<PAGE> 1
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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
------------------------
SPECTRAN CORPORATION
(NAME OF SUBJECT COMPANY)
SEATTLE ACQUISITION INC.
LUCENT TECHNOLOGIES INC.
(BIDDERS)
------------------------
COMMON STOCK, PAR VALUE $.10 PER SHARE
(TITLE OF CLASS OF SECURITIES)
------------------------
847598109
(CUSIP NUMBER OF CLASS OF SECURITIES)
------------------------
PAMELA F. CRAVEN, ESQ.
SEATTLE ACQUISITION INC.
C/O LUCENT TECHNOLOGIES INC.
600 MOUNTAIN AVENUE
MURRAY HILL, NEW JERSEY 07974
(908) 582-8500
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSONS AUTHORIZED TO
RECEIVE NOTICES AND COMMUNICATIONS ON BEHALF OF BIDDERS)
------------------------
COPIES TO:
IRVING L. ROTTER, ESQ.
SIDLEY & AUSTIN
875 THIRD AVENUE
NEW YORK, NEW YORK 10022
(212) 906-2000
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CALCULATION OF FILING FEE
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TRANSACTION VALUATION* AMOUNT OF FILING FEE
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<S> <C>
$67,331,196 $13,466.24
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</TABLE>
* For purposes of calculating amount of filing fee only. The amount assumes
the purchase of 7,481,244 shares of Common Stock, par value $.10 per share
(collectively, the "Shares"), at a price per Share of $9.00 in cash. Such
number of shares represents all the Shares outstanding, determined on a
fully diluted basis.
[ ] 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: None Filing Party: N/A
Form or Registration No.: N/A Date Filed: N/A
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<PAGE> 2
SCHEDULE 14D-1
CUSIP NO. 847598109
<TABLE>
<S> <C> <C>
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1 NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NO. OF ABOVE
PERSONS
Seattle Acquisition Inc.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS AF
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5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(e) or 2(f) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
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7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
0
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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) 0%
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10 TYPE OF REPORTING PERSON CO
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</TABLE>
2
<PAGE> 3
SCHEDULE 14D-1
CUSIP NO. 847598109
<TABLE>
<S> <C> <C>
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1 NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NO. OF ABOVE
PERSONS
Lucent Technologies Inc.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS WC
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5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(e) or 2(f) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware
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7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
0
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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) 0%
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10 TYPE OF REPORTING PERSON CO
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</TABLE>
3
<PAGE> 4
This Tender Offer Statement on Schedule 14D-1 relates to the offer by
Seattle Acquisition Inc., a Delaware corporation (the "Purchaser") and a wholly
owned subsidiary of Lucent Technologies Inc., a Delaware corporation ("Parent"),
to purchase all of the outstanding shares of common stock, par value $.10 per
share (the "Shares"), of SpecTran Corporation, a Delaware corporation (the
"Company").
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is SpecTran Corporation, which has its
principal executive offices at 50 Hall Road, Sturbridge, Massachusetts 01566.
(b) This Schedule 14D-1 relates to the offer by the Purchaser to purchase
all outstanding Shares at a price of $9.00 per Share, net to the seller in cash
(the "Offer Price"), upon the terms and subject to the conditions set forth in
the Offer to Purchase and in the related Letter of Transmittal (which, together
with any amendments or supplements thereto, collectively constitute the
"Offer"), copies of which are attached hereto as Exhibits (a)(1) and (a)(2),
respectively. Information concerning the number of outstanding Shares is set
forth in the "Introduction" of the Offer to Purchase and is incorporated herein
by reference.
(c) Information concerning the principal market in which the Shares are
traded and the high and low sales prices of Shares for each quarterly period
during the past two years is set forth in Section 6 ("Price Range of the Shares;
Dividends on the Shares") of the Offer to Purchase and is incorporated herein by
reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(d) and (g) This Schedule 14D-1 is being filed by the Purchaser and
Parent. Information concerning the principal business and the address of the
principal offices of the Purchaser and Parent is set forth in Section 9
("Certain Information Concerning the Purchaser and Parent") of the Offer to
Purchase and is incorporated herein by reference. The names, business addresses,
present principal occupations or employment, material occupations, positions,
offices or employments during the last five years and citizenship of the
directors and executive officers of the Purchaser and Parent are set forth in
Schedule I to the Offer to Purchase and are incorporated herein by reference.
(e) and (f) The information set forth in Section 9 ("Certain Information
Concerning the Purchaser and Parent") of the Offer to Purchase is incorporated
herein by reference.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
(a) and (b) The information set forth in Section 11 ("Contacts with the
Company; Background of the Offer") and Section 12 ("Purpose of the Offer; The
Merger Agreement") of the Offer to Purchase is incorporated herein by reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a) and (b) The information set forth in Section 10 ("Source and Amount of
Funds") of the Offer to Purchase is incorporated herein by reference.
(c) Not applicable.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER.
(a)-(e) The information set forth in Section 12 ("Purpose of the Offer; The
Merger Agreement") of the Offer to Purchase is incorporated herein by reference.
(f) and (g) The information set forth in Section 7 ("Effect of the Offer on
the Market for the Shares; Stock Quotation; Exchange Act Registration; Margin
Regulations") 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 the "Introduction," Section 9
("Certain Information Concerning the Purchaser and Parent") and Section 12
("Purpose of the Offer; The Merger Agreement") of the Offer to Purchase is
incorporated herein by reference.
4
<PAGE> 5
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
THE SUBJECT COMPANY'S SECURITIES.
The information set forth in the "Introduction," Section 9 ("Certain
Information Concerning the Purchaser and Parent"), Section 11 ("Contacts with
the Company; Background of the Offer") and Section 12 ("Purpose of the Offer;
The Merger Agreement") 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.
Not applicable.
ITEM 10. ADDITIONAL INFORMATION.
(a) The information set forth in Section 12 ("Purpose of the Offer; The
Merger Agreement") of the Offer to Purchase is incorporated herein by reference.
(b) and (c) The information set forth in Section 15 ("Certain Legal
Matters") of the Offer to Purchase is incorporated herein by reference.
(d) The information set forth in Section 7 ("Effect of the Offer on the
Market for the Shares; Stock Quotation; Exchange Act Registration; Margin
Regulations") of the Offer to Purchase is incorporated herein by reference.
(e) The information set forth in Section 15 ("Certain Legal Matters") of
the Offer to Purchase is incorporated herein by reference.
(f) The information set forth in the Offer to Purchase, the Letter of
Transmittal and the Agreement of Merger, dated as of July 15, 1999, among the
Purchaser, Parent and the Company, copies of which are attached hereto as
Exhibits (a)(1), (a)(2) and (c)(1), respectively, is incorporated herein by
reference.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
<TABLE>
<S> <C>
(a)(1) Offer to Purchase.
(a)(2) Letter of Transmittal.
(a)(3) Notice of Guaranteed Delivery.
(a)(4) Letter to Brokers, Dealers, Banks, Trust Companies and Other
Nominees.
(a)(5) Letter to Clients for use by Brokers, Dealers, Banks, Trust
Companies and Other Nominees.
(a)(6) Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.
(a)(7) Form of Summary Advertisement, dated July 21, 1999.
(a)(8) Text of Press Release, dated July 15, 1999, issued by
Parent.
(b) None.
(c)(1) Agreement of Merger, dated as of July 15, 1999, among the
Purchaser, Parent and the Company.
(d) None.
(e) Not applicable.
(f) None.
</TABLE>
5
<PAGE> 6
SIGNATURES
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Dated: July 21, 1999
SEATTLE ACQUISITION INC.
By: /s/ PAMELA F. CRAVEN
------------------------------------
Name: Pamela F. Craven
Title: Vice President
LUCENT TECHNOLOGIES INC.
By: /s/ PAMELA F. CRAVEN
------------------------------------
Name: Pamela F. Craven
Title: Vice President-Law
6
<PAGE> 7
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
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<S> <C>
(a)(1) Offer to Purchase
(a)(2) Letter of Transmittal
(a)(3) Notice of Guaranteed Delivery
(a)(4) Letter to Brokers, Dealers, Banks, Trust Companies and Other
Nominees
(a)(5) Letter to Clients for use by Brokers, Dealers, Banks, Trust
Companies and Other Nominees
(a)(6) Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9
(a)(7) Form of Summary Advertisement, dated July 21, 1999
(a)(8) Text of Press Release, dated July 15, 1999, issued by Parent
(b) None
(c)(1) Agreement of Merger, dated as of July 15, 1999, among the
Purchaser, Parent and the Company
(d) None
(e) Not applicable
(f) None
</TABLE>
7
<PAGE> 1
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
SPECTRAN CORPORATION
AT
$9.00 NET PER SHARE
BY
SEATTLE ACQUISITION INC.
A WHOLLY OWNED SUBSIDIARY OF
LUCENT TECHNOLOGIES INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON TUESDAY, AUGUST 17, 1999, UNLESS EXTENDED.
THE BOARD OF DIRECTORS OF SPECTRAN CORPORATION HAS UNANIMOUSLY APPROVED THE
OFFER AND THE MERGER REFERRED TO HEREIN AND DETERMINED THAT THE TERMS OF THE
OFFER AND THE MERGER ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE STOCKHOLDERS
OF THE COMPANY, AND UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS OF THE COMPANY
ACCEPT THE OFFER AND TENDER THEIR SHARES.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER THAT NUMBER OF
SHARES THAT WOULD CONSTITUTE AT LEAST A MAJORITY OF THE OUTSTANDING SHARES
(DETERMINED ON A FULLY DILUTED BASIS FOR ALL OUTSTANDING STOCK OPTIONS AND ANY
OTHER RIGHTS TO ACQUIRE SHARES ON THE DATE OF PURCHASE) AND (2) ANY WAITING
PERIOD UNDER THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS
AMENDED, AND THE REGULATIONS THEREUNDER APPLICABLE TO THE PURCHASE OF SHARES
PURSUANT TO THE OFFER HAVING EXPIRED OR BEEN TERMINATED.
IMPORTANT
If you wish to tender all or any portion of your Shares in SpecTran
Corporation, you must do one of the following:
- If you are the record holder of your Shares and hold certificates for
your Shares, (a) complete and sign the Letter of Transmittal (or a
facsimile copy) following the instructions in the Letter of Transmittal,
(b) have your signature on the Letter of Transmittal guaranteed if
required by Instruction 1 to the Letter of Transmittal, and (c) mail or
deliver the Letter of Transmittal (or a facsimile copy), the certificates
for your Shares and any other required documents to The Bank of New York
- If you are the record holder of your Shares and delivery of the Shares is
to be made by book-entry transfer, (a) transmit an agent's message (as
described in Section 2 below) and any other required documents, to The
Bank of New York and (b) deliver your Shares pursuant to the procedure
for book-entry transfer set forth in Section 2 below
- If your Shares are registered in the name of a broker, dealer, bank,
trust company or other nominee, you must contact and request your broker,
dealer, bank, trust company or other nominee to tender your Shares
If you desire to tender your Shares and your certificates for your Shares
are not immediately available or you cannot comply in a timely manner with the
procedures for book-entry transfer, or you cannot deliver all the required
documents to The Bank of New York prior to the expiration of the Offer, you may
tender your Shares by following the procedure for guaranteed delivery described
in Section 2.
If you have any questions or if you need assistance or additional copies of
this Offer to Purchase, the Letter of Transmittal or the Notice of Guaranteed
Delivery, please call Morrow & Co. at its address and telephone number set forth
on the back cover of this Offer to Purchase.
------------------------
The Information Agent for the Offer is:
MORROW & CO., INC.
445 Park Avenue
5th Floor
New York, NY 10022
July 21, 1999
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
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PAGE
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<C> <S> <C>
Introduction..................................................... 1
1. Terms of the Offer.......................................... 2
2. Procedure for Tendering Shares.............................. 4
3. Withdrawal Rights........................................... 6
4. Acceptance for Payment and Payment for Shares............... 7
5. Certain Federal Income Tax Consequences..................... 8
6. Price Range of the Shares; Dividends on the Shares.......... 9
7. Effect of the Offer on the Market for the Shares; Stock
Quotation; Exchange Act Registration; Margin Regulations.... 9
8. Certain Information Concerning the Company.................. 10
9. Certain Information Concerning the Purchaser and Parent..... 13
10. Source and Amount of Funds.................................. 14
11. Contacts with the Company; Background of the Offer.......... 14
12. Purpose of the Offer; The Merger Agreement.................. 17
13. Dividends and Distributions................................. 25
14. Certain Conditions of the Offer............................. 26
15. Certain Legal Matters....................................... 27
16. Fees and Expenses........................................... 29
17. Miscellaneous............................................... 29
</TABLE>
Schedule I -- Directors and Executive Officers of Parent and the Purchaser
i
<PAGE> 3
TO THE HOLDERS OF COMMON STOCK
OF SPECTRAN CORPORATION:
INTRODUCTION
Seattle Acquisition Inc., a Delaware corporation (the "Purchaser") and a
wholly owned subsidiary of Lucent Technologies Inc., a Delaware corporation
("Parent"), is offering to purchase all outstanding shares (the "Shares") of
Common Stock, par value $.10 per share ("Common Stock"), of SpecTran
Corporation, a Delaware corporation (the "Company"), at $9.00 per Share (the
"Offer Price"), net to the seller, in cash, upon the terms and subject to the
conditions set forth in this Offer to Purchase dated July 21, 1999 and in the
related Letter of Transmittal (which, together with any amendments or
supplements thereto, collectively constitute the "Offer").
If you have Shares registered in your name that you tender directly, you
will not be obligated to pay brokerage fees or commissions or, except as set
forth in Instruction 6 of the Letter of Transmittal, transfer taxes on the
purchase of Shares pursuant to the Offer. If you hold your Shares through a
broker or bank, you should consult with them to determine if there are any fees
applicable to a tender of the Shares. The Purchaser will pay all fees and
expenses of The Bank of New York, which is acting as the Depositary (the
"Depositary") and Morrow & Co., Inc., which is acting as Information Agent (the
"Information Agent"), incurred in connection with the Offer. See Section 16.
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE OFFER
AND THE MERGER (AS DEFINED BELOW) AND DETERMINED THAT THE TERMS OF THE OFFER AND
THE MERGER ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE STOCKHOLDERS OF THE
COMPANY, AND UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS OF THE COMPANY ACCEPT THE
OFFER AND TENDER THEIR SHARES.
The Company has advised the Purchaser that Lazard Freres & Co. LLC
("Lazard") has delivered to the board of directors of the Company its written
opinion to the effect that, as of the date of such opinion, the $9.00 in cash
per Share to be received by the holders of Shares in the Offer and the Merger is
fair to such holders from a financial point of view. That opinion is set forth
in full as an exhibit to the Company's Solicitation/Recommendation Statement on
Schedule 14D-9 (the "Schedule 14D-9"), which is being mailed to you with this
Offer to Purchase. YOU ARE URGED TO, AND SHOULD, READ SUCH OPINION CAREFULLY IN
ITS ENTIRETY.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION DATE (AS DEFINED IN SECTION
1) THAT NUMBER OF SHARES THAT WOULD CONSTITUTE AT LEAST A MAJORITY OF THE
OUTSTANDING SHARES (DETERMINED ON A FULLY DILUTED BASIS FOR ALL OUTSTANDING
STOCK OPTIONS AND ANY OTHER RIGHTS TO ACQUIRE SHARES ON THE DATE OF PURCHASE)
(THE "MINIMUM CONDITION") AND (2) ANY WAITING PERIOD UNDER THE HART-SCOTT-RODINO
ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED, AND THE REGULATIONS THEREUNDER
(THE "HSR ACT") APPLICABLE TO THE PURCHASE OF SHARES PURSUANT TO THE OFFER
HAVING EXPIRED OR BEEN TERMINATED. THE PURCHASER RESERVES THE RIGHT (SUBJECT TO
OBTAINING THE CONSENT OF THE COMPANY AND THE APPLICABLE RULES AND REGULATIONS OF
THE SECURITIES AND EXCHANGE COMMISSION (THE "COMMISSION")), WHICH IT PRESENTLY
HAS NO INTENTION OF EXERCISING, TO WAIVE OR REDUCE THE MINIMUM CONDITION AND TO
ELECT TO PURCHASE, PURSUANT TO THE OFFER, LESS THAN THE NUMBER OF SHARES
REQUIRED TO SATISFY THE MINIMUM CONDITION. SEE SECTIONS 1 AND 14.
The Offer is being made pursuant to the Agreement of Merger, dated as of
July 15, 1999 (the "Merger Agreement"), among Parent, the Purchaser and the
Company, pursuant to which, following the consummation of the Offer and the
satisfaction or waiver of certain conditions, the Purchaser will be merged with
and into the Company, with the Company surviving the merger (as such, the
"Surviving Corporation") as a wholly owned subsidiary of Parent (the "Merger").
In the Merger, each Share issued and outstanding immediately prior to the Merger
(other than Shares (1) owned or held in treasury by the Company, (2) owned by
Parent or the Purchaser, (3) remaining outstanding held by any subsidiary of the
Company or Parent or (4) owned by stockholders, if any, who are entitled to and
who properly exercise dissenters' rights
1
<PAGE> 4
under Delaware law) will be converted into the right to receive in cash, without
interest, the per Share price paid in the Offer (the "Merger Consideration").
See Section 12.
The Merger is subject to a number of conditions, including approval by
stockholders of the Company, if such approval is required by applicable law. If
the Purchaser acquires 90% or more of the outstanding Shares pursuant to the
Offer or otherwise, the Purchaser will effect the Merger pursuant to the
short-form merger provisions of the Delaware General Corporation Law (the
"DGCL"), without prior notice to, or any action by, any other stockholder of the
Company. See Section 12.
Once the Minimum Condition has been satisfied and the Purchaser accepts for
payment Shares tendered pursuant to the Offer, the Purchaser will be able to
elect a majority of the members of the Company's board of directors and to
effect the Merger without the affirmative vote of any other stockholder of the
Company.
The Merger Agreement is more fully described in Section 12. Certain Federal
income tax consequences of the sale of Shares pursuant to the Offer and the
exchange of Shares for the Merger Consideration pursuant to the Merger are
described in Section 5.
1. TERMS OF THE OFFER.
Upon the terms and subject to the conditions of the Offer (including if the
Offer is extended or amended, the terms and conditions of any such extension or
amendment), the Purchaser will accept for payment and pay for all Shares validly
tendered prior to the Expiration Date and not theretofore withdrawn in
accordance with Section 3. The term "Expiration Date" means 12:00 midnight, New
York City time, on Tuesday, August 17, 1999, unless the Purchaser shall have
extended the period of time 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 the Purchaser, shall expire.
Subject to the terms of the Merger Agreement (see Section 12) and the
applicable rules and regulations of the Commission, the Purchaser expressly
reserves the right, in its sole discretion, at any time and from time to time,
and regardless of whether or not any of the events set forth in Section 14
hereof shall have occurred or shall have been determined by the Purchaser to
have occurred, (1) to extend the period of time during which the Offer is open,
and thereby delay acceptance for payment of and the payment for any Shares, by
giving oral or written notice of such extension to the Depositary and (2) to
amend the Offer in any other respect by giving oral or written notice of such
amendment to the Depositary. UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE
PURCHASE PRICE OF THE SHARES TO BE PAID BY THE PURCHASER, REGARDLESS OF ANY
EXTENSION OF THE OFFER OR ANY DELAY IN MAKING SUCH PAYMENT.
If by 12:00 midnight, New York City time, on Tuesday, August 17, 1999 (or
any other date or time then set as the Expiration Date), any or all conditions
to the Offer have not been satisfied or waived, the Purchaser reserves the right
(but shall not be obligated), subject to the terms and conditions contained in
the Merger Agreement and to the applicable rules and regulations of the
Commission, (1) to terminate the Offer and not accept for payment any Shares and
return all tendered Shares to tendering stockholders, (2) to waive all the
unsatisfied conditions (other than the Minimum Condition and the condition that
any waiting period under the HSR Act shall have expired or been terminated) and,
subject to complying with the terms of the Merger Agreement and the applicable
rules and regulations of the Commission, accept for payment and pay for all
Shares validly tendered prior to the Expiration Date and not theretofore
withdrawn, (3) to extend the Offer and, subject to the right of stockholders to
withdraw Shares until the Expiration Date, retain the Shares that have been
tendered during the period or periods for which the Offer is extended or (4) to
amend the Offer.
There can be no assurance that the Purchaser will exercise its right to
extend the Offer (other than as required by the Merger Agreement). Any
extension, waiver, amendment or termination will be followed as promptly as
practicable by public announcement. In the case of an extension, Rule 14e-l(d)
under the Securities Exchange Act of 1934 (the "Exchange Act"), requires that
the announcement be issued no later than 9:00 a.m., New York City time, on the
next business day after the previously scheduled Expiration Date in accordance
with the public announcement requirements of Rule 14d-4(c) under the Exchange
Act. Subject to applicable law (including Rules 14d-4(c) and 14d-6(d) under the
Exchange Act which require that any
2
<PAGE> 5
material change in the information published, sent or given to stockholders in
connection with the Offer be promptly disseminated to stockholders in a manner
reasonably designed to inform stockholders of such change), and without limiting
the manner in which the Purchaser may choose to make any public announcement,
the Purchaser currently intends to make such public announcement by issuing a
press release to the Dow Jones News Service and making any appropriate filing
with the Commission.
In the Merger Agreement, the Purchaser has agreed that it will not, without
the prior consent of the Company, extend the Offer, except that, without the
consent of the Company, the Purchaser may extend the Offer (1) if at the
Expiration Date any of the conditions to the Purchaser's obligations to accept
Shares for payment are not satisfied or waived, until such time as such
conditions are satisfied or waived, (2) for any period required by any rule,
regulation, interpretation or position of the Commission or the staff thereof
applicable to the Offer or any period required by applicable law and (3) on one
or more occasions for an aggregate period of not more than 10 business days
beyond the latest expiration date that would otherwise be permitted under clause
(1) or (2) of this sentence, if on such expiration date there shall not have
been tendered at least 90% of the outstanding Shares. The Merger Agreement
further provides that if all the conditions to the Offer are not satisfied on
any scheduled expiration date of the Offer then, provided that all such
conditions are reasonably capable of being satisfied, the Purchaser will extend
the Offer from time to time until such conditions are satisfied or waived,
provided that the Purchaser will not be required to extend the Offer beyond
September 30, 1999. For purposes of the Offer, a "business day" means any day
other than a Saturday, Sunday or a federal holiday and consists of the time
period from 12:01 a.m. through 12:00 Midnight, New York City time.
In addition, the Purchaser has agreed in the Merger Agreement that it will
not, without the consent of the Company, (1) reduce the number of Shares subject
to the Offer, (2) reduce the Offer Price, (3) amend or add to the Offer
conditions any terms that are adverse to the holders of the Shares, (4) extend
the Offer, except as provided in the preceding paragraph, (5) change the form of
consideration payable in the Offer or (6) amend any other term of the Offer in
any manner adverse to the holders of the Shares.
If the Purchaser extends the Offer or if the Purchaser (whether before or
after its acceptance for payment of Shares) is delayed in its acceptance for
payment of or payment for Shares or it is unable to pay for Shares pursuant to
the Offer for any reason, then, without prejudice to the Purchaser's rights
under the Offer, the Depositary may retain tendered Shares on behalf of the
Purchaser, and such Shares may not be withdrawn except to the extent tendering
stockholders are entitled to withdrawal rights as described in Section 3.
However, the ability of the Purchaser to delay the payment for Shares that the
Purchaser has accepted for payment is limited by Rule 14e-1 under the Exchange
Act, which requires that a bidder pay the consideration offered or return the
securities deposited by or on behalf of holders of securities promptly after the
termination or withdrawal of such bidder's offer.
If the Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer or waives a material condition of the Offer
(including, with the Company's consent, a waiver of the Minimum Condition), the
Purchaser will disseminate additional tender offer materials and extend the
Offer to the extent required by Rules 14d-4(c), 14d-6(d) and 14e-l under the
Exchange Act. The minimum period during which an offer must remain open
following material changes in the terms of the offer or information concerning
the offer, other than a change in price or a change in the percentage of
securities sought, will depend upon the facts and circumstances then existing,
including the relative materiality of the changed terms or information. With
respect to a change in price or a change in the percentage of securities sought,
a minimum period of 10 business days is generally required to allow for adequate
dissemination to stockholders.
CONSUMMATION OF THE OFFER IS CONDITIONED UPON SATISFACTION OF THE MINIMUM
CONDITION, THE EXPIRATION OR TERMINATION OF ALL WAITING PERIODS IMPOSED BY THE
HSR ACT AND THE OTHER CONDITIONS SET FORTH IN SECTION 14. Subject to the terms
and conditions contained in the Merger Agreement, the Purchaser reserves the
right (but shall not be obligated) to waive any or all such conditions.
The Company has provided the Purchaser with the Company's stockholder lists
and security position listings for the purpose of disseminating the Offer to
holders of the Shares. This Offer to Purchase, the related Letter of Transmittal
and other relevant materials will be mailed by the Purchaser to record holders
of Shares
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<PAGE> 6
and will be furnished by the Purchaser to brokers, dealers, banks, trust
companies and similar persons whose names, or the names of whose nominees,
appear on the stockholder lists or, if applicable, who are listed as
participants in a clearing agency's security position listing, for subsequent
transmittal to beneficial owners of Shares.
2. PROCEDURE FOR TENDERING SHARES.
VALID TENDER. For a stockholder to tender Shares validly pursuant to the
Offer, either (1) a properly completed and duly executed Letter of Transmittal
(or facsimile thereof), together with any required signature guarantees, or in
the case of a book-entry transfer, an Agent's Message (as defined in the second
succeeding paragraph), 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 prior to the Expiration Date
and either certificates for tendered Shares must be received by the Depositary
at one of such addresses or such Shares must be delivered pursuant to the
procedure for book-entry transfer set forth below (and a Book-Entry Confirmation
(as defined in the next paragraph) received by the Depositary), in each case,
prior to the Expiration Date, or (2) the tendering stockholder must comply with
the guaranteed delivery procedure set forth below.
The Depositary will establish an account with respect to the Shares at The
Depository Trust Company (the "Book-Entry Transfer Facility") for purposes of
the Offer within two business days after the date of this Offer to Purchase. Any
financial institution that is a participant in the Book-Entry Transfer
Facility's system may make book-entry delivery of Shares by causing the
Book-Entry Transfer Facility to transfer such Shares into the Depositary's
account in accordance with the Book-Entry Transfer Facility's procedures for
such transfer. However, although delivery of Shares may be effected through
book-entry transfer into the Depositary's account at the Book-Entry Transfer
Facility, the Letter of Transmittal (or facsimile thereof), properly completed
and duly executed, with any required signature guarantees, or an Agent's
Message, and any other required documents, must, in any case, be transmitted to,
and 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.
The confirmation of a book-entry transfer of Shares into the Depositary's
account at the Book-Entry Transfer Facility as described above is referred to
herein as a "Book-Entry Confirmation." DELIVERY OF THE LETTER OF TRANSMITTAL OR
ANY OTHER REQUIRED DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE
WITH THE BOOK-ENTRY TRANSFER FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY
TO THE DEPOSITARY.
The term "Agent's Message" means a message transmitted by the Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that the Book-Entry Transfer Facility has
received an express acknowledgment from the participant in the Book-Entry
Transfer Facility tendering the Shares that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that the
Purchaser may enforce such agreement against the participant.
THE METHOD OF DELIVERY OF SHARES, THE LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER FACILITY,
IS AT THE ELECTION AND RISK OF THE TENDERING STOCKHOLDER. SHARES WILL BE DEEMED
DELIVERED ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. 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.
SIGNATURE GUARANTEES. No signature guarantee is required on the Letter of
Transmittal if (1) the Letter of Transmittal is signed by the registered holder
(which term, for purposes of this Section, includes any participant in the
Book-Entry Transfer Facility's system whose name appears on a security position
listing as the owner of the Shares) of Shares tendered therewith unless such
registered holder has completed either the box entitled "Special Delivery
Instructions" or the box entitled "Special Payment Instructions" on the Letter
of Transmittal or (2) such Shares are tendered for the account of a financial
institution (including most commercial banks, savings and loan associations and
brokerage houses) that is a participant in the Security Transfer Agents
Medallion Program, the New York Stock Exchange Medallion Signature Guarantee
Program or the Stock Exchange Medallion Program (each of the foregoing being
referred to as an "Eligible
4
<PAGE> 7
Institution"). In all other cases, all signatures on the Letters of Transmittal
must be guaranteed by an Eligible Institution. See Instructions 1 and 5 to the
Letter of Transmittal. If the certificates for Shares are registered in the name
of a person other than the signer of the Letter of Transmittal, or if payment is
to be made or certificates for Shares not tendered or not accepted for payment
are to be issued to a person other than the registered holder of the
certificates surrendered, the tendered certificates must be endorsed or
accompanied by appropriate stock powers, in either case, signed exactly as the
name or names of the registered holders or owners appear on the certificates,
with the signatures on the certificates or stock powers guaranteed as aforesaid.
See Instruction 5 to the Letter of Transmittal.
GUARANTEED DELIVERY. If a stockholder desires to tender Shares pursuant to
the Offer and such stockholder's certificates for Shares are not immediately
available or the procedures for book-entry transfer cannot be completed on a
timely basis or time will not permit all required documents to reach the
Depositary prior to the Expiration Date, such stockholder's tender may be
effected if all the following conditions are met:
(1) such tender is made by or through an Eligible Institution;
(2) a properly completed and duly executed Notice of Guaranteed
Delivery substantially in the form provided by the Purchaser is received by
the Depositary, as provided below, prior to the Expiration Date; and
(3) the certificates for all tendered Shares, in proper form for
transfer (or a Book-Entry Confirmation with respect to such Shares),
together with a properly completed and duly executed Letter of Transmittal
(or facsimile thereof), with any required signature guarantees, or, in the
case of a book-entry transfer, an Agent's Message, and any other documents
required by the Letter of Transmittal, are received by the Depositary
within three trading days after the date of execution of such Notice of
Guaranteed Delivery. A "trading day" is any day on which the New York Stock
Exchange, Inc. (the "NYSE") is open for business.
The Notice of Guaranteed Delivery may be delivered by hand to the
Depositary or transmitted by facsimile transmission or mail to the Depositary
and must include a guarantee by an Eligible Institution in the form set forth in
such Notice of Guaranteed Delivery.
Notwithstanding any other provision hereof, payment for Shares accepted for
payment pursuant to the Offer will in all cases be made only after timely
receipt by the Depositary of (1) certificates for (or a timely Book-Entry
Confirmation with respect to) such Shares, (2) a Letter of Transmittal (or
facsimile thereof), properly completed and duly executed, with any required
signature guarantees, or, in the case of a book-entry transfer, an Agent's
Message, and (3) any other documents required by the Letter of Transmittal.
Accordingly, tendering stockholders may be paid at different times depending
upon when certificates for Shares or Book-Entry Confirmations are actually
received by the Depositary. UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE
PURCHASE PRICE OF THE SHARES TO BE PAID BY THE PURCHASER, REGARDLESS OF ANY
EXTENSION OF THE OFFER OR ANY DELAY IN MAKING SUCH PAYMENT.
The valid tender of Shares pursuant to one of the procedures described
above will constitute a binding agreement between the tendering stockholder and
the Purchaser upon the terms and subject to the conditions of the Offer.
APPOINTMENT. By executing a Letter of Transmittal, the tendering
stockholder will irrevocably appoint designees of the Purchaser as such
stockholder's attorneys-in-fact and proxies in the manner set forth in the
Letter of Transmittal, each with full power of substitution, to the full extent
of such stockholder's rights with respect to the Shares tendered by such
stockholder and accepted for payment by the Purchaser and with respect to any
and all other Shares or other securities or rights issued or issuable in respect
of such Shares on or after July 15, 1999. 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, the Purchaser accepts for payment
Shares tendered by such stockholder as provided herein. Upon such acceptance for
payment, all prior powers of attorney, proxies and consents given by such
stockholder with respect to such Shares or other securities or rights will,
without further action, be revoked and no subsequent powers of attorney, proxies
or consents may be given (and, if given, will not be deemed effective). The
designees of the Purchaser will thereby be
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<PAGE> 8
empowered to exercise all voting rights with respect to such Shares or other
securities or rights in respect of any annual, special or adjourned meeting of
the Company's stockholders, or otherwise, and may execute any written consent,
and may otherwise act as an attorney-in-fact and proxy concerning any matter as
they in their sole discretion deem proper. The Purchaser reserves the right to
require that, in order for Shares to be deemed validly tendered, immediately
upon the Purchaser's acceptance for payment of such Shares, the Purchaser must
be able to exercise full voting rights with respect to such Shares and other
securities or rights, including voting at any meeting of stockholders then
scheduled.
DETERMINATION OF VALIDITY. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance of any tender of Shares
will be determined by the Purchaser, in its sole discretion, which determination
will be final and binding. The Purchaser reserves the absolute right to reject
any or all tenders determined by it not to be in proper form or the acceptance
for payment of, or payment for, any Shares which acceptance or payment, in the
opinion of the Purchaser's counsel, may be unlawful. The Purchaser also reserves
the absolute right to waive any defect or irregularity in any tender with
respect to any particular Shares, whether or not similar defects or
irregularities are waived in the case of other Shares. No tender of Shares will
be deemed to have been validly made until all defects or irregularities relating
thereto have been cured or waived. None of the Purchaser, Parent, the
Depositary, the Information Agent or any other person will be under any duty to
give notification of any defects or irregularities in tenders or will incur any
liability for failure to give any such notification. The Purchaser's
interpretation of the terms and conditions of the Offer (including the Letter of
Transmittal and the instructions thereto) will be final and binding.
BACKUP FEDERAL INCOME TAX WITHHOLDING. IN ORDER TO AVOID "BACKUP
WITHHOLDING" OF FEDERAL INCOME TAX ON PAYMENTS OF CASH PURSUANT TO THE OFFER, A
STOCKHOLDER SURRENDERING SHARES IN THE OFFER MUST, UNLESS AN EXEMPTION APPLIES,
PROVIDE THE DEPOSITARY WITH SUCH STOCKHOLDER'S CORRECT TAXPAYER IDENTIFICATION
NUMBER ("TIN") ON A SUBSTITUTE FORM W-9 AND CERTIFY UNDER PENALTY OF PERJURY
THAT SUCH TIN IS CORRECT AND THAT SUCH STOCKHOLDER IS NOT SUBJECT TO BACKUP
WITHHOLDING. IF A STOCKHOLDER DOES NOT PROVIDE ITS CORRECT TIN OR FAILS TO
PROVIDE THE CERTIFICATIONS DESCRIBED ABOVE, THE INTERNAL REVENUE SERVICE ("IRS")
MAY IMPOSE A PENALTY ON SUCH STOCKHOLDER AND PAYMENT OF CASH TO SUCH STOCKHOLDER
PURSUANT TO THE OFFER MAY BE SUBJECT TO BACKUP WITHHOLDING OF 31%. ALL
STOCKHOLDERS SURRENDERING SHARES PURSUANT TO THE OFFER SHOULD COMPLETE AND SIGN
THE MAIN SIGNATURE FORM AND THE SUBSTITUTE FORM W-9 INCLUDED AS PART OF THE
LETTER OF TRANSMITTAL TO PROVIDE THE INFORMATION AND CERTIFICATION NECESSARY TO
AVOID BACKUP WITHHOLDING (UNLESS AN APPLICABLE EXEMPTION EXISTS AND IS PROVEN IN
A MANNER SATISFACTORY TO THE PURCHASER AND THE DEPOSITARY). CERTAIN STOCKHOLDERS
(INCLUDING, AMONG OTHERS, ALL CORPORATIONS AND CERTAIN FOREIGN INDIVIDUALS AND
ENTITIES) ARE NOT SUBJECT TO BACKUP WITHHOLDING. NONCORPORATE FOREIGN
STOCKHOLDERS SHOULD COMPLETE AND SIGN THE MAIN SIGNATURE FORM AND A FORM W-8,
CERTIFICATE OF FOREIGN STATUS, A COPY OF WHICH MAY BE OBTAINED FROM THE
DEPOSITARY, IN ORDER TO AVOID BACKUP WITHHOLDING. SEE INSTRUCTION 9 TO THE
LETTER OF TRANSMITTAL.
3. WITHDRAWAL RIGHTS.
Except as otherwise provided in this Section 3, tenders of Shares are
irrevocable. Shares tendered pursuant to the Offer may be withdrawn pursuant to
the procedures set forth below at any time prior to the Expiration Date and,
unless theretofore accepted for payment and paid for by the Purchaser pursuant
to the Offer, may also be withdrawn at any time after September 18, 1999.
For a withdrawal to be effective, a written or facsimile transmission
notice of withdrawal must be timely received by the Depositary at one of its
addresses set forth on the back cover of this Offer to Purchase and must specify
the name of the person having tendered the Shares to be withdrawn, the number of
Shares to be withdrawn and the name of the registered holder of the Shares to be
withdrawn, if different from the name of the person who tendered the Shares. If
certificates for Shares have been delivered or otherwise identified to the
Depositary, then, prior to the physical release of such certificates, the serial
numbers shown on such certificates must be submitted to the Depositary and,
unless such Shares have been tendered by an Eligible Institution, the signatures
on the notice of withdrawal must be guaranteed by an Eligible Institution. If
Shares have been tendered pursuant to the procedures for book-entry transfer set
forth in Section 2, any notice of withdrawal must also specify the name and
number of the account at the Book Entry Transfer Facility to be credited with
the withdrawn Shares and must otherwise comply with the Book Entry Transfer
Facility's
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<PAGE> 9
procedures. Withdrawals of tenders of Shares may not be rescinded, and any
Shares properly withdrawn will thereafter be deemed not validly tendered for any
purposes of the Offer. However, withdrawn Shares may be retendered by again
following one of the procedures described in Section 2 at any time prior to the
Expiration Date.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by the Purchaser, in its sole
discretion, which determination will be final and binding. None of the
Purchaser, Parent, 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.
4. 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), the Purchaser will accept for payment and, promptly after the
Expiration Date, will pay for all Shares validly tendered prior to the
Expiration Date and not properly withdrawn in accordance with Section 3. Any
determination concerning the satisfaction of such terms and conditions will be
within the sole discretion of the Purchaser, and such determination will be
final and binding on all tendering stockholders. See Sections 1 and 14. The
Purchaser expressly reserves the right, in its sole discretion, to delay
acceptance for payment of or payment for Shares in order to comply with any
applicable law, including, without limitation, the HSR Act. Any such delays will
be effected in compliance with Rule 14e-1(c) under the Exchange Act (relating to
the Purchaser's obligation to pay for or return tendered Shares promptly after
the termination or withdrawal of the Offer).
Parent has filed a Notification and Report Form with respect to the Offer
under the HSR Act. The waiting period under the HSR Act with respect to the
Offer will expire at 11:59 p.m., New York City time, on the 15th calendar day
after such filing, unless early termination of the waiting period is granted. In
addition, the Antitrust Division of the Department of Justice (the "Antitrust
Division") or the Federal Trade Commission (the "FTC") may extend the waiting
period by requesting additional information or documentary material from Parent.
If such a request is made, such waiting period will expire at 11:59 p.m., New
York City time, on the 10th day after substantial compliance by Parent with such
request. See Section 15 for additional information concerning the HSR Act and
the applicability of the antitrust laws to the Offer.
In all cases, payment for Shares accepted for payment pursuant to the Offer
will be made only after timely receipt by the Depositary of (1) certificates for
such Shares (or timely Book-Entry Confirmation of a transfer of such Shares as
described in Section 2), (2) a Letter of Transmittal (or facsimile thereof),
properly completed and duly executed, with any required signature guarantees and
(3) any other documents required by the Letter of Transmittal. The per Share
consideration paid to any stockholder pursuant to the Offer will be the highest
per Share consideration paid to any other stockholder pursuant to the Offer.
For purposes of the Offer, the Purchaser will be deemed to have accepted
for payment, and thereby purchased, Shares properly tendered to the Purchaser
and not withdrawn, if and when the Purchaser gives oral or written notice to the
Depositary of the Purchaser's acceptance for payment of such Shares. Payment for
Shares accepted for payment pursuant to the Offer will be made by deposit of the
purchase price therefor with the Depositary, which will act as agent for
tendering stockholders for the purpose of receiving payment from the Purchaser
and transmitting payment to tendering stockholders. UNDER NO CIRCUMSTANCES WILL
INTEREST BE PAID ON THE PURCHASE PRICE OF THE SHARES TO BE PAID BY THE
PURCHASER, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING SUCH
PAYMENT.
If the Purchaser is delayed in its acceptance for payment of or payment for
Shares or is unable to accept for payment or pay for Shares pursuant to the
Offer for any reason, then, without prejudice to the Purchaser's rights under
the Offer (but subject to compliance with Rule 14e-1(c) under the Exchange Act,
which requires that a tender offeror pay the consideration offered or return the
tendered securities promptly after the termination or withdrawal of a tender
offer), the Depositary may, nevertheless, on behalf of the Purchaser, retain
tendered Shares. Any such Shares may not be withdrawn except to the extent
tendering stockholders are entitled to exercise, and duly exercise, withdrawal
rights as described in Section 3.
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<PAGE> 10
If any tendered Shares are not purchased pursuant to the Offer because of
an invalid tender or otherwise, certificates for any such Shares will be
returned, without expense to the tendering stockholder (or, in the case of
Shares delivered by book-entry transfer of such Shares into the Depositary's
account at the Book-Entry Transfer Facility pursuant to the procedure set forth
in Section 2, such Shares will be credited to an account maintained at the
Book-Entry Transfer Facility), as promptly as practicable after the expiration
or termination of the Offer.
The Purchaser reserves the right to transfer or assign, in whole or from
time to time in part, to Parent, or to one or more direct or indirect wholly
owned subsidiaries of Parent, the right to purchase Shares tendered pursuant to
the Offer. Any such transfer or assignment will not relieve the Purchaser of its
obligations under the Offer and will in no way prejudice the rights of tendering
stockholders to receive payment for Shares validly tendered and accepted for
payment pursuant to the Offer.
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES.
The receipt of cash pursuant to the Offer or the Merger will constitute a
taxable transaction for Federal income tax purposes under the Internal Revenue
Code of 1986, as amended (the "Code"), and may also constitute a taxable
transaction under applicable state, local, foreign and other tax laws. As a
result, a tendering stockholder will generally recognize gain or loss for
Federal income tax purposes in an amount equal to the difference between the
amount of cash received by the stockholder pursuant to the Offer or the Merger
and such stockholder's aggregate adjusted tax basis in the Shares tendered and
purchased pursuant to the Offer (or canceled pursuant to the Merger). Gain or
loss will be calculated separately for each block of Shares tendered and
purchased pursuant to the Offer (or canceled pursuant to the Merger). If
tendered Shares are held by a tendering stockholder as capital assets, any gain
or loss recognized by the tendering stockholder will constitute capital gain or
loss, and will constitute long-term capital gain or loss if the tendering
stockholder held the underlying Shares for more than 12 months as of the date of
disposition. There are limits on the deductibility of capital losses.
A stockholder (other than certain exempt stockholders including, among
others, all corporations and certain foreign individuals) that tenders Shares
may be subject to backup withholding at a rate of 31% unless the stockholder
provides its correct TIN (or certifies that it is awaiting a TIN) and certifies
as to no loss of exemption from backup withholding and otherwise complies with
the applicable requirements of the backup withholding rules. A stockholder that
does not furnish its correct TIN in the prescribed manner or that does not
otherwise establish a basis for an exemption from backup withholding may be
subject to a penalty imposed by the IRS, and the gross proceeds of the Offer or
the Merger payable to such stockholder may be subject to backup withholding at a
rate of 31%. Each stockholder should complete and sign the Substitute Form W-9
included as part of the Letter of Transmittal so as to provide the information
and certification necessary to avoid backup withholding.
If backup withholding applies to a stockholder, the Depositary is required
to withhold 31% from payments to such stockholder. Backup withholding is not an
additional tax. Rather, the amount of the backup withholding can be credited
against the Federal income tax liability of the person subject to the backup
withholding, provided that the required information is given to the IRS. If
backup withholding results in an overpayment of tax, a refund can be obtained by
the stockholder upon filing an income tax return.
THE FOREGOING DISCUSSION MAY NOT BE APPLICABLE WITH RESPECT TO SHARES
RECEIVED PURSUANT TO THE EXERCISE OF EMPLOYEE STOCK OPTIONS OR OTHERWISE AS
COMPENSATION OR WITH RESPECT TO HOLDERS OF SHARES WHO ARE SUBJECT TO SPECIAL TAX
TREATMENT UNDER THE CODE, SUCH AS NON-U.S. PERSONS, LIFE INSURANCE COMPANIES,
TAX-EXEMPT ORGANIZATIONS AND FINANCIAL INSTITUTIONS, AND MAY NOT APPLY TO A
HOLDER OF SHARES IN LIGHT OF SUCH PERSON'S INDIVIDUAL CIRCUMSTANCES.
STOCKHOLDERS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS TO DETERMINE THE
PARTICULAR TAX CONSEQUENCES TO THEM (INCLUDING THE APPLICATION AND EFFECT OF ANY
STATE, LOCAL OR FOREIGN INCOME AND OTHER TAX LAWS) OF THE OFFER AND THE MERGER.
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<PAGE> 11
6. PRICE RANGE OF THE SHARES; DIVIDENDS ON THE SHARES.
The Shares are traded on The Nasdaq National Market System under the symbol
"SPTR." The following table sets forth, for each of the periods indicated, the
high and low reported sale prices per Share, as reported by the Nasdaq National
Market.
<TABLE>
<CAPTION>
SHARES
-------------
HIGH LOW
---- ---
<S> <C> <C>
FISCAL YEAR ENDED DECEMBER 31, 1997
First Quarter............................................... $25 $12 5/8
Second Quarter.............................................. 21 11 1/4
Third Quarter............................................... 20 3/4 13 3/4
Fourth Quarter.............................................. 15 1/4 8 5/8
FISCAL YEAR ENDED DECEMBER 31, 1998
First Quarter............................................... $11 1/8 $ 6 7/8
Second Quarter.............................................. 10 1/4 6 15/16
Third Quarter............................................... 7 13/16 4 5/32
Fourth Quarter.............................................. 7 5/8 3 9/16
FISCAL YEAR ENDED DECEMBER 31, 1999
First Quarter............................................... $ 7 $ 3 1/4
Second Quarter.............................................. 12 7/8 3 1/2
Third Quarter (through July 20, 1999)....................... 12 8 5/8
</TABLE>
On July 14, 1999, the last full day of trading before the public
announcement of the execution of the Merger Agreement, the reported last sale
price of the Shares on the Nasdaq National Market was $11 1/2 per Share. On July
20, 1999, the last full day of trading before the commencement of the Offer, the
reported last sale price of the Shares on the Nasdaq National Market was
$8 25/32 per Share. STOCKHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS
FOR THE SHARES.
According to the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1998 (the "Form 10-K"), the Company has not paid cash
dividends on Common Stock to date and does not plan to pay cash dividends to its
stockholders in the foreseeable future.
7. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES; STOCK QUOTATION; EXCHANGE
ACT REGISTRATION; MARGIN REGULATIONS.
The purchase of Shares pursuant to the Offer will reduce the number of
holders of Shares and the number of Shares that might otherwise trade publicly
and could adversely affect the liquidity and market value of the remaining
Shares held by the public.
MARKET FOR SHARES. Depending upon the number of Shares purchased pursuant
to the Offer, the Shares may no longer meet the requirements of the National
Association of Securities Dealers, Inc. (the "NASD") for continued inclusion in
the Nasdaq National Market (the top tier market of The Nasdaq Stock Market).
According to published guidelines for the Nasdaq National Market, the Shares
might no longer be eligible for quotation on the Nasdaq National Market if,
among other things, (1) either (a) the number of Shares publicly held was fewer
than 750,000, there were fewer than 400 holders of round lots, the aggregate
market value of publicly held Shares was less than $5,000,000, net tangible
assets were less than $4,000,000 and there were fewer than two registered and
active market makers for the Shares, or (b) the number of Shares publicly held
was fewer than 1,100,000, there were fewer than 400 holders of round lots and
the aggregate market value of publicly held Shares was less than $15,000,000,
(2) either (a) the Company's market capitalization was less than $50,000,000 or
(b) the total assets and total revenue of the Company for the most recently
completed fiscal year or two of the last three most recently completed fiscal
years was less than $50,000,000 or
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<PAGE> 12
(3) there were fewer than four registered and active market makers. If these
standards are not met, the Shares might nevertheless continue to be included in
The Nasdaq Stock Market with quotations published in the Nasdaq "additional
list" or in one of the "local lists," but if the number of holders of the Shares
were to fall below 300, or if the number of publicly held Shares were to fall
below 100,000 or there were not at least two registered and active market makers
for the Shares, the NASD's rules provide that the Shares would no longer be
"qualified" for Nasdaq Stock Market reporting and The Nasdaq Stock Market would
cease to provide any quotations. Shares held directly or indirectly by
directors, officers or beneficial owners of more than 10% of the Shares are not
considered as being publicly held for this purpose. According to the Company, as
of July 14, 1999, there were approximately 650 holders of record of Shares
(including one holder in "street name" representing approximately 5,240
stockholders) and 7,040,930 Shares were outstanding. If, as a result of the
purchase of Shares pursuant to the Offer, the Shares no longer meet the
requirements of the NASD for continued inclusion in The Nasdaq Stock Market or
the Nasdaq National Market, as the case may be, the market for Shares could be
adversely affected.
If the Shares no longer meet the requirements of the NASD for quotation
through any tier of The Nasdaq Stock Market, it is possible that the Shares
would continue to trade in the over-the-counter market and that price quotations
would be reported by other sources. The extent of the public market for the
Shares and the availability of such quotations would depend, however, upon the
number of holders of Shares remaining at such time, the interests in maintaining
a market in Shares on the part of securities firms, the possible termination of
registration of the Shares under the Exchange Act, as described below, and other
factors.
EXCHANGE ACT REGISTRATION. The Shares are currently registered under the
Exchange Act. Registration of the Shares under the Exchange Act may be
terminated upon application of the Company to the Commission if the Shares are
neither listed on a national securities exchange nor held by 300 or more holders
of record. Termination of registration of the Shares under the Exchange Act
would substantially reduce the information required to be furnished by the
Company to its stockholders and to the Commission and would make certain
provisions of the Exchange Act no longer applicable to the Company, such as the
shortswing profit recovery provisions of Section 16(b) of the Exchange Act, the
requirement of furnishing a proxy statement pursuant to Section 14(a) of the
Exchange Act in connection with stockholders' meetings and the related
requirement of furnishing an annual report to stockholders and the requirements
of Rule 13e-3 under the Exchange Act with respect to "going private"
transactions. Furthermore, the ability of "affiliates" of the Company and
persons holding "restricted securities" of the Company to dispose of such
securities pursuant to Rule 144 or 144A promulgated under the Securities Act of
1933, may be impaired or eliminated. The Purchaser intends to seek to cause the
Company to apply for termination of registration of the Shares under the
Exchange Act as soon after the completion of the Offer as the requirements for
such termination are met.
If registration of the Shares is not terminated prior to the Merger, then
the Shares will cease to be reported on The Nasdaq Stock Market and the
registration of the Shares under the Exchange Act will be terminated following
the consummation of the Merger.
MARGIN REGULATIONS. The Shares are currently "margin securities" under the
regulations of the Board of Governors of the Federal Reserve System (the
"Federal Reserve Board"), which has the effect, among other things, of allowing
brokers to extend credit on the collateral of the Shares. Depending upon factors
similar to those described above regarding listing and market quotations, it is
possible that, following the Offer, the Shares would no longer constitute
"margin securities" for the purposes of the margin regulations of the Federal
Reserve Board and therefore could no longer be used as collateral for loans made
by brokers. If registration of Shares under the Exchange Act were terminated,
the Shares would no longer be "margin securities."
8. CERTAIN INFORMATION CONCERNING THE COMPANY.
The Company is a Delaware corporation with its principal executive offices
at 50 Hall Road, Sturbridge, Massachusetts 01566. According to the Form 10-K,
the Company operates through two wholly owned subsidiaries,
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<PAGE> 13
SpecTran Communication Fiber Technologies, Inc. ("SpecTran Communication") and
SpecTran Specialty Optics Company ("SpecTran Specialty"). The Company, through
its subsidiary SpecTran Communications, develops, manufactures and markets
multimode and single-mode optical fiber for data communications and
telecommunications applications and through its subsidiary SpecTran Specialty,
develops, manufactures and markets specialty multimode and single-mode fiber and
value-added fiber optic products for industrial, military/aerospace,
communication and medical applications.
Set forth below is certain selected consolidated financial information with
respect to the Company and its subsidiaries excerpted or derived from the
information contained in the Form 10-K or the Company's Form 10-Q for the
quarter ended March 31, 1999. More comprehensive financial information is
included in those reports and other documents filed by the Company with the
Commission, and the following summary is qualified in its entirety by reference
to those reports and such other documents and all the financial information
(including any related notes) contained therein. Those reports and such other
documents should be available for inspection and copies thereof should be
obtainable in the manner set forth below under "Available Information."
11
<PAGE> 14
SPECTRAN CORPORATION AND SUBSIDIARIES
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED YEAR ENDED
MARCH 31, DECEMBER 31,
------------------ ------------------
1999 1998 1998 1997
------- ------- ------- -------
(UNAUDITED)
<S> <C> <C> <C> <C>
STATEMENT OF INCOME DATA:
Net sales......................................... $20,380 $15,112 $70,856 $62,057
Cost of sales..................................... 15,059 10,001 51,976 38,781
------- ------- ------- -------
Gross profit.................................... 5,321 5,111 18,880 23,276
Selling and administrative expenses............... 3,082 3,134 13,818 13,966
Research and development costs.................... 755 1,176 5,493 3,289
------- ------- ------- -------
Income (loss) from operations..................... 1,484 801 (431) 6,021
------- ------- ------- -------
Other income (expense)
Interest income................................. 28 114 224 1,372
Interest expense................................ (736) (124) (1,419) (747)
Other net....................................... (12) 842 3,372 510
------- ------- ------- -------
Other income (expense), net..................... (720) 832 2,177 1,090
------- ------- ------- -------
Income before income taxes and equity in joint
venture......................................... 764 1,633 1,746 7,111
Loss from joint venture........................... (382) (252) (974) (287)
------- ------- ------- -------
Income before income taxes........................ 382 1,381 772 6,842
Income tax expense................................ 149 517 249 1,982
------- ------- ------- -------
Net income........................................ 233 864 523 4,842
------- ------- ------- -------
Other comprehensive income (loss)................. -- (11) (11) (6)
------- ------- ------- -------
Comprehensive income.............................. $ 233 $ 853 $ 512 $ 4,826
------- ------- ------- -------
Net earnings per common share
Basic........................................... $ .03 $ .12 $ .07 $ .72
Diluted......................................... $ .03 $ .12 $ .07 $ 68
</TABLE>
<TABLE>
<CAPTION>
AT MARCH 31, AT DECEMBER 31,
------------ -------------------
1999 1998 1997
------------ -------- -------
(UNAUDITED)
<S> <C> <C> <C>
BALANCE SHEET DATA
Total current assets...................................... $ 30,201 $ 26,106 $27,400
Investment in joint venture(1)............................ 2,857 3,239 4,213
Property, plant and equipment, net........................ 67,851 68,495 55,407
Total assets.............................................. 108,234 105,419 92,105
Long-term debt............................................ 31,800 30,800 24,000
Total stockholders' equity................................ 57,545 57,312 56,759
</TABLE>
- ---------------
(1) On June 30, 1999, the Company sold its interest in its joint venture with
General Cable Corporation, General Photonics, LLC, to BICC General Cable
Industries, Inc. for $2,367,200. General Photonics, LLC, which is a
manufacturer of optical fiber cables, was formed by the Company and General
Cable Corporation in 1996.
12
<PAGE> 15
AVAILABLE INFORMATION. The Company is subject to the reporting
requirements of the Exchange Act and, in accordance therewith, is required to
file reports and other information with the Commission relating to its business,
financial condition and other matters. Information as of particular dates
concerning the Company's directors and officers, their remuneration, 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 of the Commission located at 450 Fifth Street, N.W., Washington, D.C.
20549, and at the regional offices of the Commission located in the Northwestern
Atrium Center, 500 West Madison Street (Suite 1400), Chicago, Illinois 60661 and
Seven World Trade Center, 13th Floor, New York, New York 10048. Copies should be
obtainable, by mail, upon payment of the Commission's customary charges, by
writing to the Commission's principal office at 450 Fifth Street, N.W.,
Washington, D.C. 20549. The Commission maintains a web site that contains
reports, proxy and information statements and other information regarding
registrants that file electronically with the Commission. Such reports, proxy
and information statements and other information may be found on the
Commission's web site, the address of which is: http://www.sec.gov. Such
information should also be on file at The Nasdaq Stock Market, 1735 K Street,
N.W., Washington, D.C. 20006.
Except as otherwise stated in this Offer to Purchase, the information
concerning the Company contained herein has been taken from or based upon
publicly available documents on file with the Commission and other publicly
available information. Although the Purchaser and Parent do not have any
knowledge that any such information is untrue, neither the Purchaser nor Parent
takes any responsibility for the accuracy or completeness of such information or
for any failure by the Company to disclose events that may have occurred and may
affect the significance or accuracy of any such information.
9. CERTAIN INFORMATION CONCERNING THE PURCHASER AND PARENT.
The Purchaser, a Delaware corporation and a wholly owned subsidiary of
Parent, was organized to acquire the Company and has not conducted any unrelated
activities since its organization. The principal offices of the Purchaser are
located at 600 Mountain Avenue, Murray Hill, New Jersey, 07974. All outstanding
shares of capital stock of the Purchaser are owned by Parent.
Parent designs, builds and delivers a wide range of public and private
networks, communications systems and software, data networking systems, business
telephone systems and microelectronic components. Parent is a global leader in
the sale of public communications systems, and is a supplier of systems or
software to most of the world's largest network operators. Parent is also a
global leader in the sale of business communications systems and in the sale of
microelectronic components for communications applications to manufacturers of
communications systems and computers. Parent conducts its research and
development activities through Bell Laboratories, one of the world's foremost
industrial research and development organizations. Parent is a Delaware
corporation with its principal offices located at 600 Mountain Avenue, Murray
Hill, New Jersey, 07974.
Financial information with respect to Parent and its subsidiaries is
included in Parent's Annual Report on Form 10-K for the fiscal year ended
September 30, 1998, as amended by Amendment No. 1 thereto filed on Form 10-K/A
on May 17, 1999, Parent's Quarterly Reports on Form 10-Q for the quarters ended
December 31, 1998 and March 31, 1999, Parent's Form 8-K filed on January 8,
1999, Parent's Form 8-K filed on March 5, 1999 as amended by Amendment 1 thereto
filed on Form 8-K/A on May 18, 1999, Parent's Form 8-K filed on June 28, 1999
and other documents filed by Parent with the Commission. Such reports and other
documents should be available for inspection and copies thereof should be
obtainable in the manner set forth below under "Available Information."
Neither the Purchaser nor Parent (together, the "Corporate Entities") or,
to the best knowledge of the Corporate Entities, any of the persons listed in
Schedule I or any associate or majority-owned subsidiary of the Corporate
Entities or any of the persons so listed, beneficially owns any equity security
of the Company, and none of the Corporate Entities or, to the best knowledge of
the Corporate Entities, any of the other persons
13
<PAGE> 16
referred to above, or any of the respective directors, executive officers or
subsidiaries of any of the foregoing, has effected any transaction in any equity
security of the Company during the past 60 days.
Except as described in this Offer to Purchase, (1) there have not been any
contacts, negotiations or transactions between the Corporate Entities, any of
their respective subsidiaries or, to the best knowledge of the Corporate
Entities, any of the persons listed in Schedule I, on the one hand, and the
Company or any of its directors, officers or affiliates, on the other hand, that
are required to be disclosed pursuant to the rules and regulations of the
Commission and (2) none of the Corporate Entities or, to the best knowledge of
the Corporate Entities, any of the persons listed in Schedule I has any
contract, arrangement, understanding or relationship with any person with
respect to any securities of the Company.
Except as described in this Offer to Purchase, during the last five years,
none of the Corporate Entities or, to the best knowledge of the Corporate
Entities, any of the persons listed in Schedule I (1) has been convicted in a
criminal proceeding (excluding traffic violations and similar misdemeanors) or
(2) was 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. The name, business address, present principal occupation or
employment, five-year employment history and citizenship of each of the
directors and executive officers of the Purchaser and Parent are set forth in
Schedule I.
AVAILABLE INFORMATION. Parent is subject to the reporting requirements of
the Exchange Act and, in accordance therewith, is required to file reports and
other information with the Commission relating to its business, financial
condition and other matters. Information, as of particular dates, concerning
Parent's directors and officers, their remuneration, stock options granted to
them, the principal holders of Parent's securities and any material interest of
such persons in transactions with Parent is disclosed in proxy statements
distributed to Parent's stockholders and filed with the Commission. Such
reports, proxy statements and other information should be available for
inspection at the Commission, and copies thereof should be obtainable from the
Commission, in the same manner as set forth with respect to information
concerning the Company in Section 8. Such material should also be available for
inspection at the library of the NYSE, 20 Broad Street, New York, New York
10005.
10. SOURCE AND AMOUNT OF FUNDS.
The total amount of funds required by the Purchaser to purchase all
outstanding Shares pursuant to the Offer and to pay fees and expenses related to
the Offer and the Merger is estimated to be approximately $64.2 million. The
Purchaser plans to obtain all funds needed for the Offer and the Merger through
a capital contribution which will be made by Parent to the Purchaser.
Parent intends to provide to the Purchaser the funds required to consummate
the Offer and the Merger from its available cash, which includes revenues from
customers and the proceeds of short-term commercial paper issued to finance
current assets. Parent generally repays commercial paper out of cash flow
generated by Parent from operations and through the issuance of equity or
long-term debt when advantageous opportunities arise.
11. CONTACTS WITH THE COMPANY; BACKGROUND OF THE OFFER.
The Company has a long-standing relationship with Parent both as a supplier
of optical fiber to Parent and a licensee of technology from Parent.
SUPPLY RELATIONSHIP WITH THE COMPANY. The Company and Parent have a
three-year supply agreement (the "Supply Agreement") terminating December 31,
1999, under which Parent is required to make certain annual minimum purchases of
optical fiber. Parent has satisfied its minimum annual purchase obligations
under the Supply Agreement through and including 1999. In 1998, Parent purchased
quantities of optical fiber in excess of the required annual minimum. For the
calendar years ending December 31, 1998 and 1997, Parent purchased from the
Company approximately $26.0 million and $6.6 million, respectively, of optical
fiber.
14
<PAGE> 17
From January 1, 1999 through June 30, 1999, Parent purchased from the Company
approximately $9.5 million of optical fiber.
In the fall of 1998, the Company and Parent's Network Products Group had
discussions regarding the quantities of optical fiber Parent would need in the
future. The Company was invited to respond to a request for quotes regarding
Parent's optical fiber needs for 1999 along with two other bidders. The
Company's bid was above the two other bidders and the Company was invited to
rebid but the Company's bid continued to remain above that of the two other
bidders.
Parent continued to purchase under the Supply Agreement during the first
two calendar quarters of 1999. On June 1, 1999, Parent advised the Company that,
due to excess inventories, Parent would decrease significantly the amount of
optical fiber it would purchase from the Company for the remainder of the year.
On June 17, 1999, a representative of Parent informed a representative of Lazard
that Parent had completed its purchases of optical fiber from the Company for
the year.
LICENSE AGREEMENTS WITH THE COMPANY. The Company has been a licensee of
Parent's and its predecessor company's optical fiber patents since 1981. Between
mid-1997 and October 30, 1998, the Company and Parent discussed the possibility
of entering into an additional patent license agreement. On October 30, 1998,
the Company and Parent established a new worldwide, non-exclusive license
exchanging rights under their optical fiber patents issued prior to January 1,
1998 and additional patents related to multimode fiber based on applications
filed through October 1998. The Company is licensed by Parent to make optical
fiber at its existing factories for worldwide use, sale and export from the
United States. The license contains some product limitations including certain
exclusions to make or sell select specialty fibers for some applications. Parent
receives non-exclusive, royalty-free worldwide rights to the licensed Company
patents. The Company agreed to pay Parent a $4.0 million license fee in
installments and, beginning in 2000, a royalty on sales. On January 31, 1999,
the Company paid the first license fee installment of $750,000 and will be
making a further $500,000 payment on July 31, 1999. An additional $1.0 million
is due in 2000, $1.0 million in 2001 and $750,000 in 2002. Parent has the right
to terminate the agreement if the Company is acquired by an optical fiber
manufacturer.
For the six months ended June 30, 1999, the Company made no royalty
payments to Parent. For the fiscal years ending December 31, 1998, 1997 and
1996, the Company made aggregate royalty payments to Parent of approximately
$60,000, $890,000 and $760,000, respectively. All such royalty payments were in
respect of sales by SpecTran Communication.
MERGER NEGOTIATIONS WITH THE COMPANY. In early 1999, Parent's Network
Products Group was contacted by Mr. Charles B. Harrison, President, Chief
Executive Officer and Chairman of the Board of the Company, as part of an
auction process conducted by Lazard, the Company's investment bank. Mr. Harrison
met with Mr. Denys Gounot, Chief Operating Officer of Parent's Network Products
Group, and Mr. Robert Mohalley, Strategy Vice President for Parent's Network
Products Group, at Parent's Network Products Group's offices in Atlanta, Georgia
on February 1, 1999.
The parties signed a non-disclosure agreement on March 5, 1999.
On March 24 and 25, 1999, representatives of Parent's Network Products
Group met at the Company's offices with Mr. Harrison, Mr. John Chapman,
President of SpecTran Communication, Mr. Martin Siefert, President of SpecTran
Specialty, and other managers of the Company, to review the Company and gather
initial due diligence information.
On April 20, 1999, Lazard, on behalf of the Company, corresponded with
Parent's Network Products Group to formally invite participation in an auction
of the Company and to forward to Parent the Offering Memorandum of the Company.
Parent informed Lazard that it was not going to submit a proposal, but that,
under the right circumstances, Parent might be interested in pursuing a supply
agreement with the Company.
On May 10, 1999, Mr. Mohalley sent the Company a letter stating that upon
further review Parent might be interested in pursuing a transaction. On May 11,
1999, during a telephone conversation, Mr. Mohalley
15
<PAGE> 18
asked Mr. Harrison for at least an additional two weeks to conduct more due
diligence before submitting an indication of interest letter.
On May 17 and 18, 1999, representatives of Parent, including Mr. Terence
Bentley, Director Corporate Development of Parent, and Mr. Richard Sullivan,
Network Products Group Director Business Development of Parent, visited the
Company's headquarters in Sturbridge, Massachusetts to conduct a preliminary due
diligence review of the Company. Messrs. Bentley and Sullivan also met with
Messrs. Harrison, Chapman, Siefert, and George Roberts, Chief Financial Officer
of the Company, to discuss a potential acquisition by Parent of the Company. Due
diligence by Parent continued throughout May and June.
On June 14, 1999, Mr. William Spivey, President of Parent's Network
Products Group, Mr. Gounot and Mr. Bentley visited the Company's manufacturing
facilities and met with managers of the Company.
On June 15, 1999, senior officers of Parent met and, after being briefed,
approved formal negotiation relating to the purchase of the Company. Mr. Bentley
indicated to Mr. Harrison of the Company that Parent would be willing to offer
$8.00 per Share in cash, subject to due diligence.
Parent and the Company executed a revised non-disclosure agreement on June
22, 1999.
On June 16 and 17, 1999, representatives of Parent, including Mr. Bentley,
the Company and Lazard had discussions regarding the form of consideration, the
structure of the transaction and other material terms relating to the
transaction, including human resources and real estate matters.
On June 17, 1999, Parent submitted a non-binding proposal to acquire the
Company for between $8.00 and $8.75 per Share.
On Monday, June 21, 1999, Mr. Bentley and Mr. Harrison met in Murray Hill,
New Jersey, to discuss various acquisition structures. Negotiations with respect
to structure, prices, form of consideration and other material terms continued
throughout the morning. Mr. Bentley indicated that Parent would be willing to
increase its previous proposal to $9.00 per Share in cash but did not want to
pursue a stock transaction.
On the evening of June 21, 1999, the board of directors of the Company met
by conference telephone call (one director was unavailable) and discussed Mr.
Harrison's report of his meeting with Parent. The Board directed Mr. Harrison to
discuss a possible stock transaction again with Mr. Bentley.
On the morning of June 22, 1999, Mr. Harrison spoke with Mr. Bentley and
reported that the Company's board of directors strongly preferred a stock
transaction. Mr. Bentley reiterated that Parent would not agree to a stock
transaction but would be interested in pursuing a $9.00 per Share cash
transaction.
On June 22, 1999 at 5:00 p.m., the board of directors of the Company met
and was updated by Mr. Harrison. The Board reiterated its interest in a stock
transaction. The board directed Mr. Harrison to attempt again to ascertain
whether Parent would be willing to acquire the Company for stock, but also
authorized Mr. Harrison to proceed with discussions regarding a cash transaction
for $9.00 per Share or higher. Later that evening Mr. Harrison raised the matter
of a stock transaction again with Mr. Bentley.
On June 23, 1999, Mr. Bentley informed Mr. Harrison that Parent was
strongly disinclined to enter into a stock transaction for a number of reasons,
including additional cost and time to complete the acquisition. Mr. Bentley
stated that he would consider discussing with Parent's Chief Financial Officer
an acquisition of the Company at a per Share price of $8.00 in Parent stock but
advised Mr. Harrison that he did not believe such a transaction would be
approved and that the environment for obtaining such approval from Parent's
senior management was very unfavorable. Mr. Harrison stated he would discuss the
matter with the Company's directors and advise Mr. Bentley. Mr. Harrison polled
the board and the unanimous sense was to proceed with negotiations for a $9.00
per Share cash transaction. Mr. Harrison so informed Mr. Bentley that same day.
On June 28 and June 29, 1999, a due diligence team from Parent visited the
Company to meet with management of the Company, to tour the Company's facilities
and to continue due diligence.
16
<PAGE> 19
From July 1 to July 14, 1999, representatives of Parent conducted further
due diligence. These representatives also negotiated the Merger Agreement with
representatives of the Company. During the negotiations, the Company requested
and Parent agreed to eliminate several measures designed to make it more likely
that a transaction would be completed if an agreement were reached, including
granting Parent an option to acquire up to 19.9% of the Company's Shares under
certain conditions and agreements from officers and directors to tender their
Shares and vote in favor of the Merger. The Company also requested, and Parent
agreed to, a reduction in the break-up fee payable to Parent in the event the
transaction was not completed for certain reasons from $2.5 million to $2.0
million.
On July 14, 1999, the board of directors of the Company held a meeting to
consider the Offer, the Merger and the Merger Agreement. At the meeting, the
board of directors of the Company heard presentations by its legal counsel with
respect to the terms of the proposed offer, the Merger and the Merger Agreement,
and legal counsel advised the board of directors that the negotiations for the
Merger Agreement were substantially complete. The board of directors also heard
a presentation by representatives of Lazard with respect to the financial terms
of the Offer and the Merger and Lazard's valuation analysis. The board of
directors, with the participation of the representatives of Lazard, reviewed
again the alternatives for the Company.
At the conclusion of the presentation, representatives of Lazard delivered
Lazard's oral opinion that, as of the date of the Merger Agreement, the $9.00 in
cash per Share to be paid to the stockholders of the Company pursuant to the
Offer and the Merger was fair to such stockholders from a financial point of
view. Lazard subsequently delivered a written opinion, dated the date of the
Merger Agreement, to the same effect. On July 15, 1999, Parent, the Purchaser
and the Company executed and delivered the Merger Agreement.
Based upon such discussion, presentations and opinion, the Board of
Directors of the Company has unanimously approved the Offer and the Merger and
determined that the terms of the Offer and the Merger are fair to, and in the
best interests of, the stockholders of the Company and unanimously recommends
that stockholders of the Company accept the Offer and tender their Shares to the
Purchaser pursuant to the terms of the Offer.
12. PURPOSE OF THE OFFER; THE MERGER AGREEMENT.
PURPOSE OF THE OFFER. The purpose of the Offer is to enable Parent to
acquire control of, and the entire equity interest in, the Company. Following
the consummation of the Offer, the Purchaser and Parent intend to acquire any
remaining equity interest in the Company not acquired in the Offer by
consummating the Merger. The Offer is subject to certain terms and conditions.
Notwithstanding anything to the contrary set forth in the Offer to Purchase, any
determination concerning the satisfaction of such terms and conditions will be
within the reasonable discretion of the Purchaser.
THE MERGER AGREEMENT. The Merger Agreement provides that following the
satisfaction or waiver of the conditions described below under "Conditions to
the Merger," the Purchaser will be merged with and into the Company, and each
then outstanding Share (other than Shares (1) owned or held in treasury by the
Company, (2) owned by the Purchaser or Parent, (3) remaining outstanding held by
any subsidiary of the Company or Parent or (4) owned by stockholders, if any,
who are entitled to and who properly exercise dissenters' rights under Delaware
law), will be converted into the right to receive an amount in cash, without
interest, equal to the price per Share paid pursuant to the Offer.
VOTE REQUIRED TO APPROVE MERGER. The DGCL requires, among other things,
that the adoption of any plan of merger or consolidation of the Company must be
approved by the board of directors of the Company and, if the "short form"
merger procedure described below is not available, by the holders of a majority
of the Company's outstanding Shares. The board of directors of the Company has
approved the Offer, the Merger and the Merger Agreement; consequently, the only
additional action of the Company that may be necessary to effect the Merger is
approval by such stockholders if the "short-form" merger procedure described
below is not available. Under the DGCL, the affirmative vote of holders of a
majority of the outstanding Shares (including any Shares owned by the
Purchaser), is generally required to approve the Merger. If the Purchaser
acquires, through the Offer or otherwise, voting power with respect to at least
a majority of the outstanding Shares (which would be the case if the Minimum
Condition were satisfied and the Purchaser were to accept
17
<PAGE> 20
for payment Shares tendered pursuant to the Offer), it would have sufficient
voting power to effect the Merger without the vote of any other stockholder of
the Company. However, the DGCL also provides that if a parent company owns at
least 90% of each class of stock of a subsidiary, the parent company can effect
a "short-form" merger with that subsidiary without the action of the other
stockholders of the subsidiary. Accordingly, if, as a result of the Offer or
otherwise, the Purchaser acquires or controls the voting power of at least 90%
of the outstanding Shares, the Purchaser could (and, under the Merger Agreement,
is required to) effect the Merger using the "short-form" merger procedures
without prior notice to, or any action by, any other stockholder of the Company.
CONDITIONS TO THE MERGER. The Merger Agreement provides that the
respective obligations of Parent, the Purchaser and the Company to consummate
the Merger are subject to the satisfaction of each of the following conditions:
(1) if required by applicable law, the Merger Agreement having been approved and
adopted by the affirmative vote of holders of a majority of the outstanding
Shares, (2) no judgment, order, decree, statute, law, ordinance, rule or
regulation enacted, enforced or issued by any court or other governmental entity
of competent jurisdiction or other legal restraint or prohibition (collectively,
"Restraints") shall be in effect, and there shall not be pending any suit,
action or proceeding by any governmental entity (a) preventing the consummation
of the Merger or (b) which is otherwise reasonably likely to have a material
adverse effect on the Company or Parent, as applicable, arising out of the
Merger Agreement or the transactions contemplated by the Merger Agreement;
provided, that each of the parties shall have used its reasonable best efforts
to prevent the entry of any such Restraints and to appeal as promptly as
possible any such Restraints that may be entered and (3) the Purchaser shall
have previously accepted for payment and paid for the Shares pursuant to the
Offer.
The obligations of Parent and Purchaser to consummate the Merger are also
subject to the fulfilment or satisfaction at or prior to the effective time of
the Merger that (1) the Company shall have performed and complied in all
material respects with all agreements and conditions contained in the Merger
Agreement that are required to be performed or complied with it prior to or at
the effective time of the Merger, (2) each of the representations and warranties
of the Company contained in the Merger Agreement that are qualified by material
adverse effect, shall be true and correct and each of the representations and
warranties of the Company to the extent it is not so qualified by material
adverse effect, shall be true and correct in all material respects, in each
case, on and as of the effective time of the Merger, (3) no event or events
shall have occurred that could reasonably be expected to have a material adverse
effect on the Company and (4) the Company shall have received all necessary
consents or waivers, in form and substance satisfactory to Parent and the
Purchaser, from the other parties to each contract, lease or agreement to which
the Company is a party, except where the failure to receive such consent would
not reasonably be expected, individually or in the aggregate, to have a material
adverse effect on the Company.
The obligations of the Company to consummate the Merger are also subject to
the fulfilment or satisfaction at or prior to the effective time of the Merger
that (1) Parent and Purchaser shall have performed and complied in all material
respects with all agreements and conditions contained in the Merger Agreement
that are required to be performed or complied with them prior to or at the
effective time of the Merger and (2) each of the representations and warranties
of the Purchaser and Parent contained in the Merger Agreement that are qualified
by material adverse effect shall be true and correct and each of the
representations and warranties of the Purchaser and Parent to the extent it is
not so qualified by material adverse effect, shall be true and correct in all
material respects, in each case, on and as of the effective time of the Merger.
TERMINATION OF THE MERGER AGREEMENT. The Merger Agreement may be
terminated at any time prior to the effective time of the Merger (the "Effective
Time"), whether before or after approval and adoption of the Merger Agreement by
the stockholders of the Company or the stockholder of Purchaser (provided, that
if Shares are purchased pursuant to the Offer, neither Parent nor Purchaser may
in any event terminate the Merger Agreement), (1) by the agreement of each of
the boards of directors of Parent, the Purchaser and the Company, (2) by Parent,
the Purchaser or the Company if (a) the Purchaser has not accepted for payment
any Shares pursuant to the Offer prior to December 31, 1999, provided, that the
right to terminate the Merger Agreement pursuant to this clause (2)(a) will not
be available to any party whose failure to fulfill any
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obligation under the Merger Agreement has been the cause of, or resulted in, the
failure of the Purchaser to accept for payment any Shares on or before such
date, or (b) any court of competent jurisdiction in the United States or other
governmental authority shall have issued an order, decree or ruling or taken any
other action permanently restraining, enjoining or otherwise prohibiting the
acceptance for payment of, or payment for, Shares pursuant to the Offer or the
Merger and such order, decree or ruling or other action has become final and
nonappealable, (3) by Parent, if the Company or any of its directors or officers
shall participate in discussions or negotiations in breach (other than an
immaterial breach) of the covenants of the Company described under "No
Solicitation by the Company; Takeover Proposals" in this Section 12, (4) by the
Company prior to the meeting of the stockholders of the Company to approve the
Merger ("Company Stockholders Meeting") if in response to a takeover proposal
which constitutes a Superior Proposal (as defined in "No Solicitation by the
Company; Takeover Proposals" in this Section 12 below) which was not solicited
by the Company and which did not otherwise result from a breach of the covenants
of the Company described under "No Solicitation by the Company; Takeover
Proposals" in this Section 12; (5) by the Company, in the event Parent or the
Purchaser materially breaches its obligations under the Merger Agreement, unless
such breach is cured within 15 days after notice to Parent by the Company, (6)
by Parent or the Purchaser, in the event the Company materially breaches its
obligations under the Merger Agreement, unless such breach is cured within 15
days after notice to the Company by Parent or the Purchaser, or (7) by Parent or
the Purchaser prior to the purchase of Shares pursuant to the Offer in the event
of a breach or failure to perform by the Company of any representation,
warranty, covenant or other agreement contained in the Merger Agreement which
(a) would give rise to the failure of a condition set forth below in paragraph
(4) or (5) described below in Section 14 and (b) cannot be cured, or has not
been cured within 15 days after the Company receives written notice from Parent
of such breach or failure to perform.
NO SOLICITATION BY THE COMPANY; TAKEOVER PROPOSALS. The Merger Agreement
provides that the Company will not, nor will it permit any of it subsidiaries
to, nor will it authorize or permit any of its, directors, officers or employees
or any investment banker, financial advisor, attorney, accountant or other
representative retained by it or any of its subsidiaries to, directly or
indirectly, (1) solicit, initiate or encourage (including by way of furnishing
information), or take any other action designed to facilitate, any inquiries or
the making of any proposal which constitutes a Takeover Proposal (as defined
below) or (2) participate in any discussions or negotiations regarding any
Takeover Proposal. Notwithstanding the foregoing, if prior to the Company
Stockholders Meeting, the board of directors of the Company determines in good
faith, after consultation with outside counsel, that it is legally advisable to
do so in order to comply with its fiduciary duties to the Company's stockholders
under applicable law, the Company, in response to a Superior Proposal (as
defined below) which was not solicited by it or which did not result from a
breach by the Company of its non-solicitation obligations, and subject to
compliance with the Merger Agreement, may furnish information with respect to
the Company and its subsidiaries to any person making a Superior Proposal
pursuant to a customary confidentiality agreement and participate in discussions
or negotiations regarding such Superior Proposal.
For purposes of the Merger Agreement, a "Takeover Proposal" means any
inquiry, proposal or offer from any person (1) relating to any direct or
indirect acquisition or purchase of (a) a business that constitutes 15% or more
of the net revenues, net income or the assets of the Company and its
subsidiaries, taken as a whole, (b) 20% or more of any class of equity
securities of the Company or (c) any material equity interest in any subsidiary
of the Company, (2) relating to any tender offer or exchange offer that if
consummated would result in any person beneficially owning 20% or more of any
class of equity securities of the Company or any material equity interest in any
of its subsidiaries, or (3) relating to any merger, consolidation, business
combination, recapitalization, liquidation, dissolution or similar transaction
involving the Company or any of its subsidiaries, other than the transactions
contemplated by the Merger Agreement.
For purposes of the Merger Agreement, "Superior Proposal" means any
proposal made by a third party to acquire, directly or indirectly, including
pursuant to a tender offer, exchange offer, merger, consolidation, business
combination, recapitalization, liquidation, dissolution or similar transaction,
for consideration consisting of cash and/or securities, more than 50% of the
combined voting power of the Shares then outstanding or all or substantially all
the assets of the Company and otherwise on terms which the board of directors of
the Company determines in its good faith judgment (based on the advice of a
financial advisor of
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nationally recognized reputation) to be more favorable to the Company's
stockholders than the Merger and for which financing, to the extent required, is
then committed or which, in the good faith judgment of the board of directors of
the Company, is reasonably capable of being obtained by such third party.
The Merger Agreement provides further that neither the board of directors
of the Company nor any committee thereof may (1) withdraw or modify, or propose
publicly to withdraw or modify, in a manner adverse to Parent, the approval or
recommendation by such board of directors or such committee of the Offer, the
Merger or the Merger Agreement, (2) approve or recommend, or propose publicly to
approve or recommend, any Takeover Proposal or (3) cause the Company to enter
into any letter of intent, agreement in principle, acquisition agreement or
other similar agreement related to any Takeover Proposal other than any such
agreement entered into concurrently with the termination of the Merger Agreement
by the Company to facilitate such action. See "Termination of the Merger
Agreement" in this Section 12.
The Merger Agreement provides that the Company must promptly advise Parent
orally and in writing of any Takeover Proposal or any request for information by
any person which the Company reasonably believes is in connection with the
preparation of a Takeover Proposal, the material terms and conditions of the
Takeover Proposal or the information requested by the person making the request
and the identity of the person making the Takeover Proposal or request for
information. The Company must promptly inform Parent of any change in the status
and material terms and conditions (including amendments or proposed amendments)
of any such Takeover Proposal or request for information.
The Merger Agreement provides that nothing contained therein will prohibit
the Company from taking and disclosing to its stockholders a position
contemplated by Rule 14d-9 or Rule 14e-2(a) promulgated under the Exchange Act
or from making any disclosure to the Company's stockholders if, in the good
faith judgment of the board of directors of the Company, after consultation with
outside counsel, failure so to disclose would be inconsistent with its
obligations under applicable law; provided, that, except as expressly permitted
by the Merger Agreement, neither the Company nor its board of directors nor any
committee thereof may withdraw or modify, or propose publicly to withdraw or
modify, its position with respect to the Offer, the Merger Agreement or the
Merger or approve or recommend, or propose to approve or recommend, a Takeover
Proposal.
FEES AND EXPENSES; TERMINATION FEE. The Merger Agreement provides that all
fees and expenses incurred in connection with the Offer, the Merger, the Merger
Agreement and the transactions contemplated by the Merger Agreement will be paid
by the party incurring such fees or expenses, whether or not the Offer or the
Merger is consummated except that each of Parent and the Company shall bear and
pay one-half of (1) the cost and expenses incurred in connection with the
filing, printing and mailing of any proxy statement of the Company in connection
with any meeting of the stockholders of the Company to approve the merger
(including Commission filing fees) and (2) the filing fees for the pre-merger
notification and report forms under the HSR Act.
The Merger Agreement provides that the Company shall pay in same day funds
to Parent $2,000,000 under the circumstances and terms set forth below:
(1) A bona fide Superior Proposal shall have been made directly to the
stockholders of the Company generally or shall have otherwise become
publicly known or any Person shall have publicly announced an intention
(whether or not conditional) to make a Superior Proposal and thereafter the
Merger Agreement is terminated by any of Parent, the Purchaser or the
Company because the Purchaser shall not have accepted for payment any
Shares pursuant to the Offer prior to December 31, 1999, provided that the
$2,000,000 is only payable to Parent if, within twelve months of the
termination of the Merger Agreement, the Company or any of its subsidiaries
enters into any definitive agreement with respect to, or consummates, any
Superior Proposal;
(2) The Merger Agreement is terminated by Parent or the Purchaser
prior to the purchase of Shares pursuant to the Offer in the event of a
breach or a failure to perform by the Company of any representation,
warranty, covenant or other agreement contained in the Merger Agreement
which (a) would give rise to a failure of condition (4) or (5) as set forth
below in Section 14 and (b) cannot be
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cured, or has not been cured within 15 days after the Company receives
written notice from Parent of such breach or failure to perform;
(3) The Merger Agreement is terminated by the Company prior to the
Company Stockholder Meeting in response to a Superior Proposal which was
not solicited by the Company and which does not otherwise result from a
breach of the non-solicitation covenants of the Company described above
under "No Solicitation by the Company; Takeover Proposals" in this Section
12; or
(4) The Merger Agreement is terminated by Parent because the Company
or any of its directors or officers participated in discussions or
negotiations in breach (other than an immaterial breach) of the Company's
covenants described under "No Solicitation by the Company; Takeover
Proposals" in this Section 12.
CONDUCT OF BUSINESS BY THE COMPANY. The Merger Agreement provides that
until the consummation of the Merger, the Company will (and will cause each of
its Subsidiaries to):
(1) maintain its existence in good standing;
(2) maintain the general character of its business and properties and
conduct its business in the ordinary and usual manner consistent with past
practices, except as expressly permitted by the Merger Agreement;
(3) maintain business and accounting records consistent with past
practices; and
(4) use its reasonable best efforts (a) to preserve its business
intact, (b) to keep available to the Company the services of its present
officers and employees and (c) to preserve for the Company or such
subsidiary the goodwill of its suppliers, customers and others having
business relations with the Company or such subsidiary.
In addition, the Merger Agreement provides that unless provided for in the
Merger Agreement or approved by Parent in writing, until the consummation of the
Merger, the Company will not (and will not permit any of its Subsidiaries to):
(1) amend or otherwise change its certificate of incorporation or
by-laws;
(2) issue or sell or authorize for issuance or sale (other than any
issuance of Common Stock upon the exercise of any outstanding option or
warrant to purchase Common Stock which option or warrant was issued prior
to the date of the Merger Agreement in accordance with the terms of the
relevant stock option or warrant agreement), or grant any options or
warrants or make other agreements with respect to, any shares of its
capital stock or any other of its securities or warrants;
(3) 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;
(4) reclassify, combine, split, subdivide or redeem, purchase or
otherwise acquire, directly or indirectly, any of its capital stock;
(5) 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 (a) short-term borrowings (including
borrowings under the Company's existing line of credit with Fleet National
Bank) incurred in the ordinary course of business (or to refinance existing
or maturing indebtedness) and (b) intercompany indebtedness between the
Company and any of its subsidiaries or between subsidiaries;
(6) (a) 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; (b) enter into any contract or agreement other
than in the ordinary course of business, consistent with past practice; (c)
authorize any capital commitment which is in excess of $50,000 or capital
expenditures which are, in the aggregate, in excess of $100,000, except as
otherwise disclosed in
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the Merger Agreement; or (d) enter into or amend any contract, agreement,
commitment or arrangement with respect to any of the foregoing matters
described in these clauses (5) and (6);
(7) mortgage, pledge or subject to lien, any of its assets or
properties or agree to do so except for liens permitted by the Merger
Agreement;
(8) sell, lease, license, mortgage or otherwise encumber or subject to
any lien or otherwise dispose of any of its properties or assets (including
securitizations), other than sales or licenses of finished goods in the
ordinary course of business consistent with past practice;
(9) assume, guarantee or otherwise become responsible for the
obligations of any other person or agree to so do;
(10) enter into or agree to enter into any employment agreement;
(11) except as otherwise disclosed in the Merger Agreement, take any
action, other than in the ordinary course of business and consistent with
past practice, with respect to accounting policies or procedures
(including, without limitation, procedures with respect to the payment of
accounts payable and collection of accounts receivables);
(12) make any tax election or settle or compromise any material
federal, state, local or foreign income tax liability;
(13) settle or compromise any pending or threatened suit, action or
claim which is material or which relates to any of the transactions
contemplated by the Merger Agreement;
(14) 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 reflected or
reserved against in the most recently audited balance sheet contained in
documents of the Company filed with the Commission or subsequently incurred
in the ordinary course of business and consistent with past practice;
(15) except in connection with the sale of the Company's products in
the ordinary course of business and consistent with past practice, sell,
assign, transfer, license, sublicense, pledge or otherwise encumber any of
the Company's intellectual property rights;
(16) except as required by law or contemplated hereby, enter into,
adopt or amend in any material respect or terminate any Company benefit
plan or any other agreement, plan or policy involving the Company or its
subsidiaries, and one or more of its directors, officers or employees, or
materially change any actuarial or other assumption used to calculate
funding obligations with respect to any pension plan, or change the manner
in which contributions to any pension plan are made or the basis on which
such contributions are determined;
(17) except for normal increases in the ordinary course of business
consistent with past practice that, in the aggregate, do not materially
increase benefits or compensation expenses of the Company or its
subsidiaries, or as contemplated by the Merger Agreement or by the terms of
any employment agreement in existence on the date of the Merger Agreement,
increase the cash compensation of any director, executive officer or other
key employee or pay any benefit or amount not required by a plan or
arrangement as in effect on the date of the Merger Agreement to any such
Person; or
(18) announce an intention, commit or agree to do any of the
foregoing.
BOARD OF DIRECTORS. The Merger Agreement provides that promptly upon the
acceptance for payment of, and payment for, Shares by the Purchaser pursuant to
the Offer, the Purchaser will be entitled to designate such number of directors
on the board of directors of the Company as will give the Purchaser, subject to
compliance with Section 14(f) of the Exchange Act, representation on the
Company's board of directors equal to the product of (1) the total number of
directors on the Company's board of directors and (2) the percentage that the
number of Shares purchased by the Purchaser in the Offer bears to the number of
Shares outstanding, and the Company will, at such time, cause the Purchaser's
designees to be selected by its existing
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board of directors. Subject to applicable law, the Company has agreed to take
all action requested by Parent necessary to effect any such election, including
mailing to its stockholders the Information Statement containing the information
required by Section 14(f) of the Exchange Act and Rule 14f-1 promulgated
thereunder. The Merger Agreement further provides that in the event that the
Purchaser's designees are elected to the board of directors of the Company,
until the effective time of the Merger, the board of directors of the Company
will have at least two independent directors who were directors on the date of
the Merger Agreement and who are not officers of the Company or any of its
subsidiaries. The Merger Agreement also provides that the Company will promptly,
at the option of Parent, either increase the size of the Company's board of
directors and/or obtain the resignation of such number of its current directors
as is necessary to enable the Purchaser's designees to be elected or appointed
to, and to constitute a majority of, the Company's board of directors as
provided above.
STOCK OPTIONS; WARRANTS. The Merger Agreement provides that the board of
directors of the Company (or, if appropriate, any committee administering the
Company stock plans) will adopt such resolutions and take such other actions as
may be required to terminate the Company stock plans as of the effective time of
the Merger and each then outstanding Company stock option granted under the
Company stock plans, whether vested or unvested, will be cancelled and converted
into a right to receive an amount in cash, without interest, equal to the
product of (1) the number of shares of Common Stock represented by such Company
stock option immediately prior to such cancellation and conversion multiplied by
(2) the excess, if any, by which the Offer Price exceeds the exercise price per
share with respect to such Company stock option (such payment to be net of all
applicable federal, state, local or foreign taxes). Prior to the effective time
of the Merger, the Company will obtain all necessary consents from, and provide
(in a form acceptable to Parent) any required notices to, holders of Company
stock options and amend the terms of the Company stock plans, in each case, as
is necessary to give effect to the immediately preceding sentence.
The Merger Agreement also provides that, prior to the effective time of the
Merger, the Company will take all actions to receive from each holder of an
outstanding warrant to purchase shares of Common Stock an agreement that, as of
the effective time of the Merger, such warrant will be converted into a right of
such holder to receive from the Depositary the consideration set forth in the
next sentence at the same time that each such holder is entitled to receive
payment for shares of Common Stock from the Surviving Corporation in connection
with the Merger. Each holder of a warrant will be entitled to receive from the
Depositary in respect of the shares of Common Stock to be issued upon the
exercise of such warrant, an amount in cash, without interest, equal to the
product of (1) the number of shares of Common Stock subject to such warrant
immediately prior to the effective time of the Merger and (2) the excess, if
any, by which the Offer Price exceeds the exercise price per share that was
applicable with respect to such warrant.
EMPLOYEE MATTERS. The Merger Agreement provides that as soon as
practicable after the Merger, Parent will provide, or cause to be provided,
employee benefit plans, programs and arrangements to employees of the Company
that are the same as those made generally available to non-represented employees
of Parent who are hired by Parent after December 31, 1998. Until then, Parent
will provide, or cause to be provided, the employee benefit plans, programs and
arrangements of the Company provided to employees of the Company as of the date
of the Merger Agreement.
The Merger Agreement also provides that with respect to each benefit plan,
program practice, policy or arrangement maintained by Parent in which employees
of the Company subsequently participate, for purposes of determining vesting and
entitlement to benefits, including for severance benefits and vacation
entitlement (but not for accrual of pension benefits), service with the Company
(or predecessor employers to the extent the Company provides past service
credit) will be treated as service with Parent, provided, that such service
shall not be recognized to the extent that such recognition would result in a
duplication of benefits. Such service also shall apply for purposes of
satisfying any waiting periods, evidence of insurability requirements, or the
application of any pre-existing condition limitations. Each Parent plan will
waive pre-existing condition limitations to the same extent waived under the
applicable Company benefit plan. Company employees will be given credit for
amounts paid under a corresponding benefit plan during the same period for
purposes of applying deductibles, copayments and out-of-pocket maximums as
though such amounts had been paid in accordance with the terms and conditions of
the Parent plan.
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The Merger Agreement provides that, prior to the Merger, the Company shall
take all necessary actions or agreements to terminate the retirement plan for
employees of the Company in accordance with its terms. The effective date of
such termination will in no event be later than the effective time of the
Merger. Prior to such termination, the Company shall file with respect thereto a
determination letter application on Form 5310 with the IRS. In connection with
such termination, the assets of such plan (including any excess assets), net of
expenses, will be allocated among participants based on the accrued benefit
obligation.
The Merger Agreement also provides that prior to the Merger, the Company
will terminate its supplemental retirement agreements. In connection therewith,
accrued benefits will be paid to each participant in such plan in accordance
with the procedures described in each such supplemental retirement agreement.
Also prior to the Merger, the Company will terminate its retirement plan for
outside directors in accordance with the terms of such plan. In connection
therewith, accrued benefits will be paid to each participant in the retirement
plan in accordance with the procedures described in that plan.
INDEMNIFICATION. From and after the consummation of the Offer, Parent
will, or will cause the Surviving Corporation to, fulfill and honor in all
respects the obligations of the Company to indemnify each person who is or was a
director or officer (an "Indemnified Party") of the Company or any of its
subsidiaries pursuant to any indemnification provision of the Company's
certificate of incorporation or by-laws as each is in effect on the date of the
Merger Agreement. In addition, the Merger Agreement provides that, for a period
of six years after the consummation of the Offer, Parent shall cause to be
maintained in effect the current officers' and directors' liability insurance
maintained by the Company with respect to the Indemnified Parties (provided that
Parent may elect either (1) to require the Company to obtain prior to the Merger
coverage of the type contemplated by section 10 of the Company's existing
directors, officers and corporate liability insurance policy or (2) to
substitute therefor policies of at least the same coverage and amounts
containing terms and conditions which are no less advantageous to the
Indemnified Parties than such existing insurance) covering acts or omissions
occurring prior to the effective time of the Merger.
REASONABLE BEST EFFORTS. Upon the terms and subject to the conditions set
forth in the Merger Agreement, Parent, the Purchaser and the Company have each
agreed to use its reasonable best efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, and to assist and cooperate with each
other in doing, all things necessary, proper or advisable to consummate and make
effective, in the most expeditious manner practicable, the Offer, the Merger and
the other transactions contemplated by the Merger Agreement, including (1) the
taking of all reasonable acts necessary to cause the conditions of the Offer to
be satisfied, (2) the obtaining of all necessary actions or nonactions, waivers,
consents and approvals from governmental entities and the making of all
necessary registrations and filings and the taking of all steps as may be
necessary to obtain an approval or waiver from, or to avoid an action or
proceeding by, any governmental entity, (3) the obtaining of all necessary
consents, approvals or waivers from third parties, (4) the defending of any
lawsuits or other legal proceedings, whether judicial or administrative,
challenging the Merger Agreement or the consummation of the transactions
contemplated by the Merger Agreement, including seeking to have any stay or
temporary restraining order entered by any court or other governmental entity
vacated or reversed, and (5) the execution and delivery of any additional
instruments necessary to consummate the transactions contemplated by, and to
fully carry out the purposes of, the Merger Agreement. In connection with and
without limiting the foregoing, but subject to the terms and conditions of the
Merger Agreement, the Company and its board of directors will (1) take all
action necessary to ensure that no state takeover statute or similar statute or
regulation is or becomes applicable to the Offer, the Merger, the Merger
Agreement or any of the other transactions contemplated by the Merger Agreement,
and (2) if any state takeover statute or similar statute or regulation becomes
applicable to the Offer, the Merger, the Merger Agreement or any other
transaction contemplated by the Merger Agreement, take all action necessary to
ensure that the Offer, the Merger, the Merger Agreement and the other
transactions contemplated by the Merger Agreement may be consummated as promptly
as practicable on the terms contemplated by the Offer and the Merger Agreement
and otherwise to minimize the effect of such statute or regulation on the Offer,
the Merger, the Merger Agreement and the other transactions contemplated by the
Merger Agreement.
The Merger Agreement further provides that the Company will give prompt
notice to Parent, and Parent will give prompt notice to the Company, of (1) the
occurrence, or non-occurrence, of any event which would
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be likely to cause any representation or warranty contained in the Merger
Agreement to be untrue or inaccurate in any material respect or any covenant,
condition or agreement contained in the Merger Agreement not to be complied with
or satisfied or (2) any failure of the Company, Parent or the Purchaser to
comply with or satisfy any covenant, condition or agreement to be complied with
or satisfied by it under the Merger Agreement; provided that no such
notification will limit or otherwise affect the remedies available to the party
receiving the notice.
REPRESENTATIONS AND WARRANTIES. The Merger Agreement contains various
customary representations and warranties.
The foregoing summary of the Merger Agreement is qualified in its entirety
by reference to the Merger Agreement, a copy of which is filed as Exhibit (c)(1)
to the Purchaser's Tender Offer Statement on Schedule 14D-1 filed with the
Commission on the date hereof (the "Schedule 14D-1") and incorporated by
reference herein. The Merger Agreement should be read in its entirety for a more
complete description of the matters summarized above.
APPRAISAL RIGHTS. No appraisal rights are available in connection with the
Offer. However, if the Merger is consummated, holders of Shares will have
certain rights pursuant to the provisions of Section 262 of the DGCL to dissent
and demand appraisal of, and to receive payment in cash of the fair value of,
their Shares. If the statutory procedures were complied with, such rights could
lead to a judicial determination of the fair value required to be paid in cash
to such dissenting holders for their Shares. In determining the fair value of
the Shares, the court is required to take into account all relevant factors.
Accordingly, any such judicial determination of the fair value of Shares could
be based upon considerations other than or in addition to the Offer Price or the
market value of the Shares, including the asset value and investment value of
the Shares. The value so determined could be more or less than the Offer Price
or the Merger Consideration.
If any holder of Shares who demands appraisal under Section 262 of the DGCL
fails to perfect, or effectively withdraws or loses his right to appraisal, as
provided in the DGCL, the Shares of such stockholder will be converted into the
Merger Consideration in accordance with the Merger Agreement.
The foregoing discussion is not a complete statement of law pertaining to
appraisal rights under the DGCL and is qualified in its entirety by the full
text of Section 262 of the DGCL.
FAILURE TO FOLLOW THE STEPS REQUIRED BY SECTION 262 OF THE DGCL FOR
PERFECTING APPRAISAL RIGHTS MAY RESULT IN THE LOSS OF SUCH RIGHTS.
GOING PRIVATE TRANSACTIONS. The Merger would have to comply with any
applicable Federal law operative at the time of its consummation. Rule 13e-3
under the Exchange Act is applicable to certain "going private" transactions.
The Purchaser does not believe that Rule 13e-3 will be applicable to the Merger
unless the Merger is consummated more than one year after the termination of the
Offer. If applicable, Rule 13e-3 would require, among other things, that certain
financial information concerning the Company and certain information relating to
the fairness of the Merger and the consideration offered to minority
stockholders be filed with the Commission and disclosed to minority stockholders
prior to consummation of the Merger.
OTHER MATTERS. Except as otherwise described in this Offer to Purchase,
the Purchaser and Parent have no current plans or proposals that would relate
to, or result in, any extraordinary corporate transaction involving the Company
or any of its subsidiaries, such as a merger, reorganization or liquidation
involving the Company or any of its subsidiaries, a sale or transfer of a
material amount of assets of the Company or any of its subsidiaries, any change
in the present board of directors of the Company or management of the Company,
any material change in the Company's capitalization or dividend policy or any
other material change in the Company's business, corporate structure or
personnel.
13. DIVIDENDS AND DISTRIBUTIONS.
Pursuant to the terms of the Merger Agreement, the Company is prohibited
from taking any of the actions described in the next paragraph, and nothing
herein shall constitute a waiver by the Purchaser or
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Parent of any of its rights under the Merger Agreement or a limitation of
remedies available to the Purchaser or Parent for any breach of the Merger
Agreement, including termination thereof.
If, on or after the date of the Merger Agreement, any stock split,
combination, reclassification or stock dividend with respect to the outstanding
Shares, any change or conversion of outstanding shares of Common Stock into
other securities or any other dividend or distribution with respect to the
outstanding Shares should occur, appropriate and proportionate adjustments shall
be made to the Merger Consideration.
14. CERTAIN CONDITIONS OF THE OFFER.
Notwithstanding any other term of the Offer or the Merger Agreement, the
Purchaser will not be required to accept for payment or, subject to any
applicable rules and regulations of the Commission, including Rule 14e-1(c)
under the Exchange Act (relating to the Purchaser's obligation to pay for or
return tendered Shares after the termination or withdrawal of the Offer), to pay
for any Shares tendered pursuant to the Offer unless (1) the Minimum Condition
shall have been satisfied and (2) any waiting period under the HSR Act
applicable to the purchase of Shares pursuant to the Offer shall have expired or
been terminated. Furthermore, the Purchaser will not be required to accept for
payment or, subject as aforesaid, to pay for any Shares not theretofore accepted
for payment or paid for, and may, in accordance with the provisions of the
Merger Agreement described in the subsection entitled "Termination of the Merger
Agreement" in Section 12 above, terminate the Merger Agreement or amend the
Offer with the consent of the Company, if, upon the scheduled expiration date of
the Offer (as extended, if required, pursuant to the provisions discussed in the
fifth paragraph of Section 1 above), any of the following conditions exists and
is continuing and does not result principally from the breach by Parent or the
Purchaser of any of their obligations under the Merger Agreement:
(1) there shall be instituted or pending by any governmental entity
any suit, action or proceeding (a) challenging the acquisition by Parent or
the Purchaser of any Shares under the Offer, seeking to restrain or
prohibit the making or consummation of the Offer or the Merger or the
performance of any of the other transactions contemplated by the Merger
Agreement or seeking to obtain from the Company, Parent or the Purchaser
any damages that are material in relation to the Company and its
subsidiaries as a whole, (b) seeking to prohibit or materially limit the
ownership or operation by the Company, Parent or any of Parent's
subsidiaries of all or a portion of the business or assets of the Company
or Parent and its subsidiaries, taken as a whole, or to compel the Company
or Parent and its subsidiaries to dispose of or hold separate all or a
portion of the business or assets of the Company or Parent and their
subsidiaries, taken as a whole, in each case as a direct result of the
Offer or any of the other transactions contemplated by the Merger
Agreement, (c) seeking to impose material limitations on the ability of
Parent or the Purchaser to acquire or hold, or exercise full rights of
ownership of, any Shares to be accepted for payment pursuant to the Offer,
including, without limitation, the right to vote such Shares on all matters
properly presented to the stockholders of the Company, (d) seeking to
prohibit Parent or any of its subsidiaries from effectively controlling in
any material respect any material portion of the business or operations of
the Company, (e) that could reasonably be expected to require the
divestiture by Parent or the Purchaser of Shares, in the case of any of the
foregoing in clauses (b), (c) or (d), which could reasonably be expected,
individually or in the aggregate, to have a material adverse effect on the
businesses of the Company and its subsidiaries, or (f) that could
reasonably be expected to result in a material adverse effect on the
Company or Parent;
(2) there shall be any statute, rule, regulation, judgment, order or
injunction enacted, entered, enforced, promulgated or deemed applicable to
the Offer or the Merger, by any governmental entity or court, other than
the application to the Offer or the Merger of applicable waiting periods
under the HSR Act, that would result in any of the consequences referred to
in clauses (a) through (f) of paragraph (1) above;
(3) there shall have occurred any events or changes which have had or
which could reasonably be expected to have, individually or in the
aggregate, a material adverse effect on the Company;
26
<PAGE> 29
(4) any of the representations and warranties of the Company set forth
in the Merger Agreement that are qualified as to materiality shall not be
true and correct or any such representations and warranties that are not so
qualified shall not be true and correct in any material respect, in each
case, at the date of the Merger Agreement and at the scheduled or extended
expiration of the Offer;
(5) the Company shall have failed to perform in any material respect
any material obligation or to comply in any material respect with any
material agreement or material covenant of the Company to be performed or
complied with by it under the Merger Agreement, which failure to perform or
comply cannot be cured, or has not been cured within 15 business days after
the Company receives written notice from Parent of such breach or failure
to perform;
(6) the Merger Agreement shall have been terminated in accordance with
its terms;
(7) any consent (other than the filing of the Certificate of Merger or
Company Stockholder Approval if required by the DGCL) required to be filed,
occurred or been obtained by the Company or any of its Subsidiaries in
connection with the execution and delivery of the Merger Agreement, the
Offer and the consummation of the transactions contemplated by the Merger
Agreement shall not have been filed or obtained or shall not have occurred,
except where the failure to obtain such consent could not reasonably be
expected to have, individually or in the aggregate, a material adverse
effect on the Company;
(8) the Company's board of directors (a) shall have withdrawn, or
modified or changed in a manner adverse to Parent or the Purchaser
(including by amendment of the Schedule 14D-9) its recommendation of the
Offer, the Merger Agreement or the Merger, (b) shall have recommended a
Superior Proposal, (c) shall have adopted any resolution to effect any of
the foregoing or (d) upon request of Parent or the Purchaser, shall fail to
reaffirm its approval of recommendation of the Offer, the Merger Agreement
or the Merger; or
(9) any person or "group" (within the meaning of Section 13(d)(3) of
the Exchange Act), other than Parent, the Purchaser or their affiliates or
any group of which any of them is a member, shall have acquired or
announced its intention to acquire beneficial ownership (as determined
pursuant to Rule 13d-3 promulgated under the Exchange Act) of 20% or more
of the Shares;
and, in the good faith judgment of Parent or the Purchaser, in its sole
discretion, make it inadvisable to proceed with such acceptance of Shares for
payment or the payment therefor.
The Merger Agreement provides that the foregoing conditions are for the
sole benefit of Parent and the Purchaser and (except for the Minimum Condition),
subject to the terms of the Merger Agreement, may be waived by Parent and the
Purchaser in whole or in part at any time and from time to time in their sole
discretion. The failure by Parent or the 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 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.
Based on a review of publicly available filings made by the Company with
the Commission and other publicly available information concerning the Company,
neither the Purchaser nor Parent is aware of any license or regulatory permit
that appears to be material to the business of the Company and its subsidiaries,
taken as a whole, that might be adversely affected by the Purchaser's
acquisition of Shares as contemplated herein or of any approval or other action,
except as otherwise described in this Section 15, by any governmental entity
that would be required for the acquisition or ownership of Shares by the
Purchaser as contemplated herein. Should any such approval or other action be
required, the Purchaser and Parent currently contemplate that such approval or
other action will be sought, except as described below under "State Takeover
Laws". Except as otherwise expressly described in this Section 15, while the
Purchaser does not presently intend to delay the acceptance for payment of or
payment for Shares tendered pursuant to the Offer pending the outcome of any
such matter, there can be no assurance that any such approval or other
27
<PAGE> 30
action, if needed, would be obtained or would be obtained without substantial
conditions or that failure to obtain any such approval or other action might not
result in consequences adverse to the Company's business or that certain parts
of the Company's business might not have to be disposed of if such approvals
were not obtained or such other actions were not taken or in order to obtain any
such approval or other action. If certain types of adverse action are taken with
respect to the matters discussed below, the Purchaser could decline to accept
for payment or pay for any Shares tendered. See Section 14 for certain
conditions to the Offer.
STATE TAKEOVER LAWS. A number of states throughout the United States have
enacted takeover statutes that purport, in varying degrees, to be applicable to
attempts to acquire securities of corporations that are incorporated or have
assets, stockholders, executive offices or places or business in such states. In
Edgar v. MITE Corp., the Supreme Court of the United States held that the
Illinois Business Takeover Act, which involved state securities laws that made
the takeover of certain corporations more difficult, imposed a substantial
burden on interstate commerce and therefore was unconstitutional. In CTS Corp.
v. Dynamics Corp. of America, however, the Supreme Court of the United States
held that a state may, as a matter of corporate law, and, in particular, those
laws concerning corporate governance, constitutionally disqualify a potential
acquiror from voting on the affairs of a target corporation without prior
approval of the remaining stockholders; provided that such laws were applicable
only under certain conditions.
Section 203 of the DGCL limits the ability of a Delaware corporation to
engage in business combinations with "interested stockholders" (defined
generally as any beneficial owner of 15% or more of the outstanding voting stock
of the corporation) unless, among other things, the corporation's board of
directors has given its prior approval to either the business combination or the
transaction which resulted in the stockholder becoming an "interested
stockholder." The Company's board of directors has approved the Merger Agreement
and the Purchaser's acquisition of Shares pursuant to the Offer and, therefore,
Section 203 of the DGCL is inapplicable to the Offer and the Merger.
Based on information supplied by the Company, the Purchaser does not
believe that any other state takeover statutes purport to apply to the Offer,
the Merger or the Merger Agreement. Neither the Purchaser nor Parent has
currently complied with any state takeover statute or regulation. The Purchaser
reserves the right to challenge the applicability or validity of any state law
purportedly applicable to the Offer, the Merger or the Merger Agreement and
nothing in this Offer to Purchase or any action taken in connection with the
Offer, the Merger or the Merger Agreement is intended as a waiver of such right.
If it is asserted that any state takeover statute is applicable to the Offer,
the Merger or the Merger Agreement and if an appropriate court does not
determine that it is inapplicable or invalid as applied to the Offer, the Merger
or the Merger Agreement, the Purchaser might be required to file certain
information with, or to receive approvals from, the relevant state authorities,
and the Purchaser might be unable to accept for payment or pay for Shares
tendered pursuant to the Offer, or be delayed in consummating the Offer or the
Merger. In such case, the Purchaser may not be obliged to accept for payment or
pay for any Shares tendered pursuant to the Offer.
ANTITRUST. Under the provisions of the HSR Act applicable to the Offer,
the purchase of Shares under the Offer may be consummated following the
expiration of a 15-calendar day waiting period following the filing by Parent of
a Notification and Report Form with respect to the Offer, unless Parent receives
a request for additional information or documentary material from the Antitrust
Division or the FTC or unless early termination of the waiting period is
granted. Parent is in the process of making such filing. If, within the initial
15-day waiting period, either the Antitrust Division or the FTC requests
additional information or material from Parent concerning the Offer, the waiting
period will be extended and would expire at 11:59 p.m., New York City time, on
the tenth calendar day after the date of substantial compliance by Parent with
such request. Only one extension of the waiting period pursuant to a request for
additional information is authorized by the HSR Act. Thereafter, such waiting
period may be extended only by court order or with the consent of Parent. In
practice, complying with a request for additional information or material can
take a significant amount of time. In addition, if the Antitrust Division or the
FTC raises substantive issues in connection with a proposed transaction, the
parties frequently engage in negotiations with the relevant governmental agency
concerning possible means of addressing those issues and may agree to delay
consummation of the transaction while such negotiations continue.
28
<PAGE> 31
The Merger would not require an additional filing under the HSR Act if the
Purchaser owns 50% or more of the outstanding Shares at the time of the Merger
or if the Merger occurs within one year after the HSR Act waiting period
applicable to the Offer expires or is terminated.
The FTC and the Antitrust Division frequently scrutinize the legality under
the antitrust laws of transactions such as the Purchaser's proposed acquisition
of the Company. At any time before or after the Purchaser's purchase of Shares
pursuant to the Offer, the Antitrust Division or FTC 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 the consummation of the Merger or seeking the divestiture of Shares
acquired by the Purchaser or the divestiture of substantial assets of Parent or
its subsidiaries, or the Company or its subsidiaries. Private parties may also
bring legal action under the antitrust laws under certain circumstances. 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, of the results thereof.
LITIGATION. After the announcement of the Merger Agreement by Parent and
the Company on July 15, 1999, two putative class action lawsuits relating to the
Merger were filed in the Court of Chancery for the State of Delaware: Chase v.
Harrison et. al., C.A. No. 17312-NC and Airmont Plaza Associates et. al. v.
SpecTran Corporation et. al., C.A. No. 17314-NC.
The lawsuits were filed by plaintiffs claiming to be stockholders of the
Company, purportedly on behalf of all the Company's stockholders, against the
Company, members of the board of directors of the Company and Parent. The
plaintiffs in both lawsuits allege, among other things, that the terms of the
proposed Merger were not the result of an auction process or active market
check, that the $9.00 per share price offered by Parent is inadequate, and that
the Company's directors breached their fiduciary duties to the stockholders of
the Company in connection with the Merger Agreement. Both lawsuits seek to have
the Merger enjoined or, if the Merger is completed, to have it rescinded and to
recover unspecified damages, fees and expenses. The Company and Parent intend to
vigorously oppose these lawsuits.
16. FEES AND EXPENSES.
The Purchaser has retained Morrow & Co., Inc. to act as the Information
Agent and The Bank of New York to serve as the Depositary in connection with the
Offer. The Information Agent and the Depositary each will receive reasonable and
customary compensation for their services, be reimbursed for certain reasonable
out-of-pocket expenses and be indemnified against certain liabilities and
expenses in connection therewith, including certain liabilities under the
Federal securities laws.
Neither the Purchaser nor Parent will pay any fees or commissions to any
broker or dealer or other person (other than the Information Agent and the
Depositary) in connection with the solicitation of tenders of Shares pursuant to
the Offer. Brokers, dealers, banks and trust companies will be reimbursed by the
Purchaser upon request for customary mailing and handling expenses incurred by
them in forwarding materials to their customers.
17. MISCELLANEOUS.
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares in any jurisdiction in which the making of the
Offer or the acceptance thereof would not be in compliance with the laws of such
jurisdiction. Neither the Purchaser or Parent is aware of any jurisdiction in
which the making of the Offer or the tender of Shares in connection therewith
would not be in compliance with the laws of such jurisdiction. To the extent the
Purchaser or Parent becomes aware of any state law that would limit the class of
offerees in the Offer, the Purchaser will amend the Offer and, depending on the
timing of such amendment, if any, will extend the Offer to provide adequate
dissemination of such information to holders of Shares prior to the expiration
of the Offer.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION ON BEHALF OF THE PURCHASER OR PARENT NOT CONTAINED HEREIN OR IN
THE LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED.
29
<PAGE> 32
The Purchaser or Parent has filed with the Commission the Schedule 14D-1
pursuant to Rule 14d-3 under the Exchange Act, furnishing certain additional
information with respect to the Offer. In addition, the Company has filed with
the Commission the Schedule 14D-9 pursuant to Rule 14d-9 under the Exchange Act
setting forth its recommendation with respect to the Offer and the reasons for
such recommendation and furnishing certain additional related information. Such
Schedules and any amendments thereto, including exhibits, should be available
for inspection and copies should be obtainable in the manner set forth in
Sections 8 and 9 (except that they will not be available at the regional offices
of the Commission).
SEATTLE ACQUISITION INC.
July 21, 1999
30
<PAGE> 33
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF
PARENT AND THE PURCHASER
1. DIRECTORS AND EXECUTIVE OFFICERS OF PARENT. The name, business address,
present principal occupation or employment and five-year employment history of
each of the directors and executive officers of Parent are set forth below.
Unless otherwise indicated, the business address of each such director and each
such executive officer is 600 Mountain Avenue, Murray Hill, New Jersey 07974.
Except as set forth below, the directors and executive officers listed below are
citizens of the United States.
<TABLE>
<CAPTION>
POSITION WITH PARENT;
PRINCIPAL OCCUPATION OR
NAME AND BUSINESS ADDRESS EMPLOYEE 5-YEAR EMPLOYMENT HISTORY
------------------------- ----------------------------------
<S> <C>
Paul A. Allaire...................... Director of Parent since 1996. Chairman of the Board of
Xerox Corporation Xerox Corporation (document processing services and
800 Long Ridge Road products) since 1991. Chief Executive Officer of Xerox
P.O. Box 1600 Corporation (1990-April 1999). Director of Sara Lee Corp.,
Stamford, CT 06904 SmithKline Beecham p.l.c., J.P. Morgan & Co., Inc. and
Priceline.com Incorporated. Committees: Member of the Audit
and Finance and Corporate Governance and Compensation
Committees. Age: 61.
Carla A. Hills....................... Director of Parent since 1996. Chairman of the Board and
Hills & Company Chief Executive Officer of Hills & Company (international
1200 Nineteenth St., N.W. consultants) since 1993 and United States Trade
Washington, DC 20036 Representative (1989-1993). Director of American
International Group, Inc., Chevron Corp. and Time Warner
Inc. Committees: Member of the Corporate Governance and
Compensation Committee. Age: 65.
Drew Lewis........................... Director of Parent since 1996. Retired Chairman of the Board
Box 70 and Chief Executive Officer of Union Pacific Corporation
Lederach, PA 19450 (1987-1996). Director of Aegis Communications Group, Inc.,
American Express Company, FPL Group, Inc., Gannett Co.,
Inc., Millennium Bank, Union Pacific Resources Group Inc.
and Gulfstream Aerospace Corporation. Committees: Member of
the Audit and Finance and Corporate Governance and
Compensation Committees. Age: 67.
Richard A. McGinn.................... Chairman of the Board and Chief Executive Officer of Parent
since February 1998, Chief Executive Officer and President
of Parent since October 1997 and Director of Parent since
1996. President and Chief Operating Officer of Parent
(1996-1997). Executive Vice President of AT&T and Chief
Executive Officer of the AT&T Network Systems Group
(1994-1996) and President and Chief Operating Officer of the
AT&T Network Systems Group (1993-1994). Director of Oracle
Corporation and American Express Company. Age: 52.
Paul H. O'Neill...................... Director of Parent since 1996. Chairman of the Board of
ALCOA Alcoa Inc. (production of aluminum) since 1987. Chief
201 Isabella Street Executive Officer of Alcoa Inc. (1987-May 1999). Chairman of
Pittsburgh, PA 15212-5858 the Rand Corporation. Director of Eastman Kodak Company, the
National Association of Securities Dealers, Inc., the Gerald
R. Ford Foundation and Manpower Demonstration Research
Corporation. Committees: Member of the Audit and Finance and
Corporate Governance and Compensation Committees. Age: 63.
</TABLE>
I-1
<PAGE> 34
<TABLE>
<CAPTION>
POSITION WITH PARENT;
PRINCIPAL OCCUPATION OR
NAME AND BUSINESS ADDRESS EMPLOYEE 5-YEAR EMPLOYMENT HISTORY
------------------------- ----------------------------------
<S> <C>
Donald S. Perkins.................... Director of Parent since 1996. Retired Chairman of the Board
One First National Plaza and Chief Executive Officer of Jewel Companies, Inc.
21 South Clark Street (diversified retailer) (1970-1980). Non-Executive Chairman
Chicago, IL 60603-2006 of Kmart Corp. (1995). Director of Aon Corp., LaSalle Hotel
Properties and Nanophase Technologies Corporation.
Committees: Chairman of the Audit and Finance Committee and
Member of the Corporate Governance and Compensation
Committee. Age: 72.
Donald K. Peterson................... Executive Vice President and Chief Financial Officer of
Parent since 1996. Joined AT&T in 1995 as Vice President and
Chief Financial Officer of AT&T's Communications Services
Group. Joined Northern Telecom, Inc. in 1976 and served in
various executive positions there including President of
Nortel Communications Systems, Inc. (1993-1995). Age: 49.
Richard J. Rawson.................... Senior Vice President and General Counsel of Parent since
1996. Secretary of Parent from 1996 to February 1999. Joined
AT&T Law Division in 1984 and was appointed Vice President,
Law -- AT&T Network Systems Group in 1992. Age: 46.
Patricia F. Russo.................... Executive Vice President, Strategy, Business Development and
Corporate Operations of Parent since 1998. Executive Vice
President, Corporate Staff Operations of Parent (1997-1998),
Executive Vice President, Chief Staff Officer of Parent
(1996-1997) and President, Business Communications Systems
business unit of Parent (1996). President, Global Business
Communications Systems of AT&T (1993-1996). Age: 46.
Henry B. Schacht..................... Director of Parent since 1996. Chairman of the Board of
E.M. Warburg, Pincus & Parent (1996-1998). Chief Executive Officer of Parent
Co., LLC (1996-1997). Director and Senior Advisor of E.M. Warburg,
466 Lexington Avenue Pincus & Co., LLC since March 1999 (global venture capital
New York, NY 10017 company). Chairman (1977-1995) and Chief Executive Officer
(1973-1994) of Cummins Engine Company, Inc. (designer and
manufacturer of diesel engines). Director of The Chase
Manhattan Corporation and The Chase Manhattan Bank, N.A.,
Alcoa Inc., Cummins Engine Company, Inc., Johnson & Johnson,
Knoll, Inc. and the New York Times Co. Age: 64.
Daniel C. Stanzione.................. Executive Vice President and Chief Operating Officer of
Parent since 1997, President, Broadband Networks Group of
Parent (since January 1999), Bell Laboratories (since 1996)
and Network Systems business unit of Parent (1996-1997).
President, AT&T Bell Laboratories (1995-1996) and President,
Global Public Networks (1994-1995) and Switching Systems
(1993-1994), both units of the AT&T Network Systems Group.
Age: 53.
Franklin A. Thomas................... Director of Parent since 1996. Consultant to the TFF Study
TFF Study Group Group since 1996 (a non-profit initiative assisting
Fuller Building development in southern Africa). Retired President of The
595 Madison Avenue Ford Foundation (1979-1996). Director of Alcoa Inc.,
New York, NY 10022 Citigroup N.A., Cummins Engine Company, Inc. and PepsiCo,
Inc. Committees: Chairman of the Corporate Governance and
Compensation Committee and Member of the Audit and Finance
Committee. Age: 65.
</TABLE>
I-2
<PAGE> 35
<TABLE>
<CAPTION>
POSITION WITH PARENT;
PRINCIPAL OCCUPATION OR
NAME AND BUSINESS ADDRESS EMPLOYEE 5-YEAR EMPLOYMENT HISTORY
------------------------- ----------------------------------
<S> <C>
Ben J. M. Verwaayen.................. Executive Vice President and Chief Operating Officer of
Parent since 1997 and Executive Vice President-President
International (1997). President of PTT Telecom (national
telecommunications operator of the Netherlands) from 1988
through September 1997. Co-founder of Unisource
(pan-European alliance of Telia of Sweden, Swiss Telecom and
PTT Telecom). Citizen of The Netherlands. Age: 47.
John A. Young........................ Director of Parent since 1996. Vice Chairman of Novell, Inc.
Hewlett-Packard Co. since 1997 (provider of directory-enabled networking
3200 Hillview Avenue software). Retired President and Chief Executive Officer of
Palo Alto, CA 94304 Hewlett-Packard Company (manufacturer of measurement and
computation products) (1978-1992). Director of Wells Fargo
Bank, Wells Fargo & Co., Chevron Corp., International
Integration Incorporated, SmithKline Beecham p.l.c.,
Affymetrix, Inc. and Novell, Inc. Committees: Member of the
Corporate Governance and Compensation Committee. Age: 67.
</TABLE>
2. DIRECTORS AND EXECUTIVE OFFICERS OF THE PURCHASER. The name, business
address, present principal occupation or employment and five-year employment
history of each of the directors and executive officers of the Purchaser are set
forth below. The business address of the directors and executive officers listed
below is 600 Mountain Avenue, Murray Hill, New Jersey 07974. Except as set forth
below, the directors and executive officers listed below are citizens of the
United States.
<TABLE>
<CAPTION>
POSITION WITH THE PURCHASER;
PRINCIPAL OCCUPATION OR
NAME EMPLOYEE 5-YEAR EMPLOYMENT HISTORY
- ---- ----------------------------------
<S> <C>
William R. Spivey.................... Group President, Network Products Group of Parent since
October 1997 and President of the Purchaser since June 1999.
Previously Dr. Spivey was Vice President, Systems and
Components, Microelectronics business unit of Parent. Joined
AT&T in 1994. Previously Dr. Spivey was President of
Tektronix Development Company for Tektronix, Inc. based in
Oregon. He has also held senior management positions for
Honeywell, Inc. and General Electric in various systems
control, computer and semiconductor units. Age: 53.
Carol E. Kirby....................... Corporate Counsel for the Network Products Group of Parent
since 1998 and Director and Vice President of the Purchaser
since June 1999. Corporate counsel for Parent and AT&T Corp.
since 1991. Age: 45.
Pamela F. Craven..................... Vice President -- Law of Parent since 1996 and Secretary of
Parent since February 1999. Director and Vice President of
the Purchaser since June 1999. Joined AT&T Corp. Law
Division in 1991. Age: 45.
Justin C. Choi....................... Corporate Counsel in the Mergers and Acquisitions Law Group
of Parent since 1997 and Director and Secretary of the
Purchaser since June 1999. Associate at Paul, Hastings,
Janofsky & Walker (law firm) (1990-1997). Citizen of the
Republic of Korea. Age: 33.
</TABLE>
I-3
<PAGE> 36
Manually signed facsimile copies of the Letter of Transmittal will be
accepted. The Letter of Transmittal, certificates for Shares and any other
required documents should be sent or delivered by each stockholder of the
Company or such stockholder's broker, dealer, bank, trust company or other
nominee to the Depositary at one of its addresses set forth below.
The Depositary for the Offer is:
THE BANK OF NEW YORK
<TABLE>
<S> <C> <C>
By Mail: By Facsimile: By Hand/Overnight Courier:
(for Eligible Institutions
Tender & Exchange Department only) Tender & Exchange Department
P.O. Box 11248 (212) 815-6213 101 Barclay Street
Church Street Station Receive and Delivery Window
New York, New York 10286-1248 Confirm by Telephone New York, New York 10286
1-800-507-9357
</TABLE>
Questions or requests for assistance may be directed to the Information
Agent at its address and telephone number 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:
MORROW & CO., INC.
445 Park Avenue
5th Floor
New York, NY 10022
Banks and Brokerage Firms call:
(800) 662-5200
Shareholders please call:
(800) 566-9061
<PAGE> 1
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
OF
SPECTRAN CORPORATION
PURSUANT TO THE OFFER TO PURCHASE
DATED JULY 21, 1999
BY
SEATTLE ACQUISITION INC.
A WHOLLY OWNED SUBSIDIARY OF
LUCENT TECHNOLOGIES INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON TUESDAY, AUGUST 17, 1999 UNLESS EXTENDED.
The Depositary for the Offer is:
THE BANK OF YORK
<TABLE>
<S> <C> <C>
By Mail: By Facsimile: By Hand or Overnight Courier:
Tender & Exchange Department (For Eligible Institutions Only) Tender & Exchange Department
P.O. Box 11248 (212) 815-6213 101 Barclay Street
Church Street Station Receive and Deliver Window
New York, New York 10286-1248 Confirmation by Telephone: New York, New York 10286
1-800-507-9357
</TABLE>
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS, OR TRANSMISSION OF
INSTRUCTIONS VIA A FACSIMILE NUMBER, OTHER THAN AS SET FORTH ABOVE DOES NOT
CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF SHARES TENDERED
- ------------------------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED OWNER(S)
(PLEASE FILL IN, IF BLANK, EXACTLY AS NAME(S) SHARES TENDERED
APPEAR(S) ON CERTIFICATE(S)) (ATTACH ADDITIONAL LIST IF NECESSARY)
- ------------------------------------------------------------------------------------------------------------------------
TOTAL NUMBER
OF SHARES NUMBER
CERTIFICATE REPRESENTED BY OF SHARES
NUMBER(S)(1) CERTIFICATE(S)(1) TENDERED(2)
<S> <C> <C> <C>
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
Total Shares
- ------------------------------------------------------------------------------------------------------------------------
(1) Need not be completed by Book-Entry Stockholders.
(2) Unless otherwise indicated, it will be assumed that all Shares described herein are being tendered. See Instruction
4.
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 2
This Letter of Transmittal is to be used either if certificates for Shares
(as defined below) are to be forwarded herewith or, unless an Agent's Message
(as defined in Section 2 of the Offer to Purchase (as defined below)) is
utilized, if delivery of Shares is to be made by book-entry transfer to an
account maintained by the Depositary at the Book-Entry Transfer Facility (as
defined in and pursuant to the procedures set forth in Section 2 of the Offer to
Purchase). Stockholders who deliver Shares by book-entry transfer are referred
to herein as "Book-Entry Stockholders" and other Stockholders are referred to
herein as "Certificate Stockholders." Stockholders whose certificates for Shares
are not immediately available or who cannot deliver either the certificates for,
or a Book-Entry Confirmation (as defined in Section 2 of the Offer to Purchase)
with respect to, their Shares and all other documents required hereby to the
Depositary prior to the Expiration Date (as defined in Section 1 of the Offer to
Purchase) must tender their Shares in accordance with the guaranteed delivery
procedures set forth in Section 2 of the Offer to Purchase. See Instruction 2.
DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE
WITH SUCH BOOK-ENTRY TRANSFER FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY
TO THE DEPOSITARY.
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
MADE TO AN ACCOUNT MAINTAINED BY THE DEPOSITARY WITH THE BOOK-ENTRY TRANSFER
FACILITY AND COMPLETE THE FOLLOWING (ONLY PARTICIPANTS IN THE BOOK-ENTRY
TRANSFER FACILITY MAY DELIVER SHARES BY BOOK-ENTRY TRANSFER):
Name of Tendering Institution
The Depository Trust Company Account Number
Transaction Code Number
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING:
Name(s) of Registered Owner(s)
Date of Execution of Notice of Guaranteed Delivery
If delivered by book-entry transfer check box: [ ]
The Depository Trust Company Account Number
Transaction Code Number
2
<PAGE> 3
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
The undersigned hereby tenders to Seattle Acquisition Inc., a Delaware
corporation (the "Purchaser") which is a wholly owned subsidiary of Lucent
Technologies Inc., a Delaware corporation ("Parent"), the above-described shares
of Common Stock, par value $.10 per share (the "Shares"), of SpecTran
Corporation, a Delaware corporation (the "Company"), upon the terms and subject
to the conditions set forth in the Purchaser's Offer to Purchase dated July 21,
1999 (the "Offer to Purchase"), and this Letter of Transmittal (which, together
with any amendments or supplements thereto or hereto, collectively constitute
the "Offer"), receipt of which is hereby acknowledged.
Upon the terms of the Offer, subject to, and effective upon, acceptance for
payment of, and payment for, the Shares tendered herewith in accordance with the
terms of the Offer, the undersigned hereby sells, assigns and transfers to, or
upon the order of, the Purchaser all right, title and interest in and to all the
Shares that are being tendered hereby (and any and all other Shares or other
securities or rights issued or issuable in respect thereof on or after July 15,
1999), and irrevocably constitutes and appoints The Bank of New York (the
"Depositary"), the true and lawful agent and attorney-in-fact of the
undersigned, with full power of substitution (such power of attorney being
deemed to be an irrevocable power coupled with an interest), to the full extent
of the undersigned's rights with respect to such Shares (and any such other
Shares or securities or rights), (a) to deliver certificates for such Shares
(and any such other Shares or securities or rights) or transfer ownership of
such Shares (and any such other Shares or securities or rights) on the account
books maintained by the Book-Entry Transfer Facility together, in any such case,
with all accompanying evidences of transfer and authenticity to, or upon the
order of, the Purchaser, (b) to present such Shares (and any such other Shares
or securities or rights) for transfer on the Company's books and (c) to receive
all benefits and otherwise exercise all rights of beneficial ownership of such
Shares (and any such other Shares or securities or rights), all in accordance
with the terms of the Offer.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the tendered
Shares (and any and all other shares or other securities or rights issued or
issuable in respect of such Shares on or after July 15, 1999) and, when the same
are accepted for payment by the Purchaser, the Purchaser will acquire good title
thereto, free and clear of all liens, restrictions, claims and encumbrances, and
the same will not be subject to any adverse claim. The undersigned, upon
request, will execute any additional documents deemed by the Depositary or the
Purchaser to be necessary or desirable to complete the sale, assignment and
transfer of the tendered Shares (and any and all such other Shares or securities
or rights).
All authority conferred or agreed to be conferred pursuant to this Letter
of Transmittal shall be binding upon the successors, assigns, heirs, executors,
administrators and legal representatives of the undersigned and shall not be
affected by, and shall survive, the death or incapacity of the undersigned.
Except as stated in the Offer to Purchase, this tender is irrevocable.
The undersigned hereby irrevocably appoints Justin C. Choi and Carol E.
Kirby, and each of them, and any other designees of the Purchaser, the
attorneys-in-fact and proxies of the undersigned, each with full power of
substitution, to vote at any annual, special or adjourned meeting of the
Company's stockholders or otherwise in such manner as each such attorney-in-fact
and proxy or his substitute shall in his or her sole discretion deem proper with
respect to, to execute any written consent concerning any matter as each such
attorney-in-fact and proxy or his or her substitute shall in his or her sole
discretion deem proper with respect to, and to otherwise act as each such
attorney-in-fact and proxy or his or her substitute shall in his or her sole
discretion deem proper with respect to, the Shares tendered hereby that have
been accepted for payment by the Purchaser prior to the time any such action is
taken and with respect to which the undersigned is entitled to vote (and any and
all other Shares or other securities or rights issued or issuable in respect of
such Shares on or after July 15, 1999). This appointment is effective when, and
only to the extent that, the Purchaser accepts for payment such Shares as
provided in the Offer to Purchase. This power of attorney and proxy are
irrevocable and are granted in consideration of the acceptance for payment of
such Shares in accordance with the terms of the Offer. Upon such acceptance for
payment, all prior powers of attorney, proxies and consents given by the
undersigned with respect to such Shares (and any such other Shares or securities
or rights) will, without further action, be revoked and no
3
<PAGE> 4
subsequent powers of attorney, proxies, consents or revocations may be given
(and, if given, will not be deemed effective) by the undersigned.
The undersigned understands that the valid tender of Shares pursuant to any
of the procedures described in Section 2 of the Offer to Purchase and in the
Instructions hereto will constitute a binding agreement between the undersigned
and the Purchaser upon the terms and subject to the conditions of the Offer.
Unless otherwise indicated herein under "Special Payment Instructions,"
please issue the check for the purchase price and/or return any certificates for
Shares not tendered or accepted for payment in the name(s) of the registered
holder(s) appearing under "Description of Shares Tendered." Similarly, unless
otherwise indicated under "Special Delivery Instructions," please mail the check
for the purchase price and/or return any certificates for Shares not tendered or
accepted for payment (and accompanying documents, as appropriate) to the
address(es) of the registered holder(s) appearing under "Description of Shares
Tendered." In the event that both "Special Delivery Instructions" and "Special
Payment Instructions" are completed, please issue the check for the purchase
price and/or return any certificates for Shares not tendered or accepted for
payment (and any accompanying documents, as appropriate) in the name of, and
deliver such check and/or return such certificates (and any accompanying
documents, as appropriate) to, the person or persons so indicated. Please credit
any Shares tendered herewith by book-entry transfer that are not accepted for
payment by crediting the account at the Book-Entry Transfer Facility. The
undersigned recognizes that the Purchaser has no obligation pursuant to "Special
Payment Instructions" to transfer any Shares from the name of the registered
holder thereof if the Purchaser does not accept for payment any of the Shares so
tendered.
[ ] CHECK HERE IF ANY OF THE CERTIFICATES REPRESENTING SHARES THAT YOU OWN HAVE
BEEN LOST OR DESTROYED AND SEE INSTRUCTION 11.
Number of Shares represented by the lost or destroyed certificates:
__________.
4
<PAGE> 5
------------------------------------------------------------
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 5, 6 AND 7)
To be completed ONLY if certificates for Shares not tendered or not
accepted for payment and/or the check for the purchase price of Shares
accepted for payment are to be issued in the name of someone other than
the undersigned.
Issue: [ ] Check [ ] Certificate(s) to:
Name:
----------------------------------------------------
(PLEASE PRINT)
Address:
--------------------------------------------------
------------------------------------------------------------
(INCLUDE ZIP CODE)
------------------------------------------------------------
(EMPLOYER IDENTIFICATION OR
SOCIAL SECURITY NUMBER)
------------------------------------------------------------
------------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 5, 6 AND 7)
To be completed ONLY if certificates for Shares not tendered or not
accepted for payment and/or the check for the purchase price of Shares
accepted for payment are to be sent to someone other than the undersigned,
or to the undersigned at an address other than that above.
Mail: [ ] Check [ ] Certificate(s) to:
Name:
----------------------------------------------------
(PLEASE PRINT)
Address:
--------------------------------------------------
------------------------------------------------------------
(INCLUDE ZIP CODE)
------------------------------------------------------------
(EMPLOYER IDENTIFICATION OR
SOCIAL SECURITY NUMBER)
------------------------------------------------------------
5
<PAGE> 6
SIGN HERE
(ALSO COMPLETE SUBSTITUTE FORM W-9 BELOW)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(SIGNATURE(S) OF STOCKHOLDER(S))
Dated:
- --------------------------- , 1999
(Must be signed by registered holder(s) as name(s) appear(s) on the
certificate(s) for the Shares or on a security position listing or by person(s)
authorized to become registered holder(s) by certificates and documents
transmitted herewith. If signature is by trustees, executors, administrators,
guardians, attorneys-in-fact, officers of corporations or others acting in a
fiduciary or representative capacity, please provide the following information
and see Instruction 5.)
Name(s)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(PLEASE PRINT)
Capacity (Full Title)
- --------------------------------------------------------------------------------
Address
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(INCLUDE ZIP CODE)
Daytime Area Code and Telephone No.
- ----------------------------------------------------------------------------
Employer Identification or Social Security Number
- ----------------------------------------------------------------
(SEE SUBSTITUTE FORM W-9)
GUARANTEE OF SIGNATURE(S)
(IF REQUIRED -- SEE INSTRUCTIONS 1 AND 5)
Authorized Signature
- --------------------------------------------------------------------------------
Name
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(PLEASE PRINT)
Name of Firm
- --------------------------------------------------------------------------------
Address
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(INCLUDE ZIP CODE)
Daytime Area Code and Telephone No.
- ----------------------------------------------------------------------------
Dated:
- --------------------------- , 1999
6
<PAGE> 7
INSTRUCTIONS
FORMING PART OF THE TERMS
AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. No signature guarantee is required on this
Letter of Transmittal (a) if this Letter of Transmittal is signed by the
registered holder(s) (which term, for purposes of this Section, includes any
participant in the Book-Entry Transfer Facility's system whose name appears on a
security position listing as the owner of the Shares) of Shares tendered
herewith, unless such registered holder(s) has completed either the box entitled
"Special Payment Instructions" or the box entitled "Special Delivery
Instructions" on this Letter of Transmittal or (b) if such Shares are tendered
for the account of a financial institution (including most commercial banks,
savings and loan associations and brokerage houses) that is a participant in the
Security Transfer Agents Medallion Program, the New York Stock Exchange
Medallion Signature Guarantee Program or the Stock Exchange Medallion Program
(such participant, an "Eligible Institution"). In all other cases, all
signatures on this Letter of Transmittal must be guaranteed by an Eligible
Institution. See Instruction 5.
2. REQUIREMENTS OF TENDER. This Letter of Transmittal is to be completed
by stockholders either if certificates are to be forwarded herewith or, unless
an Agent's Message (as defined below) is utilized, if delivery of Shares is to
be made pursuant to the procedures for book-entry transfer set forth in Section
2 of the Offer to Purchase. For a stockholder to validly tender Shares pursuant
to the Offer, either (a) a Letter of Transmittal (or facsimile thereof),
properly completed and duly executed, together with any required signature
guarantees, or, in the case of a book-entry transfer, an Agent's Message, and
any other required documents, must be received by the Depositary at one of its
addresses set forth herein prior to the Expiration Date and either certificates
for tendered Shares must be received by the Depositary at one of such addresses
or such Shares must be delivered pursuant to the procedures for book-entry
transfer set forth herein (and a Book-Entry Confirmation received by the
Depositary), in each case prior to the Expiration Date, or (b) the tendering
stockholder must comply with the guaranteed delivery procedures set forth below
and in Section 2 of the Offer to Purchase.
If a stockholder desires to tender Shares pursuant to the Offer and such
stockholder's certificates for Shares are not immediately available or the
procedures for book-entry transfer cannot be completed on a timely basis or time
will not permit all required documents to reach the Depositary prior to the
Expiration Date, such stockholder's tender may be effected by properly
completing and duly executing the Notice of Guaranteed Delivery pursuant to the
guaranteed delivery procedures set forth in Section 2 of the Offer to Purchase.
Pursuant to such procedures, (a) such tender must be made by or through an
Eligible Institution, (b) a properly completed and duly executed Notice of
Guaranteed Delivery, substantially in the form provided by the Purchaser, must
be received by the Depositary prior to the Expiration Date and (c) the
certificates for all tendered Shares in proper form for transfer (or a
Book-Entry Confirmation with respect to all such Shares), together with a Letter
of Transmittal (or facsimile thereof), properly completed and duly executed,
with any required signature guarantees, or, in the case of a book-entry
transfer, an Agent's Message, and any other required documents, must be received
by the Depositary within three trading days after the date of execution of such
Notice of Guaranteed Delivery as provided in Section 2 of the Offer to Purchase.
A "trading day" is any day on which the New York Stock Exchange, Inc. is open
for business.
The term "Agent's Message" means a message transmitted by the Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that the Book-Entry Transfer Facility has
received an express acknowledgment from the participant in the Book-Entry
Transfer Facility tendering the Shares that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that the
Purchaser may enforce such agreement against the participant.
THE METHOD OF DELIVERY OF SHARES, THE LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER FACILITY,
IS AT THE ELECTION AND RISK OF THE TENDERING STOCKHOLDER. SHARES WILL BE DEEMED
DELIVERED ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY (INCLUDING, IN THE CASE
OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION). IF DELIVERY IS BY MAIL,
REGISTERED MAIL WITH RETURN RECEIPT
7
<PAGE> 8
REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME
SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
No alternative, conditional or contingent tenders will be accepted and no
fractional Shares will be purchased. All tendering stockholders, by execution of
this Letter of Transmittal (or facsimile thereof), waive any right to receive
any notice of the acceptance of their Shares for payment.
3. INADEQUATE SPACE. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares should be listed on a separate
schedule attached hereto.
4. PARTIAL TENDERS (Applicable to Certificate Stockholders Only). If
fewer than all the Shares evidenced by any certificate submitted are to be
tendered, fill in the number of Shares that are to be tendered in the box
entitled "Number of Shares Tendered." In any such case, new certificate(s) for
the remainder of the Shares that were evidenced by the old certificate(s) will
be sent to the registered holder, unless otherwise provided in the appropriate
box on this Letter of Transmittal, as soon as practicable after the acceptance
for payment of, and payment for, the Shares tendered herewith. All Shares
represented by certificates delivered to the Depositary will be deemed to have
been tendered unless otherwise indicated.
5. SIGNATURES ON LETTER OF TRANSMITTAL, STOCK POWERS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered holder of the Shares
tendered hereby, the signature must correspond with the name as written on the
face of the certificate(s) without any change whatsoever.
If any of the Shares tendered hereby are owned of record by two or more
joint owners, all such owners must sign this Letter of Transmittal.
If any tendered Shares are registered in different names on several
certificates, it will be necessary to complete, sign and submit as many separate
Letters of Transmittal as there are different registrations of certificates.
If this Letter of Transmittal or any certificates or stock powers are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing, and proper evidence
satisfactory to the Purchaser of their authority so to act must be submitted.
When this Letter of Transmittal is signed by the registered owner(s) of the
Shares listed and transmitted hereby, no endorsements of certificates or
separate stock powers are required unless payment is to be made to, or
certificates for Shares not tendered or accepted for payment are to be issued
to, a person other than the registered owner(s). Signatures on such certificates
or stock powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered owner(s) of the certificates listed, the certificates must be
endorsed or accompanied by appropriate stock powers, in either case signed
exactly as the name or names of the registered owner or owners appear on the
certificates. Signatures on such certificates or stock powers must be guaranteed
by an Eligible Institution.
6. STOCK TRANSFER TAXES. The Purchaser will pay any stock transfer taxes
with respect to the transfer and sale of Shares to it or its order pursuant to
the Offer. If, however, payment of the purchase price is to be made to, or if
certificates for Shares not tendered or accepted for payment are to be
registered in the name of, any person(s) other than the registered owner(s), or
if tendered certificates are registered in the name(s) of any person(s) other
than the person(s) signing this Letter of Transmittal, the amount of any stock
transfer taxes (whether imposed on the registered owner(s) or such person(s))
payable on account of the transfer to such person(s) will be deducted from the
purchase price unless satisfactory evidence of the payment of such taxes or
exemption therefrom is submitted.
EXCEPT AS PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY FOR
TRANSFER TAX STAMPS TO BE AFFIXED TO THE CERTIFICATES LISTED IN THIS LETTER OF
TRANSMITTAL.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check is to be issued
in the name of, and/or certificates for Shares not accepted for payment are to
be returned to, a person other than the signer of this
8
<PAGE> 9
Letter of Transmittal or if a check is to be sent and/or such certificates are
to be returned to a person other than the signer of this Letter of Transmittal
or to an address other than that shown above, the appropriate boxes on this
Letter of Transmittal should be completed.
8. WAIVER OF CONDITIONS. The Purchaser reserves the absolute right in its
sole discretion to waive any of the specified conditions of the Offer, in whole
or in part, in the case of any Shares tendered, except for the condition that
such number of Shares representing a majority of the outstanding Shares
(determined on a fully diluted basis for all outstanding stock options and any
other rights to acquire Shares on the date of the purchase) be validly tendered
and not withdrawn prior to the expiration of the Offer, which condition may not
be waived without the prior written consent of the Company.
9. 31% BACKUP WITHHOLDING. In order to avoid backup withholding of
Federal income tax on payments of cash pursuant to the Offer, a stockholder
surrendering Shares in the Offer must, unless an exemption applies, provide the
Depositary with such stockholder's correct taxpayer identification number
("TIN") on Substitute Form W-9 below in this Letter of Transmittal and certify
under penalty of perjury that such TIN is correct and that such stockholder is
not subject to backup withholding. If a stockholder does not provide such
stockholder's correct TIN or fails to provide the certifications described
above, the Internal Revenue Service (the "IRS") may impose a penalty on such
stockholder and the payment of cash to such stockholder pursuant to the Offer
may be subject to backup withholding of 31%.
Backup withholding is not an additional income tax. Rather, the amount of
the backup withholding can be credited against the U.S. federal income tax
liability of the person subject to the backup withholding, provided that the
required information is given to the IRS. If backup withholding results in an
overpayment of tax, a refund can be obtained by the stockholder upon filing an
income tax return.
10. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and requests
for assistance or additional copies of the Offer to Purchase, this Letter of
Transmittal, the Notice of Guaranteed Delivery and the Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9 may be
directed to the Information Agent at its address set forth below.
11. LOST, DESTROYED OR STOLEN CERTIFICATES. If any certificate
representing Shares has been lost, destroyed or stolen, the stockholder should
promptly notify the Depositary by checking the box immediately preceding the
special payment/special delivery instructions and indicating the number of
Shares lost. The stockholder will then be instructed as to the steps that must
be taken in order to replace the certificate. This Letter of Transmittal and
related documents cannot be processed until the procedures for replacing lost or
destroyed certificates have been followed.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE HEREOF), TOGETHER WITH ANY
REQUIRED SIGNATURE GUARANTEES, OR, IN THE CASE OF A BOOK-ENTRY
TRANSFER, AN AGENT'S MESSAGE, AND ANY OTHER REQUIRED DOCUMENTS, MUST
BE RECEIVED BY THE DEPOSITARY PRIOR TO THE EXPIRATION DATE AND EITHER
CERTIFICATES FOR TENDERED SHARES MUST BE RECEIVED BY THE DEPOSITARY
OR SHARES MUST BE DELIVERED PURSUANT TO THE PROCEDURES FOR BOOK-ENTRY
TRANSFER, IN EACH CASE, PRIOR TO THE EXPIRATION DATE, OR THE
TENDERING STOCKHOLDER MUST COMPLY WITH THE PROCEDURES FOR GUARANTEED
DELIVERY.
9
<PAGE> 10
IMPORTANT TAX INFORMATION
Under Federal income tax law, a stockholder is required to provide the
Depositary such stockholder's TIN (i.e., social security number or employer
identification number) on Substitute Form W-9 (or otherwise establish a basis
for exemption from backup withholding) and certify under penalty of perjury that
such TIN is correct and that such stockholder is not subject to backup
withholding. If the Shares are held in more than one name or are not in the name
of the actual owner, consult the enclosed "Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9" for additional guidance
on which number to report. If the Depositary is not provided with a
stockholder's correct TIN, the stockholder or other payee may be subject to a
penalty imposed by the Internal Revenue Service. In addition, any amounts
payable to such stockholder in connection with the Offer may be subject to
backup withholding at a 31% rate.
The box in Part 3 of the Substitute Form W-9 may be checked if the
tendering stockholder has not been issued a TIN and has applied for a TIN or
intends to apply for a TIN in the near future. If the box in Part 3 is checked,
the stockholder or other payee must also complete the Certificate of Awaiting
Taxpayer Identification Number below in order to avoid backup withholding.
Notwithstanding that the box in Part 3 is checked and the Certificate of
Awaiting Taxpayer Identification Number is completed, the Depositary will
withhold 31% on all payments made prior to the time a properly certified TIN is
provided to the Depositary.
Certain stockholders (including, among others, all corporations and certain
foreign individuals and entities) are not subject to backup withholding.
Noncorporate foreign stockholders should complete and sign the main signature
form and a Form W-8, Certificate of Foreign Status, a copy of which may be
obtained from the Depositary, in order to avoid backup withholding. See the
enclosed "Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9" for more instructions.
10
<PAGE> 11
<TABLE>
<S> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------
PAYER'S NAME: THE BANK OF NEW YORK
- ----------------------------------------------------------------------------------------------------------------------------
SUBSTITUTE PART 1 -- PLEASE PROVIDE YOUR TIN IN THE BOX AT RIGHT -------------------------------
FORM W-9 AND CERTIFY BY SIGNING AND DATING BELOW Social Security Number
DEPARTMENT OF THE TREASURY
INTERNAL REVENUE SERVICE OR
PAYER'S REQUEST FOR -------------------------------
TAXPAYER IDENTIFICATION Employer Identification
NUMBER (TIN) Number(s)
-----------------------------------------------------------------------------------------
PART 2 -- Certification -- Under penalties of
perjury, I certify that: PART 3 --
(1) the number shown on this form is my correct Awaiting TIN
Taxpayer Identification Number (or I am waiting
for a number to be issued to me) and [ ]
(2) I am not subject to backup withholding because ---------------------------------
(a) I am exempt from backup withholding or (b) I have
not been notified by the Internal Revenue Service
("IRS") that I am subject to backup withholding PART 4 --
as a result of a failure to report all interest Exempt TIN
or dividends or (c) the IRS has notified me that
I am no longer subject to backup withholding. [ ]
-----------------------------------------------------------------------------------------
CERTIFICATION INSTRUCTIONS -- You must cross out item (2) in Part 2 above if you have
been notified by the IRS that you are subject to backup withholding because of under
reporting interest or dividends on your tax returns. However, if after being notified by
the IRS that you were subject to backup withholding you received another notification
from the IRS stating that you are no longer subject to backup withholding, do not cross
out such item (2). If you are exempt from backup withholding, check the box in Part 4
above.
- ----------------------------------------------------------------------------------------------------------------------------
Signature
--------------------------------------------------------------------------------------------------------------------------- Date
--------------------------------------------------------------------------------------------------------------------------------- ,
1999
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 3 OF
SUBSTITUTE FORM W-9
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalty of perjury that a taxpayer identification number
has not been issued to me, and either (a) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or (b)
I intend to mail or deliver an application in the near future. I understand
that, if I do not provide a taxpayer identification number to the Depositary by
the time of payment, 31% of all reportable payments made to me thereafter will
be withheld until I provide a properly certified taxpayer identification number
to the Depositary.
<TABLE>
<S> <C>
- ------------------------------------------------------------ -------------------------------,
1999
Signature Date
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS SUBSTITUTE FORM W-9 MAY RESULT IN
BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE
OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL INFORMATION.
<PAGE> 12
The Information Agent for the Offer is:
MORROW & CO., INC.
445 Park Avenue
5th Floor
New York, NY 10022
Banks and Brokerage Firms
please call:
(800) 662-5200
Shareholders please call:
(800) 566-9061
<PAGE> 1
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK
OF
SPECTRAN CORPORATION
As set forth in Section 2 of the Offer to Purchase (as defined below), this
form or one substantially equivalent hereto must be used to accept the Offer (as
defined below) if certificates for shares of Common Stock, par value $.10 per
share (the "Shares"), of SpecTran Corporation, a Delaware corporation (the
"Company"), are not immediately available or if the procedure for book-entry
transfer cannot be completed on a timely basis or time will not permit all
required documents to reach the Depositary prior to the Expiration Date (as
defined in Section 1 of the Offer to Purchase). This form may be delivered by
hand to the Depositary or transmitted by facsimile transmission or mail to the
Depositary and must include a guarantee by an Eligible Institution (as defined
in Section 2 of the Offer to Purchase). See Section 2 of the Offer to Purchase.
The Depositary for the Offer is:
THE BANK OF NEW YORK
<TABLE>
<S> <C> <C>
By Mail: By Facsimile: By Hand or Overnight Courier:
Tender & Exchange Department (For Eligible Institutions Tender & Exchange Department
P.O. Box 11248 Only) 101 Barclay Street
Church Street Station (212) 815-6213 Receive and Deliver Window
New York, New York 10286-1248 New York, New York 10286
Confirmation by Telephone:
1-800-507-9357
</TABLE>
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS, OR TRANSMISSION OF INSTRUCTIONS
VIA A FACSIMILE NUMBER, OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A
VALID DELIVERY.
This form is not to be used to guarantee signatures. If a signature on a
Letter of Transmittal is required to be guaranteed by an Eligible Institution
under the instructions thereto, such signature guarantee must appear in the
applicable space provided in the signature box on the Letter of Transmittal.
<PAGE> 2
Ladies and Gentlemen:
The undersigned hereby tenders to Seattle Acquisition Inc., a Delaware
corporation (the "Purchaser"), which is a wholly owned subsidiary of Lucent
Technologies Inc., a Delaware corporation, upon the terms and subject to the
conditions set forth in the Purchaser's Offer to Purchase dated July 21, 1999
(the "Offer to Purchase"), and the related Letter of Transmittal (which,
together with any amendments or supplements thereto, collectively constitute the
"Offer"), receipt of which is hereby acknowledged, the number of Shares set
forth below, all pursuant to the guaranteed delivery procedures set forth in
Section 2 of the Offer to Purchase.
Number of Shares
- --------------------------------
Certificate Nos. (if available):
- ----------------------------------------------------
- ----------------------------------------------------
- ----------------------------------------------------
Check box if Shares
will be tendered by book-entry transfer: [ ]
The Depository Trust Company Account Number
- ----------------------------------------------------
Dated:
- --------------------------------------------
Name(s) of Record Holder(s)
- ----------------------------------------------------
- ----------------------------------------------------
- ----------------------------------------------------
Please Print
Address(es)
- --------------------------------------
- ----------------------------------------------------
Zip Code
Daytime Area Code and Tel. No.:
- ----------------------------------------------------
Signature(s):
- -------------------------------------
- ----------------------------------------------------
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a participant in the Security Transfer Agents Medallion
Program, the New York Stock Exchange Medallion Signature Guarantee Program or
the Stock Exchange Medallion Program, hereby guarantees to deliver to the
Depositary either the certificates representing the Shares tendered hereby, in
proper form for transfer, or a Book-Entry Confirmation (as defined in the
Offer to Purchase) with respect to such Shares, in any such case together with
a properly completed and duly executed Letter of Transmittal (or facsimile
thereof), with any required signature guarantees, or an Agent's Message (as
defined in the Offer to Purchase), and any other required documents, within
three trading days (as defined in the Offer to Purchase) after the date
hereof.
The Eligible Institution that completes this form must communicate this
guarantee to the Depositary and must deliver the Letter of Transmittal and
certificates for Shares to the Depositary within the time period shown herein.
Failure to do so could result in a financial loss to such Eligible
Institution.
Name of Firm:
- -----------------------------------
- ----------------------------------------------------
Address:
- ------------------------------------------
- ----------------------------------------------------
Area Code and Tel No.
- ----------------------------------------------------
- ----------------------------------------------------
AUTHORIZED SIGNATURE
Name:
- --------------------------------------------
Please print
Title:
- ----------------------------------------------
Dated
- ---------------------------------------------
NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE. CERTIFICATES FOR
SHARES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.
2
<PAGE> 1
MORROW & CO., INC.
445 Park Avenue
New York, New York 10022
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
SPECTRAN CORPORATION
AT
$9.00 NET PER SHARE
BY
SEATTLE ACQUISITION INC.
A WHOLLY OWNED SUBSIDIARY OF
LUCENT TECHNOLOGIES INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON TUESDAY, AUGUST 17, 1999 UNLESS EXTENDED.
July 21, 1999
To Brokers, Dealers, Banks, Trust Companies and Other Nominees:
We have been appointed by Seattle Acquisition Inc., a Delaware corporation
(the "Purchaser") and a wholly owned subsidiary of Lucent Technologies Inc., a
Delaware corporation ("Parent"), to act as Information Agent in connection with
the Purchaser's offer to purchase all outstanding shares of common stock, par
value $.10 per share (the "Shares"), of SpecTran Corporation, a Delaware
corporation (the "Company"), at $9.00 per Share, net to the seller in cash, upon
the terms and subject to the conditions set forth in the Purchaser's Offer to
Purchase dated July 21, 1999 (the "Offer to Purchase"), and the related Letter
of Transmittal (which, together with any supplements or amendments thereto,
collectively constitute the "Offer").
Please furnish copies of the enclosed materials to those of your clients
for whom you hold Shares registered in your name or in the name of your nominee.
Enclosed herewith are copies of the following documents:
1. Offer to Purchase dated July 21, 1999;
2. Letter of Transmittal to be used by stockholders of the Company
accepting the Offer;
3. The Letter to Stockholders of the Company from the President, Chief
Executive Officer and Chairman of the Board of the Board of Directors of
the Company accompanied by the Company's Solicitation/Recommendation
Statement on Schedule 14D-9;
4. A printed form of letter that may be sent to your clients for whose
account you hold Shares in your name or in the name of a nominee, with
space provided for obtaining such client's instructions with regard to
the Offer;
5. Notice of Guaranteed Delivery;
6. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9; and
7. Return envelope addressed to The Bank of New York, the Depositary.
<PAGE> 2
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (1) THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER THAT NUMBER OF
SHARES THAT WOULD REPRESENT AT LEAST A MAJORITY OF THE OUTSTANDING SHARES
(DETERMINED ON A FULLY DILUTED BASIS FOR ALL OUTSTANDING STOCK OPTIONS AND ANY
OTHER RIGHTS TO ACQUIRE SHARES ON THE DATE OF PURCHASE) (THE "MINIMUM
CONDITION") AND (2) ANY WAITING PERIOD UNDER THE HART-SCOTT-RODINO ANTITRUST
IMPROVEMENTS ACT OF 1976, AS AMENDED, AND THE REGULATIONS THEREUNDER APPLICABLE
TO THE PURCHASE OF SHARES PURSUANT TO THE OFFER HAVING EXPIRED OR BEEN
TERMINATED.
WE URGE YOU TO CONTACT YOUR CLIENTS PROMPTLY. PLEASE NOTE THAT THE OFFER
AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON
TUESDAY, AUGUST 17, 1999, UNLESS EXTENDED.
The Board of Directors of the Company has unanimously approved the Offer
and the Merger and determined that the terms of the Offer and the Merger are
fair to, and in the best interests of, the stockholders of the Company and
unanimously recommends that stockholders of the Company accept the Offer and
tender their Shares.
The Offer is being made pursuant to the Agreement of Merger dated as of
July 15, 1999 (the "Merger Agreement"), among Parent, the Purchaser and the
Company pursuant to which, following the consummation of the Offer and the
satisfaction or waiver of certain conditions, the Purchaser will be merged with
and into the Company, with the Company surviving the merger as a wholly owned
subsidiary of Parent (the "Merger"). In the Merger, each outstanding Share
(other than Shares owned by the Company or any subsidiary of the Company or by
Parent, the Purchaser or any other subsidiary of Parent or by stockholders, if
any, who are entitled to and who properly exercise dissenters' rights under
Delaware law) will be converted into the right to receive $9.00 per Share,
without interest, as set forth in the Merger Agreement and described in the
Offer to Purchase.
In all cases, payment for Shares accepted for payment pursuant to the Offer
will be made only after timely receipt by The Bank of New York (the
"Depositary"), of (a) certificates for (or a timely Book-Entry Confirmation (as
defined in the Offer to Purchase) with respect to) such Shares, (b) a Letter of
Transmittal (or facsimile thereof), properly completed and duly executed, with
any required signature guarantees, or, in the case of a book-entry transfer
effected pursuant to the procedure set forth in Section 2 of the Offer to
Purchase, an Agent's Message (as defined in the Offer to Purchase), and (c) any
other documents required by the Letter of Transmittal. Accordingly, tendering
stockholders may be paid at different times depending upon when certificates for
Shares or Book-Entry Confirmations with respect to Shares are actually received
by the Depositary. UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE PURCHASE
PRICE OF THE SHARES TO BE PAID BY THE PURCHASER, REGARDLESS OF ANY EXTENSION OF
THE OFFER OR ANY DELAY IN MAKING SUCH PAYMENT.
Neither the Purchaser nor Parent will pay any fees or commissions to any
broker or dealer or other person (other than the Information Agent and the
Depositary as described in the Offer to Purchase) in connection with the
solicitation of tenders of Shares pursuant to the Offer. You will be reimbursed
upon request for customary mailing and handling expenses incurred by you in
forwarding the enclosed offering materials to your customers.
Questions and requests for additional copies of the enclosed material may
be directed to the Information Agent at the address and telephone number set
forth on the back cover of the enclosed Offer to Purchase.
Very truly yours,
MORROW & CO., INC.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL RENDER YOU OR
ANY OTHER PERSON THE AGENT OF THE PURCHASER, PARENT, THE DEPOSITARY, THE
INFORMATION AGENT OR ANY AFFILIATE THEREOF OR AUTHORIZE YOU OR ANY OTHER PERSON
TO GIVE ANY INFORMATION OR USE ANY DOCUMENT OR MAKE ANY STATEMENTS ON BEHALF OF
ANY OF THEM WITH RESPECT TO THE OFFER OTHER THAN THE ENCLOSED DOCUMENTS AND THE
STATEMENTS CONTAINED THEREIN.
2
<PAGE> 1
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
SPECTRAN CORPORATION
AT
$9.00 NET PER SHARE
BY
SEATTLE ACQUISITION INC.
A WHOLLY OWNED SUBSIDIARY OF
LUCENT TECHNOLOGIES INC.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON TUESDAY, AUGUST 17, 1999, UNLESS EXTENDED.
July 21, 1999
To Our Clients:
Enclosed for your consideration is an Offer to Purchase, dated July 21,
1999 (the "Offer to Purchase"), and a related Letter of Transmittal (which,
together with any amendments or supplements thereto, collectively constitute the
"Offer") relating to an offer by Seattle Acquisition Inc., a Delaware
corporation (the "Purchaser") and a wholly owned subsidiary of Lucent
Technologies Inc., a Delaware corporation ("Parent"), to purchase shares of
Common Stock, par value $.10 per share (the "Shares"), of SpecTran Corporation,
a Delaware corporation (the "Company"), at $9.00 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 the President, Chief
Executive Officer and Chairman of the Board of Directors of the Company
accompanied by the Company's Solicitation/Recommendation Statement on Schedule
14D-9.
WE ARE THE HOLDER OF RECORD OF SHARES HELD BY US FOR YOUR ACCOUNT. A TENDER
OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD AND PURSUANT TO
YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR YOUR
INFORMATION ONLY AND CANNOT BE USED TO TENDER SHARES HELD BY US FOR YOUR
ACCOUNT.
We request instructions as to whether you wish to tender any of or all the
Shares held by us for your account, pursuant to the terms and conditions set
forth in the Offer.
Your attention is directed to the following:
1. The tender price is $9.00 per Share, net to the seller in cash, upon the
terms and subject to the conditions set forth in the Offer.
2. The Board of Directors of the Company has unanimously approved the Offer
and the Merger (as defined below) and determined that the terms of the
Offer and the Merger are fair to, and in the best interests of, the
stockholders of the Company and unanimously recommends that the
stockholders of the Company accept the Offer and tender their Shares.
<PAGE> 2
3. The Offer is being made for all outstanding Shares.
4. The Offer is being made pursuant to the Agreement of Merger, dated as of
July 15, 1999 (the "Merger Agreement"), by and among Parent, the
Purchaser and the Company pursuant to which, following the consummation
of the Offer and the satisfaction or waiver of certain conditions, the
Purchaser will be merged with and into the Company, with the Company
surviving the merger as a wholly owned subsidiary of Parent (the
"Merger"). In the Merger, each outstanding Share (other than Shares
owned by the Company or any subsidiary of the Company or by Parent, the
Purchaser or any other subsidiary of Parent or by stockholders, if any,
who are entitled to and who properly exercise dissenters' rights under
Delaware law) will be converted into the right to receive $9.00 per
Share, without interest, as set forth in the Merger Agreement and
described in the Offer to Purchase.
5. The Offer is conditioned upon, among other things, (1) there being
validly tendered and not withdrawn prior to the expiration of the Offer
that number of Shares which would represent at least a majority of the
outstanding Shares (determined on a fully diluted basis for all
outstanding stock options and any other rights to acquire Shares on the
date of purchase) (the "Minimum Condition") and (2) any waiting period
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, and the regulations thereunder applicable to the purchase of
Shares pursuant to the Offer having expired or been terminated.
6. The Offer and withdrawal rights will expire at 12:00 midnight, New York
City time, on Tuesday, August 17, 1999, unless the Offer is extended by
the Purchaser.
7. The Purchaser will pay any stock transfer taxes with respect to the
transfer and sale of Shares to it or its order pursuant to the Offer,
except as otherwise provided in Instruction 6 of the Letter of
Transmittal.
If you wish to have us tender any of or all your Shares, please so instruct
us by completing, executing, detaching and returning to us the instruction form
set forth below. An envelope to return your instructions to us is enclosed. If
you authorize tender of your Shares, all such Shares will be tendered unless
otherwise specified below. Your instructions to us should be forwarded promptly
to permit us to submit a tender on your behalf prior to the expiration of the
Offer.
In all cases, payment for Shares accepted for payment pursuant to the Offer
will be made only after timely receipt by The Bank of New York (the
"Depositary"), of (a) certificates for (or a timely Book-Entry Confirmation (as
defined in the Offer to Purchase) with respect to) such Shares, (b) a Letter of
Transmittal (or facsimile thereof), properly completed and duly executed, with
any required signature guarantees, or, in the case of a book-entry transfer
effected pursuant to the procedure set forth in Section 2 of the Offer to
Purchase, an Agent's Message (as defined in the Offer to Purchase), and (c) any
other documents required by the Letter of Transmittal. Accordingly, tendering
stockholders may be paid at different times depending upon when certificates for
Shares or Book-Entry Confirmations with respect to Shares are actually received
by the Depositary. UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE PURCHASE
PRICE OF THE SHARES TO BE PAID BY THE PURCHASER, REGARDLESS OF ANY EXTENSION OF
THE OFFER OR ANY DELAY IN MAKING SUCH PAYMENT.
The Offer is not being made to, nor will tenders be accepted from or on
behalf of, holders of Shares in any jurisdiction in which the making or
acceptance of the Offer would not be in compliance with the laws of such
jurisdiction.
2
<PAGE> 3
INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE
ALL OUTSTANDING SHARES OF COMMON STOCK OF
SPECTRAN CORPORATION
The undersigned acknowledges receipt of your letter enclosing the Offer to
Purchase, dated July 21, 1999, of Seattle Acquisition Inc., a Delaware
corporation and a wholly owned subsidiary of Lucent Technologies Inc., a
Delaware corporation, and the related Letter of Transmittal, relating to shares
of Common Stock, par value $.10 per share, of SpecTran Corporation, a Delaware
corporation (the "Shares").
This will instruct you to tender the number of Shares indicated below held
by you for the account of the undersigned on the terms and conditions set forth
in such Offer to Purchase and the related Letter of Transmittal.
<TABLE>
<S> <C>
Dated: ------------------------------ 1999 -----------------------------------------------------
-----------------------------------------------------
SIGNATURE(S)
Number of Shares to be Tendered* -----------------------------------------------------
------------------------------ Shares -----------------------------------------------------
PLEASE PRINT NAME(S)
Address --------------------------------------------
-----------------------------------------------------
(INCLUDE ZIP CODE)
-----------------------------------------------------
AREA CODE AND TELEPHONE NO.
-----------------------------------------------------
TAX IDENTIFICATION OR SOCIAL SECURITY NUMBER
</TABLE>
- ---------------
* Unless otherwise indicated, it will be assumed that all your Shares are to be
tendered.
3
<PAGE> 1
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>
<C> <S> <C>
- ------------------------------------------------------------
GIVE THE
FOR THIS TYPE OF ACCOUNT: SOCIAL SECURITY
NUMBER OF--
- ------------------------------------------------------------
1. An individual's account The individual
2. Two or more individuals (joint The actual owner of
account) the account or, if
combined funds, any
one of the
individuals(1)
3. Husband and wife (joint account) The actual owner of
the account or, if
joint funds, either
person(1)
4. Custodian account of a minor The minor(2)
(Uniform Gift to Minors Act)
5. Adult and minor (joint account) The adult or, if
the minor is the
only contributor,
the minor(1)
6. Account in the name of guardian or The ward, minor, or
committee for a designated ward, incompetent minor,
or incompetent person person(3)
7. a. The usual revocable savings The grantor-
trust account (grantor is also trustee(1)
trustee)
b. So-called trust account that is The actual owner(1)
not a legal or valid trust
under State law
- ------------------------------------------------------------
- ------------------------------------------------------------
GIVE THE EMPLOYER
FOR THIS TYPE OF ACCOUNT: IDENTIFICATION
NUMBER OF--
- ------------------------------------------------------------
8. Sole proprietorship account The owner(4)
9. A valid trust, estate, or pension Legal entity (Do
trust not furnish the
identifying number
of the personal
representative or
trustee unless the
legal entity itself
is not designated
in the account
title.)(5)
10. Corporate account The corporation
11. Religious, charitable, or The organization
educational organization account
12. Partnership account held in the The partnership
name of the business
13. Association, club, or other tax- The organization
exempt organization
14. A broker or registered nominee The broker or
nominee
15. Account with the Department of The public entity
Agriculture in the name of a
public entity (such as a State or
local government, 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) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show the name of the owner.
(5) 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> 2
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, 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
retirement plan or a custodial account under Section 403(b)(7).
- 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 nonexempt 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.
- Payments made to a nominee.
Exempt payees described above should file Form W-9 to avoid possible erroneous
backup withholding. FILE THIS FORM WITH THE PAYER. FURNISH YOUR TAXPAYER
IDENTIFICATION 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,
interest, 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
required to file tax returns. Payers must generally withhold 31% of taxable
interest, dividend, and certain other payments to a payee who does not furnish a
taxpayer identification number to a payer. Certain penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you fail
to furnish your taxpayer identification number to a payer, you are subject to a
penalty of $50 for each such failure unless your failure is due to reasonable
cause and not to willful neglect.
(2) FAILURE TO REPORT CERTAIN DIVIDEND AND INTEREST PAYMENTS.--If you fail to
include any portion of an includible payment for interest, dividends, or
patronage dividends in gross income, such failure will be treated as being due
to negligence and will be subject to a penalty of 5% on any portion of an
under-payment attributable to that failure unless there is clear and convincing
evidence to the contrary.
(3) 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.
(4) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Falsifying certifications or
affirmations may subject you to criminal penalties including fines and/or
imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX
CONSULTANT OR THE INTERNAL REVENUE SERVICE
<PAGE> 1
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 July
21, 1999, and the related Letter of Transmittal and is not being made to (nor
will tenders be accepted from or on behalf of) holders of Shares in any
jurisdiction in which the making of the Offer or the acceptance thereof would
not be in compliance with the laws of such jurisdiction.
NOTICE OF OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
SPECTRAN CORPORATION
AT
$9.00 NET PER SHARE
BY
SEATTLE ACQUISITION INC.
a wholly owned subsidiary of
LUCENT TECHNOLOGIES INC.
Seattle Acquisition Inc., a Delaware corporation (the "Purchaser") and
a wholly owned subsidiary of Lucent Technologies Inc., a Delaware corporation
("Parent"), is offering to purchase all outstanding shares of Common Stock, par
value $.10 per share (the "Shares"), of SpecTran Corporation, a Delaware
corporation (the "Company"), at $9.00 per Share, net to the seller in cash, upon
the terms and subject to the conditions set forth in the Offer to Purchase,
dated July 21, 1999, and in the related Letter of Transmittal (which together
with any amendments or supplements thereto, collectively constitute the
"Offer").
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON TUESDAY, AUGUST 17, 1999, UNLESS EXTENDED.
<PAGE> 2
The Offer is conditioned upon, among other things, (i) there being
validly tendered and not withdrawn prior to the expiration of the Offer such
number of Shares that would constitute at least a majority of the outstanding
Shares (determined on a fully diluted basis for all outstanding stock options
and any other rights to acquire Shares on the date of purchase) (the "Minimum
Condition") and (ii) any waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, applicable to the purchase of Shares
pursuant to the Offer having expired or been terminated.
The Offer is being made pursuant to an Agreement of Merger, dated as of
July 15, 1999 (the "Merger Agreement"), among Parent, the Purchaser and the
Company pursuant to which, following the consummation of the Offer, the
Purchaser will be merged with and into the Company (the "Merger"). On the
effective date of the Merger, each outstanding Share (other than Shares owned by
the Company or any subsidiary of the Company or by Parent, the Purchaser or any
other subsidiary of Parent or by stockholders, if any, who are entitled to and
who properly exercise appraisal rights under Delaware law) will be converted
into the right to receive $9.00, in cash, without interest.
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE
OFFER AND THE MERGER AND DETERMINED THAT THE TERMS OF THE OFFER AND THE MERGER
ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE STOCKHOLDERS OF THE COMPANY, AND
UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS OF THE COMPANY ACCEPT THE OFFER AND
TENDER THEIR SHARES.
For purposes of the Offer, the Purchaser shall be deemed to have
accepted for payment, and thereby purchased, Shares properly tendered to the
Purchaser and not properly withdrawn as, if and when the Purchaser gives oral or
written notice to the Depositary of the Purchaser's acceptance for payment of
such Shares. Upon the terms and subject to the conditions of the Offer, payment
for Shares purchased pursuant to the Offer will be made by deposit of the
purchase price therefor with the Depositary, which will act as agent for
tendering stockholders for the purpose of receiving payment from the Purchaser
and transmitting payment to tendering stockholders whose Shares have been
accepted for payment. In all cases, payment for Shares purchased pursuant to the
Offer will be made only after timely receipt by the Depositary of (i)
certificates for such Shares or timely confirmation of book-entry transfer of
such Shares into the Depositary's account at the Book-Entry Transfer Facility
(as defined in the Offer to Purchase) pursuant to the procedures set forth in
Section 2 of the Offer to Purchase, (ii) a properly completed and duly executed
Letter of Transmittal (or facsimile thereof) with any required signature
guarantees, or, in the case of a book-entry transfer, an Agent's Message (as
defined in the Offer to Purchase) and (iii) any other documents required by the
Letter of Transmittal. Under no circumstances will interest be paid by the
Purchaser on the purchase price of the Shares to be paid by the Purchaser,
regardless of any extension of the Offer or any delay in making such payment.
The term "Expiration Date" means 12:00 midnight, New York City time, on
Tuesday, August 17, 1999, unless and until the Purchaser, in its sole discretion
but subject to the terms of the Merger Agreement, shall have extended the period
of time during which the Offer is open, in which event the term "Expiration
Date" shall mean the latest time and date on which the Offer, as
<PAGE> 3
so extended by the Purchaser, shall expire. The Purchaser expressly reserves the
right, in its sole discretion, at any time or from time to time, and regardless
of whether or not any of the events set forth in Section 14 of the Offer to
Purchase shall have occurred, (i) to extend the period of time during which the
Offer is open and thereby delay acceptance for payment of, and the payment for,
any Shares, by giving oral or written notice of such extension to the Depositary
and (ii) to amend the Offer in any other respect by giving oral or written
notice of such amendment to the Depositary. The Purchaser shall not have any
obligation to pay interest on the purchase price for tendered Shares, whether or
not the Purchaser exercises its right to extend the Offer. There can be no
assurance that the Purchaser will exercise its right to extend the Offer (other
than as required by the Merger Agreement). Any such extension will be followed
by a public announcement thereof no later than 9:00 a.m., New York City time, on
the next business day after the previously scheduled Expiration Date. During any
such extension, all Shares previously tendered and not withdrawn will remain
subject to the Offer, subject to the right of a tendering stockholder to
withdraw such stockholder's Shares.
Except as otherwise provided below, tenders of Shares are irrevocable.
Shares tendered pursuant to the Offer may be withdrawn at any time prior to the
Expiration Date and, unless previously accepted for payment and paid for by the
Purchaser pursuant to the Offer, may also be withdrawn at any time after
Saturday, September 18, 1999. For a withdrawal to be effective, a written or
facsimile transmission notice of withdrawal must be timely received by the
Depositary at one of its addresses set forth on the back cover of the Offer to
Purchase and must specify the name of the person having delivered the Shares to
be withdrawn, the number of Shares to be withdrawn and the name of the
registered holder of the Shares to be withdrawn, if different from the name of
the person who tendered the Shares. If certificates for Shares have been
delivered or otherwise identified to the Depositary, then, prior to the physical
release of such certificates, the serial numbers shown on such certificates must
be submitted to the Depositary and, unless such Shares have been tendered by an
Eligible Institution (as defined in Section 2 of the Offer to Purchase), the
signatures on the notice of withdrawal must be guaranteed by an Eligible
Institution. If Shares have been tendered pursuant to the procedures for
book-entry transfer as set forth in Section 2 of the Offer to Purchase, any
notice of withdrawal must also specify the name and number of the account at the
Book-Entry Transfer Facility to be credited with the withdrawn shares and
otherwise comply with the Book-Entry Transfer Facility's procedures. Withdrawals
of tenders of Shares may not be rescinded, and any Shares properly withdrawn
will thereafter be deemed not validly tendered for purposes of the Offer.
However, withdrawn Shares may be retendered by again following one of the
procedures described in Section 2 of the Offer to Purchase at any time prior to
the Expiration Date. All questions as to the form and validity (including time
of receipt) of notices of withdrawal will be determined by the Purchaser, in its
sole discretion, whose determination will be final and binding.
The Offer to Purchase and the related Letter of Transmittal and other
relevant materials will be mailed to record holders of Shares and furnished to
brokers, dealers, banks, trust companies and similar persons whose names, or the
names of whose nominees, appear on the stockholder lists or, if applicable, who
are listed as participants in a clearing agency's security position listing, for
subsequent transmittal to beneficial owner of Shares.
The information required to be disclosed by Rule 14d-6(e)(1)(vii) of
the Securities Exchange Act of 1934 is contained in the Offer to Purchase and is
incorporated herein by reference.
<PAGE> 4
THE OFFER TO PURCHASE AND LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION WHICH SHOULD BE READ BEFORE ANY DECISION IS MADE WITH RESPECT TO THE
OFFER.
Requests for copies of the Offer to Purchase, the Letter of Transmittal
and all other tender offer materials may be directed to the Information Agent as
set forth below, and copies will be furnished promptly at the Purchaser's
expense.
The Information Agent for the Offer is:
MORROW & CO., INC.
445 Park Avenue
5th Floor
New York, New York 10022
Banks and Brokerage Firms Please Call:(800) 662-5200
Shareholders Please call: (800) 566-9061
The Depositary for the Offer is:
THE BANK OF NEW YORK
<TABLE>
By Mail: By Facsimile: By Hand/Overnight Courier:
<S> <C> <C>
Tender & Exchange Department (for Eligible Institutions only) Tender & Exchange Department
P.O. Box 11248 (212) 815-6213 101 Barclay Street
Church Street Station Receive and Deliver Window
New York, New York Confirm by Telephone: New York, New York 10286
10286-1248 1-800-507-9357
</TABLE>
<PAGE> 1
News Release
[LUCENT LOGO]
<TABLE>
<S> <C> <C>
Bill Price Roger Frizzell Michael Polyviou
Lucent Technologies Lucent Technologies Porter, LeVay & Rose, Inc.
908-582-4820 (office) 972-745-4831 (office) (For Spectran)
973-515-5038 (home) 972-539-6653 (home) 212-564-4700
</TABLE>
LUCENT TECHNOLOGIES TO PURCHASE SPECTRAN CORPORATION, A LEADING MANUFACTURER OF
WORLD-CLASS OPTICAL FIBER AND FIBER OPTIC PRODUCTS
FOR IMMEDIATE RELEASE: THURSDAY, JULY 15, 1999
MURRAY HILL, N.J. - Lucent Technologies (NYSE:LU) today announced it
has signed an agreement to acquire SpecTran Corporation (NASDAQ, NM:SPTR), an
industry leader in the design and manufacture of specialty optical fibers and
fiber optic products, for about $64 million or $9 a share, plus the assumption
of $35 million in SpecTran debt, in an all-cash tender offer.
SpecTran, based in Sturbridge, Mass., employs approximately 500 people
in two divisions. The first, SpecTran Communication Fiber Technologies in
Sturbridge, manufactures high-performance optical fiber for premises data
communications and telecommunications applications. SpecTran Specialty Optics
Company, located in Avon, Conn., develops custom-engineered fiber solutions and
cable components for industrial automation, data communications,
military/aerospace and medical applications.
Lucent and SpecTran are building off an established relationship. Last
year, the two companies signed an agreement giving SpecTran rights to certain
Lucent fiber patents for use in the company's manufacturing operations. In
addition, Lucent has been one of SpecTran's major customers.
The transaction is expected to be completed by the end of the quarter
ending Sept. 30, 1999. The impact of the purchase on earnings is expected to be
immaterial.
"The communications revolution is fueling strong worldwide demand for
optical fiber," said Bill Spivey, president of the Network Products Group for
Lucent Technologies. "Our acquisition of SpecTran will support continued growth
in our business by providing us with new fiber products, additional expertise
and new market niches within the optical fiber industry."
"SpecTran and Lucent have a number of important synergies that should
make this match successful," said Charles B. Harrison, president and chief
executive officer of SpecTran. "Working with Lucent and the unmatched technical
capabilities of Bell Labs, we have the opportunity to deliver world-class fiber
solutions."
Harrison intends to stay with Lucent for a transition period to ensure
a successful integration of the businesses.
Under the terms of the definitive agreement, which has been approved by
SpecTran's board of directors, Lucent will begin a cash tender offer for all
outstanding shares of SpecTran common stock for $9 a share. The offer is
expected to commence on July 21. Any shares not purchased in the offer will be
acquired for the same price in cash, in a second-step merger. The offer and
merger are subject to the purchase of the majority of the outstanding shares of
SpecTran. Lazard Freres & Co. LLC has acted as investment banker to SpecTran
Corporation.
<PAGE> 2
Lucent's Optical Fiber Business
Lucent Technologies is one of the world's leading manufacturers of
fiber, with 13 fiber and cable manufacturing operations and joint ventures
around the world. Earlier this year, Lucent announced a joint venture in Russia
with SviaStroy-1 to produce optical fiber cable. In addition, Lucent has a $350
million expansion program underway at its manufacturing facility in Atlanta, as
well as expansion programs under way at other sites in Denmark and China.
Lucent's extensive fiber product line is designed by the company's
research and development organization, Bell Laboratories, which holds more than
1,600 patents in optical networking. Lucent's Bell Labs invented
nonzero-dispersion (NZDF) fiber with its award-winning TrueWave(R) fiber
offering. Lucent remains the industry leader in providing fiber for
high-capacity networks. To date, Lucent has produced more than 6 billion meters
of its TrueWave fiber -- enough fiber to wrap around the world 150 times.
About SpecTran Corporation
SpecTran Corporation is a leading manufacturer of high-performance
multimode and single-mode optical fiber for data communications,
telecommunications, CATV and industry applications worldwide. Founded in 1981,
the company's application-specific optical fiber and cable products also serve
industrial, aerospace and medical markets. For additional information about
SpecTran, visit the company's web site at http://www.spectran.com.
About Lucent Technologies
Lucent Technologies designs, builds and delivers a wide range of public
and private networks, communications systems and software, data networking
systems, business telephone systems and microelectronics components. Bell Labs
is the research and development arm for the company. More information about
Lucent Technologies, headquartered in Murray Hill, N.J., is available on its Web
site at http://www.lucent.com.
<PAGE> 1
EXHIBIT (c)(1)
CONFORMED COPY
-----------------------------------------------------------------
AGREEMENT OF MERGER
BY AND AMONG
LUCENT TECHNOLOGIES INC.,
SEATTLE ACQUISITION INC.,
AND
SPECTRAN CORPORATION
-------------------------------------------
Dated as of July 15, 1999
-------------------------------------------
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
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<S> <C> <C>
1. The Offer......................................................................... -2-
1.1. The Offer................................................................ -2-
1.2. Company Actions.......................................................... -4-
2. The Merger........................................................................ -4-
2.1. General.................................................................. -4-
2.2. Certificate of Incorporation............................................. -5-
2.3. By-Laws.................................................................. -5-
2.4. Directors and Officers................................................... -5-
2.5. Conversion of Securities................................................. -6-
2.6. Adjustment of the Merger Consideration................................... -6-
2.7. Dissenting Shares........................................................ -6-
2.8. Surrender of Shares; Stock Transfer Books................................ -7-
2.9. No Further Ownership Rights in Company Capital Stock..................... -9-
2.10. Return of Payment Fund................................................... -9-
2.11. Further Assurances....................................................... -9-
3. Representations and Warranties of the Company..................................... -9-
3.1. Organization............................................................. -10-
3.2. Subsidiaries............................................................. -10-
3.3. Capital Structure........................................................ -10-
3.4. Authority................................................................ -12-
3.5. No Conflict.............................................................. -12-
3.6. SEC Documents; Undisclosed Liabilities................................... -13-
3.7. Schedule 14D-9; Company Proxy Statement.................................. -14-
3.8. Absence of Certain Changes............................................... -14-
3.9. Properties............................................................... -16-
3.10. Leases................................................................... -16-
3.11. Contracts................................................................ -17-
3.12. Absence of Default....................................................... -18-
3.13. Litigation............................................................... -18-
3.14. Compliance with Law...................................................... -19-
3.15. Intellectual Property; Year 2000......................................... -19-
3.16. Taxes.................................................................... -20-
3.17. Benefit Plans............................................................ -21-
3.18. ERISA Compliance......................................................... -21-
3.19. Employment Matters....................................................... -23-
3.20. Environmental Laws....................................................... -24-
</TABLE>
-i-
<PAGE> 3
<TABLE>
<S> <C> <C>
3.21. Accounts Receivable; Inventory........................................... -24-
3.22. Customers and Suppliers.................................................. -24-
3.23. Voting Requirements...................................................... -25-
3.24. State Takeover Statutes.................................................. -25-
3.25. Brokers.................................................................. -25-
3.26. Opinion of Financial Advisor............................................. -26-
3.27. Complete Copies of Materials............................................. -26-
3.28. Disclosure............................................................... -26-
4. Representations and Warranties of Lucent and Acquisition.......................... -26-
4.1. Organization, Standing and Corporate Power............................... -26-
4.2. Authority................................................................ -26-
4.3. No Conflict.............................................................. -27-
4.4. Information Supplied..................................................... -27-
4.5. Brokers.................................................................. -28-
5. Conduct Pending Closing........................................................... -28-
5.1. Conduct of Business Pending Closing...................................... -28-
5.2. Prohibited Actions Pending Closing....................................... -38-
5.3. Other Actions............................................................ -30-
6. Additional Agreements............................................................. -31-
6.1. Access; Documents; Supplemental Information.............................. -31-
6.2. No Solicitation by the Company........................................... -32-
6.3. Preparation of the Company Proxy Statement;
Company Stockholders Meeting............................................. -34-
6.4. Reasonable Best Efforts.................................................. -35-
6.5. Stock Options; Warrants.................................................. -35-
6.6. Employee Benefit Plans; Existing Agreement............................... -36-
6.7. Indemnification.......................................................... -37-
6.8. Directors................................................................ -37-
6.9. Fees and Expenses........................................................ -38-
6.10. Public Announcements..................................................... -39-
6.11. Stockholder Litigation................................................... -39-
7. Conditions Precedent.............................................................. -39-
7.1. Conditions Precedent to Each Party's Obligation to Effect the Merger..... -39-
7.2. Conditions Precedent to Obligations of Acquisition and Lucent............ -40-
7.3. Conditions Precedent to the Company's Obligations........................ -41-
8. Non-Survival of Representation and Warranties..................................... -41-
8.1. Representations and Warranties........................................... -41-
</TABLE>
-ii-
<PAGE> 4
<TABLE>
<S> <C>
9. Contents of Agreement; Parties in Interest; etc................................... -41-
10. Assignment and Binding Effect..................................................... -42-
11. Termination....................................................................... -42-
12. Definitions....................................................................... -43-
13. Notices........................................................................... -45-
14. Amendment......................................................................... -46-
15. Extensions; Waiver................................................................ -47-
16. Governing Law..................................................................... -47-
17. No Benefit to Others.............................................................. -47-
18. Severability...................................................................... -47-
19. Section Headings.................................................................. -47-
20. Schedules and Exhibits............................................................ -48-
21. Counterparts...................................................................... -48-
Glossary of Defined Terms.................................................................. i
</TABLE>
-iii-
<PAGE> 5
AGREEMENT OF MERGER
AGREEMENT OF MERGER ("Agreement") dated as of July 15, 1999 by and
among LUCENT TECHNOLOGIES INC., a Delaware corporation ("Lucent"), SEATTLE
ACQUISITION INC., a Delaware corporation ("Acquisition"), and SPECTRAN
CORPORATION, a Delaware corporation (the "Company").
BACKGROUND
A. The Company is a Delaware corporation with its registered office
located at 9 East Lockerman Street, Dover, Delaware 19901 and has authorized
20,000,000 shares of common stock with voting rights, par value $.10 per share
(the "Company Voting Common Stock"), of which 7,040,930 shares of Company Voting
Common Stock are issued and outstanding, and 250,000 shares of common stock with
no voting rights, par value $.10 per share (the "Company Non-Voting Common
Stock" and together with the Company Voting Common Stock, the "Company Common
Stock"), of which no shares of Company Non-Voting Common Stock are issued and
outstanding. The Company is engaged principally in the design, development,
production, marketing, distribution, maintenance and support of multi-mode and
single-mode optical fiber for data communications and telecommunications
applications.
B. Lucent is a Delaware corporation with its registered office located
at 1013 Centre Road, Wilmington, Delaware.
C. Acquisition is a wholly-owned subsidiary of Lucent and was formed to
merge with and into the Company so that, as a result of the merger, the Company
will survive and become a wholly-owned subsidiary of Lucent. Acquisition is a
Delaware corporation with its registered office located at 1013 Centre Road,
Wilmington, Delaware and has authorized an aggregate of 1,000 shares of common
stock, no par value per share (the "Acquisition Common Stock").
D. In furtherance of the acquisition of the Company by Lucent on the
terms and subject to the conditions set forth in this Agreement, Lucent proposes
to cause Acquisition to make a tender offer (as it may be amended from time to
time as permitted under this Agreement, the "Offer") to purchase all the
outstanding shares of Company Common Stock (the "Shares"), at a purchase price
of $9.00 per Share (the "Offer Price"), net to the seller in cash, without
interest thereon, upon the terms and subject to the conditions set forth in this
Agreement.
E. The Board of Directors of each of Lucent, Acquisition and the
Company has determined that the Offer, this Agreement and the merger of
Acquisition with and into the Company (the "Merger") in accordance with the
provisions of the Delaware General Corporation Law, as amended (the "DGCL"),
and, subject to the terms and conditions of this Agreement, is advisable and in
the best interests of Lucent, Acquisition and the Company and their respective
<PAGE> 6
stockholders. The Board of Directors of each of Lucent, Acquisition and the
Company have approved the Offer, this Agreement and the Merger.
NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements contained herein and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto intending to be legally bound do hereby agree
as follows:
1. The Offer.
1.1. The Offer. (a) Subject to the provisions of this
Agreement, as promptly as practicable but in no event later than five business
days after the date of the public announcement by Lucent and the Company of this
Agreement, Acquisition shall, and Lucent shall cause Acquisition to, commence
the Offer. The initial expiration date for the Offer shall be the 20th business
day following the commencement of the Offer. The obligation of Acquisition to
accept for payment, and pay for, any Shares tendered pursuant to the Offer shall
be subject only to the conditions set forth in Exhibit A (the "Offer
Conditions") (any of which may be waived in whole or in part by Acquisition in
its sole discretion; provided that, without the prior written consent of the
Company, Acquisition shall not waive the Minimum Condition (as defined in
Exhibit A)) and to the terms and conditions of this Agreement. Acquisition
expressly reserves the right to modify the terms of the Offer, except that,
without the consent of the Company, Acquisition shall not (i) reduce the number
of Shares subject to the Offer, (ii) reduce the Offer Price, (iii) amend or add
to the Offer Conditions any terms that are adverse to the holders of the Shares,
(iv) except as provided in the next sentence, extend the Offer, (v) change the
form of consideration payable in the Offer or (vi) amend any other term of the
Offer in any manner adverse to the holders of the Shares. Notwithstanding the
foregoing, Acquisition may, without the consent of the Company, (A) extend the
Offer, if at the scheduled or extended expiration date of the Offer any of the
Offer Conditions shall not be satisfied or waived, until such time as such
conditions are satisfied or waived, (B) extend the Offer for any period required
by any rule, regulation, interpretation or position of the Securities and
Exchange Commission (the "SEC") or the staff thereof applicable to the Offer or
any period required by applicable law and (C) extend the Offer on one or more
occasions for an aggregate period of not more than 10 business days beyond the
latest expiration date that would otherwise be permitted under clause (A) or (B)
of this sentence, if on such expiration date there shall not have been tendered
at least 90% of the outstanding Shares. Lucent and Acquisition agree that if all
the Offer Conditions are not satisfied on any scheduled expiration date of the
Offer then, provided that all such conditions are reasonably capable of being
satisfied, Acquisition shall extend the Offer from time to time until such
conditions are satisfied or waived; provided that Acquisition shall not be
required to extend the Offer beyond September 30, 1999. Subject to the terms and
conditions of the Offer and this Agreement, Acquisition shall, and Lucent shall
cause Acquisition to, accept for payment, and pay for, all Shares validly
tendered and not withdrawn pursuant to the Offer that Acquisition becomes
obligated to accept for payment and pay for, pursuant to the Offer as promptly
as practicable after the expiration of the Offer.
-2-
<PAGE> 7
(b) On the date of commencement of the Offer, Lucent and
Acquisition shall file with the SEC a Tender Offer Statement on Schedule 14D-1
(the "Schedule 14D-1") with respect to the Offer, which shall contain an offer
to purchase and a related letter of transmittal and summary advertisement (such
Schedule 14D-1 and the documents included therein pursuant to which the Offer
shall be made, together with any supplements or amendments thereto, the "Offer
Documents"). Lucent and Acquisition agree that the Offer Documents shall comply
as to form in all material respects with the Securities Exchange Act of 1934
(the "Exchange Act"), and the rules and regulations promulgated thereunder and
the Offer Documents, on the date first published, sent or given to the Company's
stockholders, shall not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which they
were made, not misleading, except that no representation or warranty is made by
Lucent or Acquisition with respect to information supplied by the Company or any
of its stockholders specifically for inclusion or incorporation by reference in
the Offer Documents. Each of Lucent, Acquisition and the Company agree promptly
to correct any information provided by it for use in the Offer Documents if and
to the extent that such information shall have become false or misleading in any
material respect, and Lucent and Acquisition 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 the
Company's stockholders, in each case as and to the extent required by applicable
federal securities laws. The Company and its counsel shall be given reasonable
opportunity to review and comment upon the Offer Documents prior to their filing
with the SEC or dissemination to the stockholders of the Company. Lucent and
Acquisition agree to provide the Company and its counsel any comments Lucent,
Acquisition or their counsel may receive from the SEC or its staff with respect
to the Offer Documents promptly after the receipt of such comments.
(c) Lucent shall provide or cause to be provided to
Acquisition on a timely basis the funds necessary to accept for payment, and pay
for, any Shares that Acquisition becomes obligated to accept for payment, and
pay for, pursuant to the Offer.
1.2. Company Actions. (a) The Company hereby approves of and
consents to the Offer and represents that the Board of Directors of the Company,
at a meeting duly called and held, duly and unanimously adopted resolutions
approving this Agreement, the Offer and the Merger, determining, as of the date
of such resolutions, that the terms of the Offer and the Merger are fair to, and
in the best interests of, the Company's stockholders, recommending that the
Company's stockholders accept the Offer, tender their shares pursuant to the
Offer and approve this Agreement (if required) and approving the acquisition of
Shares by Acquisition pursuant to the Offer and the other transactions
contemplated by this Agreement. The Company has been advised by each of its
directors and executive officers who owns Shares (each of whom is listed in Item
1.2(a) of the Company Disclosure Schedule) that such person currently intends to
tender all Shares (other than Shares, if any, held by such person that, if
tendered, could cause such person to incur liability under the provisions of
Section 16(b) of the Exchange Act) owned by such person pursuant to the Offer.
-3-
<PAGE> 8
(b) On the date the Offer Documents are filed with the SEC,
the Company shall file with the SEC a Solicitation/Recommendation Statement on
Schedule 14D-9 with respect to the Offer (such Schedule 14D-9, as supplemented
or amended from time to time, the "Schedule 14D-9") containing, subject to the
terms of this Agreement, the recommendation described in paragraph (a) and shall
mail the Schedule 14D-9 to the stockholders of the Company. The Schedule 14D-9
shall comply as to form in all material respects with the requirements of the
Exchange Act and the rules and regulations promulgated thereunder and, on the
date filed with the SEC and on the date first published, sent or given to the
Company's stockholders, shall not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading, except that no representation or
warranty is made by the Company with respect to information supplied by Lucent
or Acquisition specifically for inclusion in the Schedule 14D-9. Each of the
Company, Lucent and Acquisition agrees promptly to correct any information
provided by it for use in the Schedule 14D-9 if and to the extent that such
information shall have become false or misleading in any material respect, and
the Company further agrees to take all steps necessary to amend or supplement
the Schedule 14D-9 and to cause the Schedule 14D-9 as so amended or supplemented
to be filed with the SEC and disseminated to the Company's stockholders, in each
case as and to the extent required by applicable federal securities laws. Lucent
and its counsel shall be given reasonable opportunity to review and comment upon
the Schedule 14D-9 prior to its filing with the SEC or dissemination to
stockholders of the Company. The Company agrees to provide Lucent and its
counsel any comments the Company or its counsel may receive from the SEC or its
staff with respect to the Schedule 14D-9 promptly after the receipt of such
comments.
(c) In connection with the Offer and the Merger, the Company
shall cause its transfer agent to furnish Acquisition promptly with mailing
labels containing the names and addresses of the record holders of Shares as of
a recent date and of those persons becoming record holders subsequent to such
date, together with copies of all lists of stockholders, security position
listings and computer files and all other information in the Company's
possession or control regarding the beneficial owners of Shares, and shall
furnish to Acquisition such information and assistance (including updated lists
of stockholders, security position listings and computer files) as Lucent may
reasonably request in communicating the Offer to the Company's stockholders.
Subject to the requirements of applicable law, and except for such steps as are
necessary to disseminate the Offer Documents and any other documents necessary
to consummate the Merger, Lucent and Acquisition and each of their agents shall
hold in confidence the information contained in any such labels, listings and
files, will use such information only in connection with the Offer and the
Merger and, if this Agreement shall be terminated, will deliver, and will use
their reasonable efforts to cause their agents to deliver, to the Company all
copies and any extracts or summaries from such information then in their
possession or control.
-4-
<PAGE> 9
2. The Merger.
2.1. General. (a) Upon the terms and subject to the conditions
of this Agreement and in accordance with the DGCL, at the Effective Time, (i)
Acquisition shall be merged with and into the Company, (ii) the separate
corporate existence of Acquisition shall cease and (iii) the Company shall be
the surviving corporation (the "Surviving Corporation") and shall succeed to and
assume all the rights and obligations of Acquisition in accordance with the
DGCL. At the election of Lucent, to the extent that any such action would not
cause a failure of a condition to the Offer or the Merger, any direct or
indirect wholly owned Subsidiary of Lucent may be substituted for and assume all
of the rights and obligations of Acquisition as a constituent corporation in the
Merger. In either such event, the parties agree to execute an appropriate
amendment to this Agreement in order to reflect the foregoing.
(b) The Merger shall become effective at the time of filing of
the certificate of merger with the Secretary of State of the State of Delaware
substantially in the form of Exhibit B attached hereto (the "Certificate of
Merger") in accordance with the provisions of Section 251 of the DGCL or such
later time as may be stated in the Certificate of Merger or such later date as
the parties may mutually agree (the "Effective Time"). Subject to the terms and
conditions of this Agreement, the Company and Acquisition shall duly execute and
file the Certificate of Merger with the Secretary of State of the State of
Delaware at the time of the Closing. The closing of the Merger (the "Closing")
shall take place at the offices of Sidley & Austin, 875 Third Avenue, New York,
N.Y. at 10:00 A.M., two business days after the date on which the last of the
conditions set forth in Article 7 shall have been satisfied or waived, or on
such other date, time and place as the parties may mutually agree (the "Closing
Date").
(c) At the Effective Time, the effect of the Merger shall be
as provided in the applicable provisions of the DGCL. 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
Acquisition shall vest in the Surviving Corporation, and all debts, liabilities,
obligations, restrictions, disabilities and duties of the Company and
Acquisition shall become the debts, liabilities, obligations, restrictions,
disabilities and duties of the Surviving Corporation.
2.2. Certificate of Incorporation. The certificate of
incorporation of Acquisition, as in effect immediately prior to the Effective
Time, shall be the certificate of incorporation of the Surviving Corporation
until thereafter amended as provided therein and by law except that Article I of
such certificate of incorporation shall be amended to read as follows:
"The name of the Corporation is: SpecTran Corporation."
2.3. By-Laws. The by-laws of Acquisition, as in effect
immediately prior to the Effective Time, shall be the by-laws of the Surviving
Corporation until thereafter amended as provided therein and by law.
-5-
<PAGE> 10
2.4. Directors and Officers. From and after the Effective
Time, (a) the directors of Acquisition 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 (b) the officers of Acquisition 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.
2.5. Conversion of Securities. At the Effective Time, by
virtue of the Merger and without any action on the part of Lucent, Acquisition,
the Company or the holders of any of the following securities:
(a) Each issued and outstanding share of common stock of
Acquisition shall be converted into one validly issued, fully paid and
nonassessable share of Common Stock, $.10 par value per share, of the Surviving
Corporation;
(b) Each Share that is owned or held in treasury by the
Company and each Share that is owned by Acquisition or Lucent shall
automatically be canceled and retired and shall cease to exist without any
conversion thereof and no payment or distribution shall be made with respect
thereto. Each Share that is owned by any Subsidiary of either the Company or
Lucent (other than Acquisition) shall remain outstanding without change; and
(c) Subject to the provisions of Section 2.6, each Share
issued and outstanding immediately prior to the Effective Time (other than
Shares to be canceled or to remain outstanding in accordance with Section 2.5(b)
and other than Dissenting Shares) shall be converted into the right to receive
from the Surviving Corporation in cash, without interest, the price per share
paid in the Offer (the "Merger Consideration"). As of the Effective Time, all
such Shares shall no longer be outstanding and shall automatically be canceled
and retired and shall cease to exist, and each holder of record of a certificate
representing any such Shares shall cease to have any rights with respect thereto
other than the right to receive the Merger Consideration, without interest.
2.6. Adjustment of the Merger Consideration. In the event
that, subsequent to the date of this Agreement but prior to the Effective Time,
any stock split, combination, reclassification or stock dividend with respect to
the outstanding shares of Company Common Stock, any change or conversion of
outstanding shares of Company Common Stock into other securities or any other
dividend or distribution with respect to the outstanding shares of Company
Common Stock should occur, appropriate and proportionate adjustments shall be
made to the Merger Consideration, and thereafter all references to the Merger
Consideration shall be deemed to be to the Merger Consideration as so adjusted.
2.7. Dissenting Shares. (a) Notwithstanding any provision of
this Agreement to the contrary, shares of Company Common Stock that are
outstanding immediately prior to the Effective Time and which are held by
stockholders who shall not have voted in favor of the
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<PAGE> 11
Merger or consented thereto in writing and who shall have demanded properly in
writing appraisal for such shares in accordance with Section 262 of the DGCL
(collectively, the "Dissenting Shares") shall not be converted into or represent
the right to receive the consideration set forth in Section 2.5(c). Such
stockholders shall instead be entitled to receive such consideration as is
determined to be due with respect to such Dissenting Shares in accordance with
the provisions of Section 262, except that all Dissenting Shares held by such
stockholders who shall have failed to perfect or who effectively shall have
withdrawn their demand for appraisal or lost their rights to appraisal of such
shares under Section 262, after the Effective Time, 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 in Section 2.5(c),
without any interest thereon, upon surrender, in the manner provided in Section
2.8, of the certificate or certificates that formerly evidenced by such
Dissenting Shares.
(b) The Company shall give Lucent (i) prompt notice of any
demands for appraisal of Shares received by the Company, withdrawals of such
demands, and any other instruments served pursuant to the DGCL and received by
the Company and (ii) the opportunity to participate in and direct all
negotiations and proceedings with respect to demands for appraisal under the
DGCL. The Company shall not, except with the prior written consent of Lucent,
make any payment with respect to any demands for appraisal or offer to settle or
settle any such demands.
2.8. Surrender of Shares; Stock Transfer Books.
(a) Prior to the Effective Time, Lucent shall designate The
Bank of New York, or another bank or trust company designated by Lucent, to act
as paying agent in the Merger (the "Paying Agent"), and, from time to time, on,
prior to or after the Effective Time, Lucent shall make available, or cause the
Surviving Corporation to make available, to the Paying Agent cash in the amounts
and at the times necessary for the prompt payment of the Merger Consideration
upon surrender of certificates representing outstanding shares of Company Common
Stock (the "Certificates") as part of the Merger pursuant to Section 2.5, and
such amounts as and when so made available shall hereinafter be referred to as
the "Payment Fund" (it being understood that any and all interest earned on
funds deposited with the Paying Agent pursuant to this Agreement shall be turned
over to Lucent).
(b) As soon as practicable after the Effective Time, Lucent
shall use its reasonable best efforts to cause the Paying Agent to send to each
Person who was, at the Effective Time, a holder of record of Certificates, a
letter of transmittal which (i) shall specify that delivery shall be effected
and risk of loss and title to such Certificates shall pass, only upon actual
delivery thereof to the Paying Agent and (ii) shall contain instructions for use
in effecting the surrender of the Certificates. Upon surrender to the Paying
Agent of Certificates for cancellation, together with such letter of transmittal
duly completed and validly executed in accordance with the instructions thereto
and such other documents as the Paying Agent may reasonably require, such holder
shall be entitled to receive in exchange therefor the applicable
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<PAGE> 12
Merger Consideration, and the Certificates so surrendered shall then be
canceled. Such Merger Consideration shall be mailed as promptly as practicable
after the satisfaction by such holder of the foregoing. Subject to Section
2.8(c), until surrendered as contemplated by this Section 2.8(b), each
Certificate, from and after the Effective Time, shall be deemed to represent
only the right to receive, upon such surrender, the Merger Consideration. No
interest will be paid or will accrue on the cash payable upon the surrender of
any Certificate.
(c) If payment of any portion of the Merger Consideration is
to be made to any Person other than the registered holder of the Certificate
surrendered in exchange therefor, it shall be a condition to such payment that
such surrendered Certificate shall be properly endorsed and otherwise in proper
form for transfer and such Person either (i) shall pay to the Paying Agent any
transfer or other taxes required as a result of the payment of the Merger
Consideration to such Person or (ii) shall establish to the satisfaction of the
Surviving Corporation that such taxes have been paid or are not applicable.
Lucent, Acquisition or the Paying Agent, as the case may be, shall be entitled
to deduct and withhold from the Merger Consideration or Company Stock Option
Consideration otherwise payable pursuant to this Agreement to any holder of
shares of Company Common Stock or holder of Company Stock Options such amounts
as are required to be deducted and withheld with respect to the making of such
payment under the Code, or any provision of state, local or foreign tax law. To
the extent that amounts are so withheld by Lucent, Acquisition or the Paying
Agent, such withheld amounts shall be treated for all purposes of this Agreement
as having been paid to the holder of shares of Company Common Stock or holder of
Company Stock Options, in respect of which such deduction and withholding was
made by Lucent, Acquisition or the Paying Agent. All amounts in respect of taxes
received or withheld by Lucent, Acquisition or the Paying Agent shall be
disposed of by Lucent, Acquisition or the Paying Agent in accordance with the
Code or such state, local or foreign tax law, as applicable.
(d) If any Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the Person claiming
such Certificate to be lost, stolen or destroyed and subject to such other
conditions as the Board of Directors of the Surviving Corporation may impose,
the Paying Agent shall pay in exchange for such lost, stolen or destroyed
Certificate the Merger Consideration deliverable in respect of such Certificate
as determined in accordance herewith. When authorizing such payment of the
Merger Consideration in exchange for such Certificate, the Board of Directors of
the Surviving Corporation (or any authorized officer thereof) may, in its
reasonable discretion and as a condition precedent to the issuance thereof,
require the owner of such lost, stolen or destroyed Certificate to deliver to
the Surviving Corporation a bond in such sum as the Surviving Corporation may
reasonably require as indemnity against any claim that may be made against
Lucent, the Surviving Corporation or the Paying Agent with respect to the
Certificate alleged to have been lost, stolen or destroyed.
(e) At the close of business on the day on which the Effective
Time occurs, the stock transfer books of the Company shall be closed and
thereafter there shall be no further
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<PAGE> 13
registration of transfers of shares of Company Common Stock on the records of
the Company. From and after the Effective Time, the holders of shares of Company
Common Stock 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.
(f) Neither Lucent nor the Company shall be liable to any
former holder of Company Capital Stock for any Merger Consideration which is
delivered to a public official pursuant to an official request under any
applicable abandoned property, escheat or similar law.
2.9. No Further Ownership Rights in Company Capital Stock. The
Merger Consideration shall be deemed to have been delivered (and paid) in full
satisfaction of all rights pertaining to the Company Common Stock previously
represented by such surrendered Certificates.
2.10. Return of Payment Fund. Any portion of the Payment Fund
which remains undistributed to the former holders of Company Common Stock for
six months after the Effective Time shall be delivered to Lucent, upon its
request, and any such former holders who have not theretofore surrendered to the
Paying Agent their Certificates in compliance herewith shall thereafter look
only to Lucent for payment of their claim for their portion of the Payment Fund.
Neither Lucent, Acquisition, the Paying Agent or the Company shall be liable to
any former holder of Company Common Stock for any portion of the Payment Fund
which is delivered to a public official pursuant to an official request under
any applicable abandoned property, escheat or similar law.
2.11. Further Assurances. If at any time after the Effective
Time the Surviving Corporation shall consider or be advised that any deeds,
bills of sale, assignments or assurances or any other acts or things are
necessary, desirable or proper (a) to vest, perfect or confirm, of record or
otherwise, in the Surviving Corporation its right, title or interest in, to or
under any of the rights, privileges, powers, franchises, properties or assets of
either the Company or Acquisition or (b) otherwise to carry out the purposes of
this Agreement, the Surviving Corporation and its proper officers and directors
or their designees shall be authorized to execute and deliver, in the name and
on behalf of either the Company or Acquisition, all such deeds, bills of sale,
assignments and assurances and do, in the name and on behalf of the Company or
Acquisition, all such other acts and things necessary, desirable or proper to
vest, perfect or confirm its right, title or interest in, to or under any of the
rights, privileges, powers, franchises, properties or assets of the Company or
Acquisition, as applicable, and otherwise to carry out the purposes of this
Agreement.
3. Representations and Warranties of the Company.
Except as set forth on the Disclosure Schedule delivered by
the Company to Lucent prior to the execution of this Agreement (the "Company
Disclosure Schedule") and making reference to the particular subsection of this
Agreement to which exception is being taken, the Company represents and warrants
to Lucent and Acquisition as follows:
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<PAGE> 14
3.1. Organization. Each of the Company and its Subsidiaries is
a corporation or other legal entity duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or organization
and has all requisite power and authority and all necessary governmental
approval to carry on its business as it has been and is now being conducted.
Except as set forth in Item 3.1 of the Company Disclosure Schedule, each of the
Company and its Subsidiaries is duly qualified or licensed as a foreign
corporation to do business and is in good standing (with respect to
jurisdictions which recognize such concept) in each jurisdiction where the
nature of its business or the ownership, leasing or operation of its properties
makes such qualification or licensing necessary, except where the failure to be
so qualified or licensed and in good standing, would not have a Material Adverse
Effect. The Company has made available to Lucent prior to the execution of this
Agreement complete and correct copies of its certificate of incorporation and
by-laws and the charter documents for each of its Subsidiaries in each case, as
amended to the date hereof.
3.2. Subsidiaries. Item 3.2 of the Company Disclosure Schedule
contains (i) the name and jurisdiction of incorporation of each Subsidiary of
the Company, (ii) the total number of shares of each class of capital stock of
(or other equity interests in) each Subsidiary authorized, the number of shares
(or other equity interests) outstanding and the number of shares (or other
equity interests) owned by the Company or any other Subsidiary of the Company
and (iii) a complete list of the directors and officers of the Company and each
Subsidiary. All the issued and outstanding capital stock of (or other equity
interests in) each Subsidiary have been duly and validly authorized and issued
and are fully paid, nonassessable and free of pre-emptive rights. None of the
outstanding capital stock of (or other equity interests in) any Subsidiary has
been issued in violation of the preemptive rights of any equity holder of such
Subsidiary. The capital stock of (or other equity interests in) each Subsidiary
were issued in compliance in all material respects with all applicable federal
and state securities laws and regulations, are owned free and clear of all Liens
(except as set forth in Item 3.2 of the Company Disclosure Schedule) and are
free of any restriction on the right to vote, sell or otherwise dispose of such
capital stock or other equity interest.
3.3. Capital Structure. (a) The authorized capital stock of
the Company consists of 20,000,000 shares of Company Voting Common Stock and
250,000 shares of Company Non-Voting Common Stock. At the close of business on
July 14, 1999, (i) 7,040,930 shares of Company Voting Common Stock were issued
and outstanding; (ii) no shares of Company Non-Voting Common Stock were issued
and outstanding; (iii) no shares of Company Common Stock were held by the
Company in its treasury; (iv) 150,000 shares of Company Common Stock were
reserved for issuance upon exercise of the Warrants; and (v) 1,411,836 shares of
Company Common Stock were reserved for issuance pursuant to the SpecTran
Corporation 1991 Incentive Stock Option Plan and the SpecTran Corporation
Incentive Stock Option Plan (collectively, the "Company Stock Plans") (of which
1,037,739 shares are subject to outstanding Company Stock Options as of July 14,
1999).
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<PAGE> 15
(b) Except as set forth in paragraph (a), at the close of
business on July 14, 1999, no shares of capital stock or other voting securities
of the Company were issued, reserved for issuance or outstanding. There are no
outstanding stock appreciation rights ("SARs") or rights (other than outstanding
stock options or other rights to purchase or receive Company Common Stock
granted under the Company Stock Plans (collectively, "Company Stock Options"))
to receive shares of Company Common Stock on a deferred basis granted under the
Company Stock Plans or otherwise and no warrants to purchase shares of capital
stock of the Company at any time or upon the occurrence of any stated event. The
Company has delivered to Lucent a complete and correct list, as of June 30,
1999, of the number of shares of Company Common Stock subject to Company Stock
Options and the exercise prices thereof.
(c) As of the date of this Agreement, no bonds, debentures,
notes or other indebtedness of the Company having the right to vote (or
convertible into, or exchangeable for, securities having the right to vote) on
any matters on which stockholders of the Company may vote are issued or
outstanding. All outstanding shares of capital stock of the Company are, and all
shares which may be issued upon the exercise of the Warrants will be, when
issued, duly authorized, validly issued, fully paid and nonassessable, not
subject to preemptive rights and were issued in compliance in all material
respects with all applicable federal and state securities laws.
(d) Except as set forth in this Section 3.3 and except for
changes since July 14, 1999 resulting from the issuance of shares of Company
Common Stock pursuant to Company Stock Options outstanding as of July 14, 1999,
there are not issued, reserved for issuance or outstanding (i) any shares of
capital stock or other voting securities of the Company, (ii) any securities of
the Company convertible into or exchangeable or exercisable for shares of
capital stock or voting securities of the Company, (iii) any warrants, calls,
options or other rights to acquire from the Company or any Subsidiary, and no
obligation of the Company or any Subsidiary to issue, any capital stock, voting
securities or securities convertible into or exchangeable or exercisable for
capital stock or voting securities of the Company. Except as set forth in this
Section 3.3, on the date hereof there are not any outstanding obligations of the
Company or any Subsidiary to repurchase, redeem or otherwise acquire any such
securities or to issue, deliver or sell, or cause to be issued, delivered or
sold, any such securities. The Company is not a party to any voting agreement
with respect to the voting of any such securities.
(e) There are no outstanding (i) securities of the Company or
any Subsidiary convertible into or exchangeable or exercisable for shares of
capital stock or other voting securities or ownership interests in any
Subsidiary, (ii) warrants, calls, options or other rights to acquire from the
Company or any Subsidiary, and no obligation of the Company or any Subsidiary to
issue, any capital stock, voting securities or other ownership interests in, or
any securities convertible into or exchangeable or exercisable for any capital
stock, voting securities or ownership interests in, any such Subsidiary or (iii)
obligations of the Company or any Subsidiary to repurchase, redeem or otherwise
acquire any such outstanding securities of such Subsidiaries or to issue,
deliver or sell, or cause to be issued, delivered or sold, any such
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<PAGE> 16
securities. Except for the Company's ownership of the Subsidiaries, the Company
does not, directly or indirectly, have any ownership or other interest in, or
control of, any Person, nor is the Company or any Subsidiary controlled by or
under common control with any Person.
3.4. Authority. The Company has all requisite corporate power
and authority to enter into this Agreement and, subject to Company Stockholder
Approval, to consummate the transactions contemplated by this Agreement. The
execution and delivery of this Agreement by the Company and the consummation by
the Company of the transactions contemplated by this Agreement have been duly
authorized by all necessary corporate action on the part of the Company, and
except, in the case of this Agreement, for (i) Company Stockholder Approval and
(ii) the filing and recordation of appropriate merger documents as required by
the DGCL, no other corporate proceedings on the part of the Company are
necessary to authorize this Agreement and the transactions contemplated by this
Agreement. This Agreement has been duly authorized, executed and delivered by
the Company and constitutes the legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by the effect of general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity or at
law).
3.5. No Conflict. (a) Except as set forth in Item 3.5 of the
Company Disclosure Schedule, the execution and delivery of this Agreement do
not, and the consummation of the transactions contemplated by this Agreement and
compliance with the provisions of this Agreement will not, conflict with, or
result in any violation of, or default (with or without notice or lapse of time,
or both) under, or give rise to a right of termination, cancellation or
acceleration of any obligation or loss of a benefit under, or result in the
creation of any Lien upon any of the properties or assets of the Company or any
of its Subsidiaries under, (i) the certificate of incorporation or by-laws of
the Company or the comparable organizational documents of any of its
Subsidiaries, (ii) any loan or credit agreement, note, bond, mortgage,
indenture, lease or other agreement, instrument, permit, concession, franchise,
license or similar authorization applicable to the Company or any of its
Subsidiaries or their respective properties or assets or (iii) subject to the
governmental filings and other matters referred to in paragraph (b), any
judgment, order, decree, statute, law, ordinance, rule or regulation applicable
to the Company or any of its Subsidiaries or their respective properties or
assets, other than, in the case of clauses (ii) and (iii), any such conflicts,
violations, defaults, rights, losses or Liens that individually or in the
aggregate could not reasonably be expected to have a Material Adverse Effect on
the Company.
(b) No consent, approval, order or authorization of, action by
or in respect of, or registration, declaration or filing with, any federal,
state, local or foreign government, any court, administrative, regulatory or
other governmental agency, commission or authority or any non-governmental
self-regulatory agency, commission or authority (each a "Governmental Entity")
is required by or with respect to the Company or any of its Subsidiaries in
connection
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<PAGE> 17
with the execution and delivery of this Agreement by the Company or the
consummation by the Company of the transactions contemplated by this Agreement,
except for (i) the filing of a premerger notification and report form by the
Company under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended (the "HSR Act") and any applicable filings and approvals under similar
foreign antitrust laws and regulations; (ii) the filing with the SEC and The
Nasdaq National Market ("Nasdaq") of (A) the Schedule 14D-9, (B) a proxy
statement relating to the Company Stockholders Meeting for the approval by the
stockholders of the Company of the Merger (such proxy statement, as amended or
supplemented from time to time, the "Company Proxy Statement"), and (C) such
reports under Section 13(a), 13(d), 15(d) or 16(a) of the Exchange Act as may be
required in connection with this Agreement and the transactions contemplated by
this Agreement; (iii) the filing of the Certificate of Merger with the Secretary
of State of the State of Delaware and appropriate documents with the relevant
authorities of other states in which the Company is qualified to do business;
and (iv) such consents, approvals, orders or authorizations which if not made or
obtained, either individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect on the Company.
3.6. SEC Documents; Undisclosed Liabilities. Except as set
forth in Item 3.6 of the Company Disclosure Schedule, the Company has filed with
the SEC since January 1, 1997 or, with respect to the Offer, will file with the
SEC all required registration statements, reports, schedules, forms, statements,
proxy or information statements and other documents (including exhibits and all
other information incorporated therein) (the "Company SEC Documents"). As of
their respective dates, the Company SEC Documents complied or, with respect to
those not yet filed, will comply in all material respects with the requirements
of the Securities Act of 1933 (the "Securities Act"), or the Exchange Act, as
the case may be, and, in each case, the rules and regulations of the SEC
promulgated thereunder and, except to the extent that information contained in
any Company SEC Document has been revised and superseded by a later filed
Company SEC Document, did not or, with respect to those not yet filed, will not
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
therein, in light of the circumstances under which they were made, not
misleading. The financial statements of the Company included in the Company SEC
Documents comply as to form, as of their respective dates of filing with the
SEC, in all material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto, have been
prepared in accordance with generally accepted accounting principles (except, in
the case of unaudited statements, as permitted by Form 10-Q of the SEC) applied
on a consistent basis during the periods involved (except as may be indicated in
the notes thereto) and fairly present in all material respects the consolidated
financial position of the Company and its consolidated Subsidiaries as of the
dates thereof and the consolidated results of their operations and cash flows
for the periods then ended (subject, in the case of unaudited statements, to
normal recurring year-end audit adjustments). Except for liabilities (i)
reflected in such financial statements or in the notes thereto, (ii) incurred in
the ordinary course of business consistent with past practice since the date of
the most recent audited financial statements included in the Company SEC
Documents filed and publicly available prior to the date of this Agreement (as
amended to the date of this Agreement, the "Company Filed
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<PAGE> 18
SEC Documents"), (iii) incurred in connection with this Agreement or the
transactions contemplated hereby, or (iv) disclosed in Item 3.6 of the Company
Disclosure Schedule, neither the Company nor any of its Subsidiaries has any
liabilities or obligations of any nature which, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect on the
Company.
3.7. Schedule 14D-9; Company Proxy Statement. None of the
information supplied or to be supplied by the Company specifically for inclusion
or incorporation by reference in (i) the Offer Documents, (ii) the Schedule
14D-9, (iii) the information to be filed by the Company in connection with the
Offer pursuant to Rule 14f-1 promulgated under the Exchange Act (the
"Information Statement") or (iv) the Company Proxy Statement, if any, will, in
the case of the Offer Documents, the Schedule 14D-9 and the Information
Statement, at the respective times the Offer Documents, the Schedule 14D-9 and
the Information Statement are filed with the SEC or first published, sent or
given to the Company's stockholders, or, in the case of the Company Proxy
Statement, if any, at the date the Company Proxy Statement is first mailed to
the Company's stockholders and at the time of the Stockholders Meeting, 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
therein, in light of the circumstances under which they are made, not
misleading. The Schedule 14D-9, the Information Statement and the Company Proxy
Statement, if any, will comply as to form in all material respects with the
requirements of the Exchange Act and the rules and regulations thereunder,
except that no representation or warranty is made by the Company with respect to
statements made or incorporated by reference therein based on information
supplied by Lucent specifically for inclusion or incorporation by reference
therein.
3.8. Absence of Certain Changes. Except for liabilities
incurred in connection with this Agreement or the transactions contemplated
hereby and except as disclosed in the Company Filed SEC Documents, since
December 31, 1998, the Company and its Subsidiaries have conducted their
business only in the ordinary course, and there has not been:
(a) any event or occurrence which could reasonably be expected
to have a Material Adverse Effect on the Company;
(b) any declaration, setting aside or payment of any dividend
or other distribution (whether in cash, stock or property) with respect to any
of the Company's capital stock;
(c) any split, combination or reclassification of any of the
Company's capital stock or any issuance or the authorization of any issuance of
any other securities in respect of, in lieu of or in substitution, for shares of
the Company's capital stock, except for issuances of Company Common Stock upon
the exercise of Company Stock Options under the Company Stock Plans, in each
case awarded prior to the date hereof in accordance with their present terms;
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<PAGE> 19
(d) (i) Except as set forth in Item 3.8(d)(i) of the Company
Disclosure Schedule, any granting by the Company or any of its Subsidiaries to
any current or former director, executive officer or other key employee of the
Company or its Subsidiaries of any increase in compensation, bonus or other
benefits, except for normal increases in cash compensation in the ordinary
course of business consistent with past practice or as was required under any
employment agreements in effect as of the date of the most recent audited
financial statements included in the Company Filed SEC Documents, (ii) any
granting by the Company or any of its Subsidiaries to any such current or former
director, executive officer or key employee of any increase in severance or
termination pay, except in the ordinary course of business consistent with past
practice, (iii) except as set forth in Item 3.8(d)(iii) of the Company
Disclosure Schedule, any entry by the Company or any of its Subsidiaries into,
or any amendments of, any employment, deferred compensation, consulting,
severance, termination or indemnification agreement with any such current or
former director, executive officer or key employee, or (iv) any amendment to, or
modification of, any Company Stock Option;
(e) except insofar as may have been required by a change in
generally accepted accounting principles, any change in accounting methods,
principles or practices by the Company;
(f) any tax election that individually or in the aggregate
could reasonably be expected to have a Material Adverse Effect on the Company or
any of its tax attributes or any settlement or compromise of any material income
tax liability;
(g) any impairment, damage, destruction, loss or claim,
whether or not covered by insurance, or condemnation or other taking which could
reasonably be expected to have a Material Adverse Effect on the Company;
(h) any issuance, delivery or agreement (conditionally or
unconditionally) to issue or deliver any bonds, notes or other debt securities,
or the incurrence of or agreement to incur any indebtedness for borrowed money,
other than in the ordinary course of business consistent with past practice or
the entry into any lease the obligations of which, in accordance with GAAP,
would be capitalized;
(i) any material amendment or termination of any agreement to
which the Company or any of its Subsidiaries is a party and is or should be set
forth on Item 3.11 of the Company Disclosure Schedule;
(j) except as set forth in Item 3.8(j) of the Company
Disclosure Schedule, any undertaking or commitment to undertake capital
expenditures exceeding $100,000 for any single project or related series of
projects;
(k) except as set forth in Item 3.8(k) of the Company
Disclosure Schedule, any sale, lease (as lessor), transfer or other disposition
of, mortgage, pledge, or imposition of any
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<PAGE> 20
Lien on, any of the assets reflected on the Company's most recent audited
financial statement included in the Company Filed SEC Documents or any assets
acquired by the Company or any of its Subsidiaries after the date of such
audited financial statement, except for inventory and personal property sold or
otherwise disposed of for fair value in the ordinary course of its business
consistent with past practice and except for Permitted Liens;
(l) cancellation of any debts owed to or claims held by the
Company or any of its Subsidiaries (including the settlement of any claims or
litigation) other than in the ordinary course of its business consistent with
past practice;
(m) except as set forth in Item 3.8(m) of the Company
Disclosure Schedule, acceleration or delay in collection of accounts receivable
in advance of or beyond their regular due dates or the dates when the same would
have been collected in the ordinary course of its business consistent with past
practice;
(n) acceleration or delay in payment of any account payable or
other liability beyond or in advance of its due date or the date when such
liability would have been paid in the ordinary course of its business consistent
with past practice; and
(o) entry into or commitment to enter into any other material
transaction except in the ordinary course of business.
3.9. Properties. (a) Each of the Company and its Subsidiaries
has good and valid title to or a valid leasehold interest in all its properties
and assets reflected on the most recently audited balance sheet contained in the
Company Filed SEC Documents or acquired after the date thereof except for (i)
properties and assets sold or otherwise disposed of in the ordinary course of
business since the date of such balance sheet, (ii) properties and assets the
loss of which individually or in the aggregate could reasonably be expected to
have a Material Adverse Effect on the Company and (iii) properties and assets
sold in connection with the transaction referred to in Item 3.8(k) of the
Company Disclosure Schedule.
(b) Except as set forth in Item 3.9(b) of the Company
Disclosure Schedule, neither the Company nor any or its Subsidiaries owns any
real property.
3.10. Leases. Item 3.10 of the Company Disclosure Schedule
lists all outstanding leases, both capital and operating, or licenses, pursuant
to which the Company or any of its Subsidiaries has (i) obtained the right to
use or occupy any real or tangible personal property under arrangements where
the remaining obligation is more than $50,000, inclusive of any renewal rights
or (ii) granted to any other Person the right to use any material item of
machinery, equipment, furniture, vehicle or other personal property of the
Company or any of its Subsidiaries having an original cost of $50,000 or more.
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3.11. Contracts. Item 3.11 of the Company Disclosure Schedule
lists any of the following not otherwise listed on any other item of the Company
Disclosure Schedule:
(a) each written contract or commitment which creates an
obligation on the part of the Company or any of its Subsidiaries in excess of
$100,000;
(b) each written debt instrument, including, without
limitation, any loan agreement, line of credit, promissory note, security
agreement or other evidence of indebtedness, where the Company or any of its
Subsidiaries is a lender, borrower or guarantor, in a principal amount in excess
of $100,000;
(c) each written contract or commitment restricting the
Company or any of its Subsidiaries from engaging in any industry or in any line
of business in any location;
(d) each written contract or commitment in excess of $10,000
to which the Company or any of its Subsidiaries is a party for any charitable
contribution;
(e) each written joint venture or partnership agreement to
which the Company or any of its Subsidiaries is a party;
(f) each written agreement in excess of $25,000 to which the
Company or any of its Subsidiaries is a party with respect to any assignment,
discounting or reduction of any receivables of the Company or such Subsidiary;
(g) each written distributorship, sales agency, sales
representative, reseller or marketing agreement to which the Company or any of
its Subsidiaries is a party, and each sales representative agreement is
substantially identical to the form previously delivered to Lucent;
(h) each value added reseller, original equipment
manufacturing, technology transfer, source code license or other license or each
other agreement containing the right to sublicense software and/or technology,
in each case, to which the Company or any of its Subsidiaries is a party, other
than "off-the-shelf" software;
(i) each agreement, option or commitment or right with, or
held by, any third party to acquire any assets or properties, or any interest
therein, of the Company or any of its Subsidiaries, having a value in excess of
$100,000, except for contracts for the sale of inventory, machinery or equipment
in the ordinary course of business;
(j) each written employment contract entered into by the
Company or any of its Subsidiaries; and
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<PAGE> 22
(k) each supply agreement to which the Company or any of its
Subsidiaries is a party that the Company or such Subsidiary could not readily
replace without a Material Adverse Effect on the Company.
There are (i) no oral contracts or commitments of the types
described in this Section 3.11 which create an obligation on the part of the
Company or any of its Subsidiaries in excess of $25,000, (ii) no contracts or
commitments between the Company or any of its Subsidiaries and any Affiliate
(other than a wholly-owned Subsidiary) and (iii) no contracts or commitments
which would create rights to any Person against Lucent or any of its Affiliates
(other than rights against the Company and its Subsidiaries as in effect on the
Closing Date).
3.12. Absence of Default. Except as set forth in Item 3.12 of
the Company Disclosure Schedule, each of the leases, contracts and other
agreements listed or required to be listed in Items 3.10 and 3.11 of the Company
Disclosure Schedule that create obligations on any Person in excess of $100,000
constitutes a valid and binding obligation of the parties thereto and is in full
force and effect and will continue in full force and effect after the Effective
Time, in each case, without breaching the terms thereof or resulting in the
forfeiture or impairment of any rights thereunder and without the consent,
approval or act of, or the making of any filing with, any other Person. Each of
the Company and its Subsidiaries has fulfilled and performed in all material
respects its obligations under each such lease, contract or other agreement to
which it is a party to the extent such obligations are required by the terms
thereof to have been fulfilled or performed through the date hereof (except for
any such lease, contract or other agreement which, by its terms, will expire
prior to the Effective Time) and neither the Company nor any such Subsidiary is,
and, neither the Company nor any such Subsidiary is alleged in writing to be, in
breach or default under, nor is there or is there alleged in writing to be any
basis for termination of, any such lease, contract or other agreement. To the
best knowledge of the Company, no other party to any such lease, contract or
other agreement has breached or defaulted thereunder. No event has occurred and
no condition or state of facts exists which, with the passage of time or the
giving of notice or both, would constitute such a default or breach by the
Company or, to the best knowledge of the Company, by any such other party. The
Company is not currently renegotiating any such lease, contract or other
agreement or paying liquidated damages in lieu of performance thereunder.
Complete and correct copies of each such lease, contract or other agreement and
any amendments thereto have heretofore been delivered to Lucent.
3.13. Litigation. Item 3.13 of the Disclosure Schedule sets
forth (i) any actions, suits, arbitrations, legal or administrative proceedings
or investigations pending or, to the best knowledge of the Company, threatened
against the Company or any of its Subsidiaries; (ii) any judgment, order, writ,
injunction or decree of any court, governmental agency or arbitration tribunal
as to which any of the assets, properties or business of the Company or any of
its Subsidiaries is subject; and (iii) any actions, suits, arbitrations or
proceedings as to which the Company or any such Subsidiary is the plaintiff or
the Company or any such Subsidiary is contemplating commencing legal action
against any other Person. None of the matters, if any,
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listed on Item 3.13 of the Disclosure Schedule could reasonably be expected to
have a Material Adverse Effect on the Company.
3.14. Compliance with Law.
(a) Each of the Company and its Subsidiaries has complied in
all material respects with, and is not in violation of, in any material respect,
any law, ordinance or governmental rule or regulation (collectively, "Laws") to
which it or its business is subject;
(b) Each of the Company and its Subsidiaries has obtained all
licenses, permits, certificates or other governmental authorizations
(collectively "Authorizations") necessary for the ownership or use of its assets
and properties or the conduct of its business other than Authorizations (i)
which are ministerial in nature and which the Company or such Subsidiary has no
reason to believe would not be issued in due course and (ii) which, the failure
of the Company or such Subsidiary to possess, would not subject the Company and
its Subsidiaries to penalties other than fines not to exceed $50,000 in the
aggregate ("Immaterial Authorizations"); and
(c) Neither the Company nor any of its Subsidiaries has
received notice of violation of, or knows of any violation of, any Laws to which
it or its business is subject or any Authorization necessary for the ownership
or use of its assets and properties or the conduct of its business (other than
Immaterial Authorizations).
3.15. Intellectual Property; Year 2000. (a) Except as set
forth in Item 3.15 of the Company Disclosure Schedule, the Company and its
Subsidiaries own, or are validly licensed or otherwise have the right to use,
all patents, patent rights, trademarks, trade secrets, trade names, service
marks, copyrights and other proprietary intellectual property rights and
computer programs (the "Intellectual Property Rights") which are material to the
conduct of the business of the Company and its Subsidiaries as presently
conducted.
(b) To the Company's best knowledge, neither the Company nor
any of its Subsidiaries has interfered with, infringed upon, misappropriated or
otherwise come into conflict with any Intellectual Property Rights or other
proprietary information of any other Person. Neither the Company nor any of its
Subsidiaries has received any written charge, complaint, claim, demand or notice
alleging any such interference, infringement, misappropriation or violation
(including any claim that the Company or any such Subsidiary must license or
refrain from using any Intellectual Property Rights or other proprietary
information of any other Person) which has not been settled or otherwise fully
resolved. To the Company's best knowledge, no other Person has interfered with,
infringed upon, misappropriated or otherwise come into conflict with any
Intellectual Property Rights or other proprietary information of the Company or
any of its Subsidiaries.
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<PAGE> 24
(c) Assuming that Lucent continues to operate the business of
the Company and its Subsidiaries as presently conducted and proposed to be
conducted by the Company then, to the Company's best knowledge, Lucent's use of
the Intellectual Property Rights or other proprietary information which is
material to the conduct of the business of the Company and its Subsidiaries,
taken as a whole, will not interfere with, infringe upon, misappropriate or
otherwise come into conflict with the Intellectual Property Rights or other
proprietary information of any other Person.
(d) Each employee, agent, consultant or contractor who has
materially contributed to or participated in the creation or development of any
copyrightable, patentable or trade secret material on behalf of the Company, any
of its Subsidiaries or any predecessor in interest thereto either: (i) is a
party to a "work-for-hire" agreement under which the Company or such Subsidiary
is deemed to be the original owner/author of all property rights therein; or
(ii) has executed an assignment or an agreement to assign in favor of the
Company, such Subsidiary or such predecessor in interest, as applicable all
right, title and interest in such material.
(e) The Company has taken all necessary steps reasonably to
assure that the year 2000 date change will not adversely affect its operations
or the systems and facilities that support the operations of the Company and its
Subsidiaries, except as could not reasonably be expected to have a Material
Adverse Effect on the Company.
3.16. Taxes. (a) Each of the Company and its Subsidiaries has
filed all material tax returns and reports required to be filed by it and all
such returns and reports are complete and correct in all material respects, or
requests for extensions to file such returns or reports have been timely filed,
granted and have not expired, except to the extent that such failures to file,
to be complete or correct or to have extensions granted that remain in effect
individually or in the aggregate could not reasonably be expected to have a
Material Adverse Effect. The Company and each of its Subsidiaries has paid (or
the Company has paid on its behalf) all Taxes shown as due on such returns, and
the most recent financial statements contained in the Company Filed SEC
Documents reflect an adequate reserve for all taxes payable by the Company and
its Subsidiaries for all taxable periods and portions thereof accrued through
the date of such financial statements.
(b) No deficiencies for any taxes have been proposed, asserted
or assessed against the Company or any of its Subsidiaries that are not
adequately reserved for, except for deficiencies that individually or in the
aggregate could not reasonably be expected to have a Material Adverse Effect on
the Company.
(c) The Company Benefit Plans and other Company employee
compensation arrangements in effect as of the date of this Agreement have been
designed so that the disallowance of a material deduction under Section 162(m)
of the Code for employee remuneration will not apply to any amounts paid or
payable by the Company or any of its Subsidiaries under any such plan or
arrangement and, to the best knowledge of the Company, no
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<PAGE> 25
fact or circumstance exists that could reasonably be expected to cause such
disallowance to apply to any such amounts.
(d) Neither the Company nor any of its Subsidiaries has
constituted either a "distributing corporation" or a "controlled corporation" in
a distribution of stock qualifying for tax-free treatment under Section 355 of
the Code (x) in the two years prior to the date of this Agreement or (y) in a
distribution which could otherwise constitute part of a "plan" or "series of
related transactions" (within the meaning of Section 355(e) of the Code) in
conjunction with the Merger.
(e) Neither the Company nor any of its Subsidiaries is a party
(other than as an investor) to any outstanding industrial development bond.
3.17. Benefit Plans. (a) Item 3.17 of the Company Disclosure
Schedule contains a list and brief description of all "employee pension benefit
plans" (as defined in Section 3(2) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA")) (sometimes referred to as "Pension Plans"),
"employee welfare benefit plans" (as defined in Section 3(1) of ERISA)
(sometimes referred to as "Welfare Plans") and all other Benefit Plans (together
with the Pension Plans and Welfare Plans, the "Company Benefit Plans")
maintained, or contributed to, by the Company, any of its Subsidiaries or any
Person that, together with the Company or any of its Subsidiaries, is treated as
a single employer under Section 414(b), (c), (m) or (o) of the Code (the
Company, such Subsidiaries and each such other Person, a "Commonly Controlled
Entity") for the benefit of any current or any former employees, officers or
directors of the Company. The Company has made available to Lucent true,
complete and correct copies of (i) each Company Benefit Plan (or, in the case of
any unwritten Company Benefit Plans, descriptions thereof), (ii) the most recent
annual report on Form 5500 filed with the Internal Revenue Service (the "IRS")
with respect to each Company Benefit Plan (if any such report was required),
(iii) the most recent summary plan description for each Company Benefit Plan for
which such summary plan description is required, (iv) each trust agreement and
group annuity contract relating to any Company Benefit Plan and (v) all
correspondence with the IRS or the United States Department of Labor relating to
any outstanding controversy or audit.
(b) Since the date of the most recent audited financial
statements included in the Company Filed SEC Documents, there has not been any
adoption or amendment in any material respect by the Company, any of its
Subsidiaries or any Commonly Controlled Entity of any Company Benefit Plans, or
any material change in any actuarial or other assumption used to calculate
funding obligations with respect to any Pension Plans of the Company, or any
change in the manner in which contributions to any Pension Plans of the Company
are made or the basis on which such contributions are determined.
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<PAGE> 26
3.18. ERISA Compliance. (a) With respect to the Company
Benefit Plans, no event has occurred and, to the best knowledge of the Company,
there exists no condition or set of circumstances, in connection with which the
Company or any of its Subsidiaries could be subject to any liability under
ERISA, the Code or any other applicable law that individually or in the
aggregate could reasonably be expected to have a Material Adverse Effect under
ERISA, the Code or any other applicable law.
(b) Each Benefit Plan has been administered in accordance with
its terms, except for any failures so to administer any Benefit Plan that
individually or in the aggregate could not reasonably be expected to have a
Material Adverse Effect on the Company. The Company, its Subsidiaries and all
the Company Benefit Plans are in compliance with the applicable provisions of
ERISA, the Code, all regulations promulgated thereunder, all other applicable
laws, regulations and other pronouncements, and the terms of all applicable
collective bargaining agreements, except for any failures to be in such
compliance that individually or in the aggregate could not reasonably be
expected to have a Material Adverse Effect. Each Benefit Plan that is intended
to be qualified under Section 401(a) or 401(k) of the Code has received a
favorable determination letter from the IRS that it is so qualified and each
trust established in connection with any Company Benefit Plan that is intended
to be exempt from federal income taxation under Section 501(a) of the Code has
received a determination letter from the IRS that such trust is so exempt. To
the best knowledge of the Company, no fact or event has occurred since that date
of any determination letter from the IRS which could reasonably be expected to
affect adversely the qualified status of any such Benefit Plan or the exempt
status of any such trust. There are no pending or, to the best knowledge of the
Company, threatened lawsuits, claims, grievances, investigations or audits of
any Benefit Plan that, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect. Neither the Company nor any of its
Subsidiaries has engaged in a transaction with respect to any Company Benefit
Plan that, assuming the taxable period of such transaction expired as of the
date hereof, could subject it to a tax or penalty imposed by either Section 4975
of the Code or Section 502(i) of ERISA.
(c) Neither the Company nor any of its Subsidiaries has
incurred any liability under Title IV of ERISA (other than liability for
premiums to the Pension Benefit Guaranty Corporation arising in the ordinary
course). No Benefit Plan has incurred an "accumulated funding deficiency"
(within the meaning of Section 302 of ERISA or Section 412 of the Code) whether
or not waived. To the best knowledge of the Company, there are no facts or
circumstances that could reasonably be expected to materially change the funded
status of any Benefit Plan that is a "defined benefit" plan (as defined in
Section 3(35) of ERISA) since the date of the most recent actuarial report for
such plan. No notice of a "reportable event", within the meaning of Section 4043
of ERISA, for which the 30-day reporting requirement has not been waived has
been required to be filed within the 12-month period ending on the date hereof.
No Benefit Plan is a "multiemployer plan" within the meaning of Section 3(37) of
ERISA.
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(d) Under each Benefit Plan that is a "defined benefit" plan
(as defined in Section 3(35) of ERISA) as of the last day of the most recent
plan year ended prior to the date hereof, the actuarially determined present
value of all "benefit liabilities", within the meaning of Section 4001(a)(16) of
ERISA (as determined on the basis of the actuarial assumptions contained in such
plan's most recent actuarial valuation), did not exceed the then current value
of the assets of such plan.
(e) Except as set forth in Item 3.18(e) of the Company
Disclosure Schedule, no employee of the Company will be entitled to any
additional benefits or any acceleration of the time of payment or vesting of any
benefits under any Benefit Plan as a result of the transactions contemplated by
this Agreement. Except as set forth in Item 3.18(e) of the Company Disclosure
Schedule, no amount payable, or economic benefit provided, by the Company or its
Subsidiaries (including any acceleration of the time of payment or vesting of
any benefit) could be considered an "excess parachute payment" under Section
280G of the Code as a result of the transactions contemplated by this Agreement.
No Person is entitled to receive any additional payment from the Company or its
Subsidiaries or any other Person (a "Parachute Gross-Up Payment") in the event
that the excise tax of Section 4999 of the Code is imposed on such Person. The
Board of Directors of the Company or any of its Subsidiaries has not granted to
any Person any right to receive any Parachute Gross-Up Payment.
(f) Except as set forth in Item 3.18(f) of the Company
Disclosure Schedule, neither the Company nor any of its Subsidiaries has any
liability or obligation under any "employee welfare benefit plans" (as defined
in Section 3(1) of ERISA) to provide life insurance or medical benefits after
termination of employment to any employee or dependent other than as required by
Part 6 of Title I of ERISA.
3.19. Employment Matters. (a) Each of the Company and its
Subsidiaries has complied in all material respects with all applicable laws,
rules and regulations respecting employment and employment practices, terms and
conditions of employment, wages and hours, and neither the Company nor any of
its Subsidiaries is liable for any arrears of wages or any taxes or penalties
for failure to comply with any such laws, rules or regulations; (b) the Company
believes that the Company's and its Subsidiaries' relations with their
respective employees is satisfactory; (c) there are no controversies pending or,
to the best knowledge of the Company, threatened between the Company or any of
its Subsidiaries and any of their respective employees, which controversies have
or could have a Material Adverse Effect on the Company; (d) neither the Company
nor any Subsidiary is a party to any collective bargaining agreement or other
labor union contract applicable to Persons employed by the Company or any such
Subsidiary, nor, to the best knowledge of the Company, are there any activities
or proceedings of any labor union to organize any such employees; (e) there are
no unfair labor practice complaints pending against the Company or any of its
Subsidiaries before the National Labor Relations Board or any current union
representation questions involving employees of the Company or any of its
Subsidiaries; (f) there is no strike, slowdown, work stoppage or lockout
existing, or, to the best knowledge of the Company, threatened, by or with
respect to any employees of the
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Company or any of its Subsidiaries; (g) except as set forth in Item 3.19(g) of
the Company Disclosure Schedule, no charges are pending before the Equal
Employment Opportunity Commission or any state, local or foreign agency
responsible for the prevention of unlawful employment practices with respect to
the Company or any of its Subsidiaries; (h) there are no claims pending against
the Company or any of its Subsidiaries before any workers' compensation board
which could reasonably be expected to have a Material Adverse Effect on the
Company; and (i) neither the Company nor any of its Subsidiaries has received
notice that any federal, state, local or foreign agency responsible for the
enforcement of labor or employment laws intends to conduct an investigation of
or relating to the Company or any of its Subsidiaries and, to the best knowledge
of the Company, no such investigation is in progress.
3.20. Environmental Laws. The Company has not received any
notice or claim (and is not aware of any facts that would form a reasonable
basis for any claim), or entered into any negotiations or agreements with any
other Person, and, to the best knowledge of the Company, neither the Company nor
any of its Subsidiaries is the subject of any investigation by any governmental
or regulatory authority, domestic or foreign, relating to any material or
potentially material liability or remedial action under any Environmental Laws.
There are no pending or, to the best knowledge of the Company, threatened,
actions, suits or proceedings against the Company, any of its Subsidiaries or
any of their respective properties, assets or operations asserting any such
material liability or seeking any material remedial action in connection with
any Environmental Laws.
3.21. Accounts Receivable; Inventory. (a) Except as set forth
in Item 3.21(a) of the Company Disclosure Schedule, all accounts receivable of
the Company and its Subsidiaries (i) have arisen from bona fide transactions by
the Company or its Subsidiaries in the ordinary course of its business and
represent and will represent bona fide claims against debtors for sales and
other charges and (ii) are not subject to discount except for normal cash and
immaterial trade discount. The amount carried for doubtful accounts and
allowances accrued on the books of the Company and its Subsidiaries is
sufficient to provide for any losses that may be sustained on realization of the
accounts receivable of the Company and its Subsidiaries.
(b) The inventories (and any reserves established with respect
thereto) of the Company and its Subsidiaries as of December 31, 1998 are
described in Item 3.21(b) of the Company Disclosure Schedule. All such
inventories (net of any such reserves) are properly reflected on the Company's
most recent audited financial statement included in the Company Filed SEC
Documents in accordance with GAAP and, to the best knowledge of the Company, are
of such quality as to be useable and saleable in the ordinary course of business
(subject, in the case of work-in-process inventory, to completion in the
ordinary course of business) and are reflected in the books and records of the
Company or its Subsidiaries at the lower of cost (based on a first-in-first-out
basis) or market value. Such inventories are located at the locations set forth
in Item 3.21(b) of the Company Disclosure Schedule.
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<PAGE> 29
3.22. Customers and Suppliers. Neither the Company's nor any
of its Subsidiaries' customers which individually accounted for more than 5% of
the Company's or such Subsidiary's gross revenues during the 12-month period
preceding the date hereof has terminated any agreement with the Company or such
Subsidiary. Except as set forth in Item 3.22 of the Company Disclosure Schedule,
as of the date hereof, no material supplier of the Company or any of its
Subsidiaries has notified the Company in writing that it will stop, or decrease
the rate of, supplying materials, products or services to the Company or such
Subsidiary. Neither the Company nor any of its Subsidiaries has knowingly
breached, so as to provide a benefit to the Company or any of its Subsidiaries
that was not intended by the parties, any agreement with, or engaged in any
fraudulent conduct with respect to, any customer or supplier of the Company or
any of its Subsidiaries.
3.23. Voting Requirements. Pursuant to the provisions of the
DGCL, the certificate of incorporation of the Company, the by-laws of the
Company and any other applicable law, the affirmative vote of the holders of a
majority of the voting power of all outstanding shares of Company Common Stock
at the Company Stockholders Meeting to adopt this Agreement (the "Company
Stockholder Approval") is the only vote of the holders of any class or series of
the Company's capital stock necessary to approve and adopt the Merger, this
Agreement and the transactions contemplated by this Agreement. The Board of
Directors of the Company (at a meeting duly called and held) has (i) unanimously
approved the Offer, this Agreement and the transactions contemplated by this
Agreement, (ii) determined that the Offer and the Merger are fair to and in the
best interests of the Company's stockholders, (iii) resolved (subject to Section
6.2) to recommend this Agreement, the Offer and the Merger to such holders for
approval and adoption and (iv) directed (subject to Section 6.2) that this
Agreement be submitted to the Company's stockholders. The Company hereby agrees
to the inclusion in the Schedule 14D-9 and the Company Proxy Statement of the
recommendation of such Board of Directors.
3.24. State Takeover Statutes. The Board of Directors of the
Company (including the disinterested directors thereof) has unanimously approved
the Offer, this Agreement and the consummation of the Merger and the other
transactions contemplated by this Agreement and such approval is sufficient to
render inapplicable to the Offer, the Merger, this Agreement and the
transactions contemplated by this Agreement the provisions of Chapter 203 of the
DGCL. To the Company's knowledge, no other state takeover statute is applicable
to the Offer, the Merger, this Agreement or the transactions contemplated by
this Agreement and no provision of the certificates of incorporation, by-laws or
other governing instruments of the Company or any of its Subsidiaries would,
directly or indirectly, restrict or impair the ability of Lucent to vote, or
otherwise exercise the rights of a stockholder with respect to, shares of
capital stock or other equity interest of the Company and its Subsidiaries that
may be acquired or controlled by Lucent as contemplated by this Agreement.
3.25. Brokers. No broker, investment banker, financial advisor
or other Person, other than Lazard Freres & Co. LLC, the fees and expenses of
which will be paid by the
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<PAGE> 30
Company, is entitled to any broker's, finder's, financial advisor's or other
similar fee or commission in connection with the transactions contemplated by
this Agreement based upon arrangements made by or on behalf of the Company. The
Company has furnished to Lucent true and complete copies of all agreements under
which any such fees or expenses are payable and all indemnification and other
agreements related to the engagement of the Persons to whom such fees are
payable.
3.26. Opinion of Financial Advisor. The Company has received
the opinion of Lazard Freres & Co. LLC, dated the date of this Agreement, to the
effect that, as of such date, the consideration to be received in the Offer and
the Merger by the Company's stockholders is fair from a financial point of view
to the Company's stockholders (other than Lucent and its Affiliates), a signed
copy of which opinion has been or will promptly be delivered to Lucent.
3.27. Complete Copies of Materials. The Company has delivered
or made available to Lucent true and complete copies of each material document
related to the Company or its business in connection with their legal and
accounting review of the Company.
3.28. Disclosure. None of the representations or warranties of
the Company contained herein, none of the information contained in the Company
Disclosure Schedule, and none of the other information or documents furnished or
to be furnished to Lucent or Acquisition by the Company or any of its
Subsidiaries or pursuant to the terms of this Agreement, when taken as a whole,
contains, or at the Effective Time will contain, any untrue statement of a
material fact or omits, or at the Effective Time will omit, to state a material
fact required to be stated herein or therein necessary to make the statements
herein or therein, in light of the circumstances under which they were made, not
misleading in any material respect.
4. Representations and Warranties of Lucent and Acquisition.
Except as set forth on the Disclosure Schedule delivered by
Lucent to the Company prior to the execution of this Agreement (the "Lucent
Disclosure Schedule") and making reference to the particular subsection of this
Agreement to which exception is being taken, Lucent and Acquisition represent
and warrant to the Company as follows:
4.1. Organization, Standing and Corporate Power. Each of
Lucent and Acquisition is a corporation or other legal entity duly organized,
validly existing and in good standing under the laws of the jurisdiction in
which it is organized and has the requisite corporate or other power, as the
case may be, and authority to carry on its business as now being conducted,
except for those jurisdictions where the failure to be so organized, existing or
in good standing individually or in the aggregate could not reasonably be
expected to have a Material Adverse Effect on Lucent. Each of Lucent and
Acquisition is duly qualified or licensed to do business and is in good standing
(with respect to jurisdictions which recognize such concept) in each
jurisdiction in which the nature of its business or the ownership, leasing or
operation of its properties makes such qualification or licensing necessary,
except for those jurisdictions where
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<PAGE> 31
the failure to be so qualified or licensed or to be in good standing
individually or in the aggregate could not reasonably be expected to have a
Material Adverse Effect on Lucent.
4.2. Authority. Each of Lucent and Acquisition has all
requisite corporate power and authority to enter into this Agreement and to
consummate the transactions contemplated by this Agreement. The execution and
delivery of this Agreement by Lucent and Acquisition and the consummation by
Lucent and Acquisition of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of Lucent and
Acquisition. This Agreement has been duly executed and delivered by Lucent and
Acquisition and, constitutes the legal, valid and binding obligation of Lucent
and Acquisition, enforceable against each of them in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by the effect of general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity or at
law).
4.3. No Conflict. (a) The execution and delivery of this
Agreement do not, and the consummation of the transactions contemplated by this
Agreement and the compliance with the provisions of this Agreement will not,
conflict with, or result in any violation of, or default (with or without notice
or lapse of time, or both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation or loss of a benefit under, or
result in the creation of any Lien upon any of the properties or assets of
Lucent or Acquisition or any of Lucent's other Subsidiaries under, (i) the
charter documents of Lucent or Acquisition, (ii) any loan or credit agreement,
note, bond, mortgage, indenture, lease or other agreement, instrument, permit,
concession, franchise, license or similar authorization applicable to Lucent or
Acquisition or any of Lucent's other Subsidiaries or their respective properties
or assets or (iii) subject to the governmental filings and other matters
referred to in Section 4.3(b), any judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to Lucent or any of its Subsidiaries or
their respective properties or assets, other than, in the case of paragraph (b),
any such conflicts, violations, defaults, rights, losses or Liens that
individually or in the aggregate could not reasonably be expected to have a
Material Adverse Effect on Lucent.
(b) No consent, approval, order or authorization of, action
by, or in respect of, or registration, declaration or filing with, any
Governmental Entity is required by or with respect to Lucent or Acquisition in
connection with the execution and delivery of this Agreement by Lucent and
Acquisition or the consummation by Lucent and Acquisition of the transactions
contemplated by this Agreement, except for (i) the filing of a premerger
notification and report form by Lucent under the HSR Act and any applicable
filings and approvals under similar foreign antitrust laws and regulations; (ii)
the filing with the SEC of (A) the Offer Documents and (B) such reports under
Section 13(a), 13(d), 15(d) or 16(a) of the Exchange Act as may be required in
connection with this Agreement and the transactions contemplated by this
Agreement; (iii) the filing of the Certificate of Merger with the Secretary of
State of the State of Delaware and appropriate documents with the relevant
authorities of other states in which Lucent is qualified to do business; and
(iv) such consents, approvals, orders or authorizations the failure
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of which to be made or obtained individually or in the aggregate could not
reasonably be expected to have a Material Adverse Effect on Lucent.
4.4. Information Supplied. None of the information supplied or
to be supplied by Lucent specifically for inclusion or incorporation by
reference in (i) the Offer Documents, (ii) the Schedule 14D-9, (iii) the
Information Statement or (iv) the Company Proxy Statement, if any, will, in the
case of the Offer Documents, the Schedule 14D-9 and the Information Statement,
at the respective times the Offer Documents, the Schedule 14D-9 and the
Information Statement are filed with the SEC or first published, sent or given
to the Company's stockholders, or, in the case of the Company Proxy Statement,
if any, at the date the Company Proxy Statement is first mailed to the Company's
stockholders and at the time of the Stockholders Meeting, 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 therein, in light of
the circumstances under which they are made, not misleading. The Offer Documents
will comply as to form in all material respects with the requirements of the
Exchange Act and the rules and regulations thereunder, except that no
representation or warranty is made by Lucent or Acquisition with respect to
statements made or incorporated by reference therein based on information
supplied by the Company specifically for inclusion or incorporation by reference
therein.
4.5. Brokers. No broker, investment banker, financial advisor
or other Person is entitled to any broker's, finder's, financial advisor's or
other similar fee or commission in connection with the transactions contemplated
by this Agreement based upon arrangements made by or on behalf of Lucent.
5. Conduct Pending Closing.
5.1. Conduct of Business Pending Closing. From the date hereof
until the Closing, the Company shall (and shall cause each of its Subsidiaries
to):
(a) maintain its existence in good standing;
(b) maintain the general character of its business and
properties and conduct its business in the ordinary and usual manner consistent
with past practices, except as expressly permitted by this Agreement;
(c) maintain business and accounting records consistent with
past practices; and
(d) use its reasonable best efforts (i) to preserve its
business intact, (ii) to keep available to the Company the services of its
present officers and employees, and (iii) to preserve for the Company or such
Subsidiary the goodwill of its suppliers, customers and others having business
relations with the Company or such Subsidiary.
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5.2. Prohibited Actions Pending Closing. Unless otherwise
provided for herein or approved by Lucent in writing, from the date hereof until
the Closing, the Company shall not (and shall not permit any of its Subsidiaries
to):
(a) amend or otherwise change its certificate of incorporation
or by-laws;
(b) issue or sell or authorize for issuance or sale (other
than any issuance of Company Common Stock upon the exercise of any outstanding
option or warrant to purchase Company Common Stock which option or warrant was
issued prior to the date hereof in accordance with the terms of the relevant
stock option or warrant agreement), or grant any options or warrants or make
other agreements with respect to, any shares of its capital stock or any other
of its securities or warrants;
(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) 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 (i) short-term borrowings (including borrowings under
the Company's existing line of credit with Fleet National Bank) incurred in the
ordinary course of business (or to refinance existing or maturing indebtedness)
and (ii) intercompany indebtedness between the Company and any of its
Subsidiaries or between Subsidiaries;
(f) (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) enter into any contract or agreement other than in the ordinary
course of business, consistent with past practice; (iii) authorize any capital
commitment which is in excess of $50,000 or capital expenditures which are, in
the aggregate, in excess of $100,000, except as contemplated in Item 3.8(j) of
the Company Disclosure Schedule; or (iv) enter into or amend any contract,
agreement, commitment or arrangement with respect to any matter set forth in
Section 5.2(e) or this Section 5.2(f);
(g) mortgage, pledge or subject to Lien, any of its assets or
properties or agree to do so except for Permitted Liens;
(h) sell, lease, license, mortgage or otherwise encumber or
subject to any Lien or otherwise dispose of any of its properties or assets
(including securitizations), other than sales or licenses of finished goods in
the ordinary course of business consistent with past practice;
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(i) assume, guarantee or otherwise become responsible for the
obligations of any other Person or agree to so do;
(j) enter into or agree to enter into any employment
agreement;
(k) except as set forth in Item 5.2(k) of the Company
Disclosure Schedule, take any action, other than in the ordinary course of
business and consistent with past practice, with respect to accounting policies
or procedures (including, without limitation, procedures with respect to the
payment of accounts payable and collection of accounts receivables);
(l) make any Tax election or settle or compromise any material
federal, state, local or foreign income Tax liability;
(m) settle or compromise any pending or threatened suit,
action or claim which is material or which relates to any of the transactions
contemplated by this Agreement;
(n) 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 reflected or reserved
against in the most recently audited balance sheet contained in the Company SEC
Documents or subsequently incurred in the ordinary course of business and
consistent with past practice;
(o) except in connection with the sale of the Company's
products in the ordinary course of business and consistent with past practice,
sell, assign, transfer, license, sublicense, pledge or otherwise encumber any of
the Intellectual Property Rights;
(p) except as required by law or contemplated hereby, enter
into, adopt or amend in any material respect or terminate any Company Benefit
Plan or any other agreement, plan or policy involving the Company or its
Subsidiaries, and one or more of its directors, officers or employees, or
materially change any actuarial or other assumption used to calculate funding
obligations with respect to any pension plan, or change the manner in which
contributions to any pension plan are made or the basis on which such
contributions are determined;
(q) except for normal increases in the ordinary course of
business consistent with past practice that, in the aggregate, do not materially
increase benefits or compensation expenses of the Company or its Subsidiaries,
or as contemplated hereby or by the terms of any employment agreement in
existence on the date hereof, increase the cash compensation of any director,
executive officer or other key employee or pay any benefit or amount not
required by a plan or arrangement as in effect on the date of this Agreement to
any such Person; or
(r) announce an intention, commit or agree to do any of the
foregoing.
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5.3. Other Actions. The Company shall not take any action that
would reasonably be expected to result in (i) any of the representations and
warranties of the Company set forth in this Agreement that are qualified as to
materiality becoming untrue, (ii) any of such representations and warranties
that are not so qualified becoming untrue in any material respect or (iii) any
of the Offer Conditions not being satisfied.
6. Additional Agreements.
6.1. Access; Documents; Supplemental Information. (a) From and
after the date hereof until the Closing, the Company shall afford, shall cause
its Subsidiaries to afford and, with respect to clause (ii) below, shall use its
reasonable best efforts to cause the independent certified public accountants
for the Company to afford, (i) to the officers, independent certified public
accountants, counsel and other representatives of Acquisition and Lucent, upon
reasonable advance notice, free and full access at all reasonable times to the
properties, books and records including tax returns filed and those in the
process of being prepared by the Company or any of its Subsidiaries and the
right to consult with the officers, employees, accountants, counsel and other
representatives of the Company or any of its Subsidiaries in order that
Acquisition and Lucent may have full opportunity to make such investigations as
they shall reasonably desire to make of the operations, properties, business,
financial condition and prospects of the Company and its Subsidiaries, (ii) to
the independent certified public accountants of Acquisition and Lucent, upon
reasonable advance notice, free and full access at all reasonable times to the
work papers and other records of the accountants relating to the Company and its
Subsidiaries, and (iii) to Acquisition and Lucent and their representatives,
such additional financial and operating data and other information as to the
properties, operations, business, financial condition and prospects of the
Company and its Subsidiaries as Acquisition and Lucent shall from time to time
reasonably require.
(b) From the date of this Agreement through and including the
Closing, Acquisition, Lucent and the Company agree to furnish to each other
copies of any notices, documents, requests, court papers, or other materials
received from any governmental agency or any other third party with respect to
the transactions contemplated by this Agreement, except where it is obvious from
such notice, document, request, court paper or other material that the other
party was already furnished with a copy thereof.
(c) Except as required by law, the Company and Lucent shall
not, and shall not permit any of their respective Subsidiaries to, voluntarily
take any action that would, or that could reasonably be expected to, result in
(i) any of the representations and warranties of such party set forth in this
Agreement that are qualified as to materiality becoming untrue at the Effective
Time, (ii) any of such representations and warranties that are not so qualified
becoming untrue in any material respect at the Effective Time, or (iii) any of
the conditions to the Merger set forth in Article 7 not being satisfied.
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(d) The Company shall give prompt notice to Lucent, and Lucent
shall give prompt notice to the Company, of (a) the occurrence, or
non-occurrence, of any event which would be likely to cause (i) any
representation or warranty contained in this Agreement to be untrue or
inaccurate in any material respect or (ii) any covenant, condition or agreement
contained in this Agreement not to be complied with or satisfied; and (b) any
failure of the Company, Lucent or Acquisition, 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 that the delivery of any notice pursuant to
this Section 6.1(d) shall not limit or otherwise affect the remedies available
to the party receiving such notice.
(e) The Company shall notify Lucent of any filing made by the
Company with the SEC under the Exchange Act, including, without limitation, any
Form 10-Q, 8-K or 10-K, not later than five business days after the date of such
filing.
6.2. No Solicitation by the Company. (a) The Company shall
not, nor shall it permit any of its Subsidiaries to, nor shall it authorize or
permit any of its directors, officers or employees or any investment banker,
financial advisor, attorney, accountant or other representative retained by it
or any of its Subsidiaries to, directly or indirectly through another Person,
(i) solicit, initiate or encourage (including by way of furnishing information),
or take any other action designed to facilitate, any inquiries or the making of
any proposal which constitutes a Takeover Proposal (as defined below) or (ii)
participate in any discussions or negotiations regarding any Takeover Proposal;
provided, that if, at any time prior to the date of the Company Stockholders
Meeting (the "Applicable Period"), the Board of Directors of the Company
determines in good faith, after consultation with outside counsel, that it is
legally advisable to do so in order to comply with its fiduciary duties to the
Company's stockholders under applicable law, the Company may, in response to a
Superior Proposal (as defined below) which was not solicited by it or which did
not otherwise result from a breach of this Section 6.2, and subject to providing
prior written notice of its decision to take such action to Lucent (a "Section
6.2 Notice") and complying with Section 6.2(c), (A) furnish information with
respect to the Company and its Subsidiaries to any Person making a Superior
Proposal pursuant to a customary confidentiality agreement (as determined by the
Company after consultation with its outside counsel) and (B) participate in
discussions or negotiations regarding such Superior Proposal. For purposes of
this Agreement, a "Takeover Proposal" means any inquiry, proposal or offer from
any Person (i) relating to any direct or indirect acquisition or purchase of (A)
a business that constitutes 15% or more of the net revenues, net income or the
assets of the Company and its Subsidiaries, taken as a whole, (B) 20% or more of
any class of equity securities of the Company or (C) any material equity
interest in any Subsidiary of the Company (i.e., in excess of 20% of the
outstanding capital stock of such Subsidiary), (ii) relating to any tender offer
or exchange offer that if consummated would result in any Person beneficially
owning 20% or more of any class of equity securities of the Company or any
material equity interest in any of its Subsidiaries, or (iii) relating to any
merger, consolidation, business combination, recapitalization, liquidation,
dissolution or similar transaction involving the Company or any of its
Subsidiaries, other than the transactions contemplated by this Agreement.
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(b) Except as expressly permitted by this Section 6.2, neither
the Board of Directors of the Company nor any committee thereof shall (i)
withdraw or modify, or propose publicly to withdraw or modify, in a manner
adverse to Lucent, the approval or recommendation by such Board of Directors or
such committee of the Offer, the Merger or this Agreement, (ii) approve or
recommend, or propose publicly to approve or recommend, any Takeover Proposal,
or (iii) cause the Company to enter into any letter of intent, agreement in
principle, acquisition agreement or other similar agreement (each, an
"Acquisition Agreement") related to any Takeover Proposal, other than any such
agreement entered into concurrently with a termination pursuant to the next
sentence in order to facilitate such action. Notwithstanding the foregoing,
during the Applicable Period, in response to a Superior Proposal which was not
solicited by the Company and which did not otherwise result from a breach of
Section 6.2(a), the Board of Directors of the Company may (subject to this and
the following sentences) terminate this Agreement (and concurrently with or
after such termination, if it so chooses, cause the Company to enter into any
Acquisition Agreement with respect to any Superior Proposal), but only at a time
that is during the Applicable Period and is after the third business day
following Lucent's receipt of written notice advising Lucent that the Board of
Directors of the Company is prepared to accept a Superior Proposal, specifying
the material terms and conditions of such Superior Proposal and identifying the
Person making such Superior Proposal. For purposes of this Agreement, a
"Superior Proposal" means any proposal made by a third party to acquire,
directly or indirectly, including pursuant to a tender offer, exchange offer,
merger, consolidation, business combination, recapitalization, liquidation,
dissolution or similar transaction, for consideration consisting of cash and/or
securities, more than 50% of the combined voting power of the shares of Company
Common Stock then outstanding or all or substantially all the assets of the
Company and otherwise on terms which the Board of Directors of the Company
determines in its good faith judgment (based on the advice of a financial
advisor of nationally recognized reputation) to be more favorable to the
Company's stockholders than the Merger and for which financing, to the extent
required, is then committed or which, in the good faith judgment of the Board of
Directors of the Company, is reasonably capable of being obtained by such third
party.
(c) In addition to the obligations of the Company set forth in
paragraphs (a) and (b) of this Section 6.2, the Company shall promptly advise
Lucent orally and in writing of any Takeover Proposal or any request for
information by any Person which the Company reasonably believes is in connection
with the preparation of a Takeover Proposal, the material terms and conditions
of such Takeover Proposal or the information requested by any such Person and
the identity of the Person making such Takeover Proposal or request for
information. The Company will promptly inform Lucent of any change in the status
and material terms and conditions (including amendments or proposed amendments)
of any such Takeover Proposal or request for information.
(d) Nothing contained in this Section 6.2 shall prohibit the
Company from taking and disclosing to its stockholders a position contemplated
by Rule 14d-9 or Rule 14e-2(a) promulgated under the Exchange Act or from making
any disclosure to the Company's stockholders if, in the good faith judgment of
the Board of Directors of the Company, after
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consultation with outside counsel, failure so to disclose would be inconsistent
with its obligations under applicable law; provided, that, except as expressly
permitted by this Section 6.2, neither the Company nor its Board of Directors
nor any committee thereof shall withdraw or modify, or propose publicly to
withdraw or modify, its position with respect to the Offer, this Agreement or
the Merger or approve or recommend, or propose publicly to approve or recommend,
a Takeover Proposal.
6.3. Preparation of the Company Proxy Statement; Company
Stockholders Meeting. (a) If the Company Stockholder Approval is required by
law, the Company shall, as soon as practicable following the expiration of the
Offer, prepare and file with the SEC a preliminary Company Proxy Statement and
shall use its reasonable best efforts to respond to any comments of the SEC or
its staff and to cause the Company Proxy Statement to be mailed to the Company's
stockholders as promptly as practicable after responding to all such comments to
the satisfaction of the staff. No filing of, or amendment or supplement to, the
Company Proxy Statement will be made by the Company without providing Lucent the
opportunity to review and comment thereon. The Company shall notify Lucent
promptly of the receipt of any comments from the SEC or its staff and of any
request by the SEC or its staff for amendments or supplements to the Company
Proxy Statement or for additional information and will supply Lucent with copies
of all correspondence between the Company or any of its representatives, on the
one hand, and the SEC or its staff, on the other hand, with respect to the
Company Proxy Statement or the Merger. If at any time prior to the Company
Stockholders Meeting there shall occur any event or information that should be
set forth in an amendment or supplement to the Company Proxy Statement, so that
the Company Proxy Statement would not include any misstatement of a material
fact or omit to state a material fact necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading, the
Company shall notify Lucent and shall promptly prepare and mail to its
stockholders and file with the SEC an appropriate amendment or supplement
describing such information. The Company shall not mail any Company Proxy
Statement or any amendment or supplement thereto, to which Lucent reasonably
objects.
(b) If the Company Stockholder Approval is required by law,
the Company shall, as soon as practicable following the expiration of the Offer,
duly call, give notice of, convene and hold a meeting of its stockholders (the
"Company Stockholders Meeting") for the purpose of obtaining the Company
Stockholder Approval and shall, through its Board of Directors, recommend to its
stockholders the approval and adoption of the Offer, this Agreement, the Merger
and the other transactions contemplated hereby. Without limiting the generality
of the foregoing but subject to its rights to terminate this Agreement pursuant
to Section 6.2(b), the Company agrees that its obligations pursuant to the first
sentence of this Section 6.3(b) shall not be affected by the commencement,
public proposal, public disclosure or communication to the Company of any
Takeover Proposal. Notwithstanding the foregoing, if Acquisition or any other
Subsidiary of Lucent shall acquire at least 90% of the outstanding Shares, the
parties shall take all necessary and appropriate action to cause the Merger to
become effective as soon as
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practicable after the expiration of the Offer without a Stockholders Meeting in
accordance with Section 253 of the DGCL.
(c) Lucent agrees to cause all Shares purchased pursuant to
the Offer and all other Shares owned by Lucent or any Subsidiary of Lucent to be
voted in favor of the Merger, this Agreement and the transactions contemplated
hereby.
6.4. Reasonable Best Efforts. (a) Upon the terms and subject
to the conditions set forth in this Agreement, each of the parties agrees to use
its reasonable best efforts to take, or cause to be taken, all actions, and to
do, or cause to be done, and to assist and cooperate with the other parties in
doing, all things necessary, proper or advisable to consummate and make
effective, in the most expeditious manner practicable, the Offer, the Merger and
the other transactions contemplated by this Agreement, including (i) the taking
of all reasonable acts necessary to cause the Offer Conditions to be satisfied,
(ii) the obtaining of all necessary actions or nonactions, waivers, consents and
approvals from Governmental Entities and the making of all necessary
registrations and filings and the taking of all steps as may be necessary to
obtain an approval or waiver from, or to avoid an action or proceeding by, any
Governmental Entity, (iii) the obtaining of all necessary consents, approvals or
waivers from third parties, (iv) the defending of any lawsuits or other legal
proceedings, whether judicial or administrative, challenging this Agreement or
the consummation of the transactions contemplated by this Agreement, including
seeking to have any stay or temporary restraining order entered by any court or
other Governmental Entity vacated or reversed, and (v) the execution and
delivery of any additional instruments necessary to consummate the transactions
contemplated by, and to fully carry out the purposes of, this Agreement.
(b) In connection with and without limiting the foregoing, the
Company and its Board of Directors shall (i) take all action necessary to ensure
that no state takeover statute or similar statute or regulation is or becomes
applicable to the Offer, the Merger, this Agreement or any of the other
transactions contemplated by this Agreement and (ii) if any state takeover
statute or similar statute or regulation becomes applicable to the Offer, the
Merger, this Agreement or any other transaction contemplated by this Agreement,
take all action necessary to ensure that the Offer, the Merger, this Agreement
and the other transactions contemplated by this Agreement may be consummated as
promptly as practicable on the terms contemplated by the Offer and this
Agreement and otherwise to minimize the effect of such statute or regulation on
the Offer, the Merger or this Agreement and the other transactions contemplated
by this Agreement.
6.5. Stock Options; Warrants. (a) The Board of Directors of
the Company (or, if appropriate, any committee administering the Company Stock
Plans) shall adopt such resolutions and take such other actions as may be
required to terminate the Company Stock Plans as of the Effective Time and each
then outstanding Company Stock Option granted under the Company Stock Plans,
whether vested or unvested, shall be cancelled and converted into a right of the
holder thereof to receive in respect of such Company Stock Option an amount in
cash, without interest (the "Company Stock Option Consideration"), equal to the
product of (i) the
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number of shares of Company Common Stock represented by such Company Stock
Option immediately prior to such cancellation and conversion multiplied by (ii)
the excess, if any, by which the Offer Price exceeds the exercise price per
share with respect to such Company Stock Option (such payment to be net of all
applicable federal, state, local or foreign taxes).
(b) Prior to the Effective Time, the Company shall (i) obtain
all necessary consents from, and provide (in a form acceptable to Lucent) any
required notices to, holders of Company Stock Options and (ii) amend the terms
of the Company Stock Plans, in each case, as is necessary to give effect to the
provisions of Section 6.5(a).
(c) Prior to the Effective Time, the Company shall take all
actions to receive from each holder of an outstanding warrant (each, a
"Warrant") to purchase shares of Company Common Stock an agreement that, as of
the Effective Time, such Warrant shall be converted into a right of such holder
to receive from the Paying Agent the consideration set forth in the next
sentence at the same time that each such holder is entitled to receive payment
for shares of Company Common Stock from the Surviving Corporation in connection
with the Merger. Each holder of a Warrant shall be entitled to receive from the
Paying Agent in respect of the shares of Company Common Stock to be issued upon
the exercise of such Warrant, an amount in cash, without interest (the "Warrant
Consideration"), equal to the product of (i) the number of shares of Company
Common Stock subject to such Warrant immediately prior to the Effective Time and
(ii) the excess, if any, by which the Offer Price exceeds the exercise price per
share that was applicable with respect to such Warrant.
6.6. Employee Benefit Plans; Existing Agreement. (a) As soon
as practicable after the Effective Time (the "Benefits Date"), Lucent shall
provide, or cause to be provided, employee benefit plans, programs and
arrangements to employees of the Company that are the same as those made
generally available to non-represented employees of Lucent who are hired by
Lucent after December 31, 1998. From the Effective Time to the Benefits Date
(which the parties acknowledge may occur on different dates with respect to
different plans, programs or arrangements of the Company) (the "Continuation
Period"), Lucent shall provide, or cause to be provided, the employee benefit
plans, programs and arrangements of the Company provided to employees of the
Company as of the date hereof.
(b) With respect to each benefit plan, program practice,
policy or arrangement maintained by Lucent (the "Lucent Plans") in which
employees of the Company subsequently participate, for purposes of determining
vesting and entitlement to benefits, including for severance benefits and
vacation entitlement (but not for accrual of pension benefits), service with the
Company (or predecessor employers to the extent the Company provides past
service credit) shall be treated as service with Lucent; provided, that such
service shall not be recognized to the extent that such recognition would result
in a duplication of benefits. Such service also shall apply for purposes of
satisfying any waiting periods, evidence of insurability requirements, or the
application of any pre-existing condition limitations. Each Lucent Plan shall
waive pre-existing condition limitations to the same extent waived under the
applicable Company Benefit Plan.
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Company Employees shall be given credit for amounts paid under a corresponding
benefit plan during the same period for purposes of applying deductibles,
copayments and out- of-pocket maximums as though such amounts had been paid in
accordance with the terms and conditions of the Lucent Plan.
(c) Prior to the Effective Time, the Company shall take all
necessary actions or agreements to terminate the retirement plan for employees
of the Company in accordance with its terms. The effective date of such
termination shall in no event be later than the Effective Time. Prior to such
termination, the Company shall file with respect thereto a determination letter
application on Form 5310 with the IRS. In connection with such termination, the
assets of such plan (including any excess assets), net of expenses, shall be
allocated among participants based on the accrued benefit obligation.
(d) Prior to the Effective Time, the Company shall terminate
its supplemental retirement agreements. In connection therewith, accrued
benefits shall be paid to each participant in such plan in accordance with the
procedures described in Section 10.2 of each such supplemental retirement
agreement.
(e) Prior to the Effective Time, the Company shall terminate
its retirement plan for outside directors in accordance with the terms of such
plan. In connection therewith, accrued benefits shall be paid to each
participant in such plan in accordance with the procedures described in Section
16 of such plan.
6.7. Indemnification. (a) From and after the consummation of
the Offer, Lucent shall, or shall cause the Surviving Corporation to, fulfill
and honor in all respects the obligations of the Company to indemnify each
Person who is or was a director or officer (an "Indemnified Party") of the
Company or any of its Subsidiaries pursuant to any indemnification provision of
the Company's certificate of incorporation or by-laws as each is in effect on
the date hereof.
(b) For a period of six years after the consummation of the
Offer, Lucent shall cause to be maintained in effect the current officers' and
directors' liability insurance maintained by the Company with respect to the
Indemnified Parties; provided that Lucent may elect either (i) to require the
Company to obtain prior to the Effective Time coverage of the type contemplated
by Section 10 of the Company's existing directors, officers and corporate
liability insurance policy or (ii) to substitute therefor policies of at least
the same coverage and amounts (containing terms and conditions which are no less
advantageous to the Indemnified Parties than such existing insurance) covering
acts or omissions occurring prior to the Effective Time. The current annual
premium paid by the Company for its existing coverage is set forth in Item
6.7(b) of the Company Disclosure Schedule.
(c) This Section 6.7 shall survive the closing of all the
transactions contemplated hereby, is intended to benefit the Indemnified Parties
and their respective heirs and
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personal representative (each of which shall be entitled to enforce this Section
6.7 against Lucent and the Surviving Corporation, as the case may be, as a
third-party beneficiary of this Agreement), and shall be binding on all
successors and assigns of Lucent and the Surviving Corporation.
6.8. Directors. Promptly upon the acceptance for payment of,
and payment for, Shares by Acquisition pursuant to the Offer, Acquisition shall
be entitled to designate such number of directors on the Board of Directors of
the Company as will give Acquisition, subject to compliance with Section 14(f)
of the Exchange Act, representation on the Company's Board of Directors equal to
the product of (i) the total number of directors on the Company's Board of
Directors and (ii) the percentage that the number of Shares purchased by
Acquisition in the Offer bears to the number of Shares outstanding, and the
Company shall, at such time, cause Acquisition's designees to be so elected by
its existing Board of Directors; provided, that in the event that Acquisition's
designees are elected to the Board of Directors of the Company, until the
Effective Time such Board of Directors shall have at least two directors who are
directors of the Company on the date of this Agreement and who are not officers
of the Company or any of its Subsidiaries (the "Independent Directors") and;
provided further that, in such event, if the number of Independent Directors
shall be reduced below two for any reason whatsoever, the remaining Independent
Director shall designate a person to fill such vacancy who shall be deemed to be
an Independent Director for purposes of this Agreement or, if no Independent
Directors then remain, the other directors of the Company on the date hereof
shall designate two persons to fill such vacancies who shall not be officers or
affiliates of the Company or any of its Subsidiaries, or officers or affiliates
of Lucent or any of its Subsidiaries, and such persons shall be deemed to be
Independent Directors for purposes of this Agreement. Subject to applicable law,
the Company shall take all action requested by Lucent necessary to effect any
such election, including mailing to its stockholders the Information Statement
containing the information required by Section 14(f) of the Exchange Act and
Rule 14f-1 promulgated thereunder, and the Company agrees to make such mailing
with the mailing of the Schedule 14D-9 (provided that Acquisition shall have
provided to the Company on a timely basis all information required to be
included in the Information Statement with respect to Acquisition's designees).
In connection with the foregoing, the Company will promptly, at the option of
Lucent, either increase the size of the Company's Board of Directors and/or
obtain the resignation of such number of its current directors as is necessary
to enable Acquisition's designees to be elected or appointed to, and to
constitute a majority of the Company's Board of Directors as provided above.
6.9. Fees and Expenses; Termination Fee. (a) Except as
provided in this Section 6.9, all fees and expenses incurred in connection with
the Offer, the Merger, this Agreement and the transactions contemplated by this
Agreement shall be paid by the party incurring such fees or expenses, whether or
not the Offer or the Merger is consummated, except that each of Lucent and the
Company shall bear and pay one-half of (i) the costs and expenses incurred in
connection with the filing, printing and mailing of the Company Proxy Statement
(including SEC filing fees) and (ii) the filing fees for the pre-merger
notification and report forms under the HSR Act.
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(b) In the event that (i) a bona fide Superior Proposal shall
have been made directly to the stockholders of the Company generally or shall
have otherwise become publicly known or any Person shall have publicly announced
an intention (whether or not conditional) to make a Superior Proposal and
thereafter this Agreement is terminated by any of Lucent, Acquisition or the
Company pursuant to Section 11(b)(i), or (ii) this Agreement is terminated (A)
by Lucent or Acquisition pursuant to Section 11(g), (B) by the Company pursuant
to Section 11(d) or (C) by Lucent pursuant to Section 11(c), then the Company
shall promptly, but in no event later than the date of such termination, pay
Lucent a fee equal to $2,000,000 (the "Termination Fee"), payable by wire
transfer of same day funds; provided, that no Termination Fee shall be payable
to Lucent pursuant to clause (i) of this Section 6.9(b) unless within twelve
(12) months of such termination the Company or any of its Subsidiaries enters
into any definitive agreement with respect to, or consummates, any Superior
Proposal. The Company acknowledges that the agreements contained in this Section
6.9(b) are an integral part of the transactions contemplated by this Agreement
and that, without these agreements, Lucent would not enter into this Agreement.
Accordingly, if the Company fails promptly to pay the amount due pursuant to
this Section 6.9(b), and, in order to obtain such payment, Lucent commences a
suit which results in a final, non-appealable judgment against the Company for
the fee set forth in this Section 6.9(b), the Company shall pay to Lucent its
costs and expenses (including attorneys' fees and expenses) in connection with
such suit, together with interest on the amount of the fee at the prime rate of
Citibank, N.A. in effect on the date such payment was required to be made.
6.10. Public Announcements. Lucent and the Company will
consult with each other before issuing, and provide each other the opportunity
to review, comment upon and concur with, any press release or other public
statements with respect to the transactions contemplated by this Agreement,
including the Merger, and shall not issue any such press release or make any
such public statement prior to such consultation, except as either party may
determine is required by applicable law (including Rule 14d-9 promulgated under
the Exchange Act), court process or by obligations pursuant to any listing
agreement with any national securities exchange or national trading system or as
contemplated or provided elsewhere herein. The parties agree that the initial
press release to be issued with respect to the transactions contemplated by this
Agreement shall be in the form heretofore agreed to by the parties.
6.11. Stockholder Litigation. The Company agrees that it shall
not settle any litigation commenced after the date hereof against the Company or
any of its directors by any stockholder of the Company relating to the Offer,
the Merger or this Agreement without the prior written consent of Lucent, which
consent shall not be unreasonably withheld. The Company shall give Lucent the
opportunity to participate in the defense or settlement of any stockholder
litigation against the Company and/or its directors relating to the transactions
contemplated by this Agreement. In addition, the Company shall not voluntarily
cooperate with any third party that may hereafter seek to restrain or prohibit
or otherwise oppose the Offer, the Merger or the transactions contemplated by
this Agreement and shall cooperate with Lucent and Acquisition to
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resist any such effort to restrain or prohibit or otherwise oppose the Offer,
the Merger or the transactions contemplated by this Agreement.
7. Conditions Precedent.
7.1. Conditions Precedent to Each Party's Obligation to Effect
the Merger. The respective obligations of each party hereto to effect the Merger
shall be subject to the fulfillment or satisfaction, prior to or on the Closing
Date of the following conditions:
(a) Stockholder Approval. If required by applicable law, the
Company Stockholder Approval shall have been obtained.
(b) No Litigation. No judgment, order, decree, statute, law,
ordinance, rule or regulation, entered, enacted, promulgated, enforced or issued
by any court or other Governmental Entity of competent jurisdiction or other
legal restraint or prohibition (collectively, "Restraints") shall be in effect,
and there shall not be pending any suit, action or proceeding by any
Governmental Entity (i) preventing the consummation of the Merger or (ii) which
otherwise is reasonably likely to have a Material Adverse Effect on the Company
or Lucent, as applicable, arising out of this Agreement or the transactions
contemplated hereby; provided, that each of the parties shall have used its
reasonable best efforts to prevent the entry of any such Restraints and to
appeal as promptly as possible any such Restraints that may be entered.
(c) Purchases of Shares. Acquisition shall have previously
accepted for payment and paid for Shares pursuant to the Offer.
7.2. Conditions Precedent to Obligations of Acquisition and
Lucent. All obligations of Acquisition and Lucent under this Agreement are
subject to the fulfillment or satisfaction, prior to or on the Closing Date, of
each of the following conditions precedent:
(a) Performance of Obligations. The Company shall have
performed and complied in all material respects with all agreements and
conditions contained in this Agreement that are required to be performed or
complied with by it prior to or at the Closing.
(b) Representations and Warranties. Each of the Company's
representations and warranties contained in Section 3 of this Agreement to the
extent it is qualified by Material Adverse Effect shall be true and correct and
each of the Company's representations and warranties to the extent it is not so
qualified by Material Adverse Effect, shall be true and correct in all material
respects, in each case, on and as of the Closing with the same effect as though
such representations and warranties were made on and as of the Closing, except
for changes permitted by this Agreement and except to the extent that such
representations and warranties expressly relate to an earlier date, in which
case such representations and warranties shall be as of such earlier date.
Lucent and Acquisition shall have received a certificate dated the Closing
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Date and signed by the Chairman, President or a Vice-President of the Company,
certifying that, the conditions specified in clauses (a) and (b) of this Section
7.2 have been satisfied.
(c) No Material Adverse Change. No event or events shall have
occurred that could reasonably be expected to have a Material Adverse Effect on
the Company, and Lucent shall have received a certificate signed on behalf of
the Company by its Chief Executive Officer and Chief Financial Officer to such
effect.
(d) Consents. The Company shall have received all necessary
consents or waivers, in form and substance satisfactory to Lucent and
Acquisition, from the other parties to each contract, lease or agreement to
which the Company is a party, except where the failure to receive such consent
would not reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect on the Company.
7.3. Conditions Precedent to the Company's Obligations. All
obligations of the Company under this Agreement are subject to the fulfillment
or satisfaction, prior to or on the Closing Date, of each of the following
conditions precedent:
(a) Performance of Obligations. Acquisition and Lucent shall
have performed and complied in all material respects with all agreements and
conditions contained in this Agreement that are required to be performed or
complied with by them prior to or at the Closing.
(b) Representations and Warranties. Each of the
representations and warranties of Acquisition and Lucent contained in Section 4
of this Agreement to the extent it is qualified by Material Adverse Effect shall
be true and correct and each of the representations and warranties of
Acquisition and Lucent to the extent it is not so qualified by Material Adverse
Effect shall be true and correct in all material respects, in each case, on and
as of the Closing with the same effect as though such representations and
warranties were made on and as of the Closing except for changes permitted by
this Agreement and except to the extent that such representations and warranties
expressly relate to an earlier date, in which case such representations and
warranties shall be as of such earlier date. The Company shall have received
certificates dated the Closing Date and signed by the President or a
Vice-President of Acquisition and an authorized signatory of Lucent, certifying
that the conditions specified in clauses (a) and (b) of this Section 7.3 have
been satisfied.
8. Non-Survival of Representation and Warranties.
8.1. Representations and Warranties. None of the
representations and warranties in this Agreement or in any instrument delivered
pursuant to this Agreement shall survive the Effective Time or, in the case of
the Company, shall survive the acceptance of payment for, Shares by Acquisition
pursuant to the Offer. This Section shall not limit any covenant or agreement by
the parties which contemplates performance after the Effective Time.
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9. Contents of Agreement; Parties in Interest; etc.
This Agreement and the agreements referred to or contemplated
herein and the letter agreement dated June 18, 1999, concerning confidentiality
(the "Confidentiality Agreement") set forth the entire understanding of the
parties hereto with respect to the transactions contemplated hereby, and, except
as set forth in this Agreement, such other agreements and the Exhibits hereto
and the Confidentiality Agreement, there are no representations or warranties,
express or implied, made by any party to this Agreement with respect to the
subject matter of this Agreement and the Confidentiality Agreement. Except for
the matters set forth in the Confidentiality Agreement, any and all previous
agreements and understandings between or among the parties regarding the subject
matter hereof, whether written or oral, are superseded by this Agreement and the
agreements referred to or contemplated herein.
10. Assignment and Binding Effect.
This Agreement may not be assigned by either party hereto
without the prior written consent of the other party; provided, that Acquisition
may assign its rights and obligations under this Agreement to any directly or
indirectly wholly-owned Subsidiary of Lucent, upon written notice to the Company
if the assignee shall assume the obligations of Acquisition hereunder and Lucent
shall remain liable for its obligations hereunder. All the terms and provisions
of this Agreement shall be binding upon and inure to the benefit of and be
enforceable by the respective successors and assigns of the parties hereto.
11. Termination.
This Agreement may be terminated, and the Merger may be
abandoned at any time prior to the Effective Time whether before or after the
approval and adoption of this Agreement and the transactions contemplated hereby
by the stockholders of the Company or the stockholder of Acquisition (provided
that if the Shares are purchased pursuant to the Offer, neither Lucent nor
Acquisition may in any event terminate this Agreement):
(a) by the agreement of each of the Board of Directors of
Lucent, Acquisition and the Company;
(b) by Lucent, Acquisition or the Company if (i) Acquisition
shall not have accepted for payment any Shares pursuant to the Offer prior to
December 31, 1999; provided that the right to terminate this Agreement under
this Section 11(b)(i) 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 Acquisition to accept for payment any Shares on or before
such date; or (ii) any court of competent jurisdiction in the United States or
other United States governmental authority shall have issued an order, decree,
ruling or taken any other action restraining, enjoining or otherwise prohibiting
the acceptance for payment of, or payment for, Shares pursuant to the Offer or
the Merger and such order, decree, ruling or other action shall have become
final and nonappealable;
(c) by Lucent, if the Company or any of its directors or
officers shall participate in discussions or negotiations in breach (other than
an immaterial breach) of Section 6.2;
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(d) by the Company in accordance with Section 6.2(b); provided
that, in order for the termination of this Agreement pursuant to this paragraph
(d) to be deemed effective, the Company shall have complied with all provisions
of Section 6.2, including the notice provisions therein, and with applicable
requirements, including the payment of the Termination Fee;
(e) by the Company, in the event Lucent or Acquisition
materially breaches its obligations under this Agreement, unless such breach is
cured within 15 days after notice to Lucent by the Company;
(f) by Lucent or Acquisition, in the event the Company
materially breaches its obligations under this Agreement unless such breach is
cured within 15 days after notice to Company by Lucent or Acquisition; or
(g) by Lucent or Acquisition prior to the purchase of Shares
pursuant to the Offer in the event of a breach or failure to perform by the
Company of any representation, warranty, covenant or other agreement contained
in this Agreement which (i) would give rise to the failure of a condition set
forth in paragraph (d) or (e) of Exhibit A and (ii) cannot be cured, or has not
been cured within 15 days after the Company receives written notice from Lucent
of such breach or failure to perform.
12. Definitions.
As used in this Agreement the terms set forth below shall have
the following meanings:
(a) "Affiliate" of a Person means any other Person who
directly or indirectly through one or more intermediaries controls, is
controlled by or is under common control with, such Person. As used in this
definition, "control" means the possession of the power, directly or indirectly,
to direct or cause the direction of the management and policies of a Person
whether through the ownership of voting securities, by contract or otherwise.
(b) "Benefit Plan" shall mean any bonus, pension, profit
sharing, deferred compensation, incentive compensation, stock ownership, stock
purchase, stock option, phantom stock, retirement, vacation, severance,
disability, death benefit, hospitalization, medical or other material plan,
arrangement or understanding (whether or not legally binding) providing material
benefits to any current or former employee, officer or director of the Company.
(c) "best knowledge" of any Person which is not an individual
means, with respect to any specific matter, the knowledge, after due inquiry, of
such Person's executive officers and any other officer or persons having primary
responsibility for such matter.
(d) "Code" shall mean the Internal Revenue Code of 1986, as
amended.
(e) "Environmental Laws" shall mean all applicable federal,
state, local or foreign laws, rules and regulations, orders, decrees, judgments,
permits, filings and licenses
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relating (i) to protection and clean-up of the environment and activities or
conditions related thereto, including those relating to the generation,
handling, disposal, transportation or release of Hazardous Substances and (ii)
the health or safety of employees in the workplace environment, all as amended
from time to time, and shall also include any common law theory based on
nuisance, trespass, negligence or other tortious conduct.
(f) "GAAP" shall mean generally accepted accounting
principles.
(g) "Hazardous Substances" shall mean any and all hazardous
and toxic substances, wastes or materials, any pollutants, contaminants, or
dangerous materials (including, but not limited to, polychlorinated biphenyls,
PCBs, friable asbestos, volatile and semi-volatile organic compounds, oil,
petroleum products and fractions, and any materials which include hazardous
constituents or become hazardous, toxic, or dangerous when their composition or
state is changed), or any other similar substances or materials which are
included under or regulated by any Environmental Laws.
(h) "Liens" shall mean any mortgage, pledge, lien, security
interest, conditional or installment sale agreement, encumbrance, charge or
other claims of third parties of any kind.
(i) "Material Adverse Effect" on a Person shall mean (unless
otherwise specified) any condition or event that: (i) has a material adverse
effect on the assets, business, financial condition, operations or prospects of
such Person and its Subsidiaries, taken as a whole, other than any condition or
event (A) relating to the economy in general, (B) relating to the industries in
which such party operates in general, (C) arising out of or resulting from
actions contemplated by the parties in connection with, or which is attributable
to, the announcement of this Agreement and the transactions contemplated hereby
(including loss of personnel, customers or suppliers or the delay or
cancellation of orders for products) or (D) in the case of the Company,
litigation brought or threatened against the Company or any member of its Board
of Directors in respect of this Agreement; (ii) materially impairs the ability
of such Person to perform its obligations under this Agreement; or (iii)
prevents or materially delays the consummation of transactions contemplated
under this Agreement.
(j) "Permitted Liens" shall mean (i) Liens for taxes,
assessments, or similar charges, incurred in the ordinary course of business
that are not yet due and payable or are being contested in good faith; (ii)
pledges or deposits made in the ordinary course of business; (iii) Liens of
mechanics, materialmen, warehousemen or other like Liens securing obligations
incurred in the ordinary course of business that are not yet due and payable or
are being contested in good faith; and (iv) similar Liens and encumbrances which
are incurred in the ordinary course of business and which do not in the
aggregate materially detract from the value of such assets or properties or
materially impair the use thereof in the operation of such business.
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(k) "Person" shall mean any individual, corporation,
partnership, limited partnership, limited liability company, trust, association
or entity or government agency or authority.
(l) "reasonable best efforts" shall mean prompt, substantial
and persistent efforts as a prudent Person desirous of achieving a result would
use in similar circumstances; provided that the Company, Lucent or Acquisition,
as applicable, shall be required to expend only such resources as are
commercially reasonable in the applicable circumstances.
(m) "Subsidiary" of a Person shall mean any corporation,
partnership, joint venture or other entity in which such Person (i) owns,
directly or indirectly, 50% or more of the outstanding voting securities or
equity interests or (ii) is a general partner.
(n) "Tax" (and, with correlative meaning, "Taxes" and
"Taxable") shall include all (i) federal, state, local or foreign net income,
gross income, gross receipts, windfall profit, severance, property, production,
sales, use, license, excise, franchise, employment, payroll, withholding,
alternative or add-on minimum, ad valorem, value-added, transfer, stamp, or
environmental tax, or any other tax, custom, duty, governmental fee or other
like assessment or charge of any kind whatsoever, together with any interest or
penalty, addition to tax or additional amount imposed by any governmental
authority, (ii) liability for the payment of any amounts described in (i) as a
result of being a member of an affiliated, consolidated, combined or unitary
group and (iii) liability for the payment of any amounts as a result of being
party to any tax sharing agreement or as a result of any express or implied
obligation to indemnify any other Person with respect to the payment of any
amounts of the type described in clause (i) or (ii).
(o) "Tax Return" shall mean any return, report or similar
statement required to be filed with respect to any Tax (including any attached
schedules), including, without limitation, any information return, claim for
refund, amended return or declaration of estimated Tax.
13. Notices.
Any notice, request, demand, waiver, consent, approval, or
other communication which is required or permitted to be given to any party
hereunder shall be in writing and shall be deemed given only if delivered to the
party personally or sent to the party by facsimile transmission (promptly
followed by a hard-copy delivered in accordance with this Section 13) or by
registered or certified mail (return receipt requested), with postage and
registration or certification fees thereon prepaid, addressed to the party at
its address set forth below:
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If to Acquisition or Lucent:
Lucent Technologies Inc.
2000 Northeast Expressway
Norcross, Georgia 30071
Att: President, NPG
Telephone No: separately supplied
Facsimile No: separately supplied
with copies to:
Lucent Technologies Inc.
600 Mountain Avenue
Room 6A 311
Murray Hill, NJ 07974
Att: Pamela F. Craven
Vice President-Law
Telephone No: separately supplied
Facsimile No: separately supplied
If to the Company:
SpecTran Corporation
50 Hall Road
Sturbridge, MA 01566
Att: President
Telephone No: separately supplied
Facsimile No: separately supplied
with a copy to:
Nordlicht & Hand
645 Fifth Avenue
New York, New York 10022
Att: Ira S. Nordlicht, Esq.
Telephone No: separately supplied
Facsimile No: separately supplied
or to such other address or Person as any party may have specified in a notice
duly given to the other party as provided herein. Such notice, request, demand,
waiver, consent, approval or other
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<PAGE> 51
communication will be deemed to have been given as of the date so delivered,
telegraphed or mailed.
14. Amendment.
This Agreement may be amended, modified or supplemented at any
time before or after obtaining the Company Stockholder Approval, provided that
(i) after any such approval, there shall not be made any amendment that by Law
requires further approval by the stockholders of the Company or the approval of
the stockholders of Lucent without the further approval of such stockholders and
(ii) after the purchase of the Shares pursuant to the Offer, there shall not be
made any amendment which decreases the Merger Consideration. Any amendment,
modification or revision of this Agreement and any waiver of compliance or
consent with respect hereto shall be effective only by a written instrument
executed by each of the parties hereto. Following the election or appointment of
Acquisition's designees pursuant to Section 6.8 and prior to the Effective Time,
the affirmative vote of a majority of the Independent Directors then in office
shall be required by the Company to (i) amend or terminate this Agreement by the
Company, (ii) exercise or waive any of the Company's rights or remedies under
this Agreement, (iii) extend the time for performance of Lucent and
Acquisition's respective obligations under this Agreement or (iv) take any
action to amend or otherwise modify the Company's certificate of incorporation
or by-laws (or similar governing instruments of the Company's Subsidiaries) in
violation of Section 6.7.
15. Extensions; Waiver.
At any time prior to the Effective Time, a party may (a)
extend the time for the performance of any of the obligations or other acts of
the other parties, (b) waive any inaccuracies in the representations and
warranties of the other parties contained in this Agreement or in any document
delivered pursuant to this Agreement or (c) subject to the proviso of Section
14, waive compliance by the other party with any of the agreements or conditions
contained in this Agreement. Any agreement on the part of a party to any such
extension or waiver shall be valid only if set forth in an instrument in writing
signed on behalf of such party. The failure of any party to this Agreement to
assert any of its rights under this Agreement or otherwise shall not constitute
shall not constitute a waiver of such rights.
16. Governing Law.
This Agreement shall be governed by and interpreted and
enforced in accordance with the laws of the State of Delaware as applied to
contracts made and fully performed in such state.
17. No Benefit to Others.
The representations, warranties, covenants and agreements
contained in this Agreement are for the sole benefit of the parties hereto, and
their respective successors and assigns, and they shall not be construed as
conferring, and are not intended to confer, any rights on any other Person.
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18. Severability.
If any term or other provision of this Agreement is determined
to be invalid, illegal or incapable of being enforced by any rule of law or
public policy, all other terms and provisions of the Agreement shall remain in
full force and effect. Upon such determination, the parties hereto shall
negotiate in good faith to modify this Agreement so as to give effect to the
original intent of the parties to the fullest extent permitted by applicable
law.
19. Section Headings.
All section headings are for convenience only and shall in no
way modify or restrict any of the terms or provisions hereof.
20. Schedules and Exhibits.
All Schedules and Exhibits referred to herein are intended to
be and hereby are specifically made a part of this Agreement.
21. Counterparts.
This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, and the Company, Acquisition and
Lucent may become a party hereto by executing a counterpart hereof. This
Agreement and any counterpart so executed shall be deemed to be one and the same
instrument.
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IN WITNESS WHEREOF, the parties hereto, intending to be
legally bound hereby, have duly executed this Agreement as of the date first
above written.
LUCENT TECHNOLOGIES INC.
By: /s/ William R. Spivey
________________________________
Name: William R. Spivey
Title: Group President,
Networks Products Group
SEATTLE ACQUISITION INC.
By: /s/ William R. Spivey
________________________________
Name: William R. Spivey
Title: President
SPECTRAN CORPORATION
By: /s/ Charles B. Harrison
________________________________
Name: Charles B. Harrison
Title: President, Chief Executive
Officer and Chairman of
the Board of Directors
<PAGE> 54
EXHIBIT A
Conditions of the Offer:
Notwithstanding any other term of the Offer or this Agreement,
Acquisition shall not be required to accept for payment or, subject to any
applicable rules and regulations of the SEC, including Rule 14e-1(c) under the
Exchange Act (relating to Acquisition's obligation to pay for or return tendered
Shares after the termination or withdrawal of the Offer), to pay for any Shares
tendered pursuant to the Offer unless (i) there shall have been validly tendered
and not withdrawn prior to the expiration of the Offer such number of Shares
that would constitute at least a majority of the outstanding Shares (determined
on a fully diluted basis for all outstanding stock options and any other rights
to acquire Shares on the date of purchase) (the "Minimum Condition") and (ii)
any waiting period under the HSR Act applicable to the purchase of Shares
pursuant to the Offer shall have expired or been terminated. Furthermore,
Acquisition shall not be required to accept for payment or, subject as
aforesaid, to pay for any Shares not theretofore accepted for payment or paid
for, and may, in accordance with Section 11, terminate this Agreement or amend
the Offer with the consent of the Company, if, upon the scheduled expiration
date of the Offer (as extended, if required, pursuant to the second to the last
sentence of Section 1.1(a)), any of the following conditions exists and is
continuing and does not result principally from the breach by Lucent or
Acquisition of any of their obligations under this Agreement:
(a) there shall be instituted or pending by any Governmental
Entity any suit, action or proceeding (i) challenging the acquisition by Lucent
or Acquisition of any Shares under the Offer, seeking to restrain or prohibit
the making or consummation of the Offer or the Merger or the performance of any
of the other transactions contemplated by this Agreement or seeking to obtain
from the Company, Lucent or Acquisition any damages that are material in
relation to the Company and its Subsidiaries taken as a whole, (ii) seeking to
prohibit or materially limit the ownership or operation by the Company, Lucent
or any of Lucent's Subsidiaries of all or a portion of the business or assets of
the Company or Lucent and its Subsidiaries, taken as a whole, or to compel the
Company or Lucent and its Subsidiaries to dispose of or hold separate all or a
portion of the business or assets of the Company or Lucent and their
Subsidiaries, taken as a whole, in each case as a direct result of the Offer or
any of the other transactions contemplated by this Agreement or (iii) seeking to
impose material limitations on the ability of Lucent or Acquisition to acquire
or hold, or exercise full rights of ownership of, any Shares to be accepted for
payment pursuant to the Offer including, without limitation, the right to vote
such Shares on all matters properly presented to the stockholders of the
Company; (iv) seeking to prohibit Lucent or any of its Subsidiaries from
effectively controlling in any material respect any material portion of the
business or operations of the Company; (v) that could reasonably be expected to
require the divestiture by Lucent or Acquisition of Shares, in the case of any
of the foregoing in clauses (ii), (iii) or (iv), which could reasonably be
expected, individually or in the aggregate, to have a material adverse effect on
the businesses of the Company and its Subsidiaries; or (vi) that could
reasonably be expected to result in a Material Adverse Effect on the Company or
Lucent;
<PAGE> 55
(b) there shall be any statute, rule, regulation, judgment,
order or injunction enacted, entered, enforced, promulgated or deemed applicable
to the Offer or the Merger, by any Governmental Entity or court, other than the
application to the Offer or the Merger of applicable waiting periods under the
HSR Act, that would result in any of the consequences referred to in clauses (i)
through (vi) of paragraph (a) above;
(c) there shall have occurred any events or changes which have
had or which could reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect on the Company;
(d) any of the representations and warranties of the Company
set forth in this Agreement that are qualified as to materiality shall not be
true and correct or any such representations and warranties that are not so
qualified shall not be true and correct in any material respect, in each case at
the date of this Agreement and at the scheduled or extended expiration of the
Offer;
(e) the Company shall have failed to perform in any material
respect any material obligation or to comply in any material respect with any
material agreement or material covenant of the Company to be performed or
complied with by it under this Agreement, which failure to perform or comply
cannot be cured, or has not been cured within 15 days after the Company receives
written notice from Lucent of such breach or failure to perform;
(f) this Agreement shall have been terminated in accordance
with its terms;
(g) any consent (other than the filing of the Certificate of
Merger or Company Stockholder Approval if required by the DGCL) required to be
filed, occurred or been obtained by the Company or any of its Subsidiaries in
connection with the execution and delivery of this Agreement, the Offer and the
consummation of the transactions contemplated by this Agreement shall not have
been filed or obtained or shall not have occurred, except where the failure to
obtain such consent could not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect on the Company;
(h) the Company's Board of Directors (i) shall have withdrawn,
or modified or changed in a manner adverse to Lucent or Acquisition (including
by amendment of the Schedule 14D-9) its recommendation of the Offer, the Merger
Agreement or the Merger, (ii) shall have recommended a Superior Proposal, (iii)
shall have adopted any resolution to effect any of the foregoing or (iv) upon
request of Lucent or Acquisition, shall fail to reaffirm its approval of
recommendation of the Offer, the Merger Agreement or the Merger; or
(i) any Person or "group" (within the meaning of Section
13(d)(3) of the Exchange Act), other than Lucent, Acquisition or their
Affiliates or any group of which any of them is a member, shall have acquired or
announced its intention to acquire beneficial ownership
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<PAGE> 56
(as determined pursuant to Rule 13d-3 promulgated under the Exchange Act) of 20%
or more of the Shares.
and, in the good faith judgment of Lucent or Acquisition, in its sole
discretion, make it inadvisable to proceed with such acceptance of Shares for
payment or the payment therefor;
The foregoing conditions are for the sole benefit of Lucent
and Acquisition and (except for the Minimum Condition), subject to the terms of
this Agreement, may be waived by Lucent and Acquisition in whole or in part at
any time and from time to time in their sole discretion. The failure by Lucent
or Acquisition at any time to exercise any of the foregoing rights shall not be
deemed a waiver of any such right, the waiver of any such right with respect to
particular facts and circumstances shall not be deemed a waiver with respect to
any other facts and circumstances and each such right shall be deemed an ongoing
right that may be asserted at any time and from time to time. Terms used but not
defined herein shall have the meanings assigned to such terms in the Agreement
to which this Exhibit A is a part.
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GLOSSARY OF DEFINED TERMS
Defined Term Location of Definition
- ------------ ----------------------
Acquisition........................................... Preamble
Acquisition Agreement................................. Section 6.2(b)
Acquisition Common Stock ............................. Recitals
Affiliate............................................. Section 12(a)
Agreement............................................. Preamble
Applicable Period..................................... Section 6.2(a)
Authorizations........................................ Section 3.14(b)
Benefit Plan.......................................... Section 12(b)
Benefits Date ........................................ Section 6.6
best knowledge........................................ Section 12(c)
Certificate of Merger................................. Section 2.1(b)
Certificates.......................................... Section 2.8(a)
Closing............................................... Section 2.1(b)
Closing Date.......................................... Section 2.1(b)
Code.................................................. Section 12(d)
Commonly Controlled Entity............................ Section 3.17(a)
Company............................................... Preamble
Company Benefit Plans................................. Section 3.17(a)
Company Common Stock.................................. Recitals
Company Disclosure Schedule........................... Section 3
Company Filed SEC Documents........................... Section 3.6
Company Non-Voting Common Stock....................... Recitals
Company Proxy Statement............................... Section 3.5(b)
Company SEC Documents................................. Section 3.6
Company Stockholder Approval.......................... Section 3.23
Company Stockholders Meeting.......................... Section 6.3(b)
Company Stock Options................................. Section 3.3(b)
Company Stock Option Consideration.................... Section 6.5(a)
Company Stock Plans................................... Section 3.3(a)
Confidentiality Agreement............................. Section 9
Continuation Period................................... Section 6.6(a)
DGCL.................................................. Recitals
Dissenting Shares..................................... Section 2.7(a)
Effective Time........................................ Section 2.1(b)
Environmental Laws.................................... Section 12(e)
ERISA................................................. Section 3.17(a)
Exchange Act.......................................... Section 1.1(b)
GAAP.................................................. Section 12(f)
Governmental Entity................................... Section 3.5(b)
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<PAGE> 58
Hazardous Substances.................................. Section 12(g)
HSR Act............................................... Section 3.5(b)
Immaterial Authorizations............................. Section 3.14(b)
Indemnified Party..................................... Section 6.7(a)
Information Statement................................. Section 3.7
Intellectual Property Rights.......................... Section 3.15(a)
IRS................................................... Section 3.17(a)
Laws.................................................. Section 3.14(a)
Liens................................................. Section 12(h)
Lucent................................................ Preamble
Lucent Disclosure Schedule............................ Section 4
Lucent Plans.......................................... Section 6.6(b)
Material Adverse Effect............................... Section 12(i)
Merger................................................ Recitals
Merger Consideration.................................. Section 2.5(c)
Minimum Condition..................................... Exhibit A
Nasdaq................................................ Section 3.5(b)
Offer................................................. Recitals
Offer Conditions...................................... Section 1.1(a)
Offer Documents....................................... Section 1.1(b)
Offer Price........................................... Recitals
Parachute Gross-Up Payment............................ Section 3.18(e)
Paying Agent.......................................... Section 2.8(a)
Pension Plans......................................... Section 3.17(a)
Permitted Liens....................................... Section 12(j)
Person................................................ Section 12(k)
reasonable best efforts............................... Section 12(l)
Restraints............................................ Section 7.1(b)
SARs.................................................. Section 3.3(b)
Schedule 14D-1........................................ Section 1.1(b)
Schedule 14D-9........................................ Section 1.2(b)
SEC................................................... Section 1.1(a)
Section 6.2 Notice.................................... Section 6.2(a)
Shares................................................ Recitals
Securities Act........................................ Section 3.6
Subsidiary............................................ Section 12(m)
Superior Proposal..................................... Section 6.2(b)
Surviving Corporation................................. Section 2.1(a)
Takeover Proposal..................................... Section 6.2(a)
Tax................................................... Section 12(n)
Tax Return............................................ Section 12(o)
Termination Fee....................................... Section 6.9(b)
Warrant............................................... Section 6.5(c)
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<PAGE> 59
Warrant Consideration................................. Section 6.5(c)
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