<PAGE>
------------------------------
OMB APPROVAL
------------------------------
OMB Number: 3235-0145
Expires: October 31, 1997
Estimated average burden
hours per response ..... 14.90
------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 13 )*
---------
AST RESEARCH, INC.
- --------------------------------------------------------------------------------
(Name of Issuer)
COMMON STOCK, $.01 par value
- --------------------------------------------------------------------------------
(Title of Class of Securities)
001907104
----------------------------------------------
(CUSIP Number)
Thomas D. Magill, Esq.
Gibson, Dunn & Crutcher LLP
4 Park Plaza
Irvine, CA 92614
(714) 451-3800
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
April 14, 1997
-------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [_]
Check the following box if a fee is being paid with the statement [_]. (A fee
is not required only if the reporting person: (1) has a previous statement on
file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
NOTE: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
SEC 1746 (12-91)
<PAGE>
This Amendment No. 13 amends and supplements the Schedule 13D dated
March 6, 1995, as amended (the "Schedule 13D") of Samsung Electronics Co., Ltd.,
a Korean corporation and its subsidiary Samsung Electronics America, Inc., a
New York corporation (collectively, "Samsung"), with respect to the Common
Stock, $.01 par value, of AST Research, Inc., a Delaware corporation (the
"Company"). Unless otherwise defined herein, all capitalized terms shall have
the meanings ascribed to them in the Schedule 13D.
ITEM 4 PURPOSE OF TRANSACTION.
Item 4 is hereby amended by adding the following to the end thereof:
On April 14, 1997, Samsung, AST Acquisition Inc., a Delaware corporation
and newly formed, wholly owned subsidiary of Samsung ("Sub"), and the
Company entered into an Agreement and Plan of Merger (the "Merger Agreement"), a
copy of which is attached hereto as Exhibit 24 and is incorporated herein by
reference. The Merger Agreement provides, subject to certain conditions as
described in the Merger Agreement, for the commencement of a cash tender offer
(which tender offer will be in compliance with Section 14(d)(1) of the
Securities Exchange Act of 1934, as amended, and in compliance with the rules
and regulations promulgated thereunder) (the "Offer") to purchase all of the
issued and outstanding shares of the Company's Common Stock (the "Shares"), at a
price of $5.40 per Share, net to the seller in cash, as promptly as practicable,
but in no event later than five business days after the initial public
announcement of Samsung's intention to commence the Offer. The obligation of
Samsung to accept for payment and pay for the Shares tendered pursuant to the
Offer is subject to certain other conditions that are described in the Merger
Agreement.
The Merger Agreement provides that, following the purchase of Shares by
Samsung in the Offer, upon the terms and subject to the conditions thereof,
and in accordance with the General Corporation Law of the State of Delaware (the
"DGCL"), Sub shall be merged with and into the Company (the "Merger"). As
a result of the Merger, the separate corporate existence of Sub shall
cease and the Company shall continue as the surviving corporation of the Merger
and shall become a wholly owned subsidiary of Samsung. Upon consummation of the
Merger, each issued and then outstanding Share (other than any Shares held in
the treasury of the Company, or owned by Samsung or any direct or indirect
wholly owned subsidiary of Samsung or of the Company and any Shares held by
stockholders who shall not have voted in favor of the Merger or consented
thereto in writing and who shall have complied with all of the relevant
provisions of Section 262 of the DGCL) shall be converted automatically into the
right to receive the amount paid per Share in the Offer, in cash, without
interest upon surrender of the certificate representing the Share.
On April 15, 1997, Samsung and the Company issued a joint press release
announcing the execution of the Merger Agreement. A copy of the press release
is filed herewith as Exhibit 25 and is incorporated herein by reference.
<PAGE>
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
Item 6 is hereby amended by adding the following to the end thereof:
On April 14, 1997, Samsung, Sub and the Company entered into the
Merger Agreement, a copy of which is attached hereto as Exhibit 24 and is
incorporated herein by reference. The Merger Agreement provides for the
commencement of the Offer, at a price of $5.40 per Share, net to the seller in
cash, as promptly as practicable, but in no event later than five business days
after the initial public announcement of Samsung's intention to commence the
Offer. The obligation of Samsung to accept for payment and pay for the Shares
tendered pursuant to the Offer is subject to certain conditions that are
described in the Merger Agreement.
The Merger Agreement provides that, following the purchase of Shares by
Samsung in the Offer, upon the terms and subject to the conditions thereof,
and in accordance with the DGCL, Samsung shall consummate the Merger. As a
result of the Merger, the separate corporate existence of Sub shall cease
and the Company shall continue as the surviving corporation of the Merger and
will become a wholly owned subsidiary of Samsung.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
EXHIBIT NO.
-----------
24 Merger and Plan of Agreement by and among Samsung, the Company
and Sub, dated as of April 14, 1997
25 Press Release, dated April 15, 1997.
2
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Dated: April 15, 1997
SAMSUNG ELECTRONICS CO., LTD.
/s/ JAE CHANG LEE
---------------------------------------
Name: Jae Chang Lee
Title: Director/General Legal Counsel
SAMSUNG ELECTRONICS AMERICA, INC.
/s/ JAE CHANG LEE
---------------------------------------
Name: Jae Chang Lee
Title: Attorney-in-Fact
3
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
24 Merger and Plan of Agreement by and among Samsung, the Company and
Sub, dated as of April 14, 1997
25 Press Release, dated April 15, 1997
4
<PAGE>
EXHIBIT 24
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of April 14, 1997, by and among
Samsung Electronics Co. Ltd., a Korean corporation ("Parent"), AST Acquisition,
Inc., a Delaware corporation and a wholly owned subsidiary of Parent ("Sub"),
and AST Research, Inc., a Delaware corporation (the "Company").
ARTICLE I
THE OFFER
SECTION 1.1 The Offer
(a) Provided that none of the events set forth in Annex A hereto shall have
occurred, as promptly as practicable, but in no event later than five business
days after the public announcement of the execution hereof by the parties,
Parent shall commence (within the meaning of Rule 14d-2 under the Securities and
Exchange Act of 1934, as amended (the "Exchange Act")) an offer to purchase (the
"Offer") for cash any and all of the Company's issued and outstanding shares of
common stock, par value $.01 per share (the "Shares"), at a price of $5.40 per
share, net to the seller in cash (such price, or such higher price per Share as
may be paid in the Offer, being referred to herein as the "Offer Price"). The
obligation of Parent to accept for payment and to pay for any Shares tendered
shall be subject to the conditions set forth in Annex A hereto.
(b) Parent shall not decrease the Offer Price, change the form of
consideration payable in the Offer, decrease the number of Shares sought
pursuant to the Offer, add additional conditions to the Offer, or make any other
changes in the terms or conditions of the Offer which are otherwise materially
adverse to holders of Shares without the prior written consent of the Company
(acting through the Special Committee, as defined in Section 1.2(a) below).
Subject to the terms and conditions thereof, the Offer shall expire at midnight,
New York City time, on the date that is twenty (20) business days from the date
the Offer is commenced; provided, however, that without the Special Committee's
consent, Parent may (i) from time to time extend the Offer, if at the scheduled
expiration date of the Offer any of the conditions to the Offer shall not have
been satisfied or waived, (ii) extend the offer for any period required by any
rule, regulation, interpretation or position of the Securities and Exchange
Commission ("SEC") or the staff thereof applicable to the Offer and (iii) extend
the Offer for any reason on one or more occasions for an aggregate period of not
more than ten (10) business days beyond the latest expiration date that would
otherwise be permitted under clause (i) or (ii) of this sentence. In addition,
if at any scheduled expiration date of the Offer any of the conditions of the
Offer have not been satisfied or waived by Parent, but are capable of being
satisfied in the reasonable, good faith judgment of Parent, then, on the written
request of the Company (acting through the Special Committee), Parent shall from
time to time extend the Offer for up to twenty (20) business days from the then-
scheduled expiration date of the Offer.
(c) As soon as practicable on the date the Offer is commenced, Parent shall
file with the SEC a Tender Offer Statement on Schedule 14D-1 (together with all
amendments and
<PAGE>
supplements thereto and including all exhibits thereto, the "Schedule 14D-1")
with respect to the Offer, and a Transaction Statement on Schedule 13E-3
(together with all amendments and supplements thereto and including all exhibits
thereto, the "Schedule 13E-3"). The Schedule 14D-1 shall contain as an exhibit
or incorporate by reference the Offer to Purchase (or portions thereof) and
forms of the related letter of transmittal and summary advertisement. Parent and
Sub agree that the Schedule 14D-1, the Offer to Purchase and all amendments or
supplements thereto (which together constitute the "Offer Documents"), and the
Schedule 13E-3, shall comply in all material respects with the Exchange Act and
the rules and regulations thereunder and other applicable laws. The Company and
its counsel, and the Special Committee and its counsel, shall be given an
opportunity to review the Offer Documents prior to the filing thereof with the
SEC. Parent and Sub agree to provide the Company and its counsel in writing with
any comments Parent, Sub or their counsel may receive from the SEC or its staff
with respect to the Offer Documents promptly after receipt of such comments.
SECTION 1.2 Company Actions
(a) The Company hereby approves of and consents to the Offer and represents
that its Board of Directors, at a meeting duly called and held, has in light of
the recommendation of its Special Committee of independent directors (the
"Special Committee") and subject to the terms and conditions set forth herein,
(i) determined that this Agreement and the transactions contemplated hereby,
including the Offer and the Merger (as defined in Section 2.1), taken together,
are in the best interests of the stockholders of the Company (other than Parent
and its affiliates), (ii) approved this Agreement and the transactions
contemplated hereby, including the Offer and the Merger, and (iii) resolved to
recommend that the stockholders of the Company accept the Offer, tender their
Shares thereunder to Parent and, if required by applicable law, approve and
adopt this Agreement and the Merger. The Company also represents that the
Special Committee has reviewed the opinion of Morgan Stanley & Co. Incorporated,
financial advisor to the Special Committee, that, as of April 14, 1997, the
consideration to be received pursuant to this Agreement is fair to the
stockholders of the Company (other than Parent and its affiliates) from a
financial point of view (the "Morgan Stanley Opinion").
(b) The Company shall file with the SEC, concurrently with the filing of
the Schedule 14D-1, a Solicitation/Recommendation Statement on Schedule 14D-9
(together with all amendments and supplements thereto, and including all
exhibits thereto, the "Schedule 14D-9") containing the recommendations described
in Section 1.2(a) and shall mail the Schedule 14D-9 to the stockholders of the
Company promptly after the commencement of the Offer. The Schedule 14D-9 shall
comply in all material respects with the Exchange Act and the rules and
regulations thereunder and other applicable laws. Parent and its counsel shall
be given the opportunity to review the Schedule 14D-9 prior to the filing
thereof with the SEC. The Company shall also execute, and join in the filing
of, the Schedule 13E-3 after review and approval thereof by the Company, the
Special Committee and their respective counsel.
(c) In connection with the Offer, the Company shall, or shall cause its
transfer agent to, promptly furnish Parent with such information, including
updated lists of the stockholders of the Company, mailing labels and updated
lists of security positions, and such assistance, at
<PAGE>
Parent's expense, as Parent or its agents may reasonably request in
communicating the Offer to the record and beneficial holders of Shares.
(d) Solely in connection with the tender and purchase of Shares pursuant to
the Offer and the consummation of the Merger, the Company hereby waives any and
all rights of first refusal it may have with respect to shares owned by, or
issuable to, any person.
ARTICLE II
THE MERGER
SECTION 2.1 The Merger
Upon the terms and subject to the conditions hereof, and in accordance with
the relevant provisions of the Delaware General Corporation Law (the "Delaware
Law"), Sub or another direct or indirect wholly owned subsidiary of Parent shall
be merged with and into the Company (the "Merger") as soon as practicable
following the satisfaction or waiver, if permissible, of the conditions set
forth in Article VIII hereof. Following the Merger, the Company shall continue
as the surviving corporation (the "Surviving Corporation") and shall continue
its existence under the laws of Delaware, and the separate corporate existence
of Sub (or such other subsidiary of Parent) shall cease.
The parties agree that they will consider alternative structures in order
to maximize the benefits of the ownership of the Shares by Parent, provided that
such alternative structures do not, in the opinion of the Special Committee,
adversely affect the rights of the Company or its stockholders (other than
Parent and its affiliates) under this Agreement.
SECTION 2.2 Effective Time
The Merger shall be consummated by filing with the Secretary of State of
the State of Delaware a certificate of merger in such form as is required by,
and executed in accordance with, the relevant provisions of the Delaware Law
(the time of such filing being the "Effective Time").
SECTION 2.3 Effects of the Merger
The Merger shall have the effects set forth in the Delaware Law.
SECTION 2.4 Certificate of Incorporation and Bylaws
The Certificate of Incorporation and the Bylaws of the Company at the
Effective Time shall be the Certificate of Incorporation and the Bylaws of the
Surviving Corporation until modified in accordance with applicable law.
SECTION 2.5 Directors and Officers
The directors of Sub at the Effective Time shall be the directors of the
Surviving Corporation until their successors are duly elected and qualified and
the officers of the Company
<PAGE>
at the Effective Time shall be the officers of the Surviving Corporation until
replaced in accordance with the Bylaws of the Surviving Corporation.
SECTION 2.6 Conversion of Company Shares
(a) Each Share issued and outstanding immediately prior to the Effective
Time (other than Shares held of record by Parent, Sub or any other subsidiary of
Parent (other than the Company) or held in the treasury of the Company or any
subsidiary of the Company, and Dissenting Shares, as defined in Section 3.1
hereof) shall, by virtue of the Merger and without any action on the part of the
holder thereof, be converted into the right to receive $5.40 in cash or any
higher price which may be paid pursuant to the Offer (the "Merger
Consideration") payable to the holder thereof, without interest thereon, upon
surrender of the certificate representing such share.
(b) Each share of Common Stock and Series A Redeemable Preferred Stock of
the Company held by Parent, Sub or any other subsidiary of Parent or held in the
treasury of the Company or by any subsidiary of the Company immediately prior to
the Effective Time shall, by virtue of the Merger and without any action on the
part of the holder thereof, be canceled without any payment therefor.
SECTION 2.7 Conversion of Sub Common Stock.
Each share of common stock, par value $.01 per share, of Sub issued and
outstanding immediately prior to the Effective Time shall, by virtue of the
Merger and without any action on the part of the holder thereof, be converted
into one share of common stock of the Surviving Corporation.
SECTION 2.8 Stock Options, SAR's
(a) The Company shall cancel, immediately prior to the Effective Time, each
outstanding stock option and warrant and any related stock appreciation right
(hereinafter referred to as "Options") granted under any stock incentive plan or
arrangement of the Company, provided that (i) not less than 30 days prior to the
Effective Time, each outstanding Option shall become fully exercisable and
vested, (ii) upon the earlier of September 23, 1997 or the acceptance for
payment and purchase of Shares pursuant to the Offer (the "Time of Acceptance"),
the exercise price of each outstanding Option granted under the AST Research,
Inc. 1989 Long-Term Incentive Program (the "1989 Program") which is held by non-
officer/director employees who are employed by the Company on such date and
which is subject to the Company's action on September 23, 1996 to reprice stock
options, shall be adjusted to $4.625 per Share, and (iii) each holder of a
vested Option shall be entitled to receive from the Company, as of the Effective
Time, for each Share subject to such Option an amount in cash in cancellation of
such Option equal to the excess, if any, of the Merger Consideration over the
per Share exercise price of such Option, less any applicable tax withholding.
Except as provided herein, all stock incentive plans and arrangements of the
Company shall terminate as of the Effective Time. Notwithstanding the
foregoing, Options held by Parent shall not require any payment but instead
shall be cancelled as of the Effective Time, unless theretofore exercised.
<PAGE>
(b) Notwithstanding anything else contained herein to the contrary, this
subsection 2.8(b) shall apply to Options held by employees who are laid off by
the Company prior to the Effective Time. In the event that an employee is laid
off on or after the date hereof and prior to the Effective Time, (i) each
outstanding Option held by such former employee shall become immediately fully
exercisable and vested, (ii) if the former employee was a non-officer/director
employee, the exercise price of each outstanding Option granted under the 1989
Program which is held by the former employee and which is subject to the
Company's action on September 23, 1996 to reprice stock options, shall be
adjusted to $4.625 per Share as of the acceptance for payment and purchase of
shares pursuant to the Offer, and (iii) the former employee shall be entitled to
receive from the Company, as of the Effective Time, for each Share subject to
such Option, an amount in cash in cancellation of such Option equal to the
excess, if any, of the Merger Consideration over the per Share exercise price of
such Option, less any applicable tax withholding. The Company shall thereafter
cancel, immediately prior to the Effective Time, each outstanding Option held by
laid-off employees.
SECTION 2.9 Stockholders' Meeting
If required by applicable law in order to consummate the Merger, and
subject to the fiduciary duties of the Company's Board of Directors, the
Company, acting through its Board of Directors, shall, in accordance with
applicable law:
(a) duly call, give notice of, convene and hold a special meeting (the
"Special Meeting") of its stockholders as soon as practicable following the
acceptance for payment and purchase of Shares pursuant to the Offer for the
purpose of approving and adopting this Agreement;
(b) subject to the fiduciary obligations of the Board and the Special
Committee as advised by their respective legal counsel, include in the Proxy
Statement (as defined in Section 5.6) the recommendation of its Board of
Directors that stockholders of the Company vote in favor of the approval and
adoption of this Agreement and the Morgan Stanley Opinion; and
(c) use its best efforts (i) to obtain and furnish the information required
to be included by it in the Proxy Statement, and, after consultation with
Parent, respond promptly to any comments made by the SEC with respect to the
Proxy Statement and any preliminary version thereof and cause the Proxy
Statement to be mailed to its stockholders at the earliest practicable time
following the acceptance for payment and purchase of Shares pursuant to the
Offer, and (ii) to obtain the necessary approval of the Merger by its
stockholders. Parent agrees that, at the Special Meeting, all of the Shares
owned by Parent, Sub or any other affiliate of Parent will be voted in favor of
the Merger.
SECTION 2.10 Closing
Upon the terms and subject to the conditions hereof, as soon as practicable
after the acceptance for payment and purchase of Shares pursuant to the Offer
and, if required by law, after the vote of the stockholders of the Company in
favor of the adoption of this Agreement has been obtained, the Company shall
execute in the manner required by the Delaware Law and deliver to
<PAGE>
the Delaware Secretary of State a duly executed certificate of merger, or
certificate of ownership and merger if permitted by Delaware Law, and the
parties shall take all such other and further actions as may be required by law
to make the Merger effective. Prior to the filings referred to in this Section
2.10, a closing (the "Closing") will be held at the offices of Gibson, Dunn &
Crutcher LLP, 4 Park Plaza, Irvine, California 92614 (or such other place as the
parties may agree) for the purpose of confirming all the foregoing.
ARTICLE III
DISSENTING SHARES; EXCHANGE OF SHARES
SECTION 3.1 Dissenting Shares
Notwithstanding anything in this Agreement to the contrary, in the event
that dissenters' rights are available in connection with the Merger pursuant to
Section 262 of the Delaware Law, Shares that are issued and outstanding
immediately prior to the Effective Time and that are held by stockholders who
did not vote in favor of the Merger and who comply with all of the relevant
provisions of Section 262 of the Delaware Law (the "Dissenting Shares") shall
not be converted into or be exchangeable for the right to receive the Merger
Consideration, but instead shall be converted into the right to receive such
consideration as may be determined to be due to such stockholders pursuant to
Section 262 of the Delaware Law, unless and until such holders shall have failed
to perfect or shall have effectively withdrawn or lost their rights to appraisal
under the Delaware Law. If any such holder shall have failed to perfect or
shall have effectively withdrawn or lost such right, such holder's Shares shall
thereupon be deemed to have been converted into and to have become exchangeable
for the right to receive, as of the Effective Time, the Merger Consideration
without any interest thereon. The Company shall give Parent (i) prompt notice
of any written demands for appraisal of Shares received by the Company and (ii)
the opportunity to participate in all negotiations and proceedings with respect
to any such demands. The Company shall not, without the prior written consent
of Parent, voluntarily make any payment with respect to, or settle or offer to
settle, any such demands.
SECTION 3.2 Payment for Shares
(a) Parent shall deposit in trust with a payment agent reasonably
acceptable to the Company (the "Payment Agent"), prior to the Effective Time,
cash in an aggregate amount necessary to make the payments pursuant to Section
2.6 hereof to holders (other than Parent or Sub or any of their respective
subsidiaries) of Shares that are issued and outstanding immediately prior to the
Effective Time (such amounts being hereinafter referred to as the "Payment
Fund"). The Payment Agent shall, pursuant to irrevocable instructions, make the
payments provided for in the preceding sentence out of the Payment Fund. The
Payment Agent shall invest portions of the Payment Fund as Parent directs,
provided that substantially all such investments shall be in obligations of or
guaranteed by the United States of America, in commercial paper obligations
receiving the highest rating from either Moody's Investors Services, Inc. or
Standard & Poor's Corporation, or in certificates of deposit or banker's
acceptances of commercial banks with capital exceeding $100 million. The
Payment Fund shall not be used for any other purpose, except as provided in this
Agreement.
<PAGE>
(b) Promptly after the Effective Time, the Surviving Corporation shall
cause the Payment Agent to mail to each record holder (other than Parent or Sub
or any of their respective subsidiaries), as of the Effective Time, of an
outstanding certificate or certificates which immediately prior to the Effective
Time represented Shares (the "Certificates"), a form of letter of transmittal
(which shall specify that delivery shall be effected, and risk of loss and title
to the Certificates shall pass, only upon proper delivery of the Certificates to
the Payment Agent) and instructions for use in effecting the surrender of the
Certificate or payment therefor. Upon surrender to the Payment Agent of a
Certificate, together with such letter of transmittal duly executed, the holder
of such Certificate shall be paid in exchange therefor cash in an amount equal
to the product of the number of Shares represented by such Certificate
multiplied by the Merger Consideration, and such Certificate shall forthwith be
canceled. No interest will be paid or accrued on the cash payable upon the
surrender of the Certificates. If payment is to be made to a person other than
the person in whose name the Certificate surrendered is registered, it shall be
a condition of payment that the Certificate so surrendered shall be properly
endorsed or otherwise in proper form for transfer and that the person requesting
such payment shall pay any transfer or other taxes required by reason of the
payment to a person other than the registered holder of the Certificate
surrendered or establish to the satisfaction of the Surviving Corporation that
such tax has been paid or is not applicable. After the Effective Time, until
surrendered in accordance with the provisions of this Section 3.2, each
Certificate (other than Certificates representing Shares owned by Parent, Sub or
any of their respective subsidiaries, and Dissenting Shares) shall represent for
all purposes the right to receive the Merger Consideration in cash multiplied by
the number of Shares evidenced by such Certificate, without any interest
thereon.
(c) After the Effective Time, there shall be no transfers of Shares that
were outstanding immediately prior to the Effective Time on the stock transfer
books of the Surviving Corporation. If, after the Effective Time, Certificates
are presented to the Surviving Corporation, they shall be canceled and exchanged
for cash as provided in this Section 3.2. At the Effective Time, the stock
transfer books of the Company shall be closed.
(d) Any portion of the Payment Fund (including the proceeds of any
investments thereof) that remains unclaimed by the stockholders of the Company
after one year following the Effective Time shall be repaid to the Surviving
Corporation and holders of Certificates shall thereafter look only to the
Surviving Corporation as general creditors thereof for payment of any Merger
Consideration payable upon due surrender of their Certificates. Notwithstanding
the foregoing, neither Parent nor the Surviving Corporation shall be liable to a
holder of a Certificate for amounts delivered to a public official pursuant to
any applicable abandoned property, escheat or similar laws.
<PAGE>
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF PARENT AND SUB
Parent and Sub hereby represent and warrant to the Company as follows:
SECTION 4.1 Organization and Qualification
Each of Parent and Sub is a corporation duly organized, validly existing
and in good standing under the laws of its jurisdiction of organization and has
the requisite corporate power to carry on its business as it is now being
conducted.
SECTION 4.2 Authority Relative to this Agreement
Each of Parent and Sub has the requisite corporate power and authority to
enter into this Agreement and to carry out its obligations hereunder. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized by requisite
corporate action of Parent and Sub and no other corporate proceedings on the
part of Parent or Sub are necessary to authorize this Agreement and the
transactions contemplated hereby. Neither Parent nor Sub is subject to or
obligated under any charter, bylaw or contract provision or any license,
franchise or permit, or any law, regulation, order or decree, which would be
breached or violated or in respect of which a right of acceleration would be
created by its executing and carrying out this Agreement, other than any such
breach, violation or right which (i) will not have a material adverse effect on
Parent and its subsidiaries taken as a whole or (ii) will be cured, waived or
terminated prior to the Effective Time.
SECTION 4.3 Governmental Consents
No consent, approval, order or authorization of, or registration,
qualification, designation, declaration or filing with any governmental
authority ("Consent") is required on the part of Parent or Sub in connection
with the transactions contemplated by this Agreement, except (i) those required
by the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended ("HSR"),
(ii) those required by federal and state securities laws, (iii) approval by all
necessary government officials and agencies of the Republic of Korea, (iv)
filing reports with the U.S. Department of Commerce regarding foreign direct
investment in the United States, (v) filings with the Competition Directorate of
the European Community Commission and under the Canadian Competition Act and the
Investment Canada Act, (vi) filing a certificate of merger or a certificate of
ownership and merger, as the case may be, with the Delaware Secretary of State,
and (vii) where the failure to obtain such Consents would not have a material
adverse effect on Parent's ability to consummate the transactions contemplated
hereby. Parent has no reason to believe that all required governmental consents
will not be obtained in a timely fashion.
SECTION 4.4 Offer Documents; Proxy Statement
The Offer Documents and the Offer will comply in all material respects with
the Exchange Act, except that no representation is made by Parent with respect
to information supplied in
<PAGE>
writing by the Company specifically for inclusion in the Offer Documents. None
of the information supplied in writing by Parent or its affiliates specifically
for inclusion in the Schedule 14D-9 or the Proxy Statement will, at the time
they are first filed with the SEC or distributed to the Company's stockholders,
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.
SECTION 4.5 Financing of the Offer and the Merger
Parent has available to it credit lines or other sources of financing to
provide the funds necessary for the completion of the transactions contemplated
hereby, including, without limitation, to fund the repurchase obligations of the
Company under the Company's Liquid Yield Option Notes due 2013 (the "LYONs") and
to satisfy any debt obligations of the Company which will be accelerated as a
result of the consummation of the Offer and/or the Merger. Parent agrees that
none of the borrowings it may use to consummate the transactions contemplated by
this Agreement will be incurred by, or secured, directly or indirectly, by the
assets of, the Company or any of its subsidiaries.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and Sub as follows:
SECTION 5.1 Organization and Qualification
The Company is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and has the requisite corporate
power to carry on its business as it is now being conducted. The Company is
duly qualified as a foreign corporation to do business, and is in good standing,
in each jurisdiction where the character of its properties owned or leased or
the nature of its activities makes such qualification necessary, except where
the failure to be so qualified will not have a material adverse effect on the
Company and its subsidiaries taken as a whole.
SECTION 5.2 Capitalization
The authorized capital stock of the Company consists of 200,000,000 Shares
and 1,000,000 shares of Preferred Stock. As of April 10, 1997, 57,964,830
Shares were validly issued and outstanding, no Shares were held in the Company's
treasury, and 500,000 shares of Series A Preferred were issued and outstanding.
Since April 10, 1997 no Shares of the Company's capital stock have been issued,
except Shares issued on exercise of Options. The Company has heretofore
provided Parent with a complete and accurate schedule setting forth all
outstanding Options, the holder thereof and the exercise price therefor. Except
for Options set forth on such schedule, the LYONs and the Rights issued pursuant
to the Rights Agreement (as defined in Section 5.4(b) below) there are no
options, warrants, convertible securities or other rights, agreements or
commitments obligating the Company to issue shares of its capital stock.
<PAGE>
SECTION 5.3 Subsidiaries
Each subsidiary material to the business of the Company is a corporation
duly organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has corporate power to carry on its business
as it is now being conducted. Each of such subsidiaries is duly qualified as a
foreign corporation to do business, and is in good standing, in each
jurisdiction where the character of its properties owned or leased or the nature
of its activities makes such qualification necessary, except where the failure
to be so qualified will not have a material adverse effect on the Company and
its subsidiaries taken as a whole. All the outstanding shares of capital stock
of such subsidiaries are validly issued, fully paid and nonassessable and,
except for directors' qualifying shares and certain shares held in the names of
nominees, are owned by the Company or by a subsidiary of the Company free and
clear of all liens, claims or encumbrances.
SECTION 5.4 Authority Relative to this Agreement
(a) The Company has the requisite corporate power and authority to enter
into this Agreement and to carry out its obligations hereunder. The execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by the Company's Board of
Directors and, except for the approval of its stockholders, if required by the
Delaware Law, no other corporate proceedings on the part of the Company are
necessary to authorize this Agreement and the transactions contemplated hereby.
The Company is not subject to or obligated under any charter, bylaw or contract
provision or any license, franchise or permit, or any law, regulation, order or
decree, which would be breached or violated or in respect of which a right of
acceleration would be created by its executing and carrying out this Agreement,
other than any such breach, violation or right which (i) will not have a
material adverse effect on the Company and its subsidiaries taken as a whole, or
(ii) will be cured, waived or terminated prior to the Effective Time or (iii)
which has been disclosed in writing by the Company to Parent or its advisors at
or prior to the date of this Agreement.
(b) All necessary action has been taken with respect to the Amended and
Restated Rights Agreement by and between the Company and American Stock Transfer
and Trust Company dated as of January 28, 1994, as amended by the First
Amendment thereto dated as of January 28, 1994 (the "Rights Agreement"), so that
(i) the Rights issued pursuant to the Rights Agreement will not be exercisable,
trade separately or otherwise be affected by the Offer or the Merger, (ii) none
of Parent, Sub or any of their affiliates will be deemed to be an "Acquiring
Person" for purposes of the Rights Agreement in respect of the Offer or the
Merger and (iii) a "Distribution Date" shall not occur by virtue of the Offer or
the Merger.
(c) The "Independent Directors", as defined in the Stockholder Agreement
dated as of July 31, 1995 between Parent and the Company, as amended by
Amendment No. 1 thereto dated as of December 21, 1995 (the "Stockholder
Agreement"), have approved the Offer and the Merger for all purposes of the
Stockholder Agreement, including Sections 2.1.7 and 6.3 thereof.
<PAGE>
SECTION 5.5 Governmental Consents
No consent, approval, order or authorization of, or registration,
qualification, designation, declaration or filing with any governmental
authority ("Consent") is required on the part of the Company in connection with
the transactions contemplated by this Agreement, except (i) those required by
HSR, (ii) those required by federal and state securities laws, (iii) filing
reports with the U.S. Department of Commerce regarding foreign direct investment
in the United States, (iv) filings with the Competition Directorate of the
European Community Commission and under the Canadian Competition Act and the
Investment Canada Act, (v) stockholder approval of the Merger (if required), and
filing the certificate of merger or certificate of ownership and merger, as the
case may be, with the Delaware Secretary of State, (vi) as has been disclosed in
writing by the Company to Parent or its advisors at or prior to the date of this
Agreement, and (vii) where failure to obtain such Consent would not have a
material adverse effect on the Company and its subsidiaries, taken as a whole,
or its ability to consummate the transactions contemplated hereby. The Company
has no reason to believe that all required governmental consents will not be
obtained in a timely fashion.
SECTION 5.6 SEC Reports and Financial Statements
The Company has filed with the SEC, and has heretofore made available to
Parent, true and complete copies of, all forms, reports, schedules, statements
and other documents required to be filed by it since January 1, 1995 under the
Securities Act of 1933, as amended (the "Securities Act") or the Exchange Act
(collectively, the "SEC Documents"). As of their respective dates or, if
amended, as of the date of the last such amendment, the Company SEC Documents
(as amended or supplemented by any such amendments), including, without
limitation, any financial statements or schedules included therein (a) did 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 and (b) complied in all material respects with the applicable
requirements of the Exchange Act and the Securities Act, as the case may be, and
the applicable rules and regulations of the SEC thereunder. None of the
Company's subsidiaries is required to file any forms, reports or other documents
with the SEC. The financial statements of the Company included in the SEC
Documents (as amended or supplemented by any such amendments) have been prepared
from, and are in accordance with, the books and records of the Company and its
consolidated subsidiaries, comply in all material respects with applicable
accounting requirements and with the published rules and regulations of the SEC
with respect thereto, have been prepared in accordance with United States
generally accepted accounting principles ("GAAP") applied on a consistent basis
during the periods involved (except as may be indicated in the notes thereto)
and fairly present the consolidated financial position and the consolidated
results of operations and cash flows (and changes in financial position, if any)
of the Company and its consolidated subsidiaries as of the respective dates and
for the respective periods thereof.
SECTION 5.7 Offer Documents; Proxy Statement; Other Information
If a Proxy Statement is required for the consummation of the Merger under
applicable law, the Proxy Statement will comply in all material respects with
the Exchange Act, except that
<PAGE>
no representation is made by the Company with respect to information supplied in
writing by Parent or any affiliate of Parent (other than the Company and its
subsidiaries) specifically for inclusion in the Proxy Statement. The letter to
stockholders, notice of meeting, proxy statement and form of proxy, or the
information statement, as the case may be, to be distributed to stockholders in
connection with the Merger, or any schedules required to be filed with the SEC
in connection therewith are collectively referred to herein as the "Proxy
Statement." None of the information relating to the Company and its subsidiaries
supplied in writing by the Company specifically for inclusion in the Offer
Documents or any schedules required to be filed with the SEC in connection
therewith will, at the respective times the Offer Documents or any amendments or
supplements thereto or any such schedules are filed with the SEC, 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. The
Schedule 14D-9 will comply in all material respects with the Exchange Act,
except that no representation is made by the Company with respect to information
supplied in writing by Parent or any affiliate of Parent (other than the Company
and its subsidiaries) specifically for inclusion in the Schedule 14D-9..
ARTICLE VI
CONDUCT OF BUSINESS PENDING THE MERGER
SECTION 6.1 Conduct of Business by the Company Pending the Merger
The Company covenants and agrees that, prior to the Time of Acceptance,
unless Parent shall otherwise agree in writing, or as shall have otherwise been
approved by the chief executive officer of the Company, or as otherwise
contemplated by this Agreement:
(a) the businesses of the Company and its subsidiaries shall be conducted
only in the ordinary and usual course (taking into account the Company's current
financial condition, results of operations and cash flow);
(b) the Company shall not (i) sell or pledge or agree to sell or pledge any
stock owned by it in any of its subsidiaries; (ii) amend its Certificate of
Incorporation or Bylaws; or (iii) split, combine or reclassify the outstanding
Shares or declare, set aside or pay any dividend payable in cash, stock or
property with respect to the Shares; and
(c) neither the Company nor any of its subsidiaries shall (i) issue or
agree to issue any additional shares of, or rights of any kind to acquire any
shares of, its capital stock of any class other than Shares issuable pursuant to
presently outstanding Options or pursuant to the Rights; or (ii) enter into any
contract, agreement, commitment or arrangement with respect to any of the
foregoing.
<PAGE>
ARTICLE VII
ADDITIONAL AGREEMENTS
SECTION 7.1 Expenses
Whether or not the Merger is consummated, all costs and expenses incurred
in connection with the Offer, this Agreement and the transactions contemplated
hereby shall be paid by the party incurring such expenses.
SECTION 7.2 Additional Agreements
Subject to the terms and conditions herein provided, each of the parties
hereto agrees to use all reasonable efforts to take, or cause to be taken, all
action and to do, or cause to be done, all things necessary, proper or advisable
under applicable laws and regulations to consummate and make effective the
transactions contemplated by the Offer and this Agreement, including using all
reasonable efforts to obtain all necessary waivers, consents and approvals and
to effect all necessary registrations and filings. In case at any time after
the Effective Time any further action is necessary or desirable to carry out the
purposes of this Agreement, the proper officers and/or directors of Parent, Sub
and the Company shall take all such necessary action.
SECTION 7.3 Indemnification
(a) Parent and Sub agree that all rights to indemnification and advancement
of expenses now existing in favor of the directors and officers of the Company
and its subsidiaries as provided in their Certificates of Incorporation or
Bylaws or otherwise in effect on the date of this Agreement (whether pursuant to
indemnification agreements or otherwise) with respect to matters occurring on or
prior to the Effective Time will survive the Merger and continue in full force
and effect, and Parent will cause the Surviving Corporation (or any successor to
the Surviving Corporation) to honor all such rights to indemnification and
advancement of expenses.
(b) For six years after the Effective Time, Parent shall cause the
Surviving Corporation (or any successor to the Surviving Corporation) to
indemnify, defend and hold harmless the present and former officers, directors,
employees and agents of the Company and its subsidiaries (each an "Indemnified
Party") against all losses, claims, damages, liabilities, fees, costs and
expenses (including reasonable fees and disbursements of counsel in advance of
disposition and judgments, fines, losses, claims, liabilities and amounts paid
in settlement (provided that any such settlement is effected with the written
consent of Parent or the Surviving Corporation, which consent will not be
unreasonably withheld or delayed)) arising out of actions or omissions occurring
at or prior to the Effective Time (including, without limitation, matters
arising out of or pertaining to the transactions contemplated by this Agreement)
to the full extent permitted under Delaware law, subject to the terms of the
Company's Certificate of Incorporation, Bylaws and indemnification agreements,
all as in effect at the date hereof, including provisions relating to
advancement of expenses incurred in the defense of any action or suit; provided
that, in the event any claim or claims are asserted or made within such six year
period, all rights to indemnification or advancement of expenses in respect of
any such claim or claims shall continue until disposition
<PAGE>
of any and all such claims; provided further, that each Indemnified Party's
conduct shall be conclusively presumed to comply with the standards set forth
under Delaware law, the Company's Certificate of Incorporation, Bylaws or such
agreements, as the case may be, unless and until a court of competent
jurisdiction in a final, non-appealable decision, determines to the contrary;
and provided further, that nothing herein shall impair any existing rights or
obligations of any present or former directors or officers of the Company. In
the event of any threatened or actual claim, action, suit, proceeding or
investigation as to which an Indemnified Party is entitled to indemnification or
advancement of expenses hereunder (whether asserted before, at or after the
Effective Time), the Indemnified Party may retain counsel reasonably
satisfactory to it after consultation with Parent, but in no event shall the
Surviving Corporation be required to reimburse the costs of such counsel
hereunder unless (i) the Surviving Corporation shall have declined to assume the
defense of such claim with counsel reasonably satisfactory to the Indemnified
Party within ten days of a written request for indemnification given in
accordance with Section 10.3 or (ii) the Indemnified Party shall have reasonably
concluded, upon the advice of counsel, that there may be defenses available to
it which conflict with those available to the Surviving Corporation.
(c) Parent or the Surviving Corporation shall maintain the Company's
existing officers' and directors' liability insurance ("D&O Insurance") for a
period of not less than four years after the Effective Time; provided, that the
Parent may substitute therefor policies of substantially similar coverage and
amounts containing terms no less favorable to such former directors or officers;
provided, further, if the existing D&O Insurance expires, is terminated or
canceled during such period, Parent or the Surviving Corporation will use all
reasonable efforts to obtain substantially similar D&O Insurance; provided
further, however, that in no event shall Parent or the Surviving Corporation be
required to pay aggregate premiums for insurance under this Section 7.3 in
excess of 200% of the aggregate premiums paid by the Company in 1996 on an
annualized basis for such purpose (in which event Parent or the Surviving
Corporation shall cause to be maintained D&O Insurance which, in Parent's good
faith judgment, provides the maximum coverage available at an annual premium
equal to 200% of the Company's 1996 annualized premiums).
(d) For a period of six years from the Effective Time, Parent shall cause
the Surviving Corporation (or any successor corporation) to keep in effect
provisions in its Certificate of Incorporation and Bylaws providing for
exculpation of director and officer liability and indemnification of the
Indemnified Parties to the same extent as are currently provided for in the
Company's Certificate of Incorporation and Bylaws, which such provisions shall
not be amended during such period except as required by applicable law or except
to make changes permitted by law that would expand or enlarge the Indemnified
Parties' exculpation or indemnification rights.
(e) The rights under this Section 7.3 are intended to benefit the Company
and each Indemnified Party hereunder, shall be binding on all successors and
assigns of Parent and the Surviving Corporation and shall be enforceable by each
Indemnified Party. The parties hereto acknowledge and agree that the remedy at
law for any breach of the obligations of Parent and the Surviving Corporation
under this Section 7.3 is and will be insufficient and inadequate and that the
Indemnified Parties, in addition to any remedies at law, shall be entitled to
equitable relief (including specific performance). The Surviving Corporation
shall pay all reasonable expenses,
<PAGE>
including reasonable attorneys' fees, incurred by any Indemnified Party in
enforcing the indemnity and other obligations set forth in this Section 7.3.
(f) Parent unconditionally guarantees all of the Surviving Corporation's
payment and other obligations provided for in this Section 7.3.
SECTION 7.4 Publicity
The initial press release with respect to the execution of this Agreement
has been previously approved by the parties. Following such initial press
release, so long as this Agreement is in effect, neither the Company, Parent nor
any of their respective affiliates shall issue or cause the publication of any
press release or other public announcement with respect to the Merger, this
Agreement or the other transactions contemplated hereby without the prior
consultation of the other party, except as may be required by law or by any
listing agreement with a national securities exchange or trading market.
ARTICLE VIII
CONDITIONS
SECTION 8.1 Conditions to Each Party's Obligation to Effect the Merger
The respective obligations of each party to effect the Merger shall be
subject to the fulfillment at or prior to the Effective Time of the following
conditions:
(a) this Agreement and the transactions contemplated hereby shall have been
approved and adopted by the requisite vote of the holders of the Shares, if such
vote is required by applicable law;
(b) no statute, rule, regulation, decree, order or injunction shall have
been promulgated, enacted, entered or enforced by any United States or Korean
governmental agency or authority or court which remains in effect and prohibits,
restrains, enjoins or restricts the consummation of the Merger or makes the
acquisition or holding by Parent, its subsidiaries or affiliates of the Shares
or the shares of common stock of the Surviving Corporation illegal;
(c) any governmental consents or approvals required to consummate the
Merger shall have been obtained, except where the failure to obtain such
consents or approvals would not have a material adverse effect on (i) the
Company and its subsidiaries, taken as a whole, or (ii) Parent's ability to
consummate the transactions contemplated hereby; and
(d) Parent shall have purchased Shares pursuant to the Offer.
<PAGE>
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
SECTION 9.1 Termination
This Agreement may be terminated at any time prior to the Effective Time,
whether before or after approval by the stockholders of the Company:
(a) By mutual consent of Parent and the Company (with the consent of
the Special Committee).
(b) By either Parent or the Company (with the consent of the Special
Committee) if Parent shall not have purchased Shares pursuant to the Offer by
December 31, 1997.
(c) By the Company (with the consent, and at the direction of, the
Special Committee):
(i) if, prior to the purchase of the Shares pursuant to the
Offer, the Special Committee shall have (A) withdrawn, or modified or changed in
a manner adverse to Parent or the Sub, its approval or recommendation of the
Offer, this Agreement or the Merger in order to permit the Company to execute a
definitive agreement providing for the acquisition of the Company by merger,
consolidation or otherwise, determined by the Special Committee to constitute a
superior alternative to the stockholders of the Company (other than Parent or
its affiliates) (the "Alternative Transaction") than the acquisition of the
Company contemplated by this Agreement, (B) determined, only after receipt of
advice from legal counsel to the Special Committee, that the failure to take
such action as set forth in the preceding clause (A) would cause the Board of
Directors to violate its fiduciary duties to the Company's stockholders under
applicable law, and (C) given notice to the Parent of its intent to terminate
this Agreement and of the terms and provisions of the Alternate Transaction,
such notice to be given not less than five (5) business days prior to the date
of the termination of this Agreement;
(ii) if, prior to the purchase of the Shares pursuant to the
Offer, Parent breaches or fails in any material respect to perform or comply
with any of its material covenants and agreements contained herein or breaches
its representations and warranties in any material respect; or
(iii) if the Offer shall have expired, or shall have been
withdrawn, abandoned or terminated without Parent purchasing any Shares pursuant
thereto; provided that the Company may not terminate this Agreement pursuant to
this Section 9.1(c)(iii) if the Company is in material breach of this Agreement.
(d) By Parent:
(i) if prior to the purchase of the Shares pursuant to the
Offer, the Special Committee shall have withdrawn, or modified or changed in a
manner adverse to Parent,
<PAGE>
its approval or recommendation of the Offer, this Agreement or the Merger or
shall have recommended an Alternate Transaction or offer, or the Company shall
have executed an agreement in principle (or similar agreement) or definitive
agreement providing for a tender offer or exchange offer for any shares of
capital stock of the Company, or a merger, consolidation or other business
combination with a person or entity other than Parent or its affiliates (or the
Special Committee resolves to do any of the foregoing); or
(ii) if Parent shall have terminated the Offer without
purchasing any Shares thereunder; provided that Parent may not terminate this
Agreement pursuant to this Section 9.1(d)(ii) if Parent has failed to purchase
the Shares in the Offer in breach of the terms thereof.
SECTION 9.2 Effect of Termination.
In the event of termination of this Agreement as provided above, this
Agreement shall forthwith become void and there shall be no liability on the
part of either Parent or the Company; provided, however, that nothing herein
shall relieve any party from any liability for any material breach of this
Agreement.
SECTION 9.3 Amendment
This Agreement may be amended by the parties hereto any time before or
after approval hereof by the stockholders of the Company, but, after any such
approval, no amendment shall be made which reduces the Merger Consideration or
in any way adversely affects the rights of holders of the Shares without the
further approval of such stockholders. This Agreement may not be amended except
by an instrument in writing signed on behalf of each of the parties hereto and,
in the case of the Company, approved by the Special Committee.
SECTION 9.4 Waiver
At any time prior to the Effective Time, the parties hereto may (i) extend
the time for the performance of any of the obligations or other acts of the
other parties hereto, (ii) waive any inaccuracies in the representations and
warranties contained herein or in any document delivered pursuant hereto and
(iii) waive compliance with any of the agreements or conditions contained
herein. Any agreement on the part of a party hereto to any such extension or
waiver shall be valid only if set forth in an instrument in writing signed on
behalf of such party. Without limiting the effect of any other provision of
this Agreement that confers authority upon the Special Committee with respect to
this Agreement, it is expressly agreed that all of the rights of the Company
under this Agreement (including, without limitation, rights of waiver and
enforcement) are hereby vested exclusively in the Special Committee and shall be
exercised by the Company only with the consent, or at the express direction, of
the Special Committee.
<PAGE>
ARTICLE X
GENERAL PROVISIONS
SECTION 10.1 Non-Survival of Representations and Warranties
All representations and warranties in this Agreement of Parent, Sub and the
Company or in any instrument delivered by Parent, Sub or the Company pursuant to
this Agreement shall not survive the Merger.
SECTION 10.2 Brokers
The Company represents and warrants that, except for Morgan Stanley & Co.
Incorporated, no broker, finder or investment banker is entitled to any
brokerage, finder's or other fee or commission in connection with the Merger
based upon arrangements made by or on behalf of the Company.
SECTION 10.3 Notices
Any notice required or permitted to be given under this Agreement shall be
written, and may be given by personal delivery, by cable, telecopy, telex or
telegram (with a confirmation copy mailed as follows), by Federal Express,
United Parcel Service, DHL, or other reputable commercial delivery service, or
by registered or certified mail, first-class postage prepaid, return receipt
requested. Notice shall be deemed given upon actual receipt. Mailed notices
shall be addressed as follows, but each party may change its address by written
notice in accordance with this paragraph.
To the Company: AST Research, Inc.
16215 Alton Parkway
Irvine, California 92718
Attention: General Counsel
Fax: (714) 727-8581
with copies to: The Special Committee of
Independent Directors of
AST Research, Inc.
c/o Roger W. Johnson
600 Anton Blvd., Suite 1260
Costa Mesa, CA 92626
Fax: (714) 979-6823
Irell & Manella LLP
333 South Hope Street, Suite 3300
Los Angeles, CA 90071
Attention: Henry Lesser, Esq.
Fax: (213) 229-0515
<PAGE>
O'Melveny & Myers LLP
610 Newport Center Drive
Newport Beach, CA 92660
Attention: Gary J. Singer, Esq.
Fax: (714) 669-6994
To the Parent: Samsung Electronics Co., Ltd.
Samsung Main Building
250, 2-Ka, Taepyung-Ro, Chung-Ku
Seoul, Korea 100-742
Attention: General Legal Counsel
Fax: (822) 727-7179
with a copy to: Gibson, Dunn & Crutcher LLP
333 South Grand Avenue
Los Angeles, CA 90071-3197
Attention: Andrew E. Bogen, Esq.
Fax: (213) 229-7520
SECTION 10.4 Elimination of Role of Independent Directors
Concurrently with the acceptance for payment and purchase of Shares by
Parent pursuant to the Offer, each agreement between the Company and Parent
(other than this Agreement) which contains any provision requiring the approval
of "Independent Directors" of the Company for any transaction between the
Company and Parent or any of its affiliates, including but not limited to the
Stockholder Agreement, shall automatically be amended to delete any such
requirement.
SECTION 10.5 Miscellaneous
This Agreement (i) constitutes the entire agreement and supersedes all
other prior agreements and understanding, both written and oral, among the
parties, or any of them, with respect to the subject matter hereof; (ii) is not
intended to confer upon any other person any rights or remedies hereunder,
except as otherwise expressly provided herein; and (iii) shall be governed in
all respects, including validity, interpretation and effect, by the laws of the
State of Delaware (without regard to choice of law provisions). This Agreement
may be executed in two or more counterparts which together shall constitute a
single agreement. If any term, provision, covenant or restriction set forth in
this Agreement is held by a court of competent jurisdiction to be invalid, void,
unenforceable or against its regulatory policy, the remainder of the terms,
provisions, covenants and restrictions set forth in this Agreement shall remain
in full force and effect and shall in no way be affected, impaired or
invalidated. Each of the parties hereto hereby consents to the non-exclusive
jurisdiction of the Chancery Court and Supreme Court of the State of Delaware
for purposes of resolving any disputes relating to this Agreement and waives any
objections as to venue or personal jurisdiction in such courts. Any
determination under this Agreement (including Annex A hereto) as to whether
there has been a material adverse effect with respect to the Company and its
subsidiaries, taken as a whole, shall be made in comparison to the Company's net
losses and declining equity over the past thirteen fiscal quarters, the current
trend with respect
<PAGE>
thereto, and all developments resulting therefrom. In addition, in making any
such determination, any changes resulting from any actions of the Company
approved on or after April 14, 1997 by the Board of Directors (including the
Executive Committee) or the chief executive officer shall be disregarded.
IN WITNESS WHEREOF, Parent, Sub and the Company caused this Agreement to
be signed as of the date first written above by their respective officers
thereunto duly authorized.
SAMSUNG ELECTRONICS CO. LTD.
By: /s/ W. R. Choi
-------------------------------------
W. R. Choi
Title: Executive Director, International
Finance
AST ACQUISITION, INC.
By: /s/ J. C. Lee
------------------------------------
J. C. Lee
Title: Vice President, Chief Financial Officer
and Secretary
AST RESEARCH, INC.
By: /s/ Y. S. Kim
-----------------------------------
Y. S. Kim
Title: President and Chief Executive Officer
<PAGE>
ANNEX A
(TO THE AGREEMENT AND PLAN OF MERGER)
CONDITIONS OF THE OFFER
Notwithstanding any other provision of the Offer or the Merger Agreement,
and subject to any applicable rules and regulations of the SEC, including Rule
14e-1(c) relating to Parent's obligation to pay for or return tendered shares
after termination of the Offer, Parent shall not be required to accept for
payment or pay for any Shares tendered pursuant to the Offer, or may delay the
acceptance for payment of any Shares, or may terminate the Offer if (i) any
applicable waiting period under HSR has not expired or terminated; (ii) approval
of all necessary government officials and agencies, including the Republic of
Korea, shall not have been obtained on terms and conditions reasonably
satisfactory to Purchaser (except where the failure to obtain such consents or
approvals would not have a material adverse effect on (a) the Company and its
subsidiaries, taken as a whole, or (b) Parent's ability to consummate the
transactions contemplated hereby); or (iii) at any time after April 14, 1997 and
before acceptance for payment of any Shares, any of the following events shall
occur or shall be determined by Parent to have occurred:
(a) there shall have been any action taken, or any statute, rule,
regulation, judgment, order or injunction promulgated, entered, enforced,
enacted, issued or deemed applicable to the Offer or the Merger by any domestic
or foreign governmental regulatory or administrative agency or authority or
court or legislative body or commission which directly or indirectly (1)
prohibits, or imposes any material limitations on, Parent's ownership or
operation (or that of any of their respective subsidiaries or affiliates) of all
or a material portion of their or the Company's businesses or assets, or compels
Parent or their respective subsidiaries or affiliates to dispose of or hold
separate any material portion of the business or assets of the Company or Parent
and their respective subsidiaries, in each case taken as a whole, (2) prohibits,
or makes illegal, the acceptance for payment, payment for or purchase of Shares
or the consummation of the Offer, the Merger or the other transactions
contemplated by the Merger Agreement, (3) results in the delay in or restricts
the ability of Parent, or renders Parent unable, to accept for payment, pay for
or purchase some or all of the Shares, (4) imposes material limitations on the
ability of Parent effectively to exercise full rights of ownership of the
Shares, including, without limitation, the right to vote the Shares purchased by
it on all matters properly presented to the Company's stockholders, or (5)
otherwise has a material adverse effect on the consolidated financial condition,
businesses or results of operations of the Company and its subsidiaries, taken
as a whole, provided that Parent shall have used all reasonable efforts to cause
any such judgment, order or injunction to be vacated or lifted;
(b) there shall have occurred (1) any general suspension of trading in, or
limitation on prices for, securities on the New York Stock Exchange or in the
NASDAQ National Market System, for a period in excess of twenty-four hours, (2)
a declaration of a banking moratorium or any suspension of payments in respect
of banks in the United States or the Republic of Korea (whether or not
mandatory), (3) any limitation (whether or not mandatory) by any Korean or
United States governmental authority on the extension of credit by banks or
other financial institutions, (4) a change in general, financial, bank or
capital market conditions which materially and adversely affects the ability of
financial institutions in the United States or the Republic of Korea to extend
credit or syndicate loans, (5) any significant change in the United States or
the Republic of Korea currency exchange rates (with respect to the other) or
suspension of, or
<PAGE>
limitation on, the markets therefor (whether or not mandatory) or the imposition
of, or any significant change in, any currency or exchange control laws in the
United States or the Republic of Korea, or (6) in the case of any of the
foregoing existing at the time of the commencement of the Offer, a material
acceleration or worsening thereof;
(c) (1) the representations and warranties of the Company set forth in the
Merger Agreement shall not be true and correct in any material respect as of the
date of the Merger Agreement and as of consummation of the Offer as though made
on or as of such date, (2) the Company shall have failed to comply with its
covenants and agreements under the Merger Agreement in all material respects or
(3) subject to the last two sentences of Section 10.5 of the Merger Agreement,
there shall have occurred any events or changes which have had or which are
reasonably likely to have a material adverse effect on the Company and its
subsidiaries taken as a whole;
(d) the Special Committee shall have withdrawn, or modified or changed in a
manner adverse to Parent (including by amendment of the Schedule 14D-9) its
recommendation of the Offer, the Merger Agreement, or the Merger, or recommended
another proposal or offer, or the Special Committee, upon request of Parent,
shall fail to reaffirm such approval or recommendation or shall have resolved to
do any of the foregoing; or
(e) the Merger Agreement shall have terminated in accordance with its
terms;
which in the reasonable and good faith judgment of Parent, in any such case, and
regardless of the circumstances (including any action or inaction by Parent)
giving rise to such condition makes it inadvisable to proceed with the Offer or
the acceptance for payment of or payment for the Shares.
The foregoing conditions are for the sole benefit of Parent and may be
waived by Parent, in whole or in part at any time and from time to time in the
sole discretion of Parent. The failure by Parent at any time to exercise any of
the foregoing rights shall not be deemed a waiver of any such right and each
such right shall be deemed an ongoing right which may be asserted at any time
and from time to time.
<PAGE>
NEWS RELEASE
Samsung Contact: Clara Kim
(201) 229-6067
AST Contact: Emory Epperson
(714) 727-7958
SAMSUNG ELECTRONICS CO., LTD. AND AST RESEARCH, INC.
ANNOUNCE MERGER AGREEMENT
IRVINE, California and Seoul, Korea, April 15, 1997--AST Research, Inc.
(ASTA--Nasdaq) and Samsung Electronics Co., Ltd. today jointly announced they
have signed a definitive merger agreement under which Samsung will commence a
tender offer to acquire all of AST's outstanding shares not currently owned by
Samsung or its affiliates at a price of $5.40 per share in cash. The tender
offer will be commenced by April 21, 1997 and will expire at 5:00 p.m. Eastern
Daylight Time on May 19, 1997, unless extended. Pursuant to the merger
agreement, if the tender offer is consummated, Samsung will be obligated to
acquire any remaining AST shares in a cash merger at the same price as paid in
the tender offer.
The transaction has a value to stockholders of approximately $170
million, based upon a total of approximately 31 million shares of AST common
stock outstanding which is not owned by Samsung or its affiliates. Samsung and
its affiliates currently own approximately 46 percent of the outstanding shares
of AST Common Stock, and have options which, if exercised, would result in
ownership of approximately 49 percent of the outstanding AST shares.
<PAGE>
"AST's customers and vendors should have renewed confidence in the
company's abilities and resources following completion of the acquisition,"
said Y.S. Kim, AST's President and CEO.
"Samsung strongly believes in taking a long-term approach to the PC
business and in increasing AST's global brand awareness and market share," said
Kwang-Ho Kim, President, CEO and Chairman of Samsung North America; and
Chairman of AST's Board of Directors. "Together, we will make it happen."
The Board of Directors of AST unanimously approved the merger agreement
and tender offer upon the unanimous recommendation of the Special Committee
comprised of AST's three independent directors. The Special Committee has
received an opinion of Morgan Stanley & Co. Incorporated that the consideration
to be received by the stockholder of AST (other than Samsung or its affiliates)
pursuant to the merger agreement is fair to such stockholders from a financial
point of view.
Samsung has been advised by Salomon Brothers Inc. in connection with the
transaction.
Consummation of the tender offer is subject to certain terms and
conditions, including expiration of the waiting period under the
Hart-Scott-Rodino Act and the approval of various foreign government officials
and agencies, including the Republic of Korea and others. The tender offer will
be made pursuant to definitive documents to be filed with the Securities and
Exchange Commission.
In addition, a memorandum of understanding has been entered into with
representatives of the stockholder class action suits filed in the Delaware
Chancery Court. The memorandum of understanding provides for a settlement,
subject to Court approval,
2
<PAGE>
under which the Delaware class actions would be dismissed. These class action
suits were filed following Samsung's January 30, 1997 proposal to acquire the
shares of AST common stock not owned by Samsung or its affiliates at a price
of $5.10 per share.
Samsung Electronics Co., Ltd., which had sales revenue of approximately
$19 billion in 1996, is an integrated electronics manufacturer, engaged in the
entire spectrum of electronics: semiconductors, multimedia, telecommunications
and information services, computers and consumer appliances. Additional
information on Samsung is available at http://www.samsung.com.
AST Research, Inc. develops and markets a broad spectrum of desktop,
mobile and server PC products that are sold in more than 100 countries
worldwide. AST systems meet a wide range of customer needs, ranging from
corporate business applications to advanced home and home office use. Corporate
headquarters is located at 16215 Alton Parkway, P.O. Box 57005, Irvine, Calif.
92619-7005. Telephone: (714) 727-4141. Fax: (714) 727-9355. Information about
AST and its products can be found on the World Wide Web at http://www.ast.com.
# # #
3
