TO THE OFFER TO PURCHASE DATED JANUARY 27, 1995
OF
SIEMENS NIXDORF MID-RANGE ACQUISITION CORP.
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
SIEMENS NIXDORF INFORMATIONSSYSTEME AG
A DIRECT WHOLLY OWNED SUBSIDIARY OF
SIEMENS AKTIENGESELLSCHAFT
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON FEBRUARY 24, 1995, UNLESS THE OFFER IS EXTENDED.
The Depositary for the Offer is:
CHEMICAL BANK
By Facsimile By Hand or
Transmission: Overnight Carrier:
By Mail:
(for Eligible Institutions only) Chemical Bank
Chemical Bank (212) 629-8015 55 Water Street
Reorganization Department or Second Floor-Room 234
P.O. Box 3085 (212) 629-8016 New York, New York 10041
G.P.O. Station Attention: Reorganization
New York, New York 10116- Department
3085
Confirm by Telephone:
(212) 946-7137
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION OTHER THAN AS
SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be completed by stockholders either if
certificates evidencing Shares (as defined below) are to be forwarded herewith
or, unless an Agent's Message (as defined in the Offer to Purchase) is
utilized, if delivery of Shares is to be made by book-entry transfer to the
Depositary's account at The Depository Trust Company ("DTC"), the Midwest
Securities Trust Company ("MSTC") or the Philadelphia Depository Trust Company
("PDTC") (each a "Book-Entry Transfer Facility" and collectively, the "Book-
Entry Transfer Facilities") pursuant to the book-entry transfer procedure
described in Section 3 of the Offer to Purchase (as defined below). DELIVERY
OF DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO
THE DEPOSITARY. See Instruction 2.
Stockholders whose certificates evidencing Shares ("Share Certificates") are
not immediately available or who cannot deliver their Share Certificates and
all other documents required hereby to the Depositary prior to the Expiration
Date (as defined in Section 1 of the Offer to Purchase) or who cannot complete
the procedure for delivery by book-entry transfer on a timely basis and who
wish to tender their Shares must do so pursuant to the guaranteed delivery
procedure described in Section 3 of the Offer to Purchase. See Instruction 2.
<PAGE>
[_]CHECK HERE IF SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO THE
DEPOSITARY'S ACCOUNT AT ONE OF THE BOOK-ENTRY TRANSFER FACILITIES AND
COMPLETE THE FOLLOWING:
Name of Tendering Institution _______________
Check Box of Applicable Book-Entry Transfer Facility:
(check one)
[_]DTC [_]MSTC [_]PDTC
Account Number __________________________________
Transaction Code Number _________________________
[_]CHECK HERE IF SHARES ARE BEING TENDERED PURSUANT TO A NOTICE OF GUARANTEED
DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING:
Name(s) of Registered Holder(s) ____________________________________________
Window Ticket No. (if any) _________________________________________________
Date of Execution of Notice of Guaranteed Delivery _________________________
Name of Institution which Guaranteed Delivery ______________________________
DESCRIPTION OF SHARES TENDERED
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
NAME(S) AND
ADDRESS(ES) OF
REGISTERED
HOLDER(S)
(PLEASE FILL
IN, IF BLANK,
EXACTLY AS
NAME(S)
APPEAR(S) ON
SHARE SHARE CERTIFICATE(S) AND SHARE(S) TENDERED
CERTIFICATE(S)) (ATTACH ADDITIONAL LIST, IF NECESSARY)
- ----------------------------------------------------------------------
TOTAL NUMBER
SHARE OF SHARES NUMBER OF
CERTIFICATE EVIDENCED BY SHARES
NUMBER(S)* SHARE CERTIFICATE(S)* TENDERED**
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
<S> <C> <C> <C>
TOTAL SHARES
</TABLE>
- -------------------------------------------------------------------------------
* Need not be completed by stockholders delivering Shares by book-entry
transfer.
** Unless otherwise indicated, it will be assumed that all Shares evidenced
by each Share Certificate delivered to the Depositary are being tendered
hereby. See Instruction 4.
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE INSTRUCTIONS SET FORTH IN THIS LETTER OF TRANSMITTAL CAREFULLY
Ladies and Gentlemen:
The undersigned hereby tenders to Siemens Nixdorf Mid-Range Acquisition
Corp., a Delaware corporation ("Purchaser") and an indirect wholly owned
subsidiary of Siemens Nixdorf Informationssysteme AG, a company organized
under the laws of the Federal Republic of Germany and a direct wholly owned
subsidiary of Siemens Aktiengesellschaft, a company organized under the laws
of the Federal Republic of Germany, the above-described shares of common
stock, par value $.01 per share (the "Shares"), of Pyramid Technology
Corporation, a Delaware corporation (the "Company"), pursuant to Purchaser's
offer to purchase all Shares at $16.00 per Share, net to the seller in cash,
upon the terms and subject to the conditions set forth in the Offer to
Purchase, dated January 27, 1995 (the "Offer to Purchase"), receipt of which
is hereby acknowledged, and in this Letter of Transmittal (which together
constitute the "Offer"). The undersigned understands that Purchaser reserves
the right to transfer or assign, in whole or, from time to time, in part, to
one or more of its affiliates, the right to purchase all or any portion of the
Shares tendered pursuant to the Offer.
<PAGE>
Subject to, and effective upon, acceptance for payment of the Shares
tendered herewith, in accordance with the terms of the Offer, the undersigned
hereby sells, assigns and transfers to, or upon the order of, Purchaser all
right, title and interest in and to all the Shares that are being tendered
hereby and all dividends, distributions (including, without limitation,
distributions of additional Shares) and rights declared, paid or distributed
in respect of such Shares on or after January 20, 1995 (collectively,
"Distributions"), and irrevocably appoints the Depositary the true and lawful
agent and attorney-in-fact of the undersigned with respect to such Shares and
all Distributions, with full power of substitution (such power of attorney
being deemed to be an irrevocable power coupled with an interest), to (i)
deliver Share Certificates evidencing such Shares and all Distributions, or
transfer ownership of such Shares and all Distributions on the account books
maintained by a Book-Entry Transfer Facility, together, in either case, with
all accompanying evidences of transfer and authenticity, to or upon the order
of Purchaser, (ii) present such Shares and all Distributions for transfer on
the books of the Company and (iii) receive all benefits and otherwise exercise
all rights of beneficial ownership of such Shares and all Distributions, all
in accordance with the terms of the Offer.
The undersigned hereby irrevocably appoints Dr. Adrian v. Hammerstein and
Adrienne Whitehead, and each of them, as the attorneys and proxies of the
undersigned, each with full power of substitution, to vote in such manner as
each such attorney and proxy or his or her substitute shall, in his or her
sole discretion, deem proper and otherwise act (by written consent or
otherwise) with respect to all the Shares tendered hereby which have been
accepted for payment by Purchaser prior to the time of such vote or other
action and all Shares and other securities issued in Distributions in respect
of such Shares, which the undersigned is entitled to vote at any meeting of
stockholders of the Company (whether annual or special and whether or not an
adjourned or postponed meeting) or consent in lieu of any such meeting or
otherwise. This proxy and power of attorney is coupled with an interest in the
Shares tendered hereby, is irrevocable and is granted in consideration of, and
is effective upon, the acceptance for payment of such Shares by Purchaser in
accordance with other terms of the Offer. Such acceptance for payment shall
revoke all other proxies and powers of attorney granted by the undersigned at
any time with respect to such Shares (and all Shares and other securities
issued in Distributions in respect of such Shares), and no subsequent proxy or
power of attorney shall be given or written consent executed (and if given or
executed, shall not be effective) by the undersigned with respect thereto. The
undersigned understands that, in order for Shares to be deemed validly
tendered, immediately upon Purchaser's acceptance of such Shares for payment,
Purchaser must be able to exercise full voting and other rights with respect
to such Shares and all Distributions, including, without limitation, voting at
any meeting of the Company's stockholders then scheduled.
The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender, sell, assign and transfer the Shares tendered
hereby and all Distributions, that when such Shares are accepted for payment
by Purchaser, Purchaser will acquire good, marketable and unencumbered title
thereto and to all Distributions, free and clear of all liens, restriction,
charges and encumbrances, and that none of such Shares and Distributions will
be subject to any adverse claim. The undersigned, upon request, shall execute
and deliver all additional documents deemed to be necessary or advisable to
complete the sale, the assignment and transfer of the Shares tendered hereby
and all Distributions. In addition, the undersigned shall remit and transfer
promptly to the Depositary for the account of Purchaser all Distributions in
respect of the Shares tendered hereby, accompanied by appropriate
documentation of transfer, and pending such remittance and transfer or
appropriate assurance thereof, Purchaser shall be entitled to all rights and
privileges as owner of each such Distribution and may withhold the entire
purchase price of the Shares tendered hereby, or deduct from such purchase
price, the amount or value of such Distribution as determined by Purchaser in
its sole discretion.
No authority herein conferred or agreed to be conferred shall be affected
by, and all such authority shall survive, the death or incapacity of the
undersigned. All obligations of the undersigned hereunder shall be binding
upon the heirs, personal representatives, successors and assigns of the
undersigned. Except as stated in the Offer to Purchase, this tender is
irrevocable.
The undersigned understands that tenders of Shares pursuant to any one of
the procedures described in Section 3 of the Offer to Purchase and in the
instructions hereto will constitute the undersigned's acceptance of the terms
and conditions of the Offer. Purchaser's acceptance of such Shares for payment
will constitute a binding agreement between the undersigned and Purchaser upon
the terms and subject to the conditions of the Offer.
<PAGE>
Unless otherwise indicated herein in the box entitled "Special Payment
Instructions", please issue the check for the purchase price of all Shares
purchased, and return all Share Certificates evidencing Shares not purchased
or not tendered in the name(s) of the registered holder(s) appearing above
under "Description of Shares Tendered". Similarly, unless otherwise indicated
in the box entitled "Special Delivery Instructions", please mail the check for
the purchase price of all Shares purchased and all Share Certificates
evidencing Shares not tendered or not purchased (and accompanying documents,
as appropriate) to the address(es) of the registered holder(s) appearing above
under "Description of Shares Tendered". In the event that the boxes entitled
"Special Payment Instructions" and "Special Delivery Instructions" are both
completed, please issue the check for the purchase price of all Shares
purchased and return all Share Certificates evidencing Shares not purchased or
not tendered in the name(s) of, and mail such check and Share Certificates to,
the person(s) so indicated. Unless otherwise indicated herein in the box
entitled "Special Payment Instructions", please credit any Shares tendered
hereby and delivered by book-entry transfer, but which are not purchased, by
crediting the account at the Book-Entry Transfer Facility designated above.
The undersigned recognizes that Purchaser has no obligation, pursuant to the
Special Payment Instructions, to transfer any Shares from the name of the
registered holder(s) thereof if Purchaser does not purchase any of the Shares
tendered hereby.
SPECIAL PAYMENT INSTRUCTIONS (SEE SPECIAL DELIVERY INSTRUCTIONS
INSTRUCTIONS 1, 5, 6, AND 7) (SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if the check To be completed ONLY if the check
for the purchase price of Shares for the purchase price of Shares
or Share Certificates evidencing purchased or Share Certificates
Shares not tendered or not pur- evidencing Shares not tendered or
chased to be issued in the name not purchased are to be mailed to
of someone other than the under- someone other than the under-
signed, or if Shares tendered signed, or to the undersigned at
hereby and delivered by book-en- an address other than that shown
try transfer which are not pur- under "Description of Shares Ten-
chased are to be returned by dered".
credit to an account at one of
the Book-Entry Transfer Facili-
ties other than that designated
above.
Mail [_] check [_] Share Cer-
tificate(s) to:
Name______________________________
(PLEASE PRINT)
Issue [_] check [_] Share Cer- Address __________________________
tificate(s) to: __________________________________
(ZIP CODE)
Name _____________________________ __________________________________
(PLEASE PRINT) TAXPAYER IDENTIFICATION OR SOCIAL
Address __________________________ SECURITY NUMBER
__________________________________ (SEE SUBSTITUTE FORM W-9 ON
(ZIP CODE) REVERSE SIDE)
__________________________________
TAXPAYER IDENTIFICATION OR SOCIAL
SECURITY NUMBER
(SEE SUBSTITUTE FORM W-9 ON
REVERSE SIDE)
[_]Credit Shares delivered by
book-entry transfer and not
purchased to the account set
forth below:
Check appropriate box:
[_]DTC [_]MSTC [_]PDTC
Account Number: __________________
<PAGE>
IMPORTANT
STOCKHOLDERS: SIGN HERE
(PLEASE COMPLETE SUBSTITUTE FORM W-9 ON REVERSE)
-------------------------------------------------------
-------------------------------------------------------
(SIGNATURE(S) OF HOLDER(S))
Dated: _________________________________________ , 1995
(Must be signed by registered holder(s) exactly as
name(s) appear(s) on Share Certificates or on a
security position listing or by a person(s) authorized
to become registered holder(s) by certificates and
documents transmitted herewith. If signature is by a
trustee, executor, administrator, guardian, attorney-
in-fact, officer of a corporation or other person
acting in a fiduciary or representative capacity,
please provide the following information and see
Instruction 5).
Name(s): ______________________________________________
-------------------------------------------------------
(PLEASE PRINT)
Capacity (full title): ________________________________
Address: ______________________________________________
_______________________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone No.: __________________________
Tax Identification or
Social Security No.: __________________________________
(SEE SUBSTITUTE FORM W-9 ON REVERSE SIDE)
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 5)
Authorized Signature: _________________________________
Name: _________________________________________________
(PLEASE PRINT)
Title: ________________________________________________
Name of Firm: _________________________________________
Address: ______________________________________________
_______________________________________________________
(INCLUDE ZIP CODE)
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. All signatures on this Letter of Transmittal
must be guaranteed by a firm which is a member of a registered national
securities exchange or of the National Association of Securities Dealers,
Inc., or by a commercial bank or trust company having an office or
correspondent in the United States (each of the foregoing being referred to as
an "Eligible Institution"), unless (i) this Letter of Transmittal is signed by
the registered holder(s) of the Shares (which term, for purposes of this
document, shall include any participant in a Book-Entry Transfer Facility
whose name appears on a security position listing as the owner of Shares)
tendered hereby and such holder(s) has (have) completed neither the box
entitled "Special Payment Instructions" nor the box entitled "Special Delivery
Instructions" on the reverse hereof or (ii) such Shares are tendered for the
account of an Eligible Institution. See Instruction 5.
2. DELIVERY OF LETTER OF TRANSMITTAL AND SHARE CERTIFICATES. This Letter of
Transmittal is to be used either if Share Certificates are to be forwarded
herewith or, unless an Agent's Message is utilized, if Shares are to be
delivered by book-entry transfer pursuant to the procedure set forth in
Section 3 of the Offer to Purchase. Share Certificates evidencing all
physically tendered Shares, or a confirmation of a book-entry transfer into
the Depositary's account at a Book-Entry Transfer Facility of all Shares
delivered by book-entry transfer as well as a properly completed and duly
executed Letter of Transmittal (or facsimile thereof), with any required
signature guarantees, or an Agent's Message in the case of a book-entry
delivery, and any other documents required by this Letter of Transmittal, must
be received by the Depositary at one of its addresses set forth on the reverse
hereof prior to the Expiration Date (as defined in Section 1 of the Offer to
Purchase). If Share Certificates are forwarded to the Depositary in multiple
deliveries, a properly completed and duly executed Letter of Transmittal must
accompany each such delivery. Stockholders whose Share Certificates are not
immediately available, who cannot deliver their Share Certificates and all
other required documents to the Depositary prior to the Expiration Date or who
cannot complete the procedure for delivery by book-entry transfer on a timely
basis may tender their Shares pursuant to the guaranteed delivery procedure
described in Section 3 of the Offer to Purchase. Pursuant to such procedure:
(i) such tender must be made by or through an Eligible Institution; (ii) a
properly completed and duly executed Notice of Guaranteed Delivery,
substantially in the form made available by Purchaser, must be received by the
Depositary prior to the Expiration Date; and (iii) the Share Certificates
evidencing all physically delivered Shares in proper form for transfer by
delivery, or a confirmation of a book-entry transfer into the Depositary's
account at a Book-Entry Transfer Facility of all Shares delivered by book-
entry transfer, in each case together with a Letter of Transmittal (or a
facsimile thereof), properly completed and duly executed, with any required
signature guarantees (or, in the case of book-entry delivery, an Agent's
Message), and any other documents required by this Letter of Transmittal, must
be received by the Depositary within five National Association of Securities
Dealers Automated Quotation--National Market System trading days after the
date of execution of such Notice of Guaranteed Delivery, all as described in
Section 3 of the Offer to Purchase.
The method of delivery of this Letter of Transmittal, Share Certificates and
all other required documents, including delivery through any Book-Entry
Transfer Facility, is at the option and risk of the tendering stockholder, and
the delivery will be deemed made only when actually received by the
Depositary. If delivery is by mail, registered mail with return receipt
requested, properly insured, is recommended. In all cases, sufficient time
should be allowed to ensure timely delivery.
No alternative, conditional or contingent tenders will be accepted and no
fractional Shares will be purchased. By execution of this Letter of
Transmittal (or a facsimile hereof), all tendering stockholders waive any
right to receive any notice of the acceptance of their Shares for payment.
3. INADEQUATE SPACE. If the space provided herein under "Description of
Shares Tendered" is inadequate, the Share Certificate numbers, the number of
Shares evidenced by such Share Certificates and the number of Shares tendered
should be listed on a separate schedule and attached hereto.
4. PARTIAL TENDERS (NOT APPLICABLE TO STOCKHOLDERS WHO TENDER BY BOOK-ENTRY
TRANSFER). If fewer than all the Shares evidenced by any Share Certificate
delivered to the Depositary herewith are to be tendered hereby, fill in the
number of Shares which are to be tendered in the box entitled "Number of
Shares Tendered". In such cases, new Share Certificate(s) evidencing the
remainder of the Shares that were evidenced by the Share Certificates
delivered to the Depositary herewith will be sent to the person(s) signing
this Letter of Transmittal, unless otherwise provided in the box entitled
"Special Delivery Instructions" on the reverse hereof, as soon as practicable
after the expiration or termination of the Offer. All Shares evidenced by
Share Certificates delivered to the Depositary will be deemed to have been
tendered unless otherwise indicated.
<PAGE>
5. SIGNATURES ON LETTER OF TRANSMITTAL; STOCK POWERS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signature(s) must correspond with the name(s) as written
on the face of the Share Certificates evidencing such Shares without
alteration, enlargement or any other change whatsoever.
If any Share tendered hereby is owned of record by two or more persons, all
such persons must sign this Letter of Transmittal.
If any of the Shares tendered hereby are registered in the names of
different holders, it will be necessary to complete, sign and submit as many
separate Letters of Transmittal as there are different registrations of such
Shares.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares tendered hereby, no endorsements of Share Certificates or separate
stock powers are required, unless payment is to be made to, or Share
Certificates evidencing Shares not tendered or not purchased are to be issued
in the name of, a person other than the registered holder(s), in which case,
the Share Certificate(s) evidencing the Shares tendered hereby must be
endorsed or accompanied by appropriate stock powers, in either case signed
exactly as the name(s) of the registered holder(s) appear(s) on such Share
Certificate(s). Signatures on such Share Certificate(s) and stock powers must
be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Shares tendered hereby, the Share Certificate(s)
evidencing the Shares tendered hereby must be endorsed or accompanied by
appropriate stock powers, in either case signed exactly as the name(s) of the
registered holder(s) appear(s) on such Share Certificate(s). Signatures on
such Share Certificate(s) and stock powers must be guaranteed by an Eligible
Institution.
If this Letter of Transmittal or any Share Certificate or stock power is
signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or
representative capacity, such person should so indicate when signing, and
proper evidence satisfactory to Purchaser of such person's authority so to act
must be submitted.
6. STOCK TRANSFER TAXES. Except as otherwise provided in this Instruction 6,
Purchaser will pay all stock transfer taxes with respect to the sale and
transfer of any Shares to it or its order pursuant to the Offer. If, however,
payment of the purchase price of any Shares purchased is to be made to, or
Share Certificate(s) evidencing Shares not tendered or not purchased are to be
issued in the name of, a person other than the registered holder(s), the
amount of any stock transfer taxes (whether imposed on the registered
holder(s), such other person or otherwise) payable on account of the transfer
to such other person will be deducted from the purchase price of such Shares
purchased, unless evidence satisfactory to Purchaser of the payment of such
taxes, or exemption therefrom, is submitted. Except as provided in this
Instruction 6, it will not be necessary for transfer tax stamps to be affixed
to the Share Certificates evidencing the Shares tendered hereby.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check for the purchase
price of any Shares tendered hereby is to be issued, or Share Certificate(s)
evidencing Shares not tendered or not purchased are to be issued, in the name
of a person other than the person(s) signing this Letter of Transmittal or if
such check or any such Share Certificate is to be sent to someone other than
the person(s) signing this Letter of Transmittal or to the person(s) signing
this Letter of Transmittal but at an address other than that shown in the box
entitled "Description of Shares Tendered" on the reverse hereof, the
appropriate boxes on the reverse of this Letter of Transmittal must be
completed. Stockholders delivering Shares tendered hereby by book-entry
transfer may request that Shares not purchased be credited to such account
maintained at a Book-Entry Transfer Facility as such stockholder may designate
in the box entitled "Special Payment Instructions" on the reverse hereof. If
no such instructions are given, all such Shares not purchased will be returned
by crediting the account at the Book-Entry Transfer Facility designated on the
reverse hereof as the account from which such Shares were delivered.
8. QUESTIONS AND REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and
requests for assistance may be directed to the Information Agent at its
address or telephone numbers set forth below or to the Dealer Managers at
their address set forth below. Additional copies of the Offer to Purchase,
this Letter of Transmittal and the Notice of Guaranteed Delivery may be
obtained from the Information Agent or from brokers, dealers, commercial banks
or trust companies.
<PAGE>
9. SUBSTITUTE FORM W-9. Under the federal income tax law, a stockholder
whose tendered Shares are accepted for payment is required by law to provide
the Depositary (as payer) with such stockholder's correct TIN on Substitute
Form W-9 below. If such stockholder is an individual, the TIN is such
stockholder's social security number. If the Depositary is not provided with
the correct TIN, the stockholder may be subject to a $50 penalty imposed by
the Internal Revenue Service. In addition, payments that are made to such
stockholder with respect to Shares purchased pursuant to the Offer may be
subject to backup withholding. If backup withholding applies, the Depositary
is required to withhold 31% of any payments made to the stockholder. Backup
withholding is not an additional tax. Rather, the tax liability of persons
subject to backup withholding will be reduced by the amount of tax withheld.
If withholding results in an overpayment of taxes, a refund may be obtained
from the Internal Revenue Service.
Certain stockholders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. In order for a foreign individual to qualify as an exempt
recipient, such individual must submit an Internal Revenue Service Form W-8,
signed under penalties of perjury, attesting to such individual's exempt
status. A form W-8 can be obtained from the Depositary. See the enclosed
Guidelines for Certification of Taxpayer Identification Number on Substitute
Form W-9 for additional instructions.
To prevent backup withholding on payments that are made to a stockholder
with respect to Shares purchased pursuant to the Offer, the stockholder is
required to notify the Depositary of such stockholder's correct TIN by
completing the form below certifying that the TIN provided on Substitute Form
W-9 is correct (or that such stockholder is awaiting a TIN), and that (i) such
stockholder has not been notified by the Internal Revenue Service that he is
subject to backup withholding as a result of a failure to report all interest
or dividends or (ii) the Internal Revenue Service has notified such
stockholder that such stockholder is no longer subject to backup withholding.
See the enclosed "Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9" for additional instructions.
PAYER'S NAME:
- -------------------------------------------------------------------------------
PART I--Taxpayer Identifi-
cation Number--For all ac-
counts, enter taxpayer
identification number in
the box at right. (For most
individuals, this is your
social security number. If
you do not have a number,
see Obtaining a Number in
the enclosed Guidelines.)
Certify by signing and dat-
ing below.
SUBSTITUTE ----------------------
FORM W-9 Social Security Number
DEPARTMENT OF NOTE: If the account is in
THE TREASURY more than one name, see the OR ___________________
INTERNAL REVENUE chart in the enclosed Employer
SERVICE Guidelines to determine Identification
which number to give the Number
payer.
PAYER'S REQUEST FOR
TAXPAYER IDENTIFICATION
NUMBER (TIN)
(If awaiting TIN write
"Applied For")
--------------------------------------------------------
PART II--For Payees Exempt From Backup Withholding,
see the enclosed Guidelines and complete as
instructed therein.
- -------------------------------------------------------------------------------
CERTIFICATION--Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct Taxpayer Identification
Number (or I am waiting for a number to be issued to me), and
(2) I am not subject to backup withholding either because I have not been
notified by the Internal Revenue Service (the "IRS") that I am subject
to backup withholding as a result of failure to report all interest or
dividends, or the IRS has notified me that I am no longer subject to
backup withholding.
CERTIFICATION INSTRUCTIONS--You must cross out item (2) above if you have
been notified by the IRS that you are subject to backup withholding because
of underreporting interest or dividends on your tax return. However, if
after being notified by the IRS that you were subject to backup withholding
you received another notification from the IRS that you are no longer
subject to backup withholding, do not cross out item (2). (Also see
instructions in the enclosed Guidelines.)
- -------------------------------------------------------------------------------
SIGNATURE _____________________________________ DATE _____________ , 199
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER.
FOR ADDITIONAL DETAILS, PLEASE REVIEW THE ENCLOSED GUIDELINES FOR
CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9.
<PAGE>
IMPORTANT: THIS LETTER OF TRANSMITTAL OR FACSIMILE HEREOF, PROPERLY
COMPLETED AND DULY EXECUTED, OR AN AGENT'S MESSAGE IN THE CASE OF A BOOK-ENTRY
DELIVERY (TOGETHER WITH ANY REQUIRED SIGNATURE GUARANTEES AND SHARE
CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND ALL OTHER REQUIRED
DOCUMENTS) OR A PROPERLY COMPLETED AND DULY EXECUTED NOTICE OF GUARANTEED
DELIVERY MUST BE RECEIVED BY THE DEPOSITARY PRIOR TO THE EXPIRATION DATE (AS
DEFINED IN THE OFFER TO PURCHASE).
The Information Agent for the Offer is:
GEORGESON & COMPANY INC.
Wall Street Plaza
New York, New York 10005
(212) 509-6240 (COLLECT)
BANKS AND BROKERS CALL COLLECT: (212) 440-9800
ALL OTHERS CALL TOLL FREE 1-800-223-2064
The Dealer Managers for the Offer are:
GOLDMAN, SACHS & CO.
85 Broad Street
New York, New York 10004
January 27, 1995
<PAGE>
EXHIBIT 99(A)(3)
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK
OF
PYRAMID TECHNOLOGY CORPORATION
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
This Notice of Guaranteed Delivery, or one substantially in the form hereof,
must be used to accept the Offer (as defined below) (i) if certificates
("Share Certificates") evidencing shares of common stock, par value $.01 per
share (the "Shares"), of Pyramid Technology Corporation, a Delaware
corporation (the "Company"), are not immediately available, (ii) if Share
Certificates and all other required documents cannot be delivered to Chemical
Bank, as Depositary (the "Depositary"), prior to the Expiration Date (as
defined in Section 1 of the Offer to Purchase (as defined below)) or (iii) if
the procedure for delivery by book-entry transfer cannot be completed on a
timely basis. This Notice of Guaranteed Delivery may be delivered by hand or
mail or transmitted by telegram, telex or facsimile transmission to the
Depositary. See Section 3 of the Offer to Purchase.
The Depositary for the Offer is:
CHEMICAL BANK
By Mail: By Facsimile By Hand
Transmission: or Overnight Courier:
(for Eligible
Institutions only)
Chemical Bank Chemical Bank
Reorganization (212) 629-8015 55 Water Street
Department or Second Floor--Room 234
P.O. Box 3085 (212) 629-8016 New York, New York 10041
G.P.O. Station Attention:
New York, New York Reorganization
10116-3085 Department
Confirm by Telephone:
(212) 946-7137
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE, OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION
OTHER THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY.
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 Siemens Nixdorf Mid-Range Acquisition
Corp., a Delaware corporation and an indirect wholly owned subsidiary of
Siemens Nixdorf Informationssysteme AG, a corporation organized under the laws
of the Federal Republic of Germany and a direct wholly owned subsidiary of
Siemens Aktiengesellschaft, a corporation organized under the laws of the
Federal Republic of Germany, upon the terms and subject to the conditions set
forth in the Offer to Purchase, dated January 27, 1995 (the "Offer to
Purchase"), and the related Letter of Transmittal (which together constitute
the "Offer"), receipt of each of which is hereby acknowledged, the number of
Shares specified below pursuant to the guaranteed delivery procedure described
in Section 3 of the Offer to Purchase.
Number of Shares: ___________________ -------------------------------------
-------------------------------------
Certificate Nos. Signature(s) of Holder(s)
(If Available): Dated: ________________________, 1995
- -------------------------------------
- ------------------------------------- Name(s) of Holders:
-------------------------------------
Check one box if Shares will be -------------------------------------
delivered by book-entry transfer: -------------------------------------
Please Type or Print
[_] The Depository Trust Company -------------------------------------
[_] Midwest Securities Trust Company Address
[_] Philadelphia Depository Trust Company -------------------------------------
Zip Code
Account No. _________________________ -------------------------------------
Area Code and Telephone No.
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm which is a member of a registered national
securities exchange or of the National Association of Securities Dealers, Inc.
or which is a commercial bank or trust company having an office or
correspondent in the United States, guarantees to deliver to the Depositary,
at one of its addresses set forth above, Share Certificates evidencing the
Shares tendered hereby, in proper form for transfer, or confirmation of book-
entry transfer of such Shares, into the Depositary's account at The Depository
Trust Company, the Midwest Securities Trust Company or the Philadelphia
Depository Trust Company, in each case with delivery of a Letter of
Transmittal (or facsimile thereof) properly completed and duly executed, with
any required signature guarantees or an Agent's Message (as defined in the
Offer to Purchase) in the case of a book-entry delivery, and any other
required documents, all within five National Association of Securities Dealers
Automated Quotation--National Market System trading days of the date hereof.
- ------------------------------------- -------------------------------------
Name of Firm Authorized Signature
- ------------------------------------- Name: _______________________________
Address Please Type or Print
- ------------------------------------- -------------------------------------
Zip Code Title
- ------------------------------------- Dated: ________________________, 1995
Area Code and Telephone No.
DO NOT SEND SHARE CERTIFICATES WITH THIS NOTICE. SHARE CERTIFICATES SHOULD BE
SENT WITH YOUR LETTER OF TRANSMITTAL.
<PAGE>
EXHIBIT 99(A)(4)
GOLDMAN, SACHS & CO.
85 BROAD STREET
NEW YORK, NEW YORK 10004
OFFER TO PURCHASE FOR CASH ALL OUTSTANDING SHARES OF COMMON STOCK
OF
PYRAMID TECHNOLOGY CORPORATION
AT
$16.00 NET PER SHARE
BY
SIEMENS NIXDORF MID-RANGE ACQUISITION CORP.
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
SIEMENS NIXDORF INFORMATIONSSYSTEME AG
A DIRECT WHOLLY OWNED SUBSIDIARY OF
SIEMENS AKTIENGESELLSCHAFT
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON FRIDAY, FEBRUARY 24,1995 UNLESS THE OFFER IS EXTENDED.
January 27, 1995
To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees:
We have been appointed by Siemens Nixdorf Mid-Range Acquisition Corp., a
Delaware corporation ("Purchaser") and an indirect wholly owned subsidiary of
Siemens Nixdorf Informationssysteme AG, a company organized under the laws of
the Federal Republic of Germany ("SNI AG") and a direct wholly owned
subsidiary of Siemens Aktiengesellschaft, a company organized under the laws
of the Federal Republic of Germany ("Siemens AG"), to act as Dealer Managers
in connection with Purchaser's offer to purchase all outstanding shares of
common stock, par value $.01 per share (the "Shares"), of Pyramid Technology
Corporation, a Delaware corporation (the "Company"), at a price of $16.00 per
Share, net to the seller in cash, upon the terms and subject to the conditions
set forth in Purchaser's Offer to Purchase, dated January 27, 1995 (the "Offer
to Purchase"), and the related Letter of Transmittal (which together
constitute the "Offer") enclosed herewith. Please furnish copies of the
enclosed materials to those of your clients for whose accounts you hold Shares
registered in your name or in the name of your nominee.
<PAGE>
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER AT LEAST THAT
NUMBER OF SHARES THAT, WHEN ADDED TO THE SHARES OWNED OF RECORD BY SNI AG OR
ANY OF ITS SUBSIDIARIES ON THE DATE HEREOF (OTHER THAN SHARES ISSUABLE UPON
EXERCISE OF THE WARRANT (AS DEFINED IN THE OFFER TO PURCHASE)), SHALL
CONSTITUTE A MAJORITY OF THE THEN OUTSTANDING SHARES ON A FULLY DILUTED BASIS
(OTHER THAN ANY SHARES ISSUABLE UPON THE EXERCISE OF THE WARRANT (AS DEFINED
IN THE OFFER TO PURCHASE) AND OTHER THAN THE RIGHTS (AS DEFINED IN THE OFFER
TO PURCHASE)). THE OFFER IS ALSO CONDITIONED UPON, AMONG OTHER THINGS, THE
EXPIRATION OR TERMINATION OF ALL WAITING PERIODS UNDER THE HART-SCOTT-RODINO
ANTI-TRUST IMPROVEMENTS ACT OF 1976, AS AMENDED, AND ANY FOREIGN COMPETITION
AND ANTITRUST STATUTES AND REGULATIONS.
Enclosed for your information and use are copies of the following documents:
1. Offer to Purchase, dated January 27, 1995;
2. Letter of Transmittal to be used by holders of Shares in accepting the
Offer and tendering Shares;
3. Notice of Guaranteed Delivery to be used to accept the Offer if the
Shares and all other required documents are not immediately available or
cannot be delivered to Chemical Bank (the "Depositary") by the Expiration
Date (as defined in the Offer to Purchase) or if the procedure for book-
entry transfer cannot be completed by the Expiration Date;
4. A letter to stockholders of the Company from Richard H. Lussier, Chief
Executive Officer and Chairman of the Board of the Company, together with a
Solicitation/Recommendation Statement on Schedule 14D-9 filed with the
Securities and Exchange Commission by the Company;
5. A letter which may be sent to your clients for whose accounts you hold
Shares registered in your name or in the name of your nominee, with space
provided for obtaining such clients' instructions with regard to the Offer;
6. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9; and
7. Return envelope addressed to the Depositary.
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. PLEASE NOTE
THAT THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON FRIDAY, FEBRUARY 24, 1995, UNLESS THE OFFER IS EXTENDED.
In all cases, payment for Shares accepted for payment pursuant to the Offer
will be made only after timely receipt by the Depositary of (i) certificates
evidencing such Shares (or a confirmation of a book-entry transfer of such
Shares into the Depositary's account at one of the Book-Entry Transfer
Facilities (as defined in the Offer to Purchase)), (ii) a Letter of
Transmittal (or facsimile thereof) properly completed and duly executed or an
Agent's Message (as defined in the Offer to Purchase) in connection with a
book-entry delivery of Shares and (iii) any other required documents.
If a holder of Shares wishes to tender, but cannot deliver such holder's
certificates or other required documents, or cannot comply with the procedure
for book-entry transfer, prior to the expiration of the Offer, a tender of
Shares may be effected by following the guaranteed delivery procedure
described in Section 3 of the Offer to Purchase.
2
<PAGE>
Purchaser will not pay any fees or commissions to any broker, dealer or
other person (other than the Dealer Managers, the Depositary and the
Information Agent as described in the Offer to Purchase) in connection with
the solicitation of tenders of Shares pursuant to the Offer. However,
Purchaser will reimburse you for customary mailing and handling expenses
incurred by you in forwarding any of the enclosed materials to your clients.
Purchaser will pay or cause to be paid any stock transfer taxes payable with
respect to the transfer of Shares to it, except as otherwise provided in
Instruction 6 of the Letter of Transmittal.
Any inquiries you may have with respect to the Offer should be addressed to,
and additional copies of the enclosed material may be obtained by contacting,
Georgeson & Company, Inc. (the "Information Agent") at its address and
telephone numbers set forth on the back cover page of the Offer to Purchase.
Inquiries with respect to the Offer may also be addressed to Goldman, Sachs
& Co. at the address set forth on the back cover page of the Offer to
Purchase.
Very truly yours,
Goldman, Sachs & Co.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL AUTHORIZE YOU OR
ANY OTHER PERSON TO ACT ON BEHALF OF OR AS THE AGENT OF SIEMENS AG, SNI AG,
PURCHASER, THE COMPANY, THE DEALER MANAGERS, THE INFORMATION AGENT OR THE
DEPOSITARY, OR OF ANY AFFILIATE OF ANY OF THEM, OR AUTHORIZE YOU OR ANY OTHER
PERSON TO USE ANY DOCUMENT OR TO MAKE ANY STATEMENT ON BEHALF OF ANY OF THEM
IN CONNECTION WITH THE OFFER OTHER THAN THE ENCLOSED DOCUMENTS AND THE
STATEMENTS CONTAINED THEREIN.
3
<PAGE>
EXHIBIT 99(A)(5)
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
PYRAMID TECHNOLOGY CORPORATION
AT
$16.00 NET PER SHARE
BY
SIEMENS NIXDORF MID-RANGE ACQUISITION CORP.
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
SIEMENS NIXDORF INFORMATIONSSYSTEME AG
A DIRECT WHOLLY OWNED SUBSIDIARY OF
SIEMENS AKTIENGESELLSCHAFT
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON FRIDAY, FEBRUARY 24, 1995,
UNLESS THE OFFER IS EXTENDED.
To Our Clients:
Enclosed for your consideration are an Offer to Purchase dated January 27,
1995 (the "Offer to Purchase") and a related Letter of Transmittal (which
together constitute the "Offer") in connection with the offer by Siemens
Nixdorf Mid-Range Acquisition Corp., a Delaware corporation ("Purchaser") and
an indirect wholly owned subsidiary of Siemens Nixdorf Informationssysteme AG,
a corporation organized under the laws of the Federal Republic of Germany
("SNI AG") and a direct wholly owned subsidiary of Siemens Aktiengesellschaft,
a corporation organized under the laws of the Federal Republic of Germany
("Siemens AG"), to purchase all outstanding shares of common stock, par value
$.01 per share (the "Shares"), of Pyramid Technology Corporation, a Delaware
corporation (the "Company"), at a price of $16.00 per Share, net to the seller
in cash, upon the terms and subject to the conditions set forth in the Offer.
Also enclosed is the letter to stockholders of the Company from Richard H.
Lussier, Chief Executive Officer and Chairman of the Board of the Company,
together with a Solicitation/Recommendation Statement on Schedule 14D-9 filed
with the Securities and Exchange Commission by the Company.
We are (or our nominee is) the holder of record of Shares held by us for
your account. A TENDER OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF
RECORD AND PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS
FURNISHED TO YOU FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER
SHARES HELD BY US FOR YOUR ACCOUNT.
We request instructions as to whether you wish to have us tender on your
behalf any or all of the Shares held by us for your account, upon the terms
and subject to the conditions set forth in the Offer.
Your attention is invited to the following:
1. The tender price is $16.00 per Share, net to the seller in cash.
2. The Offer is being made for all outstanding Shares.
3. The Board of Directors of the Company unanimously (with one director
recusing himself) has determined that each of the Offer and the Merger (as
defined in the Offer to Purchase) is fair
<PAGE>
to, and in the best interests of, the stockholders of the Company, and
recommends that stockholders accept the Offer and tender their Shares
pursuant to the Offer.
4. The Offer and withdrawal rights will expire at 12:00 Midnight, New
York City time, on Friday, February 24, 1995, unless the Offer is extended.
5. The Offer is conditioned upon, among other things, there being validly
tendered and not properly withdrawn prior to the expiration of the Offer at
least that number of Shares that, when added to the Shares owned of record
by SNI AG or any of its subsidiaries on the date hereof (other than Shares
issuable upon exercise of the Warrant (as defined in the Offer to
Purchase)), shall constitute a majority of the then outstanding Shares on a
fully diluted basis (including, without limitation, all Shares issuable
upon the exercise of any options, warrants or rights (other than any Shares
issuable upon the exercise of the Warrant (as defined in the Offer to
Purchase) and other than the Rights (as defined in the Offer to
Purchase))). The Offer is also conditioned upon, among other things, the
expiration or termination of all waiting periods under the Hart-Scott-
Rodino Anti-Trust Improvements Act of 1976, as amended, and any foreign
competition and antitrust statutes and regulations.
6. Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, except as otherwise provided in Instruction 6 of the Letter
of Transmittal, stock transfer taxes with respect to the purchase of Shares
by Purchaser pursuant to the Offer.
If you wish to have us tender any or all of your Shares, please so instruct
us by completing, executing and returning to us the instruction form contained
in this letter. An envelope in which to return your instructions to us is
enclosed. If you authorize the tender of your Shares, all such Shares will be
tendered unless otherwise specified in your instructions. YOUR INSTRUCTIONS
SHOULD BE FORWARDED TO US IN AMPLE TIME TO PERMIT US TO SUBMIT A TENDER ON
YOUR BEHALF PRIOR TO THE EXPIRATION OF THE OFFER.
The Offer is made solely by the Offer to Purchase and the related Letter of
Transmittal and is being made to all holders of Shares. Purchaser is not aware
of any jurisdiction where the making of the Offer is prohibited by
administrative or judicial action pursuant to any valid state statute. If
Purchaser becomes aware of any valid state statute prohibiting the making of
the Offer or the acceptance of Shares pursuant thereto, Purchaser will make a
good faith effort to comply with any such state statute. If, after such good
faith effort, Purchaser cannot comply with any such state statute, the Offer
will not be made to (nor will tenders be accepted from or on behalf of) the
holders of Shares in such state. In any jurisdiction where the securities,
blue sky or other laws require the Offer to be made by a licensed broker or
dealer, the Offer shall be deemed to be made on behalf of Purchaser by
Goldman, Sachs & Co. or one or more registered brokers or dealers licensed
under the laws of such jurisdiction.
<PAGE>
INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE FOR CASH ALL OUTSTANDING
SHARES OF COMMON STOCK OF PYRAMID TECHNOLOGY CORPORATION BY SIEMENS NIXDORF
MID-RANGE ACQUISITION CORP.
The undersigned acknowledge(s) receipt of your letter and the enclosed Offer
to Purchase, dated January 27, 1995, and the related Letter of Transmittal
(which together constitute the "Offer"), in connection with the offer by
Siemens Nixdorf Mid-Range Acquisition Corp., a Delaware corporation and an
indirect wholly owned subsidiary of Siemens Nixdorf Informationssysteme AG, a
corporation organized under the laws of the Federal Republic of Germany and a
direct wholly owned subsidiary of Siemens Aktiengesellschaft, a corporation
organized under the laws of the Federal Republic of Germany, to purchase all
outstanding shares of common stock, par value $.01 per share (the "Shares"),
of Pyramid Technology Corporation, a Delaware corporation.
This will instruct you to tender the number of Shares indicated below (or,
if no number is indicated below, all Shares) that are held by you for the
account of the undersigned, upon the terms and subject to the conditions set
forth in the Offer.
Number of Shares to be Tendered:_____________ Shares*
Dated: _______________________ , 1995
- -------------------------------------------------------------------------------
SIGN HERE
Signature(s): ________________________________________________________________
- -------------------------------------------------------------------------------
Please type or print name(s): ________________________________________________
- -------------------------------------------------------------------------------
Please type or print address: ________________________________________________
- -------------------------------------------------------------------------------
Area Code and Telephone Number: ______________________________________________
Taxpayer Identification or Social Security Number: ___________________________
* Unless otherwise indicated, it will be assumed that all Shares held by us
for your account are to be tendered.
<PAGE>
EXHIBIT 99.(A)(6)
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER. -- Social Security numbers have nine digits separated by two hyphens:
i.e. 000-00-0000. Employer identification numbers have nine digits separated by
only one hyphen: i.e. 00-0000000. The table below will help determine the
number to give the payer.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GIVE THE
FOR THIS TYPE OF ACCOUNT: SOCIAL SECURITY
NUMBER OF --
- --------------------------------------------------------------------------------
<S> <C>
1. An individual's account The individual
2. Two or more individuals (joint account) The actual owner
of the account
or, if combined
funds, any one
of the
individuals(1)
3. Custodian account of a minor (Uniform Gift to Minors Act) The minor(2)
4. a The usual revocable savings trust account (grantor is The grantor-
also trustee) trustee(1)
b So-called trust account that is not a legal or valid The actual
trust under State law owner(1)
5. Sole proprietorship account The owner(3)
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
GIVE THE EMPLOYER
FOR THIS TYPE OF ACCOUNT: IDENTIFICATION
NUMBER OF --
- --------------------------------------------------------------------------------
<S> <C>
6. A valid trust, estate, or pension trust The legal entity
(Do not furnish
the identifying
number of the
personal
representative
or trustee
unless the legal
entity itself is
not designated
in the account
title.)(4)
7. Corporate account The corporation
8. Religious, charitable, or educational organization The organization
account
9. Partnership The partnership
10. Association, club, or other tax-exempt organization The organization
11. A broker or registered nominee The broker or
nominee
12. Account with the Department of Agriculture in the name The public
of a public entity (such as a State or local government, entity
school district, or prison) that receives agricultural
program payments
</TABLE>
- --------------------------------------------------------------------------------
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Show the name of the owner. You may also enter your business name. You may
use your Social Security Number or Employer Identification Number.
(4) List first and circle the name of the legal trust, estate, or pension
trust.
NOTE: If no name is circled when there is more than one name, the number will
be considered to be that of the first name listed.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your num-
ber, obtain Form SS-5, Application for a Social Security Number Card, or Form
SS-4, Application for Employer Identification Number, at the local office of
the Social Security Administration or the Internal Revenue Service and apply
for a number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments include
the following:
. A corporation.
. A financial institution.
. An organization exempt from tax under section 501(a), or an individual re-
tirement plan.
. The United States or any agency or instrumentality thereof.
. A State, the District of Columbia, a possession of the United States, or
any subdivision or instrumentality thereof.
. A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof.
. An international organization or any agency, or instrumentality thereof.
. A registered dealer in securities or commodities registered in the U.S. or
a possession of the U.S.
. A real estate investment trust.
. A common trust fund operated by a bank under section 584(a)
. An exempt charitable remainder trust, or a non-exempt trust described in
section 4947(a)(1).
. An entity registered at all times under the Investment Company Act of 1940.
. A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
. Payments to nonresident aliens subject to withholding under section 1441.
. Payments to partnerships not engaged in a trade or business in the U.S. and
which have at least one nonresident partner.
. Payments of patronage dividends where the amount received is not paid in
money.
. Payments made by certain foreign organizations.
Payments of interest not generally subject to backup withholding include the
following:
. Payments of interest on obligations issued by individuals. Note: You may be
subject to backup withholding if this interest is $600 or more and is paid
in the course of the payer's trade or business and you have not provided
your correct taxpayer identification number to the payer.
. Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
. Payments described in section 6049(b)(5) to non-resident aliens.
. Payments on tax-free covenant bonds under section 1451.
. Payments made by certain foreign organizations.
Exempt payees described above should file Form W-9 to avoid possible erroneous
backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER IDEN-
TIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT TO
THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS,
ALSO SIGN AND DATE THE FORM.
Certain payments other than interest, dividends, and patronage dividends,
that are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under sections 6041, 6041A(a),
6045, and 6050A.
PRIVACY ACT NOTICE.-- Section 6109 requires most recipients of dividend, in-
terest, or other payments to give taxpayer identification numbers to payers
who must report the payments to IRS. IRS uses the numbers for identification
purposes. Payers must be given the numbers whether or not recipients are re-
quired to file tax returns. Beginning January 1, 1984, payers must generally
withhold 31% of taxable interest, dividend, and certain other payments to a
payee who does not furnish a taxpayer identification number to a payer. Cer-
tain penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you
fail to furnish your taxpayer identification number to a payer, you are sub-
ject to a penalty of $50 for each such failure unless your failure is due to
reasonable cause and not to willful neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Falsifying certifications or
affirmations may subject you to criminal penalties including fines and/or im-
prisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX
CONSULTANT OR THE INTERNAL REVENUE SERVICE
<PAGE>
EXHIBIT 99.(A)(7)
This announcement is neither an offer to purchase nor a solicitation of an
offer to sell Shares. The Offer is made solely by the Offer to Purchase dated
January 27, 1995 and the related Letter of Transmittal, and is being made to
all holders of Shares. Purchaser is not aware of any state where the making of
the Offer is prohibited by administrative or judicial action pursuant to any
valid state statute. If Purchaser becomes aware of any valid state statute
prohibiting the making of the Offer or the acceptance of Shares pursuant
thereto, Purchaser will make a good faith effort to comply with such state
statute. If, after such good faith effort, Purchaser cannot comply with such
state statute, the Offer will not be made to (nor will tenders be accepted from
or on behalf of) the holders of Shares in such state. In any jurisdiction where
the securities, blue sky or other laws require the Offer to be made by a
licensed broker or dealer, the Offer shall be deemed to be made on behalf of
Purchaser by Goldman, Sachs & Co. or one or more registered brokers or dealers
licensed under the laws of such jurisdiction.
Notice of Offer to Purchase for Cash
All Outstanding Shares of Common Stock
of
Pyramid Technology Corporation
at
$16.00 Net Per Share
by
Siemens Nixdorf Mid-Range Acquisition Corp.
an indirect wholly owned subsidiary of
Siemens Nixdorf Informationssysteme AG
a direct wholly owned subsidiary of
Siemens Aktiengesellschaft
Siemens Nixdorf Mid-Range Acquisition Corp., a Delaware corporation
("Purchaser") and an indirect wholly owned subsidiary of Siemens Nixdorf
Informationssysteme AG, a corporation organized under the laws of the Federal
Republic of Germany ("SNI AG") and a direct wholly owned subsidiary of Siemens
Aktiengesellschaft, a corporation organized under the laws of the Federal
Republic of Germany ("Siemens AG"), is offering to purchase all outstanding
shares of Common Stock, par value $.01 per share (the "Shares"), of Pyramid
Technology Corporation, a Delaware corporation (the "Company"), at a price of
$16.00 per Share, net to the seller in cash, upon the terms and subject to the
conditions set forth in the Offer to Purchase dated January 27, 1995 (the
"Offer to Purchase") and in the related Letter of Transmittal (which together
constitute the "Offer"). Following the Offer, Purchaser intends to effect the
Merger described below.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON FRIDAY, FEBRUARY 24, 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 of the Offer at least that
number of Shares that, when added to the Shares owned of record by SNI AG or
any of its subsidiaries on the date hereof (other than Shares issuable upon
exercise of the Warrant (as defined in the Offer to Purchase)), shall
constitute a majority of the then outstanding Shares on a fully diluted basis
(other than any Shares issuable upon the exercise of the Warrant and other than
the Rights (as defined in the Offer to Purchase)). The Offer is also
conditioned upon, among other things, the expiration or termination of all
waiting periods imposed upon consummation of the Offer by the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, and the regulations thereunder
and any applicable foreign competition and antitrust statutes and regulations,
as well as the other conditions described in the Offer to Purchase.
The Offer is being made pursuant to an Agreement and Plan of Merger dated as
of January 20, 1995 (the "Merger Agreement") among SNI AG, Purchaser and the
Company. The Merger Agreement provides that, among other things, as soon as
practicable after the purchase of Shares pursuant to the Offer and the
satisfaction of the other conditions set forth in the Merger Agreement and in
accordance with relevant provisions of the General Corporation Law of the State
of Delaware ("Delaware Law"), Purchaser will be merged with and into the
Company (the "Merger"). Following consummation of the Merger, the Company will
continue as the surviving corporation (the "Surviving Corporation") and will
become an indirect wholly owned subsidiary of SNI AG. At the effective time of
the Merger (the "Effective Time"), each Share issued and outstanding
immediately prior to the Effective Time (other than Shares held in the treasury
of the Company and any Shares owned by Purchaser, SNI AG or any direct or
indirect wholly owned subsidiary of SNI AG or of the Company, and other than
Shares held by stockholders who shall have demanded and perfected appraisal
rights, if any, under Delaware Law) will be cancelled and converted
automatically into the right to receive $16.00 in cash, or any higher price
that may be paid per Share in the Offer, without interest.
The Board of Directors of the Company has determined that each of the Offer
and the Merger is fair to, and in the best interests of, the stockholders of
the Company, and recommends that stockholders accept the Offer and tender their
Shares pursuant to the Offer.
For purposes of the Offer, Purchaser will be deemed to have accepted for
payment (and thereby purchased) Shares validly tendered and not properly
withdrawn as, if and when Purchaser gives oral or written notice to Chemical
Bank (the "Depositary") of Purchaser's acceptance for payment of such Shares
pursuant to the Offer. Upon the terms and subject to the conditions of the
Offer, payment for Shares accepted for payment pursuant to the Offer will be
made by deposit of the purchase price therefor with the Depositary, which will
act as agent for tendering stockholders for the purpose of receiving payments
from Purchaser and transmitting such payments to tendering stockholders whose
Shares have been accepted for payment. Under no circumstances will interest on
the purchase price for Shares be paid, regardless of any delay in making such
payment. In all cases, payment for Shares tendered and accepted for payment
pursuant to the Offer will be made only after timely receipt by the Depositary
of (i) the certificates evidencing such Shares (the "Share Certificates") or
timely confirmation of a book-entry transfer of such Shares into the
Depositary's account at one of the Book-Entry Transfer Facilities (as defined
in Section 2 of the Offer to Purchase) pursuant to the procedure set forth in
Section 3 of the Offer to Purchase, (ii) the Letter of Transmittal (or a
facsimile thereof), properly completed and duly executed, with any required
signature guarantees (or, in the case of a book-entry transfer, an Agent's
Message (as defined in the Offer to Purchase)) and (iii) any other documents
required under the Letter of Transmittal.
Purchaser expressly reserves the right, in its sole discretion (but subject
to the terms and conditions of the Merger Agreement), at any time and from time
to time, to extend for any reason the period of time during which the Offer is
open, including the occurrence of any condition specified in Section 14 of the
Offer to Purchase, by giving oral or written notice of such extension to the
Depositary. Any such extension will be followed as promptly as practicable by
public announcement thereof, such announcement to be made no later than 9:00
a.m., New York City time, on the next business day after the previously
scheduled expiration date of the Offer. During any such extension, all Shares
previously tendered and not withdrawn will remain subject to the Offer, subject
to the rights of a tendering stockholder to withdraw such stockholder's Shares.
Tenders of Shares made pursuant to the Offer are irrevocable except that
such Shares may be withdrawn at any time prior to 12:00 Midnight, New York City
time, on Friday, February 24, 1995 (or the latest time and date at which the
Offer, if extended by Purchaser, shall expire) and, unless theretofore accepted
for payment by Purchaser pursuant to the Offer, may also be withdrawn at any
time after March 27, 1995. For the withdrawal to be effective, a written,
telegraphic, telex or facsimile transmission notice of withdrawal must be
timely received by the Depositary at one of its addresses set forth on the back
cover page of the Offer to Purchase. Any such notice of withdrawal must specify
the name of the person who tendered the Shares to be withdrawn, the number of
Shares to be withdrawn and the name of the registered holder of such Shares, if
different from that of the person who tendered such Shares. If Share
Certificates evidencing Shares to be withdrawn have been delivered or otherwise
identified to the Depositary, then, prior to the physical release of such Share
Certificates, the serial numbers shown on such Share Certificates must be
submitted to the Depositary and the signature(s) on the notice of withdrawal
must be guaranteed by an Eligible Institution (as defined in Section 3 of the
Offer to Purchase), unless such Shares have been tendered for the account of an
Eligible Institution. If Shares have been tendered pursuant to the procedure
for book-entry transfer as set forth in Section 3 of the Offer to Purchase, any
notice of withdrawal must specify the name and number of the account at the
Book-Entry Transfer Facility to be credited with the withdrawn Shares. All
questions as to the form and validity (including the time of receipt) of any
notice of withdrawal will be determined by Purchaser, in its sole discretion,
whose determination will be final and binding.
The information required to be disclosed by Rule 14d-6(e)(1)(vii) of the
General Rules and Regulations under the Securities Exchange Act of 1934, as
amended, is contained in the Offer to Purchase and is incorporated herein by
reference.
The Company has provided Purchaser with the Company's stockholder list and
security position listings for the purpose of disseminating the Offer to
holders of Shares. The Offer to Purchase and the related Letter of Transmittal
will be mailed to record holders of Shares whose names appear on the Company's
stockholder list and will be furnished to brokers, dealers, commercial banks,
trust companies and similar persons whose names, or the names of whose
nominees, appear on the stockholder list or, if applicable, who are listed as
participants in a clearing agency's security position listing for subsequent
transmittal to beneficial owners of Shares.
The Offer to Purchase and the related Letter of Transmittal contain
important information which should be read before any decision is made with
respect to the Offer.
Questions and requests for assistance or for additional copies of the Offer
to Purchase and the related Letter of Transmittal and other tender offer
materials may be directed to the Information Agent or the Dealer Managers as
set forth below, and copies will be furnished promptly at Purchaser's expense.
No fees or commissions will be paid to brokers, dealers or other persons (other
than the Information Agent and the Dealer Managers) for soliciting tenders of
Shares pursuant to the Offer.
The Information Agent for the Offer is:
GEORGESON
& COMPANY INC.
--------------
Wall Street Plaza
New York, New York 10005
Banks and Brokers call collect (212) 440-9800
Call Toll Free: 1-800-223-2064
The Dealer Managers for the Offer are:
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
January 27, 1995
<PAGE>
EXHIBIT 99.(A)(8)
PRESS RELEASE
CONTACT:
Mr. Kent Robertson
Senior Vice President, Chief Financial Officer
Pyramid Technology Corporation
Telephone: (408) 428-9000
Mr. Jochen Doering
Vice President, Corporate Communications
Siemens Nixdorf Informationssysteme AG
Telephone: 011-49-89-636-42700
FOR IMMEDIATE RELEASE
---------------------
PYRAMID TECHNOLOGY CORPORATION
TO BE ACQUIRED BY SIEMENS NIXDORF
SAN JOSE, CALIFORNIA AND PADERBORN, GERMANY, January 23, 1995.
Pyramid Technology Corporation ("Pyramid") and Siemens Nixdorf
Informationssysteme AG ("SNI"), a wholly owned subsidiary of Siemens AG, jointly
announced today that they have entered into an agreement pursuant to which a
wholly-owned subsidiary of SNI will acquire all of the outstanding common stock
of Pyramid (NASD Symbol: PYRD) not currently owned by SNI for an aggregate
purchase price of approximately US$207 million. Under the agreement, SNI's
subsidiary will commence a tender offer for all outstanding common stock of
Pyramid for $16.00 per share in cash. The tender offer will be followed by a
merger in which any shares not acquired by SNI's subsidiary in the tender offer
will be acquired for the same amount of cash. SNI currently owns over 17% of
the outstanding stock of Pyramid.
The tender offer, which has been approved by Pyramid's board of
directors, will commence no later than January 27 and will be conditioned on a
majority of the outstanding shares of Pyramid being tendered as well as other
customary conditions, including regulatory approvals.
<PAGE>
2
Richard H. Lussier, Pyramid's Chairman and CEO, made the following
statement: "We are very pleased to become part of the SNI family. We feel this
transaction is fair to both the shareholders and the employees of Pyramid. With
the backing of SNI, our goal is to expand our market presence and to exploit our
technological leadership."
Gerhard Schulmeyer, SNI President and CEO, stated: "I am very pleased
that our two companies have come to terms. SNI's relationship with Pyramid has
evolved over a number of years. While this has been mutually beneficial, we
have together come to the conclusion that a closer link between the companies is
necessary in order to be able to fully realize our joint potential in terms of
both market coverage and technology competence.
"Pyramid will retain its corporate identity but will operate within
the framework of SNI's world-wide mid-range computer business. It is especially
important to us that this agreement has the support of Pyramid management. The
success of our combined operation depends upon maintaining that support in the
future."
SNI, Paderborn, Germany, is a systems partner with universal expertise
in the field of information technology. It is one of the world's largest
companies in this area and is the largest supplier of information technology of
European origin. In the past fiscal year (October 1, 1993 to September 30,
1994), SNI had revenues of more than U.S. $7.3 billion. SNI has a work force of
more than 39,000 and is represented in 45 countries.
SNI is a separate legal unit within the Siemens organization. In the
fiscal year 1993/94, Siemens AG had worldwide sales of more than U.S. $51
billion. Founded in 1847, the company numbers among the world's largest
electrical and electronics companies.
Founded in 1981, Pyramid develops scalable enterprise servers that
deliver high quality, high performance solutions for mid-range to high-end of
the open systems market. Pyramid provides data center-class support for
business critical environments, complemented by a full suite of professional
programs and support tools that help customers successfully implement scalable
enterprise computing. In the past fiscal year (October 1, 1993 to September 30,
1994), Pyramid had revenues of approximately $218 million. Pyramid has a work
force of approximately 850 employees.
# # #
<PAGE>
EXHIBIT 99(A)(9)
PRESS RELEASE
CONTACT:
Mr. Kevin Kimball
Corporate Communications
Siemens Corporation
Telephone: (212) 258-4335
Mr. Kent Robertson
Senior Vice President, Chief Financial Officer
Pyramid Technology Corporation
Telephone: (408) 428-9000
FOR IMMEDIATE RELEASE
SIEMENS NIXDORF LAUNCHES TENDER OFFER
FOR PYRAMID TECHNOLOGY CORPORATION
NEW YORK, NEW YORK AND SAN JOSE, CALIFORNIA, January 27, 1995. Siemens
Nixdorf Informationssysteme AG ("SNI AG"), a wholly owned subsidiary of Siemens
AG, and Pyramid Technology Corporation ("Pyramid") (NASDAQ: PYRD) jointly
announced today that SNI AG, through Siemens Nixdorf Mid-Range Acquisition
Corp. ("SNI Mid-Range"), an indirect wholly-owned subsidiary of SNI AG, have
commenced a tender offer (the "Offer") to purchase all outstanding shares of
common stock, par value $0.01 per share (the "Shares"), of Pyramid not
currently owned by SNI AG and its subsidiaries, for $16.00 per Share, net to
the seller in cash. The Offer is conditioned upon, among other things, there
being validly tendered and not withdrawn prior to the expiration of the Offer
at least that number of Shares that, when added to the Shares currently owned
by SNI AG and its affiliates, constitutes a majority of the Shares, as well as
other customary conditions, including regulatory approvals.
The Offer is being made pursuant to an Agreement and Plan of Merger dated as
of January 20, 1995 (the "Merger Agreement") among SNI AG, SNI Mid-Range and
Pyramid. The Merger Agreement provides that, among other things, as soon as
practicable after the purchase of Shares pursuant to the Offer and the
satisfaction of the other conditions set forth in the Merger Agreement and in
accordance with the relevant provisions of the General Corporation Law of the
State of Delaware, SNI Mid-Range will be merged with and into Pyramid (the
"Merger"). All shares not purchased in the Offer will be converted into the
right to receive $16.00 in cash at the time of the Merger. The Board of
Directors of Pyramid has determined that each of the Offer and the Merger is
fair to, and in the best interests of, the stockholders of Pyramid and
recommends that all Pyramid stockholders accept the Offer and tender the Shares
owned by them. Smith Barney Inc. acted as financial advisor to Pyramid in the
transaction.
The Offer and withdrawal rights expire at 12:00 Midnight, New York City time
on Friday, February 24, 1995, unless the Offer is extended. The information
filed with the Securities and Exchange Commission in connection with the Offer
may be obtained by calling the information agent, Georgeson & Company, toll
free at 800-223-2064.
SNI AG, Paderborn, Germany, is a systems partner with universal expertise in
the field of information technology. It is one of the world's largest companies
in this area and is the largest supplier of information technology of European
origin. In the past fiscal year (October 1, 1993 to September 30, 1994), SNI AG
had revenues of more than U.S. $7.3 billion. SNI AG has a work force of more
than 39,000 and is represented in 45 countries.
<PAGE>
SNI AG is a separate legal unit within the Siemens organization. In the
fiscal year 1993/94, Siemens AG had worldwide sales of more than U.S. $51
billion. Founded in 1847, Siemens AG numbers among the world's largest
electrical and electronics companies.
Founded in 1981, Pyramid develops scalable enterprise servers that deliver
high quality, high performance solutions for mid-range to high-end of the open
systems market. Pyramid provides data center-class support for business
critical environments, complemented by a full suite of professional programs
and support tools that help customers successfully implement scalable
enterprise computing. In the past fiscal year (October 1, 1993 to September 30,
1994), Pyramid had revenues of approximately $218 million. Pyramid has a work
force of approximately 850 employees.
Goldman, Sachs & Co. is acting as dealer manager for the Offer and has acted
as financial advisor to SNI AG.
2
<PAGE>
EXHIBIT 99.(C)(1)
<PAGE>
CONFORMED COPY
================================================================================
AGREEMENT AND PLAN OF MERGER
AMONG
SIEMENS NIXDORF INFORMATIONSSYSTEME AG,
SIEMENS NIXDORF MID-RANGE ACQUISITION CORP.
AND
PYRAMID TECHNOLOGY CORPORATION
DATED AS OF JANUARY 20, 1995
================================================================================
<PAGE>
TABLE OF CONTENTS
PAGE
<TABLE>
<CAPTION>
ARTICLE I
THE OFFER
---------
<S> <C> <C>
SECTION 1.01. The Offer........................................... 1
---------
SECTION 1.02. Company Action...................................... 3
--------------
<CAPTION>
ARTICLE II
THE MERGER
----------
<S> <C> <C>
SECTION 2.01. The Merger.......................................... 5
----------
SECTION 2.02. Effective Time; Closing............................. 5
-----------------------
SECTION 2.03. Effect of the Merger................................ 5
--------------------
SECTION 2.04. Certificate of Incorporation; By-laws............... 5
-------------------------------------
SECTION 2.05. Directors and Officers.............................. 6
----------------------
SECTION 2.06. Conversion of Securities............................ 6
------------------------
SECTION 2.07. .................................................... 6
SECTION 2.08. Dissenting Shares................................... 8
-----------------
SECTION 2.09. Surrender of Shares; Stock Transfer Books........... 8
-----------------------------------------
<CAPTION>
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
---------------------------------------------
<S> <C> <C>
SECTION 3.01. Organization and Qualification; Subsidiaries........ 9
--------------------------------------------
SECTION 3.02. Certificate of Incorporation and By-laws............ 10
----------------------------------------
SECTION 3.03. Capitalization...................................... 10
--------------
SECTION 3.04. Authority Relative to this Agreement................ 11
------------------------------------
SECTION 3.05. No Conflict; Required Filings and Consents.......... 11
------------------------------------------
SECTION 3.06. Compliance.......................................... 12
----------
SECTION 3.07. SEC Filings; Financial Statements................... 13
---------------------------------
SECTION 3.08. Absence of Certain Changes or Events................ 14
------------------------------------
SECTION 3.09. Absence of Litigation............................... 14
---------------------
SECTION 3.10. Employee Benefit Plans.............................. 15
----------------------
SECTION 3.11. Offer Documents; Schedule 14D-9; Proxy Statement.... 17
------------------------------------------------
SECTION 3.12. Real Property and Leases............................ 18
------------------------
SECTION 3.13. Trademarks, Patents and Copyrights.................. 18
----------------------------------
SECTION 3.14. Environmental Matters............................... 19
---------------------
SECTION 3.15. Brokers............................................. 20
-------
SECTION 3.16. Amendment to Rights Agreement....................... 20
-----------------------------
</TABLE>
<PAGE>
ii
PAGE
<TABLE>
<S> <C> <C>
SECTION 3.17. Offer Conditions.................................... 20
----------------
SECTION 3.18. Agreements.......................................... 20
----------
SECTION 3.19. Opinion of Financial Advisor........................ 21
----------------------------
SECTION 3.20. Insurance........................................... 21
---------
<CAPTION>
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER
------------------------------------------------------
<S> <C> <C>
SECTION 4.01. Corporate Organization.............................. 22
----------------------
SECTION 4.02. Authority Relative to this Agreement................ 22
------------------------------------
SECTION 4.03. No Conflict; Required Filings and Consents.......... 22
------------------------------------------
SECTION 4.04. Financing........................................... 23
---------
SECTION 4.05. Offer Documents; Proxy Statement.................... 23
--------------------------------
SECTION 4.06. Brokers............................................. 23
-------
<CAPTION>
ARTICLE V
CONDUCT OF BUSINESS PENDING THE MERGER
--------------------------------------
<S> <C> <C>
SECTION 5.01. Conduct of Business by the Company Pending the
----------------------------------------------
Merger.............................................. 24
------
<CAPTION>
ARTICLE VI
ADDITIONAL AGREEMENTS
---------------------
<S> <C> <C>
SECTION 6.01. Stockholders' Meeting............................... 26
---------------------
SECTION 6.02. Proxy Statement..................................... 26
---------------
SECTION 6.03. Company Board Representation; Section 14(f)......... 27
-------------------------------------------
SECTION 6.04. Access to Information; Confidentiality.............. 28
--------------------------------------
SECTION 6.05. No Solicitation of Transactions..................... 28
-------------------------------
SECTION 6.06. Employee Benefits Matters........................... 29
-------------------------
SECTION 6.07. Directors' and Officers' Indemnification and
--------------------------------------------
Insurance........................................... 29
---------
SECTION 6.08. Notification of Certain Matters..................... 30
-------------------------------
SECTION 6.09. Further Action; Reasonable Best Efforts............. 30
---------------------------------------
SECTION 6.10. Public Announcements................................ 31
--------------------
SECTION 6.11. ISRA................................................ 31
----
SECTION 6.12. Confidentiality Agreement........................... 32
-------------------------
SECTION 6.13. Waiver by the Company of Certain Provisions of the
--------------------------------------------------
August Purchase Agreement..................................... 32
-------------------------
</TABLE>
<PAGE>
iii
PAGE
<TABLE>
<CAPTION>
ARTICLE VII
CONDITIONS TO THE MERGER
------------------------
<S> <C> <C>
SECTION 7.01. Conditions to the Merger............................ 32
------------------------
<CAPTION>
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
---------------------------------
<S> <C> <C>
SECTION 8.01. Termination......................................... 33
-----------
SECTION 8.02. Effect of Termination............................... 34
---------------------
SECTION 8.03. Fees and Expenses................................... 35
-----------------
SECTION 8.04. Amendment........................................... 36
---------
SECTION 8.05. Waiver.............................................. 36
------
<CAPTION>
ARTICLE IX
GENERAL PROVISIONS
------------------
<S> <C> <C>
SECTION 9.01. Non-Survival of Representations, Warranties and
-----------------------------------------------
Agreements................................................... 37
----------
SECTION 9.02. Notices............................................. 37
-------
SECTION 9.03. Certain Definitions................................. 38
-------------------
SECTION 9.04. Severability........................................ 39
------------
SECTION 9.05. Entire Agreement; Assignment........................ 39
----------------------------
SECTION 9.06. Parties in Interest................................. 39
-------------------
SECTION 9.07. Specific Performance................................ 40
--------------------
SECTION 9.08. Governing Law....................................... 40
-------------
SECTION 9.09. Headings............................................ 40
--------
SECTION 9.10. Counterparts........................................ 40
------------
</TABLE>
ANNEX A -- Conditions to the Offer
ANNEX B -- Agreement Respecting the Plans and Other Employee Benefit Matters
<PAGE>
AGREEMENT AND PLAN OF MERGER dated as of January 20, 1995 (this
"Agreement") among SIEMENS NIXDORF INFORMATIONSSYSTEME AG, a corporation
---------
organized under the laws of the Federal Republic of Germany ("Parent"), SIEMENS
------
NIXDORF MID-RANGE ACQUISITION CORP., a Delaware corporation and a wholly owned
subsidiary of Parent ("Purchaser"), and PYRAMID TECHNOLOGY CORPORATION, a
---------
Delaware corporation (the "Company").
-------
WHEREAS, the Boards of Directors of Purchaser and the Company and
the Managing Board of Directors of Parent have each determined that it is in the
best interests of their respective stockholders for Parent, through Purchaser,
to acquire the Company upon the terms and subject to the conditions set forth
herein;
WHEREAS, in furtherance of such acquisition, it is proposed that
Purchaser shall make a cash tender offer (the "Offer") to acquire all the issued
-----
and outstanding shares of common stock, par value $.01 per share, of the Company
("Company Common Stock") (shares of Company Common Stock being hereinafter
--------------------
collectively referred to as the "Shares"), other than any Shares owned by
------
Parent, Purchaser or any of its affiliates or Shares issuable upon the exercise
of the Parent Warrant (as defined hereafter), for $16.00 per Share (such amount,
or any greater amount per Share paid pursuant to the Offer, being hereinafter
referred to as the "Per Share Amount") net to the seller in cash, without
----------------
interest thereon, upon the terms and subject to the conditions of this Agreement
and the Offer;
WHEREAS, the Board of Directors of the Company (the "Board") has
-----
approved the making of the Offer and resolved and agreed to recommend that
holders of Shares tender their Shares pursuant to the Offer; and
WHEREAS, also in furtherance of such acquisition, the Boards of
Directors of Purchaser and the Company and the Managing Board of Directors of
Parent have each approved the merger (the "Merger") of Purchaser with and into
------
the Company in accordance with the General Corporation Law of the State of
Delaware ("Delaware Law") following the consummation of the Offer and upon the
------------
terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, and intending to be legally bound
hereby, Parent, Purchaser and the Company hereby agree as follows:
ARTICLE I
THE OFFER
---------
SECTION 1.01. The Offer. (a) Provided that this Agreement shall
---------
not have been terminated in accordance with Section 8.01 and none of the events
set forth in paragraphs (a) through (i) of Annex A hereto shall have occurred or
be existing, Purchaser shall commence
<PAGE>
2
the Offer in accordance with Rule 14d-2 under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), as promptly as reasonably practicable
------------
after the date hereof, but in no event later than five business days after the
initial public announcement of Purchaser's intention to commence the Offer. The
obligation of Purchaser to accept for payment and pay for Shares tendered
pursuant to the Offer shall be subject only to (i) the condition (the "Minimum
-------
Condition") that there shall have been validly tendered and not withdrawn prior
- ---------
to the expiration of the Offer at least the number of Shares that when added to
the Shares owned by Parent or any of its subsidiaries on the date hereof (other
than Shares issuable upon exercise of the Parent Warrant (as defined in Section
3.03) shall constitute a majority of the then outstanding Shares on a fully
diluted basis (including, without limitation, all Shares issuable upon the
exercise of any options, warrants or rights (other than any Shares issuable upon
the exercise of the Parent Warrant and other than the Rights (as defined in the
Rights Agreement (as defined in Section 3.16))) and (ii) the satisfaction of
each of the other conditions set forth in Annex A hereto. Purchaser expressly
reserves the right to waive any such condition (other than the Minimum
Condition, which may not be waived by Parent or Purchaser without the prior
written consent of the Company), and the right to increase the price per Share
payable in the Offer, and to make any other changes in the terms and conditions
of the Offer; provided, however, that no change may be made which decreases the
-------- -------
price per Share payable in the Offer, reduces the maximum number of Shares to be
purchased in the Offer, imposes conditions to the Offer in addition to those set
forth in Annex A hereto, changes the form of consideration payable in the Offer
or amends any other terms of the Offer in a manner adverse to the Company's
stockholders. The Per Share Amount shall, subject to applicable withholding of
taxes, be net to the seller in cash, without interest thereon, upon the terms
and subject to the conditions of the Offer. Subject to the terms and conditions
of the Offer, Purchaser shall accept for payment and shall pay, as promptly as
practicable after expiration of the Offer, for all Shares validly tendered and
not withdrawn. Unless this Agreement is earlier terminated in accordance with
Section 8.01, the Offer shall remain open until 12:00 p.m., New York City time,
on the 20th business day following the commencement of the Offer (such date and
time being the "Expiration Date," unless Purchaser extends the Offer as
---------------
permitted or required by this Agreement, in which case the "Expiration Date"
---------------
means the latest time and date to which the Offer is extended). The Offer may
not, without the Company's prior written consent, be extended except as
necessary to provide time to satisfy the conditions set forth in Annex A;
provided, that Purchaser may extend (and re-extend) the Offer for up to a total
- --------
of ten business days, if as of the initial Expiration Date of the Offer, there
shall not have been tendered at least 90% of the outstanding Shares so that the
Merger could be effected without a meeting of the Company's stockholders in
accordance with Section 253 of Delaware Law. Purchaser agrees that if all
conditions set forth in Annex A are not satisfied on the initial Expiration Date
of the Offer (other than the Minimum Condition, and other than the conditions
set forth in clauses (ii) or (iii) of the second paragraph of Annex A or the
condition set forth in paragraph (a) of Annex A (which conditions in such
clauses (ii) and (iii) and paragraph (a) are subject to a 120-day extension
requirement as set forth therein)), Purchaser shall extend (and re-extend) the
Offer for up to a maximum of 20 business days to provide time to satisfy such
conditions, unless the
<PAGE>
3
Company shall have breached any representation, warranty, covenant or agreement
set forth in this Agreement, which breach shall result in any conditions set
forth in Annex A not being satisfied (and such breach is not reasonably capable
of being cured and such condition satisfied prior to the expiration of such 20-
business day period).
(b) The Offer shall be made by means of an offer to purchase (the
"Offer to Purchase") containing the terms set forth in this Agreement and the
----------------
conditions set forth in Annex A. As soon as reasonably practicable on the date
of commencement of the Offer, Purchaser shall file with the Securities and
Exchange Commission (the "SEC") a Tender Offer Statement on Schedule 14D-1
---
(together with all amendments and supplements thereto, the "Schedule 14D-1")
--------------
with respect to the Offer. The Schedule 14D-1 shall contain or shall incorporate
by reference the Offer to Purchase and forms of the related letter of
transmittal and any related summary advertisement (the Schedule 14D-1, the Offer
to Purchase and such other documents, together with all supplements and
amendments thereto, being referred to herein collectively as the "Offer
-----
Documents"). The Company and its counsel shall be given an opportunity to review
- ---------
and comment upon the Offer Documents and any amendments or supplements thereto
prior to the filing thereof with the SEC, and Parent and Purchaser shall in good
faith consider any such comments. Parent and Purchaser agree to provide the
Company and its counsel with any comments which Parent, Purchaser or their
counsel may receive from the SEC or the Staff of the SEC with respect to the
Offer Documents promptly after receipt thereof. Parent, Purchaser and the
Company agree to correct promptly any information provided by any of them for
use in the Offer Documents which shall have become false or misleading, and
Parent and Purchaser further agree to take all steps necessary to cause the
Schedule 14D-1 as so corrected to be filed with the SEC and the other Offer
Documents as so corrected to be disseminated to holders of Shares, in each case
as and to the extent required by applicable federal securities laws.
SECTION 1.02. Company Action. (a) The Company hereby approves
--------------
of and consents to the Offer and represents that (i) the Board, at a meeting
duly called and held on January 20, 1995, has (A) determined that this Agreement
and the transactions contemplated hereby, including each of the Offer and the
Merger, are fair to and in the best interests of the holders of Shares, (B)
approved and adopted this Agreement and the transactions, including, without
limitation, the Merger, contemplated hereby and (C) resolved to recommend that
the stockholders of the Company accept the Offer and approve and adopt this
Agreement and the transactions, including, without limitation, the Merger,
contemplated hereby (provided, however, that subject to the provisions of
Section 6.05(b) below, such recommendation may be withdrawn, modified or amended
in connection with a Superior Proposal (as defined in Section 6.05(b) below)),
and (ii) Smith Barney Inc. ("Smith Barney") has delivered to the Board a written
------------
opinion that the consideration to be received by the holders of Shares (other
than Parent, Purchaser or their affiliates) pursuant to each of the Offer and
the Merger is fair to such holders of Shares from a financial point of view.
The Company has been authorized by Smith Barney, subject to prior review by
Smith Barney, to include such fairness opinion (or references thereto)
<PAGE>
4
in the Offer Documents and in the Schedule 14D-9 (as defined in paragraph (b) of
this Section 1.02) and the Proxy Statement (as defined in Section 3.11). The
Company hereby consents to the inclusion in the Offer Documents of the
recommendation of the Board described in the immediately preceding sentence.
The Company has been advised by each of its directors and executive officers
that, as of the date of this Agreement, they intend either to tender all Shares
beneficially owned by them to Purchaser pursuant to the Offer, unless to do so
would subject such person to liability under Section 16(b) of the Exchange Act,
or to vote such Shares in favor of the approval and adoption by the stockholders
of the Company of this Agreement and the transactions contemplated hereby.
(b) As promptly as reasonably practicable on the date of
commencement of the Offer, the Company shall file with the SEC a
Solicitation/Recommendation Statement on Schedule 14D-9 (together with all
amendments and supplements thereto, the "Schedule 14D-9") containing, subject
--------------
only to the fiduciary duties of the Board under applicable law as advised by
independent counsel, the recommendation of the Board described in Section
1.02(a) and shall disseminate the Schedule 14D-9 to the extent required by Rule
14d-9 promulgated under the Exchange Act, and any other applicable federal
securities laws. Purchaser and its counsel shall be given an opportunity to
review and comment upon the Schedule 14D-9 and any amendments or supplements
thereto, prior to the filing thereof with the SEC, and the Company shall in good
faith consider any such comments. The Company, Parent and Purchaser agree to
correct promptly any information provided by any of them for use in the Schedule
14D-9 which shall have become false or misleading, and the Company further
agrees to take all steps necessary to cause the Schedule 14D-9 as so corrected
to be filed with the SEC and disseminated to holders of Shares, in each case as
and to the extent required by applicable federal securities laws.
(c) The Company shall promptly furnish Purchaser with mailing
labels containing the names and addresses of all record holders of Shares and
with security position listings of Shares held in stock depositories, each as of
the most recent date practicable, together with all other available listings and
computer files containing names, addresses and security position listings of
record holders and non-objecting beneficial owners of Shares. The Company shall
furnish Purchaser with such additional information, including, without
limitation, updated listings and computer files of stockholders, mailing labels
and security position listings, and such other assistance as Parent, Purchaser
or their agents may reasonably request. Subject to the requirements of
applicable law, and except for such steps as are necessary to disseminate the
Offer Documents and any other documents necessary to consummate the Offer or the
Merger, Parent and Purchaser shall hold in confidence the information contained
in such labels, listings and files, shall use such information only in
connection with the Offer and the Merger, and, if this Agreement shall be
terminated in accordance with Section 8.01, shall deliver to the Company all
copies of such information then in their possession.
<PAGE>
5
ARTICLE II
THE MERGER
----------
SECTION 2.01. The Merger. Upon the terms and subject to the
----------
conditions set forth in Article VII, and in accordance with Delaware Law, at the
Effective Time (as hereinafter defined) Purchaser shall be merged with and into
the Company. As a result of the Merger, the separate corporate existence of
Purchaser shall cease and the Company shall continue as the surviving
corporation of the Merger (the "Surviving Corporation"). Notwithstanding
---------------------
anything to the contrary contained in this Section 2.01, Parent may elect
instead, at any time prior to the fifth business day immediately preceding the
date on which the Proxy Statement (as defined in Section 3.11) is mailed
initially to the Company's stockholders, to merge the Company with or into
Purchaser or another direct or indirect wholly owned subsidiary of SIEMENS
AKTIENGESELLSCHAFT, a German corporation (the "Ultimate Parent Company"). In
-----------------------
such event, the parties agree to execute an appropriate amendment to this
Agreement in order to reflect the foregoing and to provide, as the case may be,
that Purchaser or such other wholly owned subsidiary of Parent shall be the
Surviving Corporation.
SECTION 2.02. Effective Time; Closing. As promptly as
-----------------------
practicable after the satisfaction or, if permissible, waiver of the conditions
set forth in Article VII, the parties hereto shall cause the Merger to be
consummated by filing this Agreement or a certificate of merger or certificate
of ownership and merger, as applicable (in either case, the "Certificate of
--------------
Merger"), with the Secretary of State of the State of Delaware, in such form as
- ------
is required by, and executed in accordance with the relevant provisions of,
Delaware Law (the date and time of such filing being the "Effective Time").
--------------
Prior to such filing, a closing shall be held at the offices of Shearman &
Sterling, 599 Lexington Avenue, New York, New York, 10022, or such other place
as the parties shall agree, for the purpose of confirming the satisfaction or
waiver, as the case may be, of the conditions set forth in Article VII.
SECTION 2.03. Effect of the Merger. At the Effective Time, the
--------------------
effect of the Merger shall be as provided in the applicable provisions of
Delaware Law. Without limiting the generality of the foregoing, and subject
thereto, at the Effective Time all the property, rights, privileges, powers and
franchises of the Company and Purchaser shall vest in the Surviving Corporation,
and all debts, liabilities, obligations, restrictions, disabilities and duties
of the Company and Purchaser shall become the debts, liabilities, obligations,
restrictions, disabilities and duties of the Surviving Corporation.
SECTION 2.04. Certificate of Incorporation; By-laws. (a) Unless
-------------------------------------
otherwise determined by Parent prior to the Effective Time, at the Effective
Time the Certificate of Incorporation of Purchaser, as in effect immediately
prior to the Effective Time, shall be the Certificate of Incorporation of the
Surviving Corporation until thereafter amended as provided by law and such
Certificate of Incorporation.
<PAGE>
6
(b) Unless otherwise determined by Parent prior to the Effective
Time, the By-laws of Purchaser, as in effect immediately prior to the Effective
Time, shall be the By-laws of the Surviving Corporation until thereafter amended
as provided by law, the Certificate of Incorporation of the Surviving
Corporation and such By-laws.
SECTION 2.05. Directors and Officers. The directors of Purchaser
----------------------
immediately prior to the Effective Time shall be the initial directors of the
Surviving Corporation, each to hold office in accordance with the Certificate of
Incorporation and By-laws of the Surviving Corporation, and the officers of the
Company immediately prior to the Effective Time shall be the initial officers of
the Surviving Corporation, in each case until their respective successors are
duly elected or appointed and qualified.
SECTION 2.06. Conversion of Securities. At the Effective Time,
------------------------
by virtue of the Merger and without any action on the part of Purchaser, the
Company or the holders of any of the following securities:
(a) Each Share issued and outstanding immediately prior
to the Effective Time (other than any Shares to be cancelled pursuant to
Section 2.06(b) and any Dissenting Shares (as hereinafter defined)) shall be
automatically converted into, and exchanged for, the right to receive an
amount equal to the Per Share Amount in cash (the "Merger Consideration")
--------------------
payable, without interest, to the holder of such Share, upon surrender, in the
manner provided in Section 2.09, less any required withholding tax, of the
certificate that formerly evidenced such Share;
(b) Each Share held in the treasury of the Company and
each Share owned by Purchaser, Parent or any direct or indirect wholly owned
subsidiary of Parent or of the Company immediately prior to the Effective Time
shall be cancelled without any conversion thereof and no payment or
distribution shall be made with respect thereto; and
(c) Each share of Common Stock, par value $.01 per
share, of Purchaser issued and outstanding immediately prior to the Effective
Time shall be converted into and exchanged for one validly issued, fully paid
and nonassessable share of common stock, par value $.01 per share, of the
Surviving Corporation.
SECTION 2.07. Employee Stock Options. (a) Executive Officers'
---------------------- -------------------
Nonstatutory Stock Option Plan, Share Option Scheme for U.K. Executives and
- ---------------------------------------------------------------------------
Amended and Restated Directors' Option Plan. Each outstanding employee or
- -------------------------------------------
director stock option to purchase Shares (a "non-1982 Plan Option") granted
under any of the Company's Executive Officers Nonstatutory Stock Option Plan,
Amended and Restated Directors' Option Plan and Share Option Scheme for U.K.
Executives (collectively, the "non-1982 Stock Option Plans"), shall be made
exercisable on the date that this Agreement is signed, regardless of whether
they would
<PAGE>
7
otherwise be exercisable under the terms of such non-1982 Stock Option Plans.
Any non-1982 Plan Option not exercised by the Effective Time shall be cancelled
by the Company and no payment shall be made therefor.
(b) Amended 1982 Incentive Stock Option Plan. Each outstanding
----------------------------------------
employee or director stock option to purchase Shares (a "1982 Plan Option")
granted under the Company's Amended 1982 Incentive Stock Option Plan shall be
made exercisable on the date that Purchaser accepts for payment of Shares
tendered pursuant to the Offer, regardless of whether such stock options would
otherwise be exercisable under the terms of the Amended 1982 Incentive Stock
Option Plan. Moreover, on such date, each 1982 Plan Option, other than any 1982
Plan Option that was granted to any "officer" (as that term is defined in Rule
16a-1(f) promulgated by the SEC) of the Company (a "Section 16 Insider Option"),
shall be cancelled, without further action required on the part of the holder of
such option, in exchange for the right to receive, as soon as practicable
following Purchaser's acceptance for payment of Shares tendered pursuant to the
Offer, a cash payment by the Purchaser to the holder in an amount equal to the
excess, if any, of the Per Share Amount over the exercise price per share of the
1982 Plan Option minus applicable withholding. Each outstanding Section 16
Insider Option shall be treated in one of two ways. First, with respect to
Section 16 Insider Options that were granted at any time before the date that is
six months prior to the Effective Time (the "Old Insider Options"), such options
must be exercised immediately following the acceleration of vesting provided for
in the first sentence of this subsection; to the extent that such Old Insider
Options are not so exercised, they shall be cancelled by the Company and no
payment shall be made therefor. Second, with respect to Section 16 Insider
Options that were granted at any time on or after the date that is six months
prior to the Effective Time (the "Recent Insider Options"), such options shall
remain outstanding in accordance with their terms (amended as provided below)
and shall not be affected in any way by the consummation of the Merger, except
for their becoming exercisable in full pursuant to the first sentence of this
subsection. As soon as practicable following the Effective Time, but at least
six months after the grant date of any Recent Insider Option, Parent, in its
capacity as sole stockholder of the Surviving Corporation, shall approve
amendments to the Amended 1982 Incentive Stock Option Plan to provide (a) that
upon exercise of a Recent Insider Option, the holder shall receive an amount in
cash per Share equal to the excess, if any, of the Per Share Amount over the
exercise price per share of the Recent Insider Option, minus applicable
withholding, and (b) that each Recent Insider Option that has not been exercised
as of July 31, 1995 shall be cancelled by the Surviving Corporation on such date
and no payment shall be made therefor.
(c) 1987 Employee Stock Purchase Plan. With respect to the
---------------------------------
Company's 1987 Employee Stock Purchase Plan (the "Purchase Plan"), the offering
period currently in progress shall be shortened by setting a new exercise date
which shall be the date immediately preceding the Effective Time (the "New
Exercise Date"). The Purchase Plan shall terminate immediately following the
purchase of Shares on the New Exercise Date.
<PAGE>
8
SECTION 2.08. Dissenting Shares. (a) Notwithstanding any
-----------------
provision of this Agreement to the contrary, Shares that are outstanding
immediately prior to the Effective Time and which are held by stockholders who
shall have not voted in favor of the Merger or consented thereto in writing and
who shall have demanded properly in writing appraisal for such Shares in
accordance with Section 262 of Delaware Law (collectively, the "Dissenting
----------
Shares") shall not be converted into or represent the right to receive the
- ------
Merger Consideration. Such stockholders shall be entitled to receive payment of
the appraised value of such Shares held by them in accordance with the
provisions of such Section 262, except that all Dissenting Shares held by
stockholders who shall have failed to perfect or who effectively shall have
withdrawn or lost their rights to appraisal of such Shares under such Section
262 shall thereupon be deemed to have been converted into and to have become
exchangeable for, as of the Effective Time, the right to receive the Merger
Consideration, without any interest thereon, upon surrender, in the manner
provided in Section 2.09 of this Agreement, of the certificate or certificates
that formerly evidenced such Shares.
(b) The Company shall give Parent (i) prompt notice of any demands
for appraisal received by the Company, withdrawals of such demands, and any
other instruments served pursuant to Delaware Law and received by the Company
and (ii) the opportunity to direct all negotiations and proceedings with respect
to demands for appraisal under Delaware Law. The Company shall not, except with
the prior written consent of Parent, make any payment with respect to any
demands for appraisal or offer to settle or settle any such demands.
SECTION 2.09. Surrender of Shares; Stock Transfer Books. (a)
-----------------------------------------
Prior to the Effective Time, Purchaser shall designate a bank or trust company
reasonably acceptable to the Company to act as agent (the "Paying Agent") for
------------
the holders of Shares in connection with the Merger to receive the funds to
which holders of Shares shall become entitled pursuant to Section 2.06(a). At
the Effective Time, Purchaser or Parent shall provide the Paying Agent with
sufficient cash to allow the Merger Consideration to be paid by the Paying Agent
for each Share then entitled to receive the Merger Consideration. Such funds
shall be invested by the Paying Agent as directed by the Surviving Corporation.
(b) Promptly after the Effective Time, the Surviving Corporation
shall cause to be mailed to each person who was, at the Effective Time, a holder
of record of Shares entitled to receive the Merger Consideration pursuant to
Section 2.06(a) a form of letter of transmittal (which shall specify that
delivery shall be effected, and risk of loss and title to the certificates
evidencing such Shares (the "Certificates") shall pass, only upon proper
------------
delivery of the Certificates to the Paying Agent) and instructions for use in
effecting the surrender of the Certificates pursuant to such letter of
transmittal. Upon surrender to the Paying Agent of a Certificate, together with
such letter of transmittal, duly completed and validly executed in accordance
with the instructions thereto, and such other documents as may be required
pursuant to such instructions, the holder of such Certificate shall be entitled
to receive in exchange therefor the Merger Consideration for each Share formerly
evidenced by such Certificate, and
<PAGE>
9
such Certificate shall then be cancelled. No interest shall accrue or be paid
on the Merger Consideration payable upon the surrender of any Certificate for
the benefit of the holder of such Certificate. If payment of the Merger
Consideration is to be made to a person other than the person in whose name the
surrendered Certificate is registered on the stock transfer books of the
Company, it shall be a condition of payment that the Certificate so surrendered
shall be endorsed properly or otherwise be in proper form for transfer and that
the person requesting such payment shall have paid all transfer and other taxes
required by reason of the payment of the Merger Consideration to a person other
than the registered holder of the Certificate surrendered or shall have
established to the satisfaction of the Surviving Corporation that such taxes
either have been paid or are not applicable.
(c) At any time following the third month after the Effective Time,
the Surviving Corporation shall be entitled to require the Paying Agent to
deliver to it any funds which had been made available to the Paying Agent and
not disbursed to holders of Shares (including, without limitation, all interest
and other income received by the Paying Agent in respect of all funds made
available to it), and thereafter such holders shall be entitled to look to the
Surviving Corporation (subject to abandoned property, escheat and other similar
laws) only as general creditors thereof with respect to any Merger Consideration
that may be payable upon due surrender of the Certificates held by them.
Notwithstanding the foregoing, neither the Surviving Corporation nor the Paying
Agent shall be liable to any holder of a Share for any Merger Consideration
delivered in respect of such Share to a public official pursuant to any
abandoned property, escheat or other similar law.
(d) At the close of business on the day of the Effective Time, the
stock transfer books of the Company shall be closed and thereafter there shall
be no further registration of transfers of Shares on the records of the Company.
From and after the Effective Time, the holders of Shares outstanding immediately
prior to the Effective Time shall cease to have any rights with respect to such
Shares except as otherwise provided herein or by applicable law.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
---------------------------------------------
The Company hereby represents and warrants to Parent and Purchaser
that, except as described in the Disclosure Schedule furnished by the Company to
Parent prior to the date of this Agreement (the "Disclosure Schedule") or as set
-------------------
forth in, or incorporated by reference into, the SEC Reports (as defined
hereafter):
SECTION 3.01. Organization and Qualification; Subsidiaries. (a)
--------------------------------------------
Each of the Company and each subsidiary of the Company (a "Subsidiary") is a
----------
corporation duly
<PAGE>
10
incorporated, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has the requisite power and authority and
all necessary governmental approvals to own, lease and operate its properties
and to carry on its business as it is now being conducted, except where the
failure to be so incorporated, existing or in good standing or to have such
power, authority and governmental approvals would not, individually or in the
aggregate, have a Material Adverse Effect (as defined below). The Company and
each Subsidiary is duly qualified or licensed as a foreign corporation to do
business, and is in good standing, in each jurisdiction where the character of
the properties owned, leased or operated by it or the nature of its business
makes such qualification or licensing necessary, except for such failures to be
so qualified or licensed and in good standing that would not, individually or in
the aggregate, have a Material Adverse Effect. When used in connection with the
Company or any Subsidiary, the term "Material Adverse Effect" means any change
-----------------------
or effect that, when taken together with all other adverse changes and effects
that are within the scope of the representations and warranties made by the
Company in this Agreement and which are not individually or in the aggregate
deemed to have a Material Adverse Effect, is or is reasonably likely to be
materially adverse to the business, operations, properties, assets or
liabilities (including, without limitation, contingent liabilities) of the
Company and the Subsidiaries taken as a whole. A true and complete list of all
the Subsidiaries, together with the jurisdiction of incorporation of each
Subsidiary and the percentage of the outstanding capital stock of each
Subsidiary owned by the Company and each other Subsidiary, is set forth in
Section 3.01 of the Disclosure Schedule previously delivered by the Company to
Parent. Except as disclosed in such Section 3.01, the Company does not directly
or indirectly own any equity or similar interest in, or any interest convertible
into or exchangeable or exercisable for any equity or similar interest in, any
corporation, partnership, joint venture or other business association or entity.
(b) Each Subsidiary that is material to the business, operations,
properties, assets or liabilities of the Company and the Subsidiaries taken as a
whole is so identified in Section 3.01 of the Disclosure Schedule and is
referred to herein as a "Material Subsidiary".
-------------------
SECTION 3.02. Certificate of Incorporation and By-laws. The Company
----------------------------------------
has heretofore furnished to Parent a complete and correct copy of the
Certificate of Incorporation and the By-laws or equivalent organizational
documents, each as amended to date, of the Company and each Subsidiary. Such
Certificates of Incorporation, By-laws and equivalent organizational documents
are in full force and effect. Neither the Company nor any Subsidiary is in
violation of any provision of its Certificate of Incorporation, By-laws or
equivalent organizational documents.
SECTION 3.03. Capitalization. The authorized capital stock of the
--------------
Company consists of 30,000,000 Shares. As of January 18, 1995, (i) 15,628,591
Shares are issued and outstanding, all of which are validly issued, fully paid
and nonassessable, (ii) no Shares are held in the treasury of the Company, (iii)
no Shares are held by the Subsidiaries, (iv) 3,449,923 Shares are reserved for
future issuance pursuant to outstanding employee stock options or stock
<PAGE>
11
incentive rights granted pursuant to the Company's Stock Option and Purchase
Plans and (v) 405,034 Shares are reserved for future issuance pursuant to future
grants of employee stock options or stock incentive rights pursuant to the
Company's Stock Option and Purchase Plans and (vi) 1,330,000 Shares are reserved
for future issuance pursuant to the warrant (the "Parent Warrant") purchased by
--------------
Parent pursuant to the Common Stock and Warrant Purchase Agreement dated as of
August 21, 1994, between Highnoon and Parent (the "August Purchase Agreement").
-------------------------
Except as set forth in this Section 3.03, and except pursuant to the Rights
Agreement (as defined in Section 3.16) and the August Purchase Agreement, there
are no options, warrants or other rights, agreements, arrangements or
commitments of any character relating to the issued or unissued capital stock of
the Company or any Subsidiary or obligating the Company or any Subsidiary to
issue or sell any shares of capital stock of, or other equity interests in, the
Company or any Subsidiary. All Shares subject to issuance as aforesaid, upon
issuance on the terms and conditions specified in the instruments pursuant to
which they are issuable, will be duly authorized, validly issued, fully paid and
nonassessable. There are no outstanding contractual obligations of the Company
or any Subsidiary to repurchase, redeem or otherwise acquire any Shares or any
capital stock of any Subsidiary or to provide funds to, or make any investment
(in the form of a loan, capital contribution or otherwise) in, any Subsidiary or
any other person. Each outstanding share of capital stock of each Subsidiary is
duly authorized, validly issued, fully paid and nonassessable and each such
share owned by the Company or another Subsidiary is free and clear of all
security interests, liens, claims, pledges, options, rights of first refusal,
agreements, limitations on the Company's or such other Subsidiary's voting
rights, charges and other encumbrances of any nature whatsoever.
SECTION 3.04. Authority Relative to this Agreement. The Company has
------------------------------------
all necessary power and authority to execute and deliver this Agreement, to
perform its obligations hereunder and to consummate the transactions, including,
without limitation, the Merger, contemplated hereby (the "Transactions"). The
------------
execution and delivery of this Agreement by the Company and the consummation by
the Company of the Transactions have been duly and validly authorized by all
necessary corporate action and no other corporate proceedings on the part of the
Company are necessary to authorize this Agreement or to consummate the
Transactions (other than, with respect to the Merger, the approval and adoption
of this Agreement by the holders of a majority of the then outstanding Shares if
and to the extent required by applicable law, and the filing and recordation of
appropriate merger documents as required by Delaware Law). This Agreement has
been duly and validly executed and delivered by the Company and, assuming the
due authorization, execution and delivery by Parent and Purchaser, constitutes a
legal, valid and binding obligation of the Company enforceable against the
Company in accordance with its terms. The restrictions on business combinations
contained in Section 203 of Delaware Law have been satisfied with respect to the
Transactions.
SECTION 3.05. No Conflict; Required Filings and Consents. (a) The
------------------------------------------
execution and delivery of this Agreement by the Company do not, and the
performance of this Agreement by the Company will not: (i) conflict with or
violate the Certificate of Incorporation or By-laws
<PAGE>
12
or equivalent organizational documents of the Company or any Subsidiary, (ii)
conflict with or violate any law, rule, regulation, order, judgment or decree
applicable to the Company or any Subsidiary or by which any property or asset of
the Company or any Subsidiary is bound or affected, or (iii) result in any
breach of or constitute a default (or an event which with notice or lapse of
time or both would become a default) under, or give to others any right of
termination, amendment, acceleration or cancellation of, or result in the
creation of a lien or other encumbrance on any property or asset of the Company
or any Subsidiary pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation,
except for any such conflicts, violations, breaches, defaults or other
occurrences as to which requisite waivers have been obtained or which would not,
individually or in the aggregate, have a Material Adverse Effect.
(b) The execution and delivery of this Agreement by the Company do
not, and the performance of this Agreement by the Company will not, require any
consent, approval, authorization or permit of, or filing with or notification
to, any governmental or regulatory authority, domestic or foreign, except (i)
for applicable requirements, if any, of the Exchange Act, state securities or
"blue sky" laws ("Blue Sky Laws") and state takeover laws, the pre-merger
-------------
notification requirements of the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, and the rules and regulations thereunder (the "HSR Act"), the
-------
requirements of Section 721 of Title VII of the Defense Production Act of 1950,
as amended, and the regulations promulgated thereunder (the "Exon-Florio
-----------
Provision"), the pre-Merger notification requirements of the Bundeskartellamt,
- ---------
the post-closing notification requirements of the Investment Canada Act of 1985
(the "ICA"), the requirements of the Industrial Sites Recovery Act ("ISRA"),
--- ----
applicable pre-merger notification requirements, if any, under the laws of any
other country and filing and recordation of appropriate merger documents as
required by Delaware Law and (ii) where failure to obtain such consents,
approvals, authorizations or permits, or to make such filings or notifications,
would not prevent or delay consummation of the Offer or the Merger, or otherwise
prevent the Company from performing its obligations under this Agreement, and
would not, individually or in the aggregate, have a Material Adverse Effect.
SECTION 3.06. Compliance. Neither the Company nor any Subsidiary is
----------
in conflict with, or in default or violation of, (i) any law, rule, regulation,
order, judgment or decree applicable to the Company or any Subsidiary or by
which any property or asset of the Company or any Subsidiary is bound or
affected, or (ii) any note, bond, mortgage, indenture, contract, agreement,
lease, license, permit, franchise or other instrument or obligation to which the
Company or any Subsidiary is a party or by which the Company or any Subsidiary
or any property or asset of the Company or any Subsidiary is bound or affected,
except for any such conflicts, defaults or violations that would not,
individually or in the aggregate, have a Material Adverse Effect.
<PAGE>
13
SECTION 3.07. SEC Filings; Financial Statements. (a) The Company
---------------------------------
has filed all forms, reports and documents required to be filed by it with the
SEC since September 30, 1992, and has heretofore made available to Parent, in
the form filed with the SEC, (i) its Annual Reports on Form 10-K for the fiscal
years ended September 30, 1992, 1993, and 1994, respectively, (ii) all proxy
statements (other than preliminary proxy materials) relating to the Company's
meetings of stockholders (whether annual or special) held since January 1, 1992
and (iii) all other forms, reports and other registration statements filed by
the Company with the SEC since September 30, 1992 (other than Quarterly Reports
on Form 10-Q filed by the Company with the SEC prior to September 30, 1994 (the
forms, reports and other documents referred to in clauses (i), (ii) and (iii)
above being referred to herein, collectively, as the "SEC Reports"). The SEC
-----------
Reports (i) were prepared in accordance with the requirements of the Securities
Act of 1933, as amended (the "Securities Act"), and the Exchange Act, as the
--------------
case may be, and the rules and regulations thereunder and (ii) did not at the
time they were filed contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to
make the statements made therein, in the light of the circumstances under which
they were made, not misleading. No Subsidiary is required to file any form,
report or other document with the SEC.
(b) Each of the consolidated financial statements (including, in each
case, any notes thereto) contained in the SEC Reports was prepared in accordance
with generally accepted accounting principles applied on a consistent basis
("GAAP") throughout the periods indicated (except for the notes and as may be
----
indicated in the notes thereto) and each fairly presented the consolidated
financial position, results of operations and cash flows of the Company and the
consolidated Subsidiaries as at the respective dates thereof and for the
respective periods indicated therein (subject, in the case of unaudited
statements, to normal and recurring year-end adjustments which were not and are
not expected, individually or in the aggregate, to be material in amount).
(c) Set forth on Section 3.07(c) of the Disclosure Schedule is the
earnings release issued by the Company on January 18, 1995, which, in light of
the SEC Reports, does not contain as of the date of this Agreement any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, misleading.
(d) Except as and to the extent set forth on the consolidated balance
sheet of the Company and the consolidated Subsidiaries as at September 30, 1994,
including the notes thereto (the "1994 Balance Sheet"), neither the Company nor
------------------
any Subsidiary has any liability or obligation of any nature (whether accrued,
absolute, contingent or otherwise) which would be required to be reflected on a
balance sheet, or in the notes thereto, prepared in accordance with GAAP, except
for liabilities and obligations (i) disclosed in the SEC Reports, (ii)
identified in Section 3.09(d) of the Disclosure Schedule or (iii) incurred in
the ordinary course of business
<PAGE>
14
consistent with past practice since September 30, 1994 which would not,
individually or in the aggregate, have a Material Adverse Effect.
(e) The Company has heretofore furnished to Parent complete and
correct copies of all amendments and modifications that have not been filed by
the Company with the SEC to all agreements, documents and other instruments that
previously had been filed by the Company with the SEC and are currently in
effect.
SECTION 3.08. Absence of Certain Changes or Events. Since September
------------------------------------
30, 1994, except as contemplated by this Agreement or disclosed in any SEC
Report filed since September 30, 1994 and prior to the date of this Agreement,
the Company and the Subsidiaries have conducted their businesses only in the
ordinary course and in a manner consistent with past practice and, since
September 30, 1994, there has not been (i) any change in the business,
operations, properties, condition (financial or otherwise), assets or
liabilities (including, without limitation, contingent liabilities) or prospects
of the Company or any Subsidiary having, individually or in the aggregate, a
Material Adverse Effect, (ii) any damage, destruction or loss (whether or not
covered by insurance) with respect to any property or asset of the Company or
any Subsidiary and having, individually or in the aggregate, a Material Adverse
Effect, (iii) any change by the Company in its accounting methods, principles or
practices, (iv) any revaluation by the Company of any asset (including, without
limitation, any writing down of the value of inventory or writing off of notes
or accounts receivable), other than in the ordinary course of business
consistent with past practice, (v) any failure by the Company to revalue any
asset in accordance with GAAP, (vi) any entry by the Company or any Subsidiary
into any commitment or transaction material to the Company and the Subsidiaries
taken as a whole, (vii) any declaration, setting aside or payment of any
dividend or distribution in respect of any capital stock of the Company or
redemption, purchase or other acquisition of any of its securities or (viii) any
increase in or establishment of any bonus, insurance, severance, deferred
compensation, pension, retirement, profit sharing, stock option (including,
without limitation, the granting of stock options, stock appreciation rights,
performance awards, or restricted stock awards), stock purchase or other
employee benefit plan, or any other increase in the compensation payable or to
become payable to any officers or key employees of the Company or any
Subsidiary, except in the ordinary course of business consistent with past
practice.
SECTION 3.09. Absence of Litigation. Except as disclosed in the SEC
---------------------
Reports filed prior to the date of this Agreement, there is no claim, action,
proceeding or investigation pending or, to the best knowledge of the Company,
threatened against the Company or any Subsidiary, or any property or asset of
the Company or any Subsidiary, before any court, arbitrator or administrative,
governmental or regulatory authority or body, domestic or foreign, which (i)
individually or in the aggregate, is reasonably likely to have a Material
Adverse Effect or (ii) seeks to delay or prevent the consummation of any
Transaction. As of the date hereof, neither the Company nor any Subsidiary nor
any property or asset of the Company or any
<PAGE>
15
Subsidiary is subject to any order, writ, judgment, injunction, decree,
determination or award having, individually or in the aggregate, a Material
Adverse Effect.
SECTION 3.10. Employee Benefit Plans. (a) Section 3.10 of the
----------------------
Disclosure Schedule contains a true and complete list of (i) all employee
benefit plans (within the meaning of Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA")) and all bonus, stock option,
-----
stock purchase, restricted stock, incentive, deferred compensation, retiree
medical or life insurance, supplemental retirement, severance or other benefit
plans, programs or arrangements, and all employment, termination, severance or
other similar contracts or agreements to which the Company or any Subsidiary is
a party, with respect to which the Company or any Subsidiary has any obligation
or which are maintained, contributed to or sponsored by the Company or any
Subsidiary for the benefit of any current or former employee, officer or
director of the Company or any Subsidiary and (ii) each employee benefit plan
for which the Company or any Subsidiary could incur liability under Section 4069
of ERISA, in the event such plan were terminated, or under Section 4212(c) of
ERISA, or in respect of which the Company or any Subsidiary remains secondarily
liable under Section 4204 of ERISA (collectively, the "Plans"). Each Plan is in
-----
writing or, if not, a written description thereof is set forth in Section 3.10
of the Disclosure Schedule, and the Company has made available to Parent a true
and complete copy of each Plan and a true and complete copy of each material
document prepared in connection with each such Plan, including, without
limitation, (i) a copy of each trust or other funding arrangement, (ii) each
summary plan description and summary of material modifications, (iii) the most
recently filed Internal Revenue Service ("IRS") Form 5500 and (iv) the most
---
recently received IRS determination letter for each such Plan. Except in the
ordinary course of business, neither the Company nor any Subsidiary has any
express or implied commitment (i) to create, incur liability with respect to or
cause to exist any other employee benefit plan, program or arrangement, (ii) to
enter into any contract or agreement to provide compensation or benefits to any
individual or (iii) to modify, change or terminate any Plan, other than with
respect to a modification, change or termination required by ERISA or the
Internal Revenue Code of 1986, as amended (the "Code").
----
(b) Other than as specifically disclosed in Section 3.10 of the
Disclosure Schedule, none of the Plans maintained by the Company are subject to
Title IV of ERISA, and neither the Company nor any other entity that is or was
under common control with the Company (within the meaning of (S)(S) 414(b) and
(c) of the Code) has ever maintained a plan subject to Title IV of ERISA.
Except as specifically disclosed in Section 3.10 of the Disclosure Schedule,
none of the Plans (i) provides for the payment of separation, severance,
termination or similar-type benefits to any person, (ii) obligates the Company
or any Subsidiary to pay separation, severance, termination or other benefits as
a result of any Transaction or (iii) obligates the Company or any Subsidiary to
make any payment or provide any benefit that could be subject to a tax under
Section 4999 of the Code. None of the Plans provides for or promises retiree
medical, disability or life insurance benefits to any current or former
employee, officer or director of the Company or any Subsidiary.
<PAGE>
16
(c) Each Plan which is intended to be qualified under Section
401(a) of the Code has received a favorable determination letter from the IRS
that such Plan is so qualified. To the best of the Company's knowledge, no fact
or event has occurred since the date of any such determination letter from the
IRS that could adversely affect the qualified status of any such Plan or the
exempt status of any such trust. Each trust maintained or contributed to by the
Company or any Subsidiary which is intended to be qualified as a voluntary
employees' beneficiary association exempt from federal income taxation under
Sections 501(a) and 501(c)(9) of the Code has received a favorable determination
letter from the IRS that it is so qualified and so exempt, and no fact or event
has occurred since the date of such determination by the IRS that could
adversely affect such qualified or exempt status.
(d) To the best of the Company's knowledge, there has been no
prohibited transaction (within the meaning of Section 406 of ERISA or Section
4975 of the Code) with respect to any Plan. Neither the Company nor any
Subsidiary is currently liable or has previously incurred any material liability
for any tax or penalty arising under Section 4971, 4972, 4979, 4980 or 4980B of
the Code or Section 502(c) of ERISA, and no fact or event exists which could
give rise to any such liability. No complete or partial termination has occurred
within the five years preceding the date hereof with respect to any Plan that is
an employee pension benefit plan as defined in Section 3(2) of ERISA.
(e) Each Plan is now and has been operated in all respects in
accordance with the requirements of all applicable laws, including, without
limitation, ERISA and the Code, and the Company and each Subsidiary have
performed all obligations required to be performed by them under, are not in any
respect in default under or in violation of, and have no knowledge of any
default or violation by any party to, any Plan, except for such failures of
compliance or performance, defaults and violations which do not individually, or
in the aggregate, have a Material Adverse Effect. All contributions, premiums or
payments required to be made with respect to any Plan are fully deductible for
income tax purposes and no such deduction previously claimed has been challenged
by any government entity. The 1994 Balance Sheet reflects an accrual of all
amounts of employer contributions and premiums accrued but unpaid with respect
to the Plans.
(f) The Company and the Subsidiaries have not incurred any
liability under, and have complied in all respects with, the Worker Adjustment
Retraining Notification Act and the regulations promulgated thereunder ("WARN")
----
and do not reasonably expect to incur any such liability as a result of actions
taken or not taken prior to the Effective Time. Section 3.10(f) of the
Disclosure Schedule lists (i) all the employees terminated or laid off by the
Company or any Subsidiary during the 90 days prior to the date hereof and (ii)
all the employees of the Company or any Subsidiary who have experienced a
reduction in hours of work of more than 50% (other than voluntary reductions in
hours per week) during any month during the 90 days prior to the date hereof and
describes all notices given by the Company and the Subsidiaries in connection
with WARN. The Company will, by written notice to Parent and
<PAGE>
17
Purchaser, update Section 3.10(f) of the Disclosure Schedule to include any such
terminations, layoffs and reductions in hours from the date hereof through the
Effective Time and will provide Parent and Purchaser with any related
information which they may reasonably request.
(g) In addition to the foregoing, with respect to each Plan that
is not subject to United States law (a "Foreign Benefit Plan"):
--------------------
(i) All employer and employee contributions to each Foreign
Benefit Plan required by law or by the terms of such Foreign Benefit Plan
have been made, or, if applicable, accrued in accordance with normal
accounting practices;
(ii) The fair market value of the assets of each funded
Foreign Benefit Plan, the liability of each insurer for any Foreign Benefit
Plan funded through insurance or the book reserve established for any
Foreign Benefit Plan, together with any accrued contributions, is
sufficient to procure or provide for the benefits determined on any ongoing
basis (actual or contingent) accrued to the Effective Time with respect to
all current and former participants under such Foreign Benefit Plan
according to the actuarial assumptions and valuations most recently used to
determine employer contributions to such Foreign Benefit Plan, and no
transaction contemplated by this Agreement shall cause such assets or
insurance obligations to be less than such benefit obligations, except
where any such shortfall would not have a Material Adverse Effect; and
(iii) Each Foreign Benefit Plan required to be registered has
been registered and has been maintained in good standing with applicable
regulatory authorities. Each Foreign Benefit Plan is now and always has
been operated in full compliance with all applicable non-United States
laws, except for such failure of compliance as does not, individually or in
the aggregate, have a Material Adverse Effect.
SECTION 3.11. Offer Documents; Schedule 14D-9; Proxy Statement.
------------------------------------------------
Neither the Schedule 14D-9 nor any information supplied by the Company for
inclusion in the Offer Documents shall, at the respective times the Schedule
14D-9, the Offer Documents or any amendments or supplements thereto are filed
with the SEC or are first published, sent or given to stockholders of the
Company, as the case may be, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements made therein, in the light of the circumstances
under which they are made, not misleading. Neither the proxy statement to be
sent to the stockholders of the Company in connection with the Stockholders'
Meeting (as hereinafter defined) or the information statement to be sent to such
stockholders, as appropriate (such proxy statement or information statement, as
amended or supplemented, being referred to herein as the "Proxy Statement"),
---------------
shall, at the date the Proxy Statement (or any amendment or supplement thereto)
is first mailed to stockholders of the Company, at the time of the Stockholders'
Meeting and at the Effective
<PAGE>
18
Time, be false or misleading with respect to any material fact, or omit to state
any material fact required to be stated therein or necessary in order to make
the statements made therein, in the light of the circumstances under which they
are made, not misleading or necessary to correct any statement in any earlier
communication with respect to the solicitation of proxies for the Stockholders'
Meeting which shall have become false or misleading. The Schedule 14D-9 and the
Proxy Statement shall comply in all material respects as to form with the
requirements of applicable federal securities laws, including the Exchange Act
and the rules and regulations thereunder.
SECTION 3.12. Real Property and Leases. (a) Neither the
------------------------
Company nor any Subsidiary owns any real property.
(b) Section 3.12(b)(i) of the Disclosure Schedule lists each
parcel of real property leased by the Company or any Subsidiary requiring annual
rental payments exceeding $250,000 (the "Leased Real Property"). With respect to
--------------------
any Leased Real Property, there exists no material default by the Company or any
Subsidiary or, to the knowledge of the Company, by any other party under any
lease relating thereto. Except as disclosed in Section 3.12(b)(ii) of the
Disclosure Schedule, neither the Company nor any Subsidiary has leased or
subleased any of the Leased Real Property to any other person.
SECTION 3.13. Trademarks, Patents and Copyrights. Except as set
----------------------------------
forth on Schedule 3.13 to the Disclosure Schedule:
(a) each of the Company and the Subsidiaries owns, possesses, and
has the right to use, has the right to bring actions for the infringement of,
or, where necessary, has made timely and proper application for, and diligently
protected and enforced its rights in all Intellectual Property Rights (as
hereinafter defined) owned by the Company or any Subsidiary, or used in,
contemplated for use in, or necessary or required for the conduct of its
business as currently conducted;
(b) no royalties, honorariums or fees in excess of $50,000 per
annum are payable by the Company or its Subsidiaries to other persons by reason
of the ownership or use of the Intellectual Property Rights;
(c) to the best of the Company's knowledge, no product or service
that is designed, manufactured, marketed, performed or sold by the Company or
the Subsidiaries violates any license or infringes any Intellectual Property
Rights of another, nor is there any anticipated or pending or written threat of
a claim or litigation against the Company or its Subsidiaries (nor to the
knowledge of the Company does there exist any basis therefor) claiming
infringement or violation of or contesting the validity of, or right to use, any
Intellectual Property Rights; and
<PAGE>
19
(d) none of the Company or the Subsidiaries has received notice
that any use or contemplated use of any Intellectual Property Rights, or that
the operation of or proposed operation of the Company's or the Subsidiaries'
businesses, conflicts or will conflict with the rights of others; and
(e) the Company and Subsidiaries have not granted any exclusive
rights in the Intellectual Property Rights to any third party, including to
develop, manufacture, use, market or service the Company's current products or
Intellectual Property Rights.
As used herein, the term "Intellectual Property Rights" means all industrial and
----------------------------
intellectual property rights, including, without limitation, Proprietary
Technology (as hereinafter defined), patents, patent applications, patent
rights, trademarks, trademark applications, trade names, service marks, service
mark applications, copyrights, know-how, certificates of public convenience and
necessity, franchises, licenses, trade secrets, proprietary processes and
formulae used by the Company in its businesses. As used herein, "Proprietary
-----------
Technology" means all source code, designs, algorithms, layouts, processes,
- ----------
inventions, trade secrets, know-how and other proprietary rights pertaining to
any product or service manufactured, marketed, performed or provided, or
proposed to be manufactured, marketed, performed or provided (as the case may
be), by the Company or the Subsidiaries or used, employed or exploited in the
development, license, sale, marketing, distribution or maintenance thereof, and
all documentation and media embodying or relating to the above, including,
without limitation, manuals, models, prototypes, memoranda, know-how, notebooks,
computer program software databases, patents and patent applications, trademarks
and trademark applications, copyrights and copyright applications, records and
disclosures.
SECTION 3.14. Environmental Matters. (a) For purposes of this
---------------------
Agreement, the following terms shall have the following meanings: (i)
"Hazardous Substances" means (A) those substances defined in or regulated under
--------------------
the following federal statutes and their state counterparts, as each may be
amended from time to time, and all regulations thereunder: the Hazardous
Materials Transportation Act, the Resource Conservation and Recovery Act, the
Comprehensive Environmental Response, Compensation and Liability Act, the Clean
Water Act, the Safe Drinking Water Act, the Atomic Energy Act, the Federal
Insecticide, Fungicide, and Rodenticide Act and the Clean Air Act; (B) petroleum
and petroleum products including crude oil and any fractions thereof; (C)
natural gas, synthetic gas, and any mixtures thereof; (D) radon; (E) any other
contaminant; and (F) any substance with respect to which a federal, state or
local agency requires environmental investigation, monitoring, reporting or
remediation; and (ii) "Environmental Laws" means any federal, state or local law
------------------
(A) relating to releases or threatened releases of Hazardous Substances or
materials containing Hazardous Substances; (B) relating to the manufacture,
handling, transport, use, treatment, storage or disposal of Hazardous Substances
or materials containing Hazardous Substances; or (C) otherwise relating to
pollution of the environment or the protection of human health.
<PAGE>
20
(b) Except as described in Section 3.14 of the Disclosure Schedule
or as would not, individually or in the aggregate, have a Material Adverse
Effect: (i) the Company has not violated and is not in violation of any
Environmental Law; (ii) none of the properties currently or formerly owned or
leased by the Company (including, without limitation, soils and surface and
ground waters) are contaminated with any Hazardous Substance; (iii) the Company
is not liable for any off-site contamination; (iv) the Company is not liable
under any Environmental Law; (v) the Company has all permits, licenses and other
authorizations required under any Environmental Law ("Environmental Permits");
---------------------
and (vi) the Company has always been and is in compliance with its Environmental
Permits.
SECTION 3.15. Brokers. No broker, finder or investment banker
-------
(other than Smith Barney) is entitled to any brokerage, finder's or other fee or
commission in connection with the Transactions based upon arrangements made by
or on behalf of the Company. The Company has heretofore furnished to Parent a
complete and correct copy of all agreements between the Company and Smith Barney
pursuant to which such firm would be entitled to any payment relating to the
Transactions.
SECTION 3.16. Amendment to Rights Agreement. The Board has taken
-----------------------------
such corporate action as is necessary to amend the Common Shares Rights
Agreement dated as of December 12, 1988, as amended (the "Rights Agreement"),
----------------
between the Company and Bank of America, N.T. & S.A., as Rights Agent, so that
none of the execution of this Agreement, the making of the Offer, the purchase
of Shares pursuant to the Offer or the Merger shall cause Purchaser, Parent or
any affiliate of Purchaser or Parent to become an "Acquiring Person" or cause a
"Shares Acquisition Date", "Distribution Date" or "Triggering Event" to occur
(each as defined in the Rights Agreement). Additionally, the Board has taken
such corporate action as is necessary to amend the Rights Agreement so that the
Final Expiration Date (as defined in the Rights Agreement) shall occur
immediately prior to the purchase of Shares by Purchaser pursuant to the Offer.
SECTION 3.17. Offer Conditions. To the Company's knowledge, since
----------------
September 30, 1994, no event has occurred and no circumstance has arisen which
could reasonably be expected to result in a failure to satisfy any of the
conditions to the Offer set forth in Annex A hereto.
SECTION 3.18. Agreements. Except as set forth on Schedule 3.18 to
----------
the Disclosure Schedule or on Schedule 2.12 to the Disclosure Schedule delivered
by the Company pursuant to the August Purchase Agreement, to the Company's
knowledge, the Company and the Subsidiaries are not parties to any material
written or oral contract or commitment not made in the ordinary course of
business and, whether or not made in the ordinary course of business, the
Company and the Subsidiaries are not parties to any written or oral (i) contract
or commitment with any labor union, (ii) contract or commitment for the future
purchase of fixed assets (other than materials or supplies required to
manufacture the Company's products in the
<PAGE>
21
ordinary course of business) in excess of $500,000 in the aggregate or for the
future purchase of materials, supplies or equipment in excess of normal
operating requirements, (iii) agreements, indentures or commitments relating to
the borrowing of money in excess of $250,000 individually or to the mortgaging,
pledging or otherwise placing of a lien on any assets of the Company or the
Subsidiaries (other than relating to equipment held under capitalized leases or
secured by purchase money security interests), (iv) guaranty of any obligation
(other than any obligation of a Subsidiary) in excess of $250,000 individually,
(v) agreement or other commitment for capital expenditures in excess of $500,000
individually, (vi) contract or agreement under which the Company or the
Subsidiaries are obligated to pay any broker's fees, finder's fees or any such
similar fees to any third party (other than as are incidental to the operation
of its business in the ordinary course of business consistent with industry
practices or in connection with the Transactions), (vii) contract or agreement
for the payment or receipt of any royalty, (viii) license for the use of any
patent, know-how, trademark, trade name, copyright or other intellectual
property which is material to the financial condition or operations of the
Company or (ix) other contract, agreement, arrangement or understanding that is
material to the financial condition or operations of the Company and the
Subsidiaries, taken as a whole. The Company has furnished or made available to
counsel for Purchaser true and correct copies of all such agreements and such
other documents as have been requested by Purchaser or their authorized
representatives. Each of the foregoing contracts is valid, binding and in full
force and effect in accordance with its terms.
SECTION 3.19. Opinion of Financial Advisor. The Company has
----------------------------
received the written opinion of Smith Barney to the effect that the
consideration to be received by the stockholders of the Company pursuant to the
Offer and the Merger is fair to such stockholders from a financial point of
view, a copy of which opinion has been delivered to Parent.
SECTION 3.20. Insurance. Each of the Company and the Subsidiaries
---------
maintains such insurance coverage, including amounts, described on Schedule 3.20
to the Disclosure Schedule. Such insurance listed on Schedule 3.20 to the
Disclosure Schedule is outstanding and in full force and effect and all premiums
with respect to such policies are currently paid. Each of the Company and the
Subsidiaries has not during the past three fiscal years been denied or had
revoked or rescinded any insurance policy.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER
------------------------------------------------------
Parent and Purchaser hereby, jointly and severally, represent and
warrant to the Company that:
<PAGE>
22
SECTION 4.01. Corporate Organization. Purchaser is a corporation
----------------------
duly incorporated, validly existing and in good standing under the laws of the
State of Delaware. Parent is a corporation duly incorporated, validly existing
and in good standing under the laws of the Federal Republic of Germany. Each of
Parent and Purchaser has the requisite power and authority and all necessary
governmental approvals to own, lease and operate its properties and to carry on
its business as it is now being conducted, except where the failure to be so
incorporated, existing or in good standing or to have such power, authority and
governmental approvals would not, individually or in the aggregate, adversely
affect the ability of Parent and Purchaser to perform their obligations
hereunder and to consummate the Transactions.
SECTION 4.02. Authority Relative to this Agreement. Each of
------------------------------------
Parent and Purchaser has all necessary corporate power and authority to execute
and deliver this Agreement, to perform its obligations hereunder and to
consummate the Transactions. The execution and delivery of this Agreement by
Parent and Purchaser and the consummation by Parent and Purchaser of the
Transactions have been duly and validly authorized by all necessary corporate
action and no other corporate proceedings on the part of Parent or Purchaser are
necessary to authorize this Agreement or to consummate the Transactions (other
than, with respect to the Merger, the filing and recordation of appropriate
merger documents as required by Delaware Law). This Agreement has been duly and
validly executed and delivered by Parent and Purchaser and, assuming the due
authorization, execution and delivery by the Company, constitutes a legal, valid
and binding obligation of each of Parent and Purchaser enforceable against each
of Parent and Purchaser in accordance with its terms.
SECTION 4.03. No Conflict; Required Filings and Consents. (a)
------------------------------------------
The execution and delivery of this Agreement by Parent and Purchaser do not, and
the performance of this Agreement by Parent and Purchaser will not, (i) conflict
with or violate the Certificate of Incorporation or By-laws (or equivalent
governing documents) of either Parent or Purchaser, (ii) conflict with or
violate any law, rule, regulation, order, judgment or decree applicable to
Parent or Purchaser or by which any property or asset of either of them is bound
or affected, or (iii) result in any breach of or constitute a default (or an
event which with notice or lapse of time or both would become a default) under,
or give to others any rights of termination, amendment, acceleration or
cancellation of, or result in the creation of a lien or other encumbrance on any
property or asset of Parent or Purchaser pursuant to, any material note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise or
other instrument or obligation to which Parent or Purchaser is a party or by
which Parent or Purchaser or any property or asset of either of them is bound or
affected, except for any such conflicts, violations, breaches, defaults or other
occurrences which would not, individually or in the aggregate, adversely affect
the ability of Parent and Purchaser to perform their obligations hereunder and
to consummate the Transactions.
(b) The execution and delivery of this Agreement by Parent and
Purchaser do not, and the performance of this Agreement by Parent and Purchaser
will not, require any
<PAGE>
23
consent, approval, authorization or permit of, or filing with or notification
to, any governmental or regulatory authority, domestic or foreign, except (i)
for applicable requirements, if any, of the Exchange Act, Blue Sky Laws and
state takeover laws, the HSR Act, the Exon-Florio Provision, ISRA, the
Bundeskartellamt, the ICA, applicable pre-merger notification requirements, if
any, under the laws of any other country and filing and recordation of
appropriate merger documents as required by Delaware Law and (ii) where failure
to obtain such consents, approvals, authorizations or permits, or to make such
filings or notifications, would not prevent or delay consummation of the Offer
or the Merger, or otherwise prevent Parent or Purchaser from performing their
respective obligations under this Agreement.
SECTION 4.04. Financing. Parent has or will have sufficient funds
---------
to permit Purchaser to acquire all the outstanding Shares in the Offer and the
Merger.
SECTION 4.05. Offer Documents; Proxy Statement. The Offer
--------------------------------
Documents will not, at the time the Offer Documents are filed with the SEC or
are first published, sent or given to stockholders of the Company, as the case
may be, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements made therein, in the light of the circumstances under which they are
made, not misleading. The information supplied by Parent for inclusion in the
Schedule 14D-9 and the Proxy Statement (or any amendment or supplement thereto)
will not, at the respective times the Schedule 14D-9, the Proxy Statement or any
amendments or supplements thereto are filed with the SEC or are first published,
sent or given to stockholders of the Company, at the time of the Stockholders'
Meeting and at the Effective Time, as the case may be, contain any statement
which, at such time and in light of the circumstances under which it is made, is
false or misleading with respect to any material fact, or omits to state any
material fact required to be stated therein or necessary in order to make the
statements therein not false or misleading or necessary to correct any statement
in any earlier communication with respect to the Offer or the solicitation of
proxies for the Stockholders' Meeting which shall have become false or
misleading. Notwithstanding the foregoing, Parent and Purchaser make no
representation or warranty with respect to any information supplied by the
Company or any of its representatives which is contained in any of the foregoing
documents or the Offer Documents. The Offer Documents shall comply in all
material respects as to form with the requirements of applicable federal
securities laws, including the Exchange Act and the rules and regulations
thereunder.
SECTION 4.06. Brokers. No broker, finder or investment banker
-------
(other than Goldman, Sachs & Co.) is entitled to any brokerage, finder's or
other fee or commission in connection with the Transactions based upon
arrangements made by or on behalf of Parent or Purchaser.
<PAGE>
24
ARTICLE V
CONDUCT OF BUSINESS PENDING THE MERGER
--------------------------------------
SECTION 5.01. Conduct of Business by the Company Pending the
-----------------------------------------------
Merger. The Company covenants and agrees that, between the date of this
- ------
Agreement and the Effective Time, unless Parent shall otherwise agree in
writing, the businesses of the Company and the Subsidiaries shall be conducted
only in, and the Company and the Subsidiaries shall not take any action except
in, the ordinary course of business and in a manner consistent with past
practice; and the Company shall use its reasonable best efforts to preserve
substantially intact the business organization of the Company and the
Subsidiaries, to keep available the services of the current officers, employees
and consultants of the Company and the Subsidiaries and to preserve the current
relationships of the Company and the Subsidiaries with customers, suppliers and
other persons with which the Company or any Subsidiary has significant business
relations. By way of amplification and not limitation, except as contemplated by
this Agreement or as set forth in Section 5.01 of the Disclosure Schedule,
neither the Company nor any Subsidiary shall, between the date of this Agreement
and the Effective Time, directly or indirectly do, or propose to do, any of the
following without the prior written consent of Parent:
(a) amend or otherwise change its Certificate of
Incorporation or By-laws or equivalent organizational documents;
(b) issue, sell, pledge, dispose of, grant, encumber, or
authorize the issuance, sale, pledge, disposition, grant or encumbrance of,
(i) any shares of capital stock of any class of the Company or any
Subsidiary, or any options, warrants, convertible securities or other
rights of any kind to acquire any shares of such capital stock, or any
other ownership interest (including, without limitation, any phantom
interest), of the Company or any Subsidiary (except for the issuance of a
maximum of 3,449,923 Shares issuable pursuant to employee stock options
outstanding on the date hereof, and except for the grant of stock options
under the Company's Stock Option and Purchase Plans (and the resulting
issuance of shares thereunder) consistent with established practice to new
employees of the Company hired after December 7, 1994, and identified in
Section 5.01 of the Disclosure Schedule) or (ii) any assets of the Company
or any Subsidiary, except for sales of products in the ordinary course of
business and in a manner consistent with past practice;
(c) declare, set aside, make or pay any dividend or other
distribution, payable in cash, stock, property or otherwise, with respect
to any of its capital stock;
(d) reclassify, combine, split, subdivide or redeem, purchase
or otherwise acquire, directly or indirectly, any of its capital stock;
<PAGE>
25
(e) (i) acquire (including, without limitation, by merger,
consolidation, or acquisition of stock or assets) any corporation,
partnership, other business organization or any division thereof or any
material amount of assets; (ii) incur any indebtedness for borrowed money
or issue any debt securities or assume, guarantee or endorse, or otherwise
as an accommodation become responsible for, the obligations of any person,
or make any loans or advances, except in the ordinary course of business
and consistent with past practice; (iii) enter into any contract or
agreement other than in the ordinary course of business, consistent with
past practice; (iv) other than in the ordinary course of business,
consistent with past practice, authorize any single capital expenditure
which is in excess of $250,000 or capital expenditures which are, in the
aggregate, in excess of $500,000 for the Company and the Subsidiaries taken
as a whole; or (v) enter into or amend any contract, agreement, commitment
or arrangement with respect to any matter set forth in this Section
5.01(e);
(f) other than pursuant to policies or agreements of the
Company or any of its Subsidiaries in effect on or prior to the date of
this Agreement and disclosed in Section 3.10 of the Disclosure Schedule,
increase the compensation payable or to become payable to its officers or
employees, except for increases in accordance with past practices in
salaries or wages of employees of the Company or any Subsidiary who are not
officers of the Company, or grant any severance or termination pay to, or
enter into any employment or severance agreement with, any director,
officer or other employee of the Company or any Subsidiary, or establish,
adopt, enter into or amend any collective bargaining, bonus,
profit/sharing, thrift, compensation, stock option, restricted stock,
pension, retirement, deferred compensation, employment, termination,
severance or other plan, agreement, trust, fund, policy or arrangement for
the benefit of any director, officer or employee;
(g) take any action, other than reasonable and usual actions
in the ordinary course of business and consistent with past practice, with
respect to accounting policies or procedures;
(h) make any tax election or settle or compromise any
material federal, state, local or foreign income tax liability;
(i) pay, discharge or satisfy any claim, liability or
obligation (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction, in the
ordinary course of business and consistent with past practice, of
liabilities incurred in the ordinary course of business and consistent with
past practice;
<PAGE>
26
(j) adopt a plan of complete or partial liquidation,
dissolution, merger, consolidation, restructuring, recapitalization or
other reorganization of the Company or any of its Subsidiaries (other than
the Merger);
(k) settle or comprise any pending or threatened suit, action
or claim which is material or which relates to any of the Transactions; or
(l) take or offer or propose to take, or agree to take in
writing, or otherwise, any of the actions described in paragraphs (a)
through (k) of this Section 5.01 or any action which would make any of the
representations or warranties of the Company contained in this Agreement
untrue or incorrect as of the date when made if such action had then been
taken, or would result in any of the Offer conditions not being satisfied.
ARTICLE VI
ADDITIONAL AGREEMENTS
---------------------
SECTION 6.01. Stockholders' Meeting. (a) If required by
---------------------
applicable law in order to consummate the Merger, the Company, acting through
the Board, shall, if required, in accordance with applicable law and the
Company's Certificate of Incorporation and By-laws, (i) duly call, give notice
of, convene and hold an annual or special meeting of its stockholders as soon as
practicable following consummation of the Offer for the purpose of considering
and taking action on this Agreement and the Transactions (the "Stockholders'
-------------
Meeting") and (ii) subject to its fiduciary duties under applicable law as
- -------
advised by independent counsel, (A) include in the Proxy Statement the
recommendation of the Board that the stockholders of the Company approve and
adopt this Agreement and the transactions contemplated hereby and (B) use its
reasonable best efforts to obtain such approval and adoption. At the
Stockholders' Meeting, Parent and Purchaser shall cause all Shares then owned by
them and their subsidiaries to be voted in favor of the approval and adoption of
this Agreement and the transactions contemplated hereby.
(b) Notwithstanding the foregoing, in the event that Purchaser
shall acquire at least 90 percent of the then outstanding Shares, the parties
hereto agree, at the request of Purchaser, subject to Article VII, to take all
necessary and appropriate action to cause the Merger to become effective, in
accordance with Section 253 of Delaware Law, as promptly as reasonably
practicable after such acquisition, without a meeting of the stockholders of the
Company.
SECTION 6.02. Proxy Statement. If required by applicable law, as
---------------
promptly as practicable following consummation of the Offer, the Company shall
file the Proxy Statement
<PAGE>
27
with the SEC under the Exchange Act, and shall use its best efforts to have the
Proxy Statement cleared by the SEC. Parent, Purchaser and the Company shall
cooperate with each other in the preparation of the Proxy Statement, and the
Company shall notify Parent of the receipt of any comments of the SEC with
respect to the Proxy Statement and of any requests by the SEC for any amendment
or supplement thereto or for additional information and shall provide to Parent
promptly copies of all correspondence between the Company or any representative
of the Company and the SEC. The Company shall give Parent and its counsel the
opportunity to review the Proxy Statement prior to its being filed with the SEC
and shall give Parent and its counsel the opportunity to review all amendments
and supplements to the Proxy Statement and all responses to requests for
additional information and replies to comments prior to their being filed with,
or sent to, the SEC. Each of the Company, Parent and Purchaser agrees to use
its reasonable best efforts, after consultation with the other parties hereto,
to respond promptly to all such comments of and requests by the SEC and to cause
the Proxy Statement and all required amendments and supplements thereto to be
mailed to the holders of Shares entitled to vote at the Stockholders' Meeting at
the earliest practicable time.
SECTION 6.03. Company Board Representation; Section 14(f). (a)
-------------------------------------------
Promptly upon the purchase by Purchaser of Shares pursuant to the Offer and from
time to time thereafter, Purchaser shall be entitled to designate up to such
number of directors, rounded up to the next whole number, on the Board as shall
give Purchaser representation on the Board equal to the product of the total
number of directors on the Board (giving effect to the directors elected
pursuant to this sentence) multiplied by the percentage that the aggregate
number of Shares beneficially owned by Purchaser or any affiliate of Purchaser
following such purchase bears to the total number of Shares then outstanding,
and the Company shall, at such time, promptly take all actions necessary to
cause Purchaser's designees to be elected as directors of the Company, including
increasing the size of the Board or securing the resignations of incumbent
directors or both. The Company shall cause persons designated by Purchaser to
constitute the same percentage as persons designated by Purchaser shall
constitute of the Board of (i) each committee of the Board, (ii) each board of
directors of each domestic Subsidiary and (iii) each committee of each such
board, in each case only to the extent permitted by applicable law.
Notwithstanding the foregoing, until the earlier of (i) the time Purchaser
acquires a majority of the then outstanding Shares on a fully diluted basis and
(ii) the Effective Time, the Company shall use its best efforts to ensure that
all the members of the Board and each committee of the Board and such boards and
committees of the domestic Subsidiaries as of the date hereof who are not
employees of the Company shall remain members of the Board and of such boards
and committees.
(b) The Company shall promptly take all actions required pursuant
to Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder in
order to fulfill its obligations under this Section 6.03 and shall include in
the Schedule 14D-9 such information with respect to the Company and its officers
and directors as is required under Section 14(f) and Rule 14f-1 to fulfill such
obligations. Parent or Purchaser shall supply to the Company and be
<PAGE>
28
solely responsible for any information with respect to either of them and their
nominees, officers, directors and affiliates required by such Section 14(f) and
Rule 14f-1.
(c) Following the election or appointment of designees of Purchaser
pursuant to this Section 6.03, prior to the Effective Time, any amendment of
this Agreement or the Certificate of Incorporation or By-laws of the Company,
any termination of this Agreement by the Company, any extension by the Company
of the time for the performance of any of the obligations or other acts of
Parent or Purchaser or waiver of any of the Company's rights hereunder shall
require the concurrence of a majority of the directors of the Company then in
office who neither were designated by Purchaser nor are employees of the
Company.
SECTION 6.04. Access to Information; Confidentiality. (a) From
--------------------------------------
the date hereof to the Effective Time, the Company shall, and shall cause the
Subsidiaries and the officers, directors, employees, auditors and agents of the
Company and the Subsidiaries to, afford the officers, employees and agents of
Parent and Purchaser complete access at all reasonable times to the officers,
employees, agents, properties, offices, plants and other facilities, books and
records of the Company and each Subsidiary, and shall furnish Parent and
Purchaser with all financial, operating and other data and information as Parent
or Purchaser, through its officers, employees or agents, may reasonably request.
(b) All information obtained by Parent or Purchaser pursuant to
this Section 6.04 shall be kept confidential in accordance with the provisions
of Section 7.7 of the August Purchase Agreement.
(c) No investigation pursuant to this Section 6.04 shall affect
any representation or warranty in this Agreement of any party hereto or any
condition to the obligations of the parties hereto.
SECTION 6.05. No Solicitation of Transactions. (a) Neither the
-------------------------------
Company nor any Subsidiary shall, and neither the Company nor any Subsidiary
shall permit any officer, director or agent to solicit, initiate or encourage
the submission of any proposal or offer from any person relating to any
acquisition or purchase of all or (other than in the ordinary course of
business) any portion of the assets of, or any equity interest in, the Company
or any Subsidiary or any business combination with the Company or any Subsidiary
(whether by a tender offer, exchange offer, merger, consolidation or otherwise),
participate in any negotiations regarding, or furnish to any other person any
information with respect to, any of the foregoing (an "Acquisition Proposal").
--------------------
The Company immediately shall cease and cause to be terminated all existing
discussions or negotiations with any parties conducted heretofore with respect
to any of the foregoing. The Company shall notify Parent promptly if any such
proposal or offer, or any inquiry or contact with any person with respect
thereto, is made and shall, in any such notice to Parent, indicate in reasonable
detail the identity of the person making such proposal, offer, inquiry or
contact and the terms and conditions of such proposal, offer, inquiry or
contact.
<PAGE>
29
The Company agrees not to release any third party from, or waive any provision
of, any confidentiality or standstill agreement to which the Company is a party,
except to the extent required by fiduciary obligations under applicable law as
advised by independent counsel.
(b) Notwithstanding the foregoing, to the extent required by
fiduciary obligations under applicable law as advised by independent counsel,
the Company may, in response to an Acquisition Proposal which was not solicited
after the date of this Agreement, participate in discussions or negotiations
with, or furnish information with respect to the Company pursuant to a
confidentiality agreement in reasonably customary form, to any person. In
addition, following the receipt of an Acquisition Proposal, which the Board of
Directors of the Company, after consultation with and based on the advice of
independent legal counsel and its financial advisor, determines in good faith to
be more favorable to the Company's stock-holders than the Offer and the Merger
(a "Superior Proposal"), the Company may, upon payment of the Fee and Expenses
-----------------
(as defined hereafter) as required by Section 8.01(d)(ii), terminate this
Agreement pursuant to such Section 8.01(d)(ii) and accept such Superior
Proposal, and the Board of Directors of the Company may approve or recommend
such Superior Proposal (and, in connection therewith, withdraw or modify its
approval or recommendation of the Offer, this Agreement or the Merger. Nothing
contained in this Section 6.05(b) shall prohibit the Company or its Board of
Directors from (i) taking, and disclosing to the Company's stockholders, a
position with respect to an Acquisition Proposal pursuant to Rules 14d-9 and
14e-2(a) under the Exchange Act or (ii) making any disclosure to the Company's
stockholders that, in the judgment of the Board of Directors or the Company, is
required under applicable law.
SECTION 6.06. Employee Benefits Matters. Annex B hereto sets
-------------------------
forth certain agreements among the parties hereto with respect to the Plans and
other employee benefits matters.
SECTION 6.07. Directors' and Officers' Indemnification and
---------------------------------------------
Insurance. (a) The Surviving Corporation and
---------
Parent agree that for a period ending not sooner than the sixth anniversary of
the Effective Time, the Surviving Corporation will maintain all rights to
indemnification (including with respect to the advancement of expenses incurred
in the defense of any action or suit) existing on the date of this Agreement in
favor of the present and the former directors, officers, employees and agents of
the Company as provided in the Company's Certificate of Incorporation and Bylaws
and as set forth in the Indemnification Agreements listed in Section 6.07 of the
Disclosure Schedule (true and correct copies of which have been made available
to Purchaser), in each case as in effect on the date of this Agreement, and that
during such period, the Certificate of Incorporation and Bylaws of the Surviving
Corporation shall not be amended to reduce or limit the rights of indemnity
afforded to the present and former directors, officers, employees and agents of
the Company, or the ability of the Surviving Corporation to indemnify them, nor
to hinder, delay or make more difficult the exercise of such rights or indemnity
or the ability to indemnify.
<PAGE>
30
(b) Parent and the Surviving Corporation shall use their respective
reasonable best efforts to maintain in effect for three years from the Effective
Time, if available, the current directors' and officers' liability insurance
policies maintained by the Company (provided that the Surviving Corporation may
substitute therefor policies of at least the same coverage containing terms and
conditions which are not materially less favorable) with respect to matters
occurring prior to the Effective Time; provided, however, that in no event shall
-------- -------
the Surviving Corporation be required to expend pursuant to this Section 6.07(b)
more than an amount per year equal to 150% of current annual premiums paid by
the Company for such insurance (which premiums the Company represents and
warrants to be $533,000 in the aggregate).
(c) Should any claim or claims be made against any present or former
director, officer, employee or agent of the Company, arising from such person's
service as such, on or prior to the sixth anniversary of the Effective Time, the
provisions of this Section 6.07 respecting the Certificate of Incorporation and
Bylaws and the obligation of indemnity of the Parent and the Surviving
Corporation shall continue in effect until the final disposition of all such
claims.
(d) In the event that Parent or the Surviving Corporation or any of
their successors or assigns consolidates with or merges into any other person
and shall not be the continuing or surviving corporation or entity of such
consolidation or merger, then and in each such case, proper provisions shall be
made so that the successors and assigns or Parent or the Surviving Corporation,
as the case may be, or, at Parent's option, Parent shall assume the obligations
of Parent or the Surviving Corporation set forth in this Section 6.07.
(e) The provisions of this Section 6.07 are intended to be for the
benefit of, and shall be enforceable by, each indemnified party and such party's
heirs and representatives.
SECTION 6.08. Notification of Certain Matters. The Company shall
-------------------------------
give prompt notice to Parent, and Parent shall give prompt notice to the
Company, of (i) the occurrence, or non-occurrence, of any event the occurrence,
or non-occurrence, of which would be likely to cause any representation or
warranty contained in this Agreement to be untrue or inaccurate in any material
respect and (ii) any material failure of the Company, Parent or Purchaser, as
the case may be, to comply with or satisfy any covenant, condition or agreement
to be complied with or satisfied by it hereunder; provided, however, that the
-------- -------
delivery of any notice pursuant to this Section 6.08 shall not limit or
otherwise affect the remedies available hereunder to the party receiving such
notice.
SECTION 6.09. Further Action; Reasonable Best Efforts. Upon the
---------------------------------------
terms and subject to the conditions hereof, each of the parties hereto shall (i)
make promptly its respective filings, and thereafter make any other required
submissions, under the HSR Act and the other regulatory provisions listed in
Section 3.05 with respect to the Transactions and (ii) use all
<PAGE>
31
reasonable best efforts to take, or cause to be taken, all appropriate action,
and to do, or cause to be done, all things necessary, proper or advisable under
applicable laws and regulations to consummate and make effective the
Transactions, including, without limitation, using all reasonable best efforts
to obtain all licenses, permits (including, without limitation, Environmental
Permits), consents, approvals, authorizations, qualifications and orders of
governmental authorities and parties to contracts with the Company and the
Subsidiaries as are necessary for the consummation of the Transactions and to
fulfill the conditions to the Offer and the Merger. Parent shall give notice
promptly to the Chairman of the Committee on Foreign Investment in the United
States pursuant to the Exon-Florio Provision of the Transactions, and each of
the parties hereto shall make such additional filings and submissions as may be
reasonably necessary under the Exon-Florio Provision in respect of the
Transactions. Parent and the Company will consult and cooperate with one
another, and consider in good faith the views of one another, in connection with
any analyses, appearances, presentations, memoranda, briefs, arguments, opinions
or proposals made or submitted by or on behalf of any party hereto in connection
with proceedings under or relating to the HSR Act, the Exon-Florio Provision,
the pre-notification requirements of any foreign jurisdiction, or any other
federal or state antitrust or fair trade law. In case at any time after the
Effective Time any further action is necessary or desirable to carry out the
purposes of this Agreement, the proper officers and directors of each party to
this Agreement shall use their reasonable best efforts to take all such action.
No provision of this Section 6.09 shall be interpreted as requiring the Company
to continue its recommendation to stockholders when such recommendation can be
withdrawn or modified under Section 6.05(b). Parent and Purchaser agree to
offer to enter into any remediation agreement with the NJDEPE pursuant to the
requirements of ISRA as may be necessary to permit the consummation of the
Transactions unless such remediation agreement would have a Material Adverse
Effect.
SECTION 6.10. Public Announcements. Parent and the Company shall
--------------------
consult with each other before issuing any press release or otherwise making any
public statements with respect to this Agreement or any Transaction and shall
not issue any such press release or make any such public statement prior to such
consultation and agreement as to the terms of such release, except as may be
required by law or any listing agreement with a national securities exchange to
which Parent or the Company is a party.
SECTION 6.11. ISRA. No later than five days after the execution of
----
this Agreement, the Company shall notify the New Jersey Department of
Environmental Protection and Energy (the "NJDEPE") of the Offer and the other
------
Transactions (including, without limitation, the Merger) pursuant to the
requirements of ISRA. Immediately thereafter, the Company shall make
application to the NJDEPE for a negative declaration or a remediation agreement
as appropriate under ISRA. Parent shall cooperate with and assist the Company
in any reasonable manner in connection with obtaining such negative declaration
or remediation agreement. The Company shall not enter in any remediation
agreement without the prior written consent of Parent.
<PAGE>
32
SECTION 6.12. Confidentiality Agreement. The Company hereby waives
-------------------------
the provisions of Section 7.7 of the August Purchase Agreement regarding
confidential information as and only to the extent necessary to permit the
consummation of each Transaction. Upon the acceptance for payment of Shares
pursuant to the Offer, Section 7.7 of the August Purchase Agreement shall be
deemed to have terminated without further action by the parties thereto.
SECTION 6.13. Waiver by the Company of Certain Provisions of the
--------------------------------------------------
August Purchase Agreement. The Company hereby waives the provisions of Sections
- -------------------------
7.1, 7.2, 7.3, 7.4, 7.5, 7.6, 7.9, 8.1, 8.2 and 8.3 of the August Purchase
Agreement. This Agreement shall, to the extent that there is any conflict
between the terms of this Agreement and the terms of the August Purchase
Agreement, supersede the August Purchase Agreement. If this Agreement shall be
terminated for any reason, the terms and provisions of the August Purchase
Agreement shall remain in full force and effect.
ARTICLE VII
CONDITIONS TO THE MERGER
------------------------
SECTION 7.01. Conditions to the Merger. The respective obligations
------------------------
of each party to effect the Merger shall be subject to the satisfaction at or
prior to the Effective Time of the following conditions:
(a) Stockholder Approval. This Agreement and the transactions
--------------------
contemplated hereby shall have been approved and adopted by the affirmative
vote of the stockholders of the Company to the extent required by Delaware
Law and the Certificate of Incorporation of the Company;
(b) Regulatory Approvals. Any waiting period (and any extension
--------------------
thereof) applicable to the consummation of the Merger under the HSR Act and
the other regulatory provisions listed in Section 3.05 shall have expired
or been terminated, and the Company shall have obtained a negative
declaration or executed a remediation agreement with the NJDEPE pursuant to
the requirements of ISRA;
(c) No Order. No foreign, United States or state governmental
--------
authority or other agency or commission or foreign, United States or state
court of competent jurisdiction shall have enacted, issued, promulgated,
enforced or entered any law, rule, regulation, executive order, decree,
injunction or other order (whether temporary, preliminary or permanent)
which is then in effect and has the effect of making the acquisition of
Shares by Parent or Purchaser or any affiliate of either of them illegal or
otherwise restricting, preventing or prohibiting consummation of the
Transactions; and
<PAGE>
33
(d) Offer. Purchaser or its permitted assignee shall have
-----
purchased all Shares validly tendered and not withdrawn pursuant to the
Offer; provided, however, that this condition shall not be applicable to
-------- -------
the obligations of Parent or Purchaser if, in breach of this Agreement or
the terms of the Offer, Purchaser fails to purchase any Shares validly
tendered and not withdrawn pursuant to the Offer.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
---------------------------------
SECTION 8.01. Termination. This Agreement may be terminated and the
-----------
Merger and the other Transactions may be abandoned at any time prior to the
Effective Time, notwithstanding any requisite approval and adoption of this
Agreement and the transactions contemplated hereby by the stockholders of the
Company (provided, however, that if Shares are purchased pursuant to the Offer,
-------- -------
Parent or Purchaser may not in any event terminate this Agreement):
(a) By mutual written consent duly authorized by the Boards of
Directors of Parent, Purchaser and the Company; or
(b) By either Parent, Purchaser or the Company if (i) the
Effective Time shall not have occurred on or before July 31, 1995;
provided, however, that the right to terminate this Agreement under this
-------- -------
Section 8.01(b) shall not be available to any party whose failure to
fulfill any obligation under this Agreement has been the cause of, or
resulted in, the failure of the Effective Time to occur on or before such
date or (ii) any court of competent jurisdiction or other governmental
authority shall have issued an order, decree, ruling or taken any other
action restraining, enjoining or otherwise prohibiting the Merger and such
order, decree, ruling or other action shall have become final and
nonappealable; or
(c) By Parent if (i) as the result of a failure of any condition
set forth in Annex A hereto, (A) Purchaser shall have failed to commence
the Offer within 60 days following the date of this Agreement, (B) the
Offer shall have terminated or expired in accordance with its terms without
Purchaser having accepted any Shares for payment thereunder, and without
Purchaser having had an obligation under Section 1.01 of this Agreement to
extend the Offer, or (C) Purchaser shall have failed to pay for Shares
pursuant to the Offer within 90 days following the commencement of the
Offer (or where applicable under the conditions to the Offer set forth in
Annex A, within the 120-day period specified therein), unless the
occurrence of the event set forth in any of clauses (A), (B) or (C) above
shall have been caused by or resulted from the failure of Parent or
Purchaser to perform in any material respect any material covenant or
agreement of
<PAGE>
34
either of them contained in this Agreement or the material breach by Parent
or Purchaser of any material representation or warranty of either of them
contained in this Agreement (including where such occurrence results from
an action by the Company permitted under Section 6.05(b) that results from
such failure or material breach by Parent or Purchaser) or (ii) prior to
the purchase of Shares pursuant to the Offer, the Board or any committee
thereof shall have withdrawn or modified in a manner adverse to Purchaser
or Parent its approval or recommendation of the Offer, this Agreement, the
Merger or any other Transaction or shall have recommended another
Acquisition Proposal, or shall have resolved to do any of the foregoing; or
(d) By the Company, upon approval of the Board, if (i) as the
result of the failure of any of the conditions set forth in Annex A hereto,
(A) Purchaser shall have failed to commence the Offer within 60 days
following the date of this Agreement, (B) the Offer shall have terminated
or expired in accordance with its terms without Purchaser having accepted
any Shares for payment thereunder or (C) Purchaser shall have failed to pay
for Shares pursuant to the Offer within 90 days following the commencement
of the Offer (or where applicable under the conditions to the Offer set
forth in Annex A, within the 120-day period specified therein), unless the
occurrence of the event set forth in any of clauses (A), (B) or (C) above
shall have been caused by or resulted from the failure of the Company to
perform in any material respect any material covenant or agreement of it
contained in this Agreement or the material breach by the Company of any
material representation or warranty of it contained in this Agreement,
(ii) prior to the purchase of Shares pursuant to the Offer, the Board shall
have determined to accept a Superior Proposal pursuant to Section 6.05(b)
and the Company has complied with all the provisions of Section 6.05(b);
provided that such termination under this Section 8.01(d) shall not be
--------
effective until the Company has made payment of the full fee required by
Section 8.03(a) hereof and has deposited with a mutually acceptable escrow
agent $2 million for reimbursement of Expenses (as defined below) in
accordance with Section 8.03, or (iii) prior to the purchase of Shares
pursuant to the Offer, there has been a willful breach by Parent or
Purchaser of any representation, warranty, covenant or agreement set forth
in this Agreement which breach is not reasonably capable of being cured by
within 40 business days after the date of the commencement of the Offer.
SECTION 8.02. Effect of Termination. In the event of the termination
---------------------
of this Agreement pursuant to Section 8.01, this Agreement shall forthwith
become void, and there shall be no liability on the part of any party hereto,
except (i) as set forth in Sections 8.03 and 9.01 and (ii) nothing herein shall
relieve any party from liability for any breach hereof.
<PAGE>
35
SECTION 8.03. Fees and Expenses. (a) In the event that
-----------------
(i) any person (including, without limitation, the Company or
any affiliate thereof), other than Parent or any affiliate of Parent, shall
have become the beneficial owner of more than 50% of the then outstanding
Shares and this Agreement shall have been terminated pursuant to Section
8.01; or
(ii) any person shall have commenced, publicly proposed or
communicated to the Company a proposal that is publicly disclosed for a
tender or exchange offer for 50% or more (or which, assuming the maximum
amount of securities which could be purchased, would result in any person
beneficially owning 50% or more) of the then outstanding Shares or
otherwise for the direct or indirect acquisition of the Company or all or a
substantial portion of its assets for per Share consideration having a
value greater than the Per Share Amount and (A) the Offer shall have
remained open for at least 20 business days, (B) the Minimum Condition
shall not have been satisfied, (C) this Agreement shall have been
terminated pursuant to Section 8.01, and (D) within 12 months of such
termination a Third Party Acquisition (as defined hereafter) shall occur;
or
(iii) this Agreement is terminated pursuant to Section
8.01(c)(ii) or 8.01(d)(ii);
then, in any such event, the Company shall pay Parent promptly (but in no event
later than five business days after the first of such events shall have
occurred) a fee of $7 million (the "Fee"), which amount shall be payable in
---
immediately available funds, plus all Expenses (as hereinafter defined);
provided, however, that neither the Fee nor any Expenses shall be paid pursuant
- -------- -------
to this Section 8.03 if either Parent or Purchaser shall be in material breach
of its representations and warranties or obligations hereunder.
(b) "Expenses" shall mean all out-of-pocket expenses and fees up to
$2 million in the aggregate (including, without limitation, fees and expenses
payable to all banks, investment banking firms, other financial institutions and
other persons and their respective agents and counsel for arranging, committing
to provide or providing any financing for the Transactions or structuring the
Transactions and all fees of counsel, accountants, experts and consultants to
Parent, Purchaser and their affiliates, and all printing and advertising
expenses) actually incurred or accrued by either of them or on their behalf in
connection with the Transactions, including, without limitation, the financing
thereof, and actually incurred or accrued by banks, investment banking firms,
other financial institutions and other persons and assumed by Parent, Purchaser
or their affiliates in connection with the negotiation, preparation, execution
and performance of this Agreement, the structuring and financing of the
Transactions and any financing commitments or agreements relating thereto.
<PAGE>
36
(c) Except as set forth in this Section 8.03, all costs and expenses
incurred in connection with this Agreement and the Transactions shall be paid by
the party incurring such expenses, whether or not any Transaction is
consummated.
(d) In the event that the Company shall fail to pay the Fee or any
Expenses when due, the term "Expenses" shall be deemed to include the costs and
expenses actually incurred or accrued by Parent, Purchaser and their affiliates
(including, without limitation, fees and expenses of counsel) in connection with
the collection under and enforcement of this Section 8.03, together with
interest on such unpaid Fee and Expenses, commencing on the date that the Fee or
such Expenses became due, at a rate equal to the rate of interest publicly
announced by Citibank, N.A., from time to time, in the City of New York, as such
bank's Base Rate plus 3%.
(e) "Third Party Acquisition" means the occurrence of any of the
-----------------------
following events: (i) the acquisition of the Company by merger, tender offer,
exchange offer, consolidation or otherwise by any person other than Parent,
Purchaser or any affiliate thereof (a "Third Party"); (ii) the acquisition by
-----------
any Third Party of all or substantially all of the total assets of the Company
and its Subsidiaries, taken as a whole; (iii) the acquisition by a Third Party
of 50% or more of the outstanding Shares; (iv) the adoption by the Company of a
plan of liquidation or the declaration or payment of an extraordinary dividend;
or (v) the repurchase by the Company or any of its Subsidiaries of 50% or more
of the outstanding Shares.
SECTION 8.04. Amendment. Subject to Section 6.03, this Agreement may
---------
be amended by the parties hereto by action taken by or on behalf of their
respective Boards of Directors at any time prior to the Effective Time;
provided, however, that, after the approval and adoption of this Agreement and
- -------- -------
the transactions contemplated hereby by the stockholders of the Company, no
amendment may be made which would reduce the amount or change the type of
consideration into which each Share shall be converted upon consummation of the
Merger or changes any other terms or conditions of this Agreement if the changes
alone or in the aggregate, would adversely affect the stockholders of the
Company. This Agreement may not be amended except by an instrument in writing
signed by the parties hereto.
SECTION 8.05. Waiver. At any time prior to the Effective Time,
------
unless expressly limited elsewhere in this Agreement, any party hereto may (i)
extend the time for the performance of any obligation or other act of any other
party hereto, (ii) waive any inaccuracy in the representations and warranties
contained herein or in any document delivered pursuant hereto and (iii) waive
compliance with any agreement or condition contained herein. Any such extension
or waiver shall be valid if set forth in an instrument in writing signed by the
party or parties to be bound thereby.
<PAGE>
37
ARTICLE IX
GENERAL PROVISIONS
------------------
SECTION 9.01. Non-Survival of Representations, Warranties and
-----------------------------------------------
Agreements. The representations, warranties and agreements in this Agreement
- ----------
shall terminate at the Effective Time or upon the termination of this Agreement
pursuant to Section 8.01, as the case may be, except that the agreements set
forth in Articles II and IX and Sections 6.06 and 6.07 shall survive the
Effective Time indefinitely and those set forth in Sections 6.04, 6.13 and 8.03
and Article IX shall survive termination indefinitely.
SECTION 9.02. Notices. All notices, requests, claims, demands and
-------
other communications hereunder shall be in writing and shall be given (and shall
be deemed to have been duly given upon receipt) by delivery in person, by cable,
telecopy, telegram, facsimile or telex or by registered or certified mail
(postage prepaid, return receipt requested) to the respective parties at the
following addresses (or at such other address for a party as shall be specified
in a notice given in accordance with this Section 9.02):
if to Parent or Purchaser:
Siemens Nixdorf Informationssysteme AG
Otto-Hahn-Ring 6
81739 Munich
Germany
Facsimile No: 011 49 89 636 42922
Attention: Gerhard Schulmeyer
Adrian van Hammerstein
with a copy to each of:
Siemens Corporation
1301 Avenue of the Americas
New York, New York
Facsimile No: (212) 258-4945
Attention: E. Robert Lupone
Shearman & Sterling
599 Lexington Avenue
New York, New York 10022
Facsimile No: (212) 848-7179/80
Attention: Peter D. Lyons, Esq.
<PAGE>
38
if to the Company:
Pyramid Technology Corporation
3860 N. First Street
San Jose, CA 95134
Facsimile No: (408) 428-8820
Attention: Richard H. Lussier
with a copy to:
Wilson, Sonsini, Goodrich & Rosati
650 Page Mill Road
Palo Alto, CA 94304-1050
Facsimile No: (415) 493-6811
Attention: Larry W. Sonsini, Esq.
SECTION 9.03. Certain Definitions. For purposes of this Agreement,
-------------------
the term:
(a) "affiliate" of a specified person means a person who
---------
directly or indirectly through one or more intermediaries controls, is
controlled by, or is under common control with, such specified person;
(b) "beneficial owner" with respect to any Shares means a person
----------------
who shall be deemed to be the beneficial owner of such Shares (i) which
such person or any of its affiliates or associates (as such term is defined
in Rule 12b-2 promulgated under the Exchange Act) beneficially owns,
directly or indirectly, (ii) which such person or any of its affiliates or
associates has, directly or indirectly, (A) the right to acquire (whether
such right is exercisable immediately or subject only to the passage of
time), pursuant to any agreement, arrangement or understanding or upon the
exercise of consideration rights, exchange rights, warrants or options, or
otherwise, or (B) the right to vote pursuant to any agreement, arrangement
or understanding or (iii) which are beneficially owned, directly or
indirectly, by any other persons with whom such person or any of its
affiliates or associates or person with whom such person or any of its
affiliates or associates has any agreement, arrangement or understanding
for the purpose of acquiring, holding, voting or disposing of any Shares;
(c) "business day" means any day on which the principal offices
------------
of the SEC in Washington, D.C. are open to accept filings, or, in the case
of determining a date when any payment is due, any day on which banks are
not required or authorized to close in the City of New York;
<PAGE>
39
(d) "control" (including the terms "controlled by" and "under
------- ------------- -----
common control with") means the possession, directly or indirectly or as
-------------------
trustee or executor, of the power to direct or cause the direction of the
management and policies of a person, whether through the ownership of
voting securities, as trustee or executor, by contract or credit
arrangement or otherwise;
(e) "person" means an individual, corporation, partnership,
------
limited partnership, syndicate, person (including, without limitation, a
"person" as defined in Section 13(d)(3) of the Exchange Act), trust,
association or entity or government, political subdivision, agency or
instrumentality of a government; and
(f) "subsidiary" or "subsidiaries" of the Company, the Surviving
---------- ------------
Corporation, Parent or any other person means an affiliate controlled by
such person, directly or indirectly, through one or more intermediaries.
SECTION 9.04. Severability. If any term or other provision of this
------------
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the Transactions is not affected in any manner materially adverse
to any party. Upon such determination that any term or other provision is
invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in a mutually acceptable manner in
order that the Transactions be consummated as originally contemplated to the
fullest extent possible.
SECTION 9.05. Entire Agreement; Assignment. This Agreement
----------------------------
constitutes the entire agreement among the parties with respect to the subject
matter hereof and supersedes all prior agreements and undertakings, both
written and oral, among the parties, or any of them, with respect to the subject
matter hereof. This Agreement shall not be assigned by operation of law or
otherwise, except that Parent and Purchaser may assign all or any of their
rights and obligations hereunder to any affiliate of Parent provided that no
such assignment shall relieve the assigning party of its obligations hereunder
if such assignee does not perform such obligations.
SECTION 9.06. Parties in Interest. This Agreement shall be binding
-------------------
upon and inure solely to the benefit of each party hereto, and nothing in this
Agreement, express or implied, is intended to or shall confer upon any other
person any right, benefit or remedy of any nature whatsoever under or by reason
of this Agreement, other than Section 6.07 (which is intended to be for the
benefit of the persons covered thereby and may be enforced by such persons).
<PAGE>
40
SECTION 9.07. Specific Performance. The parties hereto agree that
--------------------
irreparable damage would occur in the event any provision of this Agreement was
not performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or equity.
SECTION 9.08. Governing Law. This Agreement shall be governed by,
-------------
and construed in accordance with, the laws of the State of Delaware applicable
to contracts executed in and to be performed in that State. All actions and
proceedings arising out of or relating to this Agreement shall be heard and
determined in any state or federal court sitting in the state of Delaware.
SECTION 9.09. Headings. The descriptive headings contained in this
--------
Agreement are included for convenience of reference only and shall not affect in
any way the meaning or interpretation of this Agreement.
SECTION 9.10. Counterparts. This Agreement may be executed in one or
------------
more counterparts, and by the different parties hereto in separate counterparts,
each of which when executed shall be deemed to be an original but all of which
taken together shall constitute one and the same agreement.
<PAGE>
41
IN WITNESS WHEREOF, Parent, Purchaser and the Company have caused this
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.
ATTEST: SIEMENS NIXDORF
INFORMATIONSSYSTEME AG
/s/Michael W. Schiefen By/s/ Gerhard Schulmeyer
- --------------------------------- --------------------------------
Name: Gerhard Schulmeyer
Title: Chairman
/s/Michael W. Schiefen By/s/Adrian v. Hammerstein
- --------------------------------- --------------------------------
Name: Adrian v. Hammerstein
Title: Attorney-in-fact
ATTEST: SIEMENS NIXDORF MID-RANGE
ACQUISITION CORP.
/s/ Michael W. Schiefen By/s/Gerhard Schulmeyer
- --------------------------------- --------------------------------
Name: Gerhard Schulmeyer
Title: President
/s/ Michael W. Schiefen By/s/Adrian v. Hammerstein
- --------------------------------- --------------------------------
Name: Adrian v. Hammerstein
Title: Secretary
ATTEST:
PYRAMID TECHNOLOGY CORPORATION
/s/ Michael W. Schiefen By/s/ Richard H. Lussier
- --------------------------------- --------------------------------
Name: Richard H. Lussier
Title: Chairman
<PAGE>
ANNEX A
-------
Conditions to the Offer
-----------------------
The capitalized terms used in this Annex A have the meanings set forth
in the attached Agreement, except that the term "Merger Agreement" shall be
deemed to refer to the attached Agreement.
Notwithstanding any other provision of the Offer, subject to the terms
of the Merger Agreement (including the Purchaser's obligation to extend the
Offer as provided in the Merger Agreement), Purchaser shall not be required to
accept for payment or pay for any Shares tendered pursuant to the Offer, and may
terminate or amend the Offer and may postpone the acceptance for payment of and
payment for Shares tendered, if (i) the Minimum Condition shall not have been
satisfied, (ii) any applicable waiting period under the HSR Act and the other
regulatory provisions listed in Section 3.05 of the Merger Agreement shall not
have expired or been terminated prior to the expiration of the Offer, (iii) the
Company shall not have obtained a negative declaration or executed a remediation
agreement with the NJDEPE pursuant to the requirements of ISRA or (iv) (A) the
applicable waiting period under the Exon-Florio Provision shall not have
expired, (B) the Committee on Foreign Investment in the United States ("CFIUS")
shall have initiated an investigation of the Transactions or (C) if CFIUS
initiates an investigation, the applicable waiting period under the Exon-Florio
Provision relating to such investigation shall not have expired, or such
investigation shall have been completed and the President shall have announced a
decision to take action pursuant to the Exon-Florio Provision before the
expiration of the period ending on the 15th day (or if such day is not a
business day, the next business day) following the completion of such
investigation, which has a substantial likelihood of resulting, directly or
indirectly, in any of the consequences referred to in clauses (i) through (v) of
paragraph (a) below or such 15 day waiting period shall not have expired;
provided, however, that prior to the expiration of 120 days following the date
- -------- -------
of the Merger Agreement, Purchaser shall not terminate the Offer by reason of
the non-satisfaction of either of the conditions set forth in clauses (ii),
(iii) or (iv) above and shall extend the Offer and shall use its reasonable best
efforts to cause the satisfaction of such conditions (it being understood that
this proviso shall not prohibit Purchaser from terminating the Offer or failing
to extend the Offer by reason of the non-satisfaction of any other condition of
the Offer). Furthermore, notwithstanding any other term of the Offer, subject
to the terms of the Merger Agreement, Purchaser shall not be required to accept
for payment or pay for any Shares tendered pursuant to the Offer, and may
terminate or amend the Offer and may postpone the acceptance for payment of and
payment for Shares tendered, if, at any time on or after the date of the Merger
Agreement, and prior to the acceptance for payment of Shares, any of the
following conditions exist:
(a) there shall be pending any action or proceeding instituted
by any governmental authority before any court or governmental,
administrative or regulatory authority or agency, domestic or foreign, (i)
challenging or seeking to make illegal,
<PAGE>
A-2
materially delay or otherwise directly or indirectly restrain or prohibit
or make materially more costly the making of the Offer, the acceptance for
payment of, or payment for, any Shares by Parent, Purchaser or any other
affiliate of Parent, or the consummation of any other Transaction, or
seeking to obtain material damages in connection with any Transaction; (ii)
seeking to prohibit or limit materially the ownership or operation by the
Company, Parent or any of their subsidiaries of all or any material portion
of the business or assets of the Company, Parent or any of their
subsidiaries, or to compel the Company, Parent or any of their subsidiaries
to dispose of or hold separate all or any material portion of the business
or assets of the Company, Parent or any of their subsidiaries, as a result
of the Transactions; (iii) seeking to impose or confirm limitations on the
ability of Parent, Purchaser or any other affiliate of Parent to exercise
effectively full rights of ownership of any Shares, including, without
limitation, the right to vote any Shares acquired by Purchaser pursuant to
the Offer or otherwise on all matters properly presented to the Company's
stockholders, including, without limitation, the approval and adoption of
this Agreement and the transactions contemplated hereby; (iv) seeking to
require divestiture by Parent, Purchaser or any other affiliate of Parent
of any Shares; or (v) which otherwise has a Material Adverse Effect or
which is reasonably likely to materially adversely affect the business,
operations, properties, condition (financial or otherwise), assets or
liabilities (including, without limitation, contingent liabilities) of
Parent; provided, however, that prior to the expiration of 120 days
-------- -------
following the date hereof, Purchaser shall not terminate the Offer by
reason of the non-satisfaction of the conditions set forth in this
paragraph (a) and shall extend the Offer and use its reasonable best
efforts to cause the satisfaction of such condition unless there shall be
in effect any permanent injunction or other order, decree, judgment or
ruling that has become final and nonappealable by any court or
governmental, administrative or regulatory authority or agency, domestic or
foreign, which in any case shall have an effect specified in any of clauses
(i) through (v) above (it being understood that this proviso shall not
prohibit Purchaser from terminating the Offer or failing to extend the
Offer by reason of the non-satisfaction of any other condition of the
Offer);
(b) there shall have been any action taken, or any statute,
rule, regulation, legislation, interpretation, judgment, order or
injunction enacted, entered, enforced, promulgated, amended, issued or
deemed applicable to (i) Parent, the Company or any subsidiary or affiliate
of Parent or the Company or (ii) any Transaction, by any legislative body,
court, government or governmental, administrative or regulatory authority
or agency, domestic or foreign, which has a substantial likelihood of
resulting, directly or indirectly, in any of the consequences referred to
in clauses (i) through (v) of paragraph (a) above;
(c) except as set forth in the Disclosure Schedule, there shall
have occurred any change, condition, event or development that has a
Material Adverse Effect;
<PAGE>
A-3
(d) there shall have occurred (i) any general suspension of, or
limitation on prices for, trading in securities of the Company on the
NASDAQ National Market System, (ii) any extraordinary or material adverse
change in the market price of the Shares or in the United States securities
markets or financial markets generally, including, without limitation, a
decline, measured from the date hereof, in the Standard & Poor's 500 Index
by an amount in excess of 25%, (iii) any material adverse change in United
States currency exchange rates or a suspension of, or limitation on,
currency exchange markets, (iv) a declaration of a banking moratorium or
any suspension of payments in respect of banks in the United States or
Germany, (v) any limitation (whether or not mandatory) by any government or
governmental, administrative or regulatory authority or agency, domestic or
foreign, on, or other event that, in the reasonable judgment of Purchaser,
might affect, the extension of credit by banks or other lending
institutions, (vi) a commencement of a war or armed hostilities or other
national or international calamity directly or indirectly involving the
armed forces of the United States or Germany which could reasonably be
expected to have a Material Adverse Effect or materially adversely affect
(or materially delay) the consummation of the Offer or (vii) in the case of
any of the foregoing existing on the date hereof, a material acceleration
or worsening thereof;
(e) (i) it shall have been publicly disclosed or Purchaser shall
have otherwise learned that beneficial ownership (determined for the
purposes of this paragraph as set forth in Rule 13d-3 promulgated under the
Exchange Act) of 50% or more of the then outstanding Shares has been
acquired by any person, other than Parent or any of its affiliates or (ii)
(A) the Board or any committee thereof shall have withdrawn or modified in
a manner adverse to Parent or Purchaser the approval or recommendation of
the Offer, the Merger or the Merger Agreement or approved or recommended
any Acquisition Proposal other than the Offer and the Merger or (B) the
Board or any committee thereof shall have resolved to do any of the
foregoing (except for such action under (A) or (B) that results from the
failure of Parent or Purchaser to perform in any material respect any
material covenant or agreement of either of them contained in the Merger
Agreement or the material breach by Parent or Purchaser of any material
representation or warranty of either of them contained in the Merger
Agreement);
(f) any representation or warranty of the Company in the Merger
Agreement which is qualified as to materiality shall not be true and
correct or any such representation or warranty that is not so qualified
shall not be true and correct in any material respect, in each case as if
such representation or warranty was made as of such time on or after the
date of the Merger Agreement;
<PAGE>
A-4
(g) the Company shall have failed to perform in any material
respect any obligation or to comply in any material respect with any
agreement or covenant of the Company to be performed or complied with by it
under the Merger Agreement;
(h) the Merger Agreement shall have been terminated in
accordance with its terms; or
(i) Purchaser and the Company shall have agreed that Purchaser
shall terminate the Offer or postpone the acceptance for payment of or
payment for Shares thereunder;
which, in the reasonable judgment of Purchaser in any such case, and regardless
of the circumstances (including any action or inaction by Parent or any of its
affiliates) giving rise to any such condition, makes it inadvisable to proceed
with such acceptance for payment or payment.
The foregoing conditions are for the sole benefit of Purchaser and
Parent and may be asserted by Purchaser or Parent regardless of the
circumstances giving rise to any such condition or may be waived by Purchaser or
Parent in whole or in part at any time and from time to time in their sole
discretion, except that the Minimum Condition may not be waived by Parent or
Purchaser without the prior written consent of the Company. The failure by
Parent or 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 other 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.
<PAGE>
ANNEX B
-------
AGREEMENTS RESPECTING EMPLOYEE BENEFIT MATTERS
(a) Benefits Following the Effective Time. Parent shall cause the
-------------------------------------
Surviving Corporation for a period of at least two years following the
acceptance of Shares by Purchaser pursuant to the Offer to continue to provide
the employees of the Surviving Corporation with the employee pension, welfare
and fringe benefits currently in effect (subject to paragraph (c) below) or
substitute benefits that are substantially comparable to, and in the aggregate
no less favorable than, such employee pension, welfare and fringe benefits.
(b) Phantom Equity or Long-Term Incentive Program. As soon as practicable
---------------------------------------------
following the Effective Time, Parent shall cause the Surviving Corporation to
implement a phantom equity or long-term incentive program instead of the Stock
Option Plans as currently in effect to reward revenue growth and profitability
over a three year period, which program shall be designed by Parent following
good faith consultation with the Surviving Corporation's senior management and
under which program potential payments shall be at a level consistent with the
objective of preserving the entrepreneurial character of the Surviving
Corporation. Such program shall also contain provisions providing for the
conversion of awards into common equity of the Surviving Corporation in the
event of an initial public offering of the common equity of the Surviving
Corporation.
(c) Amendment to 401(k) Plan. As soon as practicable following the
------------------------
Effective Time, Parent shall cause the Surviving Corporation to amend the
Surviving Corporation 401(k) plan to effect an appropriate increase to the rate
of employer matching contributions and/or discretionary contributions so as to
compensate the employees of the Surviving Corporation for the termination of the
1987 Stock Purchase Plan.
(d) Management Incentive Plan. Parent shall cause the Surviving
-------------------------
Corporation to retain the Management Incentive Plan (the "MIP") until September
30, 1995, as modified as provided below, with the same employees remaining
eligible for bonuses thereunder. The amounts payable to each of the Surviving
Corporation's executive officers participating in the MIP shall be increased by
30%. Each other participant in the MIP shall be given the right to elect, no
later than 30 days following the Effective Time, either (i) the 30% increase
described in the immediately proceeding sentence or (ii) a guaranteed minimum
bonus equal to 50% of such participant's bonus at 100% target performance.
Appropriate adjustments shall be made to the plan target levels to eliminate the
effect of legal, investment banking and other extraordinary fees and expenses
incurred by the Surviving Corporation as a consequence of the transactions
effected pursuant to this Agreement and the preparation and negotiations leading
thereto.
(e) Incentive Plan for Selected Non-MIP Employees. Parent shall cause the
---------------------------------------------
Surviving Corporation to establish a bonus system for selected non-MIP, non-
sales employees which will reward milestones, for example, in the development of
products.
<PAGE>
B-2
(f) Retention Bonuses. As soon as practicable following the Effective
-----------------
Time, Parent shall cause the Surviving Corporation to enter into retention bonus
agreements with up to 30 employees of the Surviving Corporation to be identified
by mutual agreement of Parent and senior management of the Company. Such
retention bonus agreements shall be in a form to be established by Parent
following good faith consultation with senior management of the Surviving
Corporation and shall provide each covered employee with the opportunity to
receive a retention bonus (in addition to any bonus payable under the MIP or
other annual bonus plan) of up to 100% of such employee's base salary on the
second anniversary of the Effective Time, subject to such employee being
employed by the Surviving Corporation on such anniversary date.
<PAGE>
EXHIBIT 99.(C)(2)
CONFORMED COPY
MANAGEMENT RETENTION AGREEMENT
------------------------------
THIS MANAGEMENT RETENTION AGREEMENT is entered into as of
January 20, 1995, by and between PYRAMID TECHNOLOGY CORPORATION, a Delaware
corporation (the "Company"), and John S. Chen ("Executive").
WHEREAS, Executive is and has been employed by the Company and is
currently serving as the President and Chief Operating Officer of the Company;
and
WHEREAS, the Company and Executive are parties to a Statement of
Employment Terms, dated as of August 5, 1991, which sets forth the terms and
conditions of Executive's employment with the Company (the "Original
Agreement"); and
WHEREAS, Executive and the Company desire to terminate the Original
Agreement; and
WHEREAS, the Company desires to continue to employ Executive and to
assure itself of the continued services of Executive for the term of employment
provided for in this Management Retention Agreement (the "Agreement"), and
Executive desires to be employed by the Company for such period, upon the terms
and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the covenants and agreements
hereinafter set forth, the parties hereto agree as follows:
1. Termination of Original Agreement; Effectiveness of Agreement. The
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Company and Executive agree that the Original Agreement shall be terminated, and
shall be of no further force and effect, as of the Effective Date (as specified
in Section 3 of this Agreement). This Agreement shall become effective only
upon the Effective Date and shall have no force or effect for so long as the
Effective Date does not occur. The Company and Executive agree that neither
party shall be liable to the other under any provision of the Original
Agreement, and that this Agreement shall govern the terms and conditions of
Executive's employment with the Company, from and after the Effective Date.
2. Employment; Duties. The Company and Executive hereby agree that
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Executive's continued employment with the Company during the Employment Terms
(as defined in Section 3 of this Agreement) shall be upon the terms and
conditions set forth herein. During the Employment Term, Executive shall serve
as Chief Executive Officer of the Company and as a member of the Company's board
of directors (the "Board"), and shall render such business and professional
services in the performance of his duties as shall be assigned to him by the
Board. Executive shall devote his full time and efforts to perform his
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duties faithfully, diligently and to the best of his ability to advance the
interests of the Company. Executive shall not serve as a director, employee,
consultant or advisor to any other corporation or other business enterprise
without the prior written consent of the Board. Executive may serve in any
capacity with any civic, educational or charitable organization or any trade
association without the approval of the Board, provided that such activities do
not interfere with his duties and obligations under this Agreement.
3. Term of Employment. Executive's employment under this Agreement
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shall commence at the Effective Time, as such term is defined in the Agreement
and Plan of Merger (the "Merger Agreement") among Siemens Nixdorf
Informationssysteme AG ("SNI"), HN Acquisition Corp and the Company (the
"Effective Date"), and shall terminate on the earlier of (i) the fifth
anniversary of the Effective Date, or (ii) termination of Executive's employment
pursuant to this Agreement (the period commencing on the Effective Date and
ending on the fifth anniversary thereof is hereinafter referred to as the
"Employment Term").
4. Compensation.
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(a) Signing Bonus. In consideration of Executive's agreement to
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continue his employment with the Company, on or as soon as practicable (but no
more than 60 days) following the Effective Date, the Company shall pay Executive
a signing bonus of $250,000.
(b) Base Salary. The Company shall pay Executive throughout the
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term of this Agreement a base salary (the "Base Salary") at a rate of not less
than $380,000 per year, payable in equal monthly installments. Once increased,
such higher salary shall constitute Executive's Base Salary.
(c) Bonus. During the Employment Term, Executive shall be
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eligible to participate in any annual bonus plan maintained from time to time by
the Company for senior executives. For the year ending September 30, 1995,
Executive's target bonus payout under the Company's Management Incentive Plan
shall be increased from 45% to 60% of Base Salary (in addition to the 30%
increase provided in Annex B to the Merger Agreement), resulting in an aggregate
target bonus payout of 78% of Base Salary. For subsequent years during the
Employment Term, Executive's target bonus payout shall be at least 60% of Base
Salary.
(d) Retention Bonus. In consideration of Executive's services
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hereunder, on the second anniversary of the Effective Date, provided that
Executive is employed by the Company on such date, the Company shall pay
Executive a bonus in an amount equal to $760,000. Notwithstanding the foregoing,
at the election of Executive, to be made prior to the first anniversary of the
Effective Date, Executive shall participate in a supplemental pension
arrangement in lieu of the retention bonus described in the immediately
preceding
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3
sentence. Under such supplemental pension arrangement, the specific terms of
which shall be negotiated in good faith by Executive and SNI, (i) the right to
receive supplemental pension benefits shall vest on the second anniversary of
the Effective Date and (ii) the aggregate actuarial present value of such
supplemental pension benefits determined as of the second anniversary of the
Effective Date shall be $760,000.
5. Employee Benefits.
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(a) General. Executive shall be included in all employee benefit
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plans, programs or arrangements (including, without limitation, any plans,
programs or arrangements providing for retirement benefits, incentive
compensation, profit sharing, bonuses, disability benefits, health and life
insurance, automobile (or automobile allowance), vacation and paid holidays)
which shall be established by the Company for, or made available to, its senior
executives, or shall be entitled to benefits comparable to such plans, programs
or arrangements. With respect to Executive's participation in any phantom equity
or long-term incentive program established in accordance with paragraph (b) of
Annex B to the Merger Agreement, assuming that three-year long-term incentive
target performance is achieved as set forth in Exhibit A hereto and subject to
Executive's continued employment, Executive shall be entitled to a plan payment
of at least $1,000,000, it being understood and agreed that the targets set
forth on Exhibit A may be adjusted by mutual agreement of Executive and the
Company in connection with the detailed development of the phantom equity or
long term incentive program in accordance with paragraph (b) of Annex B to the
Merger Agreement.
(b) Reimbursement of Expenses. The Company shall reimburse
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Executive for all out-of-pocket expenses reasonably incurred and paid by him in
the performance of his duties pursuant to this Agreement. Such reimbursement
shall be in accordance with the Company's policies and documentation required to
support the deductibility of such expenses for federal income tax purposes.
6. Termination of Employment.
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(a) Termination without Cause; Resignation for Good Reason.
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(i) General. Subject to the provisions of Section 6(a)(ii)
and 6(a)(iii), if, prior to the expiration of the Employment Term, Executive's
employment is terminated by the Company without Cause (as defined in Section
6(c) of this Agreement), or if Executive resigns from his employment hereunder
for Good Reason (as defined in Section 6(d) of this Agreement), the Company
shall pay Executive cash severance in an aggregate amount equal to (A) if such
termination occurs on or prior to the second anniversary of the Effective Date,
two (2) times the sum of (x) the Executive's Base Salary at the annualized rate
for the year coinciding with the year of payment and (y) the average of the
annual cash
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bonus received by the Executive for the three (3) years immediately preceding or
ending coincident with the year of payment (whichever average produces the
higher amount) or (B) if such termination occurs following the second
anniversary of the Effective Date, the sum of (x) the Executive's Base Salary at
the annualized rate for the year coinciding with the year of payment and (y) the
average of the annual cash bonus received by the Executive for the three (3)
years immediately preceding or ending coincident with the year of payment
(whichever average produces the higher amount). Any severance payments to which
the Executive is entitled pursuant to this section shall be paid in a lump sum
within thirty (30) days of the Executive's termination. In addition, for a
period of twenty-four (24) months (or twelve (12) months if such termination
occurs following the second anniversary of the Effective Date) after any
termination under this Section 6(a)(i) (the "Severance Period"), the Company
shall be obligated to continue to make available to the Executive and to pay for
all health and medical benefit, life and other similar insurance plans existing
on the date of the Executive's termination. Executive shall have no further
right to receive any other compensation, or to participate in any other plan,
arrangement, or benefit, after such termination or resignation of employment,
except as provided in the previous sentence, and except as may be required by
applicable law, including, but not limited to, any rights Executive may have
under Title I, Part 6 of the Employee Retirement Income Security Act of 1974, as
amended.
(ii) Conditions Applicable to the Severance Period. If,
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during the Severance Period, Executive materially breaches his obligations under
Sections 8, 9, or 10 of this Agreement, the Company may, upon written notice to
Executive, offset the damages it incurs as a consequence of such breach against
any further payments or benefits due Executive pursuant to this Section 6(a).
(iii) Death During Severance Period. In the event of
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Executive's death during the Severance Period, the Company shall have no further
obligations under this Agreement, other than the provision to Executive's
dependents of continued health and medical benefit and similar insurance plans
for the balance of the Severance Period.
(iv) Date of Termination. The date of termination of
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employment without Cause shall be the date specified in a written notice of
termination to Executive. The date of resignation for Good Reason shall be the
date specified in the written notice of resignation from Executive to the
Company.
(b) Termination for Cause; Resignation Without Good Reason.
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(i) General. If, prior to the expiration of the
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Employment Term, Executive's employment is terminated by the Company for Cause,
or if Executive resigns from his employment hereunder other than for Good Reason
on or prior to the first anniversary of the Effective Date, Executive shall be
entitled only to payment of all amounts earned or owing to Executive through and
including the date of termination or resignation, it
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5
being specifically understood and agreed that Executive shall have no right to
any full or partial annual bonus for the year in which such termination occurs.
Executive shall have no further right to receive any other compensation, or to
participate in any other plan, arrangement, or benefit, after such termination
or resignation of employment, except as provided in the previous sentence, and
except as may be required by applicable law, including, but not limited to, any
rights Executive may have under Title I, Part 6 of the Employee Retirement
Income Security Act of 1974, as amended.
(ii) Resignation Without Good Reason Following the First
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Anniversary of the Effective Date. If, prior to the expiration of the Employment
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Term but the first anniversary of the Effective Date, Executive resigns from his
employment hereunder other than for Good Reason, Executive shall receive, for
the lesser of one year from the date of resignation or until Executive secures
new full-time employment, compensation continuation payments paid in accordance
with the Company's customary salary payroll practices at an annualized rate
equal to the sum of the Executive's Base Salary annualized for the year
coinciding with the year of resignation and the average of the annual cash
bonuses received by Executive for the three (3) years immediately preceding or
ending coincidental with the year of resignation (whichever average produces the
higher amount). In addition, for the period Executive is receiving compensation
continuation payments pursuant to this Section 6(b)(ii), the Company shall be
obligated to continue to make available to the Executive and to pay for all
health and medical benefit, life and other similar insurance plans existing on
the date of the Executive's resignation. Executive shall have no further right
to receive any other compensation, or to participate in any other plan,
arrangement, or benefit, after such termination or resignation of employment,
except as provided in the previous sentence, and except as may be required by
applicable law, including, but not limited to, any rights Executive may have
under Title I, Part 6 of the Employee Retirement Income Security Act of 1974, as
amended.
(iii) Date of Termination. The date of termination for Cause shall
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be the date of receipt by Executive of a written Notice of Termination provided
for in Section 6(b)(iv). The date of resignation without Good Reason shall be
the date specified in the written notice of resignation from Executive to the
Company, or if no date is specified therein, 10 business days after receipt by
the Company of written notice of resignation from Executive.
(iv) Notice of Termination. Termination of Executive's employment
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for Cause shall be communicated by delivery to Executive of a copy of a
resolution duly adopted by the affirmative vote of not less than a majority of
the entire membership of the Board at a meeting of the Board called and held for
such purpose (a "Notice of Termination"). For purposes of this Agreement, no
purported termination of Executive's employment for Cause shall be effective
without delivery of such Notice of Termination.
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(c) Cause. Termination for "Cause" shall mean termination of
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Executive's employment because of Executive's (i) involvement in fraud,
misappropriation or embezzlement related to the business or property of the
Company, (ii) conviction for, or guilty plea to, a felony, (iii) willful
material breach of this Agreement, (iv) breach of Sections 8, 9, or 10 of this
Agreement, or (v) willful and continued failure to substantially perform his
duties hereunder (other than as a result of illness); provided, however, that if
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such Cause is reasonably curable, the Company shall not terminate Executive's
employment hereunder unless the Board first gives notice of its intention to
terminate and of the grounds for such termination, and Executive has not, within
thirty (30) days following receipt of the notice, cured such Cause.
(d) Good Reason. For purposes of this Agreement, "Good Reason" shall
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mean (i) the assignment to Executive of any duties, or the reduction of
Executive's duties, either of which results in a material diminution in
Executive's duties and responsibilities as set forth in Section 2 hereof, (ii) a
reduction by the Company in the Base Salary of Executive as in effect
immediately prior to such reduction, (iii) a material reduction by the Company
in the kind or level of employee benefits to which Executive is entitled
immediately prior to such reduction with the result that Executive's overall
benefits package is significantly reduced (other than a reduction applicable to
senior executives generally), (iv) a failure to pay or provide any material item
of compensation or benefits in accordance with the terms of this Agreement or
any applicable employee plan in which Executive participates, (v) the relocation
of Executive to a facility or a location more than 50 miles from Executive's
then present location, without Executive's express written consent or (vi) any
Change of Control (as hereinafter defined) of the Company occurring after the
Effective Date; provided, however, that if such Good Reason is reasonably
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curable, Executive shall not resign from employment hereunder unless Executive
first gives notice of his intention to resign for Good Reason and of the grounds
for such resignation, and the Company has not, within thirty (30) days following
receipt of the notice, cured such Good Reason, as determined in good faith by
Executive. "Change of Control" shall mean the occurrence of any of the following
events as used herein, after the Effective Date: (i) any "person" (as such term
is used in Sections 13 (d) and 14 (d) of the Securities Exchange Act of 1934, as
amended) other than SNI or its affiliates (a "Third Party") is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under said Act), directly or
indirectly, of securities of the Company representing fifty percent (50%) or
more of the total voting power represented by the Company's then outstanding
voting securities; (ii) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation that is a Third Party,
other than a merger or consolidation which would result in the voting securities
of the Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting securities of
the surviving entity) at least fifty percent (50%) of the total voting power
represented by the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation; or (iii) the
stockholders of the Company approve a plan of complete liquidation of the
Company or an agreement for the
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sale or disposition by the Company of all or substantially all the Company's
assets to a Third Party.
7. Death or Permanent Disability.
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(a) Death. If Executive's employment hereunder is terminated by
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death, Executive's estate shall be entitled only to payment of all amounts
earned or owed to Executive through and including the date of Executive's death.
Notwithstanding the foregoing, if Executive dies prior to the second anniversary
of the Effective Date, Executive's estate shall also receive, within 60 days of
Executive's death, a pro rata retention bonus determined by multiplying $760,000
by a fraction, the numerator of which is the number of days elapsed between the
Effective Date and the date of Executive's death, and the denominator of which
is 730. The Company shall have no further obligations under this Agreement,
except as provided in the previous sentence, and except as may be required by
applicable law, including, but not limited to, any rights Executive may have
under Title I, Part 6 of the Employee Retirement Income Security Act of 1974, as
amended.
(b) Permanent Disability. In the event Executive shall become
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permanently disabled (as defined below), Executive shall be entitled only to
payment of Executive's Base Salary earned through and including the last day of
the six-month period referred to below. The Company shall have no further
obligations under this Agreement, except as may be provided under the Long-Term
Disability Policy maintained by the Company or as may be required by applicable
law, including, but not limited to, any rights Executive may have under Title I,
Part 6 of the Employee Retirement Income Security Act of 1974, as amended.
Notwithstanding the foregoing, if Executive becomes permanently disabled prior
to the second anniversary of the Effective Date, Executive shall also receive,
within 60 days of Executive's termination by reason of permanent disability, a
pro rata retention bonus determined by multiplying $760,000 by a fraction, the
numerator of which is the number of days elapsed between the Effective Date and
the date of termination by reason of permanent disability, and the denominator
of which is 730. Executive shall be considered permanently disabled if Executive
is absent from employment or unable to render services hereunder on a full-time
basis by reason of physical or mental illness or disability for six (6) months
or more in the aggregate in any twelve (12) month period during the term of this
Agreement. Any question as to the existence or extent of Executive's disability
upon which Executive and the Company cannot agree, shall be determined by a
qualified independent physician selected by the Company and approved by
Executive.
8. Trade Secrets; Non-solicitation.
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(a) Trade Secrets. During the Employment Term and at all times
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thereafter (unless such secrets or information become part of the public domain,
other than through Executive's breach of this Section 8), Executive shall hold
in secrecy for the
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Company, SNI and their respective subsidiaries and affiliates (the "Group") all
trade secrets and other confidential information relating to the Group's
business and affairs that may come to his knowledge or have come to his
knowledge while heretofore employed by the Company or its subsidiaries,
including but not limited to matters of a technical nature, such as scientific,
trade or engineering secrets, "know-how," formulae, secret processes or
machines, inventions, and research projects, and matters of a business nature,
such as information about costs, profits, markets, sales, lists of customers and
suppliers, and other information of a similar nature, and plans for future
development. Except as required in the performance of his duties to the Company
under this Agreement, Executive shall not use for his own benefit or disclose to
any person, directly or indirectly, such matters unless such use or disclosure
has been specifically authorized in writing by the Company in advance.
(b) Non-Solicitation. For a period of one year following the
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termination of Executive's employment hereunder for any reason except a
resignation by Executive for Good Reason, Executive shall not, without the prior
written consent of the Company, directly or indirectly, as a sole proprietor,
member of a partnership, stockholder or investor, officer or director of a
corporation, or as an employee, associate, consultant, independent contractor or
agent of any person, partnership, corporation or other business organization or
entity other than the Company or any other member of the Group (i) solicit or
endeavor to entice away from the Group any person or entity who is, or, during
the then most recent 12-month period, was, employed by, or had served as an
agent or key consultant of, the Group, or (ii) solicit or endeavor to entice
away from the Group any person or entity who is, or was within the then most
recent 12-month period, a customer or client (or reasonably anticipated (to the
general knowledge of Executive or the public) to become a customer or client) of
the Group.
9. Return of Documents and Property. Upon the termination of Executive's
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employment by the Company, or at any time upon the request of the Company,
Executive (or his heir or personal representative) shall deliver to the Company
(a) all documents and materials containing trade secrets and other confidential
information relating to the Group's business and affairs, and (b) all other
documents, materials and other property belonging to the Group that are in the
possession or under the control of Executive.
10. Inventions. Without further consideration, Executive shall (a)
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promptly notify, make full disclosure to and assign to the Company, any and all
inventions, discoveries and improvements ("Inventions"), made or developed by
him, wholly or in part, at any time during his employment with the Company that
pertain to the business carried on or products or services being sold or
developed by the Group during such period, whether patentable or not, (b) assist
the Company in obtaining for itself at its own expense United States of America
and foreign patents and other rights on any and all of the Inventions which
Executive is obligated to disclose to the Company, and (c) at the Company's
expense promptly execute, whether during his employment or thereafter, all
applications or other
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endorsements necessary or appropriate to obtain said patents and other rights
for the Company and to protect its title thereto. Any Inventions made or
developed by Executive within six months after termination of employment with
the Company that pertain to the business carried on or products or services
being sold or developed by the Group at the time of such termination shall, as
between Executive and the Company, be conclusively presumed to have been made
during Executive's employment with the Company.
The foregoing provision shall not require Executive to assign any
Invention that would cause the foregoing provision to be void or unenforceable
under Section 2870 of the California Labor Code, and Executive acknowledges
receipt of the notification required by Section 2872 of the California Labor
Code.
11. Remedies. Any breach, violation or evasion by Executive of the terms
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of this Agreement, including specifically, but not limited to, Sections 8, 9, or
10, will result in immediate and irreparable injury and harm to the Company and
will cause damage to the Company in amounts difficult to ascertain.
Accordingly, the Company shall be entitled to the remedies of injunction and
specific performance, or either of such remedies, as well as all other remedies
to which the Company may be entitled, at law, in equity or otherwise.
12. Limitation on Payments.
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(a) Basic Rule. Subject to Section 12(c) below, in the event that
any payment or benefit received or to be received by Executive pursuant to this
Agreement or otherwise (collectively, the "Payments") would (i) be treated as a
"parachute payment" within the meaning of Section 280G of the Internal Revenue
Code of 1986, as amended (the "Code"), or any similar or successor provision to
280G and (ii) but for this Section 12(a), be subject to this excise tax imposed
by Section 4999 of the Code or any similar or successor provision to Section
4999 (the "Excise Tax"), then, subject to the provisions of Section 12(b)
hereof, such Payments shall reduced to the largest amount which would result in
no portion of the Payments being subject to the Excise Tax. The determination of
any required reduction pursuant to this Section 12(a) (including the
determination as to which specific Payments shall be reduced) shall be made
initially by Executive in consultation with the Company. If Executive and the
Company shall disagree upon the amount of such reduction, then the Company
shall, at its expense, promptly call upon Ernst & Young, independent
accountants, to make such determination, and such determination shall be
conclusive and binding upon Executive and the Company or any related corporation
for all purposes. The Company and its related corporations waive all claims and
rights against Executive with respect to such determination except as
specifically set forth in the next sentence. If the Internal Revenue Service
(the "IRS") determines that Payments are subject to the Excise Tax, then the
Company or any related corporation, as their exclusive remedy, shall seek to
enforce the provisions of Section 12(b) hereof. Such enforcement of Section
12(b) hereof shall be the only remedy against Executive, under any and all
applicable state and federal
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laws or otherwise, for the failure to reduce the Payments so that no portion
thereof is subject to the Excise Tax. The Company or related corporation shall
reduce Payments in accordance with Section 12(a) only upon written notice to
Executive indicating the amount of such reduction, if any, and Executive's
agreement to the amount of such reduction (subject, in the event of
disagreement, to a determination by Ernst & Young on the basis provided above).
(b) Remedy. If, notwithstanding the reduction described in Section
12(a) hereof, the IRS determines that Executive is liable for the Excise Tax as
a result of the receipt of Payments, then Executive shall, subject to the
provisions of this Agreement, be obligated to pay to the Company (the "Repayment
Obligation") an amount of money equal to the "Repayment Amount." The Repayment
Amount with respect to Payments shall be the smallest such amount, if any, as
shall be required to be paid to the Company so that Executive net proceeds with
respect to Payments (after taking into account the payment of the Excise Tax
imposed on Payments) shall be maximized. Notwithstanding the foregoing, the
Repayment Amount with or more than zero would not eliminate the Excise Tax
imposed on Payments. If the Excise Tax is not eliminated through the performance
of the Repayment Obligation, Executive shall pay the Excise Tax. The Repayment
Obligation shall be performed within 30 days of either (i) the Employee entering
into a binding agreement with the IRS as to the amount of the Executive's Excise
Tax liability or (ii) a final determination by the IRS or a court decision
requiring the Employee to pay the Excise Tax with respect to Payments from which
no appeal is available or is timely taken.
(c) Special Rule in the Event of a Termination Without Cause or
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Resignation for Good Reason. Notwithstanding the foregoing provision of this
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Section 12, in the event Executive's employment is terminated by the Company
without Cause or Executive resigns for Good Reason and any amounts or benefits
to be received by Executive pursuant to Section 6(a) of this Agreement causes
any Payments, as reasonably determined by the Company with the advice of
nationally recognized tax counsel or accounting firm, to be subject to Excise
Tax, the provisions of this Section 12(c) shall apply instead of Sections 12(a)
and 12(b). In the event this Section 12(c) applies, Executive shall receive an
additional payment from the Company (the "Additional Payment") in the amount
necessary so that, after application of the Excise Tax and state, federal and
local income taxes to the Payments and the Additional Payment, Executive shall
receive the same aggregate after-tax benefit that he would have received had the
Payments not been subject to the Excise Tax.
13. Assignment. Executive's rights and obligations under this Agreement
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shall not be assignable by Executive. The Company's rights and obligations
under this Agreement shall not be assignable by the Company except as incident
to the transfer, by merger, liquidation, or otherwise, of all or substantially
all of the business of the Company.
14. Notices. Any notice required or permitted under this Agreement shall
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be given in writing and shall be deemed to have been effectively made or given
if personally
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delivered, or if telegraphed, telexed, cabled, or mailed to the other party at
its address set forth below in this Section 14, or at such other address as such
party may designate by written notice to the other party hereto. Any effective
notice hereunder shall be deemed given on the date personally delivered or on
the date telegraphed, telexed, cabled or deposited in the United States mail
(sent by certified mail, return receipt requested) mailed, as the case may be,
at the following address:
(i) If to the Company:
PYRAMID TECHNOLOGY CORPORATION
3860 N. First Street
San Jose, California 95134
Attention:
with a copy to:
SIEMENS NIXDORF INFORMATIONSSYSTEME AG
Otto-Hahn-Ring 6
81739 Munich
Fax # 011 4989 636 42922
Attention: G. Schulmeyer
(ii) If to Executive:
John S. Chen
PYRAMID TECHNOLOGY CORPORATION
3860 N. First Street
San Jose, California 95134
15. Disputes. Any disputes under this Agreement between the parties
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hereto shall be settled by arbitration in San Francisco, California under the
auspices of, and in accordance with the rules of, the American Arbitration
Association, by an arbitrator who is mutually agreeable to the parties hereto,
or, if the Company and Executive cannot agree on the selection of the
arbitrator, then before three arbitrators, one of which shall be appointed by
Executive, one of which shall be appointed by the Company, and the third of
which shall be chosen by the American Arbitration Association (such arbitrator
or arbitrators hereinafter referred to as the "Arbitrator"). The decision in
such arbitration shall be final and conclusive on the parties and judgment upon
such decision may be entered in any court having jurisdiction thereof. The
parties hereby agree that the Arbitrator shall be empowered to enter an
equitable decree mandating specific enforcement of the terms of this Agreement,
including an injunction restraining the Executive from engaging in activities
prohibited in Section 8, 9 or 10. The Company and Executive shall share equally
all expenses of the
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Arbitrator incurred in any arbitration hereunder; provided however, that the
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Company or Executive, as the case may be, shall bear all expenses of the
Arbitrator and all of the legal fees and out-of-pocket expenses of the other
party if the Arbitrator determines that the claim or position of such party was
frivolous and without reasonable foundation. Executive hereby agrees and
submits to jurisdiction before each and every court for purposes of enforcing
the provisions of this Section 15.
16. Severability. If an arbitrator or a court of competent jurisdiction
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determines that any term or provision hereof is invalid or unenforceable, (a)
the remaining terms and provisions hereof shall be unimpaired and (b) such court
shall have the authority to replace such invalid or unenforceable term or
provision with a term or provision that is valid and enforceable and that comes
closest to expressing the intention of the invalid or unenforceable term or
provision.
17. Entire Agreement. This Agreement represents the entire agreement of
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the parties and shall supersede any and all previous contracts, arrangements or
understandings between the Company and Executive. The Agreement may be amended
at any time only by mutual written agreement of the parties hereto.
18. Withholding. The Company shall be entitled to withhold, or cause to
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be withheld, from payment any amount of withholding taxes required by law with
respect to payments made to Executive in connection with his employment
hereunder.
19. Governing Law. This Agreement shall be construed, interpreted, and
-------------
governed in accordance with the laws of California without reference to rules
relating to conflict of law.
20. Successors. This Agreement shall be binding upon and inure to the
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benefit of, and shall be enforceable by Executive and the Company, their
respective heirs, executors, administrators and assigns. In the event the
Company is merged, consolidated, liquidated by a parent corporation, or
otherwise combined into one or more corporations, the provisions of this
Agreement shall be binding upon and inure to the benefit of the parent
corporation or the corporation resulting from such merger or to which the asset
shall be sold or transferred, which corporation from and after the date of such
merger, consolidation, sale or transfer shall be deemed to be the Company for
purposes of this Agreement. In the event of any other assignment of this
Agreement by the Company, by operation of law or otherwise, the Company shall
remain primarily liable for its obligations hereunder. This Agreement shall not
be assignable by Executive.
<PAGE>
13
21. Headings. The headings of sections herein are included solely for
--------
convenience of reference and shall not control the meaning or interpretation of
any of the provisions of this Agreement.
22. Counterparts. This Agreement may be executed by either of the parties
------------
hereto in counterparts, each of which shall be deemed to be an original, but all
such counterparts shall together constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
PYRAMID TECHNOLOGY
CORPORATION
By: /s/ Richard H. Lussier
----------------------------------
NAME Richard H. Lussier
TITLE Chairman
EXECUTIVE
/s/ John S. Chen
---------------------------------------
John S. Chen
<PAGE>
Exhibit A (to Management Retention Agreement)
<TABLE>
Three-Year Long Term Incentive
Target Performance
<CAPTION>
$ Million
FY95 FY96 FY97 Sum
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Profit before tax 10 20 45 75
Revenue 280 400 560 1,240
- --------------------------------------------------------------------------------
</TABLE>
Notes:
1) Profit before taxes is net of payouts under all bonus plans including MIP
and the long-term incentive plan.
2) Appropriate adjustments shall be made to the FY95 plan target levels to
eliminate the effect of expenses uniquely related to this transaction which
shall include legal, investment banking and other extraordinary fees and
expenses incurred by the Surviving Corporation as a consequence of the
transactions effected pursuant to this Agreement and the preparation and
negotiations leading thereto.
3) Target levels for each year will be adjusted to eliminate expenses arising
from certain provisions of Annex B to the Agreement and Plan of Merger,
specifically: (i) increases in payments under the terms of the Management
Incentive Plan, with no limit, (ii) payments under an Incentive Plan for
Selected Non-MIP Employees, to a maximum of $2 million over 3 years, and
(iii) payments for Retention Bonuses, to a maximum of $3 million over 3
years.
4) The target levels for each year will be adjusted to eliminate the impact of
payments under the Signing Bonus and Retention Bonus provisions of this
Agreement.
