<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
SCHEDULE 14D-1
TENDER OFFER STATEMENT
(PURSUANT TO SECTION 14(D)(1) OF THE SECURITIES EXCHANGE ACT OF 1934)
LIFE TECHNOLOGIES, INC.
(NAME OF SUBJECT COMPANY)
DEXTER CORPORATION
DEXTER ACQUISITION DELAWARE, INC.
(BIDDERS)
COMMON STOCK, PAR VALUE $.01 PER SHARE
(TITLE OF CLASS OF SECURITIES)
532177201
(CUSIP NUMBER OF CLASS OF SECURITIES)
------------------------
BRUCE H. BEATT, ESQ.
VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
DEXTER CORPORATION
ONE ELM STREET
WINDSOR LOCKS, CT 06096
(860) 292-7675
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED
TO RECEIVE NOTICES AND COMMUNICATIONS ON BEHALF OF BIDDERS)
------------------------
COPY TO:
JERE R. THOMSON, ESQ.
JONES, DAY, REAVIS & POGUE
599 LEXINGTON AVENUE
NEW YORK, NEW YORK 10022
(212) 326-3939
CALCULATION OF FILING FEE:
<TABLE>
<CAPTION>
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TRANSACTION VALUATION* AMOUNT OF FILING FEE**
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<S> <C>
$461,528,232 $92,306
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</TABLE>
* For purposes of calculating the amount of filing fee only. The amount assumes
the purchase of 12,473,736 shares of Common Stock, par value $.01 per share,
of Life Technologies, Inc. at $37.00 net per share in cash which represents
all outstanding shares at August 3, 1998 not owned by the persons filing this
statement and shares issuable pursuant to options that are presently
exercisable.
** The amount of the filing fee calculated in accordance with Regulation
240.0-11 of the Securities Exchange Act of 1934 equals 1/50th of 1% of the
value of the shares to be purchased.
[ ] 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.
<TABLE>
<S> <C>
Amount Previously Paid: Not applicable. Filing Party: Not applicable.
Registration No.: Not applicable. Date Filed: Not applicable.
</TABLE>
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<PAGE> 2
SCHEDULE 14D-1
CUSIP No. 532177201
<TABLE>
<S> <C> <C>
- ---------------------------------------------------------------------------
1 NAME OF REPORTING PERSONS: DEXTER CORPORATION
S.S OR I.R.S. IDENTIFICATION NO. OF ABOVE
PERSON: 06-0321410
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE
INSTRUCTIONS):
(a) [ ] (b) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS (SEE INSTRUCTIONS): BK
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 2(e) or 2(f):
[ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION: CONNECTICUT
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7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON:
12,246,664
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8 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES
CERTAIN SHARES (SEE INSTRUCTIONS):
[ ]
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9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7):
51.5%
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10 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS):
CO
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</TABLE>
<PAGE> 3
SCHEDULE 14D-1
CUSIP No. 532177201
<TABLE>
<S> <C> <C>
- ---------------------------------------------------------------------------
1 NAME OF REPORTING PERSONS: DEXTER ACQUISITION DELAWARE, INC.
S.S OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: IRS
IDENTIFICATION NO. APPLIED FOR
- ---------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE
INSTRUCTIONS):
(a) [ ] (b) [ ]
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3 SEC USE ONLY
- ---------------------------------------------------------------------------
4 SOURCE OF FUNDS (SEE INSTRUCTIONS): AF
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEM 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:
- ---------------------------------------------------------------------------
8 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES
CERTAIN SHARES (SEE INSTRUCTIONS):
[ ]
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9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7):
- ---------------------------------------------------------------------------
10 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS):
CO
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</TABLE>
<PAGE> 4
TENDER OFFER
This Tender Offer Statement on Schedule 14D-1 (the "Schedule 14D-1")
relates to a tender offer by Dexter Acquisition Delaware, Inc., a Delaware
corporation ("Purchaser") and a wholly-owned subsidiary of Dexter Corporation, a
Connecticut corporation ("Parent"), to purchase all outstanding shares of Common
Stock, par value $.01 per share, of Life Technologies, Inc., a Delaware
corporation, not currently directly or indirectly owned by Purchaser or Parent,
for a purchase price of $37.00 per share, net to the seller in cash, without
interest thereon, upon the terms and subject to the conditions set forth in the
Offer to Purchase dated November 2, 1998 (the "Offer to Purchase") and in the
related Letter of Transmittal (the "Letter of Transmittal" and, together with
the Offer to Purchase, the "Offer"), and is intended to satisfy the reporting
requirements of Section 14(d) of the Securities Exchange Act of 1934, as
amended. Copies of the Offer to Purchase and the related Letter of Transmittal
are filed with this Schedule 14D-1 as Exhibits (a)(1) and (a)(2) hereto,
respectively.
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is Life Technologies, Inc., a Delaware
corporation (the "Company"), which has its principal executive and operating
offices at 9800 Medical Center Drive, Rockville, Maryland 20850.
(b) The title of the securities which are the subject of the Offer is the
Company's Common Stock, par value $.01 per share (the "Shares"), and the Offer
is for all outstanding Shares not currently directly or indirectly owned by
Purchaser or Parent at a price of $37.00 per Share, net to the seller in cash,
without interest thereon. The information set forth in the section entitled
"INTRODUCTION" of the Offer to Purchase is incorporated herein by reference.
(c) The information set forth in the section entitled "THE TENDER
OFFER -- Price Range of the Shares; Dividends" of the Offer to Purchase is
incorporated herein by reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(d) and (g) This Schedule 14D-1 is being filed by Purchaser and Parent.
The information set forth in the sections entitled "INTRODUCTION" and "THE
TENDER OFFER -- Certain Information Concerning Parent and Purchaser" of the
Offer to Purchase and in Schedule II to the Offer to Purchase is incorporated
herein by reference.
(e)-(f) During the last five (5) years, none of Purchaser, Parent nor, to
the best knowledge of Purchaser and Parent, any executive officer or director of
Purchaser or Parent has been convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors) nor has been a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction as a
result of which such person was or is subject to a judgment, decree or final
order enjoining future violations of, or prohibiting or mandating activities
subject to, Federal or state securities laws or finding any violation of such
laws.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
(a)-(b) The information set forth in the sections entitled "INTRODUCTION"
and "SPECIAL FACTORS -- Background of the Offer" and "-- Purpose and Structure
of the Offer; Plans for the Company after the Offer" of the Offer to Purchase is
incorporated herein by reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a)-(b) The information set forth in the section entitled "THE TENDER
OFFER -- Source and Amount of Funds" of the Offer to Purchase is incorporated
herein by reference.
(c) Not applicable.
1
<PAGE> 5
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER.
(a)-(g) The information set forth in the sections entitled "INTRODUCTION,"
"SPECIAL FACTORS -- Purpose and Structure of the Offer; Plans for the Company
after the Offer" and "THE TENDER OFFER -- Certain Effects of the Transaction" of
the Offer to Purchase is incorporated herein by reference.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a)-(b) The information set forth in the sections entitled "INTRODUCTION,"
"SPECIAL FACTORS -- Background of the Offer" and "THE TENDER OFFER -- Certain
Information Concerning Parent and Purchaser" and "-- Interest of Certain Persons
in the Offer" of the Offer to Purchase and in Schedule II to the Offer to
Purchase is incorporated herein by reference.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE SUBJECT COMPANY'S SECURITIES.
The information set forth in the sections entitled "INTRODUCTION," "SPECIAL
FACTORS -- Background of the Offer" and "THE TENDER OFFER -- Interests of
Certain Persons in the Offer" 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 sections entitled "INTRODUCTION," "SPECIAL
FACTORS -- Background of the Offer" and "THE TENDER OFFER -- Fees and Expenses"
of the Offer to Purchase is incorporated herein by reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
The information set forth in the section entitled "THE TENDER
OFFER -- Certain Information Concerning Parent and Purchaser" of the Offer to
Purchase is incorporated herein by reference.
ITEM 10. ADDITIONAL INFORMATION.
(a) Not applicable.
(b) The information set forth in the section entitled "THE TENDER
OFFER -- Certain Legal Matters; Regulatory Approvals" of the Offer to Purchase
is incorporated herein by reference.
(c) Not applicable.
(d) Not applicable.
(e) The information set forth in the sections entitled "SPECIAL
FACTORS -- Background of the Offer" and "THE TENDER OFFER -- Certain Legal
Matters; Regulatory Approvals" of the Offer to Purchase is incorporated herein
by reference.
(f) The information set forth in the entire Offer to Purchase and the
Letter of Transmittal, copies of which are filed with this Schedule 14D-1 as
Exhibits (a)(1) and (a)(2), respectively, is incorporated herein by reference.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
(a)(1) Offer to Purchase.
(a)(2) Letter of Transmittal.
(a)(3) Notice of Guaranteed Delivery.
(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and
Other Nominees.
2
<PAGE> 6
(a)(5) Letter to Clients for use by Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees.
(a)(6) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(a)(7) Text of Press Release issued by Parent, dated November 2, 1998.
(a)(8) Summary Advertisement, dated November 2, 1998.
(b) Commitment Letter and Term Sheet of The First National Bank of Chicago,
dated July 6, 1998, and amendments thereto, dated October 14, 1998, October 20,
1998 and October 30, 1998.
(c) Not applicable.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
3
<PAGE> 7
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: November 2, 1998. DEXTER ACQUISITION DELAWARE, INC.
By: /s/ KATHLEEN BURDETT
--------------------------------------
Name: Kathleen Burdett
Title: Treasurer
DEXTER CORPORATION
By: /s/ BRUCE H. BEATT
--------------------------------------
Name: Bruce H. Beatt
Title: Vice President, General
Counsel and Secretary
4
<PAGE> 8
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT SEQUENTIALLY
NUMBER DESCRIPTION NUMBERED PAGE
- ------- ----------- -------------
<S> <C> <C>
(a)(1) Offer to Purchase.
(a)(2) Letter of Transmittal.
(a)(3) Notice of Guaranteed Delivery.
(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.
(a)(5) Letter to Clients for use by Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees.
(a)(6) Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.
(a)(7) Text of Press Release issued by Parent, dated November 2,
1998.
(a)(8) Summary Advertisement, dated November 2, 1998.
(b) Commitment Letter and Term Sheet of The First National Bank
of Chicago, dated July 6, 1998, and amendments thereto,
dated October 14, 1998, October 20, 1998 and October 30,
1998.
(c) Not applicable.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
</TABLE>
<PAGE> 1
OFFER TO PURCHASE
EXHIBIT(A)(1)
<PAGE> 2
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
LIFE TECHNOLOGIES, INC.
AT
$37.00 NET PER SHARE IN CASH
BY
DEXTER ACQUISITION DELAWARE, INC.
A WHOLLY-OWNED SUBSIDIARY OF
DEXTER CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON TUESDAY, DECEMBER 1, 1998, UNLESS THE OFFER IS EXTENDED.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE HAVING BEEN
VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION DATE AT LEAST THAT
NUMBER OF SHARES OF COMMON STOCK, PAR VALUE $.01 PER SHARE, OF LIFE
TECHNOLOGIES, INC. ("SHARES") THAT WOULD, WHEN AGGREGATED WITH THE SHARES OWNED
DIRECTLY OR INDIRECTLY BY DEXTER CORPORATION, REPRESENT AT LEAST 80% OF ALL
SHARES THEN OUTSTANDING ON A FULLY-DILUTED BASIS AS DESCRIBED IN THIS OFFER TO
PURCHASE. THE OFFER IS ALSO SUBJECT TO CERTAIN OTHER CONDITIONS. SEE "THE TENDER
OFFER -- CERTAIN CONDITIONS OF THE OFFER."
THE OFFER IS NOT CONDITIONED ON THE AVAILABILITY OF FINANCING OR ON THE
APPROVAL OF THE BOARD OF DIRECTORS OF LIFE TECHNOLOGIES, INC. OR ANY COMMITTEE
THEREOF.
DEXTER CORPORATION CURRENTLY BENEFICIALLY OWNS 12,246,664 SHARES,
REPRESENTING APPROXIMATELY 51.5% OF THE OUTSTANDING SHARES AT OCTOBER 29, 1998.
THIS TRANSACTION HAS NOT BEEN APPROVED OR DISAPPROVED BY THE UNITED STATES
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE
FAIRNESS OR MERITS OF SUCH TRANSACTION NOR UPON THE ACCURACY OR ADEQUACY OF THE
INFORMATION CONTAINED IN THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS
UNLAWFUL.
------------------------
The Dealer Manager for the Offer is:
MERRILL LYNCH & CO.
November 2, 1998
<PAGE> 3
IMPORTANT
Any stockholder desiring to tender all or a portion of such stockholder's
Shares should either (a)(i) complete and sign the Letter of Transmittal or a
facsimile thereof in accordance with the instructions in the Letter of
Transmittal, have such stockholder's signature thereon guaranteed if required by
Instruction 1 to the Letter of Transmittal and mail or deliver the Letter of
Transmittal together with the certificate(s) representing tendered Shares and
all other required documents to the Depositary, or (ii) tender such Shares
pursuant to the procedure for book-entry transfer set forth in "THE TENDER
OFFER -- Procedure for Tendering Shares" or (b) request such stockholder's
broker, dealer, commercial bank, trust company or other nominee to effect the
transaction for such stockholder. Stockholders having Shares registered in the
name of a broker, dealer, commercial bank, trust company or other nominee must
contact such person if they desire to tender their Shares. Any stockholder who
desires to tender Shares and whose certificates representing such Shares are not
immediately available, or who cannot comply with the procedures for book-entry
transfer on a timely basis, may tender such Shares pursuant to the guaranteed
delivery procedure set forth in "THE TENDER OFFER -- Procedure for Tendering
Shares."
Questions and requests for assistance may be directed to the Information
Agent or to the Dealer Manager at their respective addresses and telephone
numbers set forth on the back cover of this Offer to Purchase. Additional copies
of this Offer to Purchase, the Letter of Transmittal, the Notice of Guaranteed
Delivery and other related materials may be obtained from the Information Agent
or from brokers, dealers, commercial banks and trust companies.
<PAGE> 4
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
INTRODUCTION................................................ 1
SPECIAL FACTORS............................................. 3
Background of the Offer................................... 3
Fairness of the Offer..................................... 11
Analysis of Financial Advisor to Parent................... 14
Purpose and Structure of the Offer; Plans for the Company
after the Offer........................................ 18
Certain United States Federal Income Tax Consequences..... 20
Appraisal Rights in the Merger............................ 21
THE TENDER OFFER............................................ 23
Terms of the Offer........................................ 23
Acceptance for Payment and Payment for Shares............. 24
Procedure for Tendering Shares............................ 25
Withdrawal Rights......................................... 28
Price Range of the Shares; Dividends...................... 29
Certain Effects of the Transaction........................ 29
Certain Information Concerning the Company................ 30
Certain Information Concerning Parent and Purchaser....... 34
Source and Amount of Funds................................ 35
Certain Conditions of the Offer........................... 37
Certain Transactions Between Parent and the Company....... 39
Interests of Certain Persons in the Offer................. 39
Certain Legal Matters; Regulatory Approvals............... 41
Fees and Expenses......................................... 42
Miscellaneous............................................. 43
SCHEDULE I.................................................. I-1
SCHEDULE II................................................. II-1
ANNEX A..................................................... A-1
</TABLE>
<PAGE> 5
To the Holders of Common Stock of Life Technologies, Inc.:
INTRODUCTION
Dexter Acquisition Delaware, Inc., a Delaware corporation ("Purchaser") and
a wholly-owned subsidiary of Dexter Corporation, a Connecticut corporation
("Parent"), hereby offers to purchase all outstanding shares of common stock,
par value $.01 per share (the "Shares"), of Life Technologies, Inc., a Delaware
corporation (the "Company"), not owned by Parent (the "Publicly-held Shares"),
at a purchase price of $37.00 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 Offer to Purchase and in the related Letter of Transmittal
(which, as amended and supplemented from time to time, together constitute the
"Offer").
Parent currently beneficially owns 12,246,664 Shares, representing
approximately 51.5% of the outstanding Shares at October 29, 1998. Nominees of
Parent currently constitute a majority of the members of the Board of Directors
of the Company ("Company Board"). Upon acquiring at least that number of Shares
that would, when aggregated with the Shares owned directly or indirectly by
Parent, represent at least 80% of the Shares then outstanding on a fully-diluted
basis as described below (the "Minimum Condition") pursuant to the Offer or
otherwise, Parent would have the power as stockholder to approve a merger or
other business combination involving the Company without the affirmative vote of
any other stockholder. Such board representation and ownership, however, do not
give Parent or Purchaser the power to compel any stockholder of the Company to
accept the Offer.
The purpose of the Offer is to enable Parent and Purchaser to own the
entire equity interest in the Company. Parent desires to acquire the minority
equity interest at this time as part of its long-term strategy to focus its
efforts and resources on businesses with strong market positions. See "SPECIAL
FACTORS -- Background of the Offer."
On July 7, 1998, Parent proposed to acquire all of the Publicly-held Shares
through a tender offer and merger at a cash price of $37.00 per Share, subject
to the approval of the Company Board (the "Proposal"). The Company Board
appointed a special committee comprised of members of the Company Board not
affiliated with Parent (the "Special Committee") to consider the Proposal. See
"SPECIAL FACTORS -- Background of the Offer." As a result of the Special
Committee's advice that it would not recommend acceptance of the Offer, on
October 27, 1998, Parent withdrew the Proposal. Parent disclosed to the Company
Board on October 27, 1998 and publicly announced on October 28, 1998 its
intention to commence the Offer in order to give the Company's stockholders the
opportunity to receive the Offer Price, which Parent believes represents a full
and fair price for the Shares for the reasons described below under "SPECIAL
FACTORS -- Fairness of the Offer." In addition, in light of Parent's withdrawal
of the Proposal, on October 27, 1998 the Special Committee was dissolved by the
Company Board, a majority of the members of which are persons affiliated with
Parent. The Offer has not been approved and its acceptance is not being
recommended by the Company Board or any committee thereof. Each stockholder
should make its own determination as to whether to accept or reject the Offer.
See "SPECIAL FACTORS -- Background of the Offer."
Parent and Purchaser currently intend, following the consummation of the
Offer, to seek to have the Company effect a merger (the "Second Step Merger") in
accordance with the relevant provisions of the General Corporation Law of the
State of Delaware (the "DGCL") in which Purchaser will be merged with and into
the Company. At the effective time of the Second Step Merger (the "Effective
Time"), each Share not tendered pursuant to the Offer (other than Shares owned
by the Company as treasury stock, Shares owned by Parent or Purchaser or any
subsidiary thereof, or Shares with respect to which appraisal rights are
properly exercised under Delaware law) would be converted into the right to
receive an amount in cash equal to the Offer Price (the "Merger Consideration").
Following consummation of the Second Step Merger, the Company would continue as
the surviving corporation (the "Surviving Corporation") and would be a wholly-
owned subsidiary of Parent.
If Purchaser owns at least 90% of the outstanding Shares following
consummation of the Offer (assuming the transfer of Parent's currently-owned
Shares to Purchaser), Purchaser would have the ability to
<PAGE> 6
consummate the Second Step Merger without a meeting or vote of the Company Board
or any committee thereof or of the stockholders of the Company, pursuant to the
"short form" merger provisions of Section 253 of the DGCL. In such
circumstances, Purchaser currently intends to so effectuate the Second Step
Merger as soon as practicable. See "SPECIAL FACTORS--Purpose and Structure of
the Offer; Plans for the Company after the Offer."
If Parent and Purchaser own less than 90% of the outstanding Shares
following consummation of the Offer, consummation of the Second Step Merger
would require the approval by the Company Board of an agreement between the
Company, Parent and Purchaser with respect to the Second Step Merger (a "Merger
Agreement") and the adoption of the Merger Agreement by the holders of at least
80% of the outstanding Shares. If Parent and Purchaser own less than 90% of the
outstanding Shares following consummation of the Offer, Parent and Purchaser
currently intend to either (i) promptly use their best efforts to take such
steps as are necessary to cause the Second Step Merger to be effective pursuant
to a Merger Agreement, including voting the Shares owned by them for adoption of
the Merger Agreement, which will, if the Shares remain registered under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), require filing
with the United States Securities and Exchange Commission (the "Commission") of
certain disclosure materials prior to adoption of the Second Step Merger by the
Company's stockholders, or (ii) for an indeterminate period, delay the Second
Step Merger and engage in certain open market or privately negotiated purchases,
at prices which may be greater or less than the Offer Price, in order to
increase Parent and Purchaser's combined ownership to or above 90% of the
outstanding Shares, so as to enable Purchaser to effect the Second Step Merger
as a "short form" merger. See "THE TENDER OFFER --Certain Effects of the
Transaction." As a consequence, no assurance can be given as to whether or when
Purchaser will cause the Second Step Merger to be consummated and, similarly, no
assurance can be given as to whether or when the Merger Consideration will be
paid to stockholders who do not tender their Shares in the Offer. IN NO EVENT
WILL ANY INTEREST BE PAID ON THE MERGER CONSIDERATION. See "SPECIAL
FACTORS -- Purpose and Structure of the Offer; Plans for the Company After the
Offer."
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, SATISFACTION OF THE
MINIMUM CONDITION. SEE "THE TENDER OFFER -- CERTAIN CONDITIONS OF THE OFFER."
PURCHASER RESERVES THE RIGHT (BUT SHALL NOT BE OBLIGATED) TO WAIVE ANY OR ALL
CONDITIONS TO THE OFFER.
THE OFFER IS NOT CONDITIONED ON THE AVAILABILITY OF FINANCING OR ON THE
APPROVAL OF THE BOARD OF DIRECTORS OF THE COMPANY OR ANY COMMITTEE THEREOF.
The Company has advised Purchaser that, as of October 29, 1998, there were
(i) 23,765,418 Shares issued and outstanding (the "Outstanding Shares") and (ii)
1,214,830 Shares subject to issuance under options which are presently
exercisable ("Option Shares"). For purposes of calculating the Minimum
Condition, the term "fully-diluted" includes only the Outstanding Shares and the
Option Shares. Based upon the number of Outstanding Shares and Option Shares,
Parent and Purchaser currently believe that 7,737,535 Publicly-held Shares must
be tendered and not withdrawn to satisfy the Minimum Condition.
According to the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1997 (the "Company's 10-K"), there were approximately 553
holders of record of Shares on February 20, 1998. In addition, according to the
Company's 10-K, as of December 31, 1997, options to purchase approximately
2,227,354 Shares (the "Company Options") were outstanding. Purchaser is not
offering to acquire the Company Options in the Offer. Each holder of a Company
Option that is vested may exercise such Company Option prior to the consummation
of the Offer and the Shares received upon such exercise may be tendered pursuant
to the Offer. It is Parent's intention that each Company Option that is vested
and outstanding immediately prior to the consummation of the Second Step Merger
will no longer be exercisable for the purchase of Shares but will entitle each
holder thereof, in cancellation and settlement therefor, to a cash payment
promptly after the consummation of the Second Step Merger equal to the product
of (x) the total
2
<PAGE> 7
number of Shares subject to such Company Option and (y) the excess, if any, of
the Merger Consideration over the exercise price per Share subject to such
Company Option. It is also Parent's intention that action be taken in accordance
with the Company's plans so that each unexpired Company Option that is unvested
immediately prior to the consummation of the Second Step Merger will no longer
be exercisable for the purchase of Shares, but will be converted to an option
("Parent Option") to purchase shares of common stock, par value $1.00 per share,
of Parent ("Parent Shares") as described under "SPECIAL FACTORS -- Purpose and
Structure of the Offer; Plans for the Company after the Offer."
Tendering holders of Shares will not be obligated to pay brokerage fees or
commissions or, except as set forth in the Letter of Transmittal, transfer taxes
on the purchase of Shares by Purchaser pursuant to the Offer. Purchaser will pay
all charges and expenses of Merrill Lynch, Pierce, Fenner & Smith Incorporated
("Merrill Lynch"), which is acting as the Dealer Manager (in such capacity, the
"Dealer Manager") in connection with the Offer, BankBoston, N.A. which is acting
as the Depositary (the "Depositary") in connection with the Offer, and MacKenzie
Partners, Inc., which is acting as the Information Agent (the "Information
Agent") in connection with the Offer. See "THE TENDER OFFER -- Fees and
Expenses."
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER.
SPECIAL FACTORS
BACKGROUND OF THE OFFER
The Company is the surviving corporation of a merger in 1983 of a
wholly-owned Parent subsidiary with Bethesda Research Laboratories, Inc., a
Maryland corporation. Parent had acquired the business operated by its
subsidiary as part of its acquisition of The Mogul Corporation in 1977. After
such merger, Parent owned approximately 64% of the Shares and voting power of
the Company.
The Company has been operating as an independent public company since prior
to 1986. In 1986, certain Company stockholders sold shares in an underwritten
public offering. Subsequent issuances of shares by the Company for purposes such
as the conversion of convertible debentures and the exercise of employee stock
options further reduced Parent's ownership to its present 51.5% level.
In 1998, as part of a strategic review of Parent's entire business,
Parent's management evaluated its investment in the Company. In this regard,
Merrill Lynch was engaged to provide Parent with financial advisory and
investment banking services in accordance with an engagement letter dated May 1,
1998. The results of this strategic review were presented to Parent's Board of
Directors (the "Parent Board") at an informal meeting held on June 23, 1998 and
at a regular meeting held on June 24, 1998, including management's
recommendation that Parent seek to acquire all of the Company's equity interest
which Parent did not then own. The Parent Board concluded that, if such
acquisition were to be sought and completed, it would be desirable for J. Stark
Thompson, Ph.D., the chief executive officer of the Company, to continue in that
capacity.
On June 30, 1998, K. Grahame Walker, Parent's Chairman and Chief Executive
Officer, met with Dr. Thompson. Mr. Walker advised Dr. Thompson of the
possibility of Parent making an acquisition proposal at the regular meeting of
the Company Board on July 7, 1998. Mr. Walker also said that Parent would have
no present intention to change any of the Company's senior executives or other
management members, to reduce the Company's employee workforce, to move the
Company's headquarters or, except as noted below, to change the Company's
employee benefit plans in the foreseeable future. Mr. Walker noted, however,
that Parent's management would intend that the Company's employees become part
of Parent's stock option plan (which would result in option grants to fewer
Company employees and in smaller amounts than under the past operation of the
Company's stock option plans). Mr. Walker also advised Dr. Thompson that, if the
proposal were to be made and consummated, Parent would wish Dr. Thompson to
continue as the Company's chief
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<PAGE> 8
executive officer and would be interested in nominating Dr. Thompson to become a
member and Vice Chairman of the Parent Board.
On July 6, 1998, in a special telephone meeting of the Parent Board, the
Parent Board authorized Mr. Walker to make a proposal on behalf of Parent to
acquire all of the shares of the Company not currently owned by Parent for
$37.00 per share in cash.
On July 7, 1998, at a regular meeting of the Company Board, Mr. Walker
delivered the following letter to the Company Board:
As you know, the corporate strategy of Dexter Corporation ("Dexter")
is to participate in growth markets for specialty materials which can be
differentiated by proprietary technology. Life Technologies, Inc. ("LTI"),
as a specialty chemical company exclusively serving the biotechnology
market, is an important element in implementing this strategy. The Board of
Directors of Dexter has now concluded that its corporate goals would be
better served if it owned all of the equity interest in LTI.
Dexter has great confidence in LTI's strategic direction and
management. The separate identity of LTI would be continued and its
executives and other employees would be retained.
Accordingly, I am pleased to make the following proposal on behalf of
Dexter to acquire all of the outstanding common shares of LTI not currently
owned by Dexter (the "Public Shares"). The principal terms of our proposal
are as follows:
1. The acquisition would be implemented through a cash tender offer
followed by a merger of a Dexter subsidiary into LTI (collectively,
the "Transaction").
2. The Transaction would result in all holders of Public Shares
receiving $37 per share in cash. The Transaction would involve an
aggregate payment of approximately $420 million to the holders of
Public Shares, based on the number of Public Shares stated in the
LTI 10-Q as of March 31, 1998.
3. Initiation of the Transaction would be subject to, among other
things, approval by the Board of Directors of LTI, including the
approval of the unaffiliated directors, execution of a definitive
agreement, and other conditions customary in transactions of this
type.
4. The Transaction would be financed through Dexter's available cash
and committed facilities.
5. LTI's officers and other employees would continue on their present
terms for the foreseeable future, except that LTI vested stock
options would be cashed out, LTI nonvested stock options would be
converted to Dexter stock options on terms reflecting the price paid
for the Public Shares, and future long term incentive awards of
Dexter stock or stock options would be determined in a manner
consistent with that followed in respect of other officers and
employees of Dexter.
We believe that our proposal is fair to, and in the best interest of,
LTI and holders of Public Shares. The proposed acquisition price represents
a premium of approximately 13% and close to 16% over the average closing
price of LTI common stock on NASDAQ over the past 30 trading days and the
one year ended July 2, 1998, respectively.
We would like to make it clear that Dexter is not interested in
selling its interest in LTI and thus there is no realistic prospect of sale
of a controlling interest in LTI to a third party.
We understand that you may wish to have this proposal considered by a
special committee of independent directors and that such committee may wish
to retain its own advisors to assist in those deliberations. We invite such
representatives to meet with our advisors to discuss this proposal at your
earliest convenience.
We hope you will view our proposal favorably and give it your prompt
attention. We reserve the right to amend or withdraw this proposal at any
time in our discretion.
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<PAGE> 9
We look forward to hearing from you soon.
Following receipt of the Proposal at such meeting, the Company Board
adopted a resolution forming the Special Committee to consider and respond to
the Proposal. Thomas H. Adams, Ph.D., Frank E. Samuel, Jr., and Iain C. Wylie
were appointed as the members of the Special Committee, with Dr. Adams to act as
chairman. In addition, the resolution directed the Company to pay Dr. Adams
$25,000 and each of Messrs. Samuel and Wylie $17,500 in fees for their services
as members of the Special Committee in addition to their expenses incurred in
such capacity. Dr. Adams and Messrs. Samuel and Wylie are each unaffiliated with
Parent.
During the meeting, Parent issued the following press release, which
announced both the Proposal and Parent's intention to sell its packaging
coatings business (which is not related to the Company's business):
Dexter Corporation (NYSE: DEX) today announced two major
strategic initiatives to better position the company to achieve
its long-term growth objectives. Those steps include the
acquisition of the remaining 48% equity in Life Technologies,
Inc. (NASDAQ: LTEK), a 52% Dexter-owned subsidiary, and the sale
of Dexter's Packaging Coatings business, including Dexter S.A.,
its French coatings subsidiary.
K. Grahame Walker, Chairman and Chief Executive Officer of
Dexter Corporation said, "Today's announcement furthers our
stated objective of focusing our efforts and resources on
profitable, high-growth businesses with strong market positions
that have the ability to generate consistently strong earnings.
With the consummation of these two transactions, our core
specialty materials businesses will hold strong positions in the
biotechnology, electronics, nonwovens and aerospace markets. We
will be a more focused company whose specialty materials deliver
real value to our customers with products based on proprietary
technology. The transaction enables Life Technologies' employees
and customers to be part of a widely respected global company
whose growth prospects are extremely bright."
Dexter has proposed to the Life Technologies' Board of
Directors that it acquire the approximately 11.3 million shares
of Life Technologies it does not currently own, at a price of
$37 per share in cash, or approximately $420 million, net,
excluding payment of exercisable stock options. The acquisition
of the publicly owned shares of Life Technologies offers its
shareholders an 18% premium over the July 6, 1998 closing price.
The offer will be financed through Dexter's available cash and a
committed credit facility arranged by First Chicago Capital
Markets, Inc. The proposal is subject to the approval of Life
Technologies' Board of Directors. Dexter anticipates that the
Life Technologies Board will form a special independent
committee to consider the proposal.
The acquisition will give Dexter access to the significant
cash flow generated by Life Technologies which will be used to
fund future growth and repay indebtedness.
"Our decision to acquire the balance of the Life
Technologies shares reflects our view that the biotechnology
industry, in which Life Technologies' products have a strong
position, should continue to expand in the medical and
agricultural markets. Moreover, we are impressed by Life
Technologies' management and look forward to working even more
closely with them," Mr. Walker said.
The plan to divest Dexter's Packaging Coatings unit -- a
business that has a range of products serving the beer, beverage
and food can, aerosol and tube markets -- followed an
exhaustive study of Dexter's competitive position in a rapidly
consolidating industry. Packaging Coatings and Dexter S.A. had
combined 1997 sales of $208 million. "Our Packaging Coatings
business represents an attractive acquisition opportunity for
other market participants," Mr. Walker noted.
Dexter has retained Merrill Lynch & Co. as financial
advisor on the transactions.
5
<PAGE> 10
Statements made in this press release which are not
historical are forward-looking statements and as such are
subject to a number of risks. These and other risks and
uncertainties are detailed in Dexter's Form 10-K, for the year
ended December 31, 1997.
Dexter is a global specialty materials supplier with three
operating segments: specialty polymers, nonwovens and a majority
ownership in Life Technologies. The company supplies specialty
materials to the aerospace, electronics, food packaging and
medical markets. In 1997 Dexter's consolidated net sales were
$1.15 billion and it earned $56.4 million.
Life Technologies, Inc. develops, manufactures and supplies
more than 3,000 products used principally in life sciences
research and commercial manufacture of genetically engineered
products. The company is a leading supplier of sera and other
cell growth media, as well as enzymes and other biological
products necessary for recombinant DNA procedures.
The foregoing press release was issued after trading on the National Association
of Securities Dealers Automated Quotation System ("NASDAQ") closed on July 7,
1998 and, based on the Company's closing price that day of $31.00 per share, the
$37.00 per share proposed price represented a premium of 19.4%.
From July 8 to July 10, 1998, eight complaints were filed in the Delaware
Chancery Court in Wilmington, Delaware, initiating lawsuits seeking to block
implementation of the Proposal. On September 8, 1998, a consolidation order was
issued appointing an executive committee of plaintiffs' counsel. There have been
no further significant developments in such litigation.
On July 27, 1998, at a special telephonic meeting of the Company Board, the
Special Committee advised the Company Board that it had selected Goldman Sachs &
Co. ("Goldman Sachs") to act as its financial advisor and Wachtell, Lipton,
Rosen & Katz ("Wachtell Lipton") to act as its legal counsel. At such meeting,
the Company Board also elected Peter G. Kelly, a director of Parent, to fill the
vacancy on the Company Board created by the resignation of Rita R. Colwell,
Ph.D., who prior to July 7 had announced her intention to so resign as of August
1, 1998. Prior to this meeting, Dr. Thompson had suggested other persons to Mr.
Walker to fill this vacancy. Five Company directors, including Dr. Thompson,
voted in favor of Mr. Kelly's election, Dr. Adams and Mr. Wylie voted against
Mr. Kelly's election and Mr. Samuel was absent from the meeting. Accordingly,
the Company Board presently consists of Dr. Thompson, Dr. Adams, Messrs. Samuel
and Wylie, three executive officers of Parent and two independent directors of
Parent.
On August 3, 1998, the Company issued a press release announcing the
engagement of Goldman Sachs and Wachtell Lipton by the Special Committee.
On August 17, 1998, at a special telephonic meeting of the Company Board,
the Special Committee reported that it had commenced its evaluation of the
Proposal, with the assistance of the Special Committee's advisors, with a visit
to the Company's headquarters on August 4, 1998. Representatives of Parent's
legal counsel and the Special Committee's legal counsel also participated in the
August 17 meeting.
Effective as of August 18, 1998, the Company Board, acting by unanimous
written consent, clarified and supplemented its prior Special Committee
resolutions to, among other things, increase the fees for services as members of
the Special Committee to $75,000 for Dr. Adams as Chairman and $50,000 to each
of Messrs. Samuel and Wylie, reimburse their expenses, and pay all other
customary fees and expenses as members of the Company Board (other than fees for
attending meetings of the Special Committee).
On August 20, 1998, following a meeting of the Special Committee with its
financial advisor and legal counsel, such advisor and counsel held a telephonic
meeting with executive officers of Parent and representatives of Parent's
financial advisors and legal counsel. The Special Committee's financial advisor
and legal counsel reported generally on the Special Committee's activities,
including meetings and conference calls with the Company's management. The
Special Committee's financial advisor requested that Parent provide various
written materials in its possession concerning the Company prepared by Parent or
the Company. Responsive
6
<PAGE> 11
materials were provided by Parent, through its financial advisor, to the Special
Committee's financial advisor on August 25, 1998.
On August 31, 1998, at a special telephonic meeting of the Company Board,
the Special Committee reported that it planned to hold a meeting with its
financial advisor and legal counsel the following week. Representatives of
Parent's legal counsel and the Special Committee's legal counsel also
participated in the August 31 meeting.
On September 14, 1998, in a telephonic meeting with executive officers of
Parent, the Special Committee advised Parent's officers that based on its work
to date, it did not believe that the Proposal adequately reflected the value of
the Company's prospects. The Special Committee noted its particular focus on the
Company's research and development plans and projects not included in the
Company's 1998 strategic plan (the "R&D Pipeline") (the Company's 1998 strategic
plan encompasses the years 1998 to 2000 and was presented to the Company Board
in December 1997 (the "1998 Strategic Plan")). The Special Committee also
reported that it had received inquiries from one or more unnamed third parties,
which were not pursued by such third parties after they were advised of Parent's
lack of interest in disposing of its controlling block of Shares. Neither Parent
nor Merrill Lynch has received any such inquiry to date.
On September 17, 1998, Parent's and the Special Committee's financial
advisors met. At such meeting, Goldman Sachs presented to Merrill Lynch a
financial model derived from information provided by the Company's management.
The model contained projected income and cash flow statements for the Company's
business for each year from 1998 through 2002 (the "Base Case Projections").
According to the Special Committee's financial advisors, these Base Case
Projections were based on the 1998 Strategic Plan. The financial forecasts for
the years 2001 and 2002 were described as simplified extrapolations of the 1998
Strategic Plan. These Base Case Projections set forth revenues rising at a
compound annual rate of 9.5% from $361.4 million in 1998 to $519.5 million in
2002, net income rising at a compound annual rate of 14.3% from $38.1 million in
1998 to $65.0 million in 2002, earnings before interest and taxes ("EBIT")
rising at a compound annual rate of 13.7% from $59.7 million in 1998 to $99.8
million in 2002, and free cash flow rising at a compound annual rate of 37.1%
from $13.7 million in 1998 to $48.6 million in 2002.
In addition, Goldman Sachs presented to Merrill Lynch a financial model
which contained projections of additional revenues and EBIT to be realized from
the R&D Pipeline each year from 1998 through 2002 (the "R&D Projections"). These
projections were represented as being incremental to the Base Case Projections.
According to Goldman Sachs, the R&D Projections were developed with the
Company's management after its appointment as financial advisor to the Special
Committee. In the R&D Projections provided by Goldman Sachs, approximately 68%
of the revenues in 2002 and approximately 73% of the EBIT in 2002 would be
attributable to five of the 21 projects covered by such projections.
The R&D Projections provided by Goldman Sachs reflected potential revenues
and EBIT, which were risk adjusted through the utilization of a probability of
success factor for each project (meaning the probability that the revenues and
EBIT projected for such project would be realized), which factors ranged from
40% to 90%, with an implied weighted average of 73% based on 2002 revenue. The
R&D Projections for aggregate revenues, EBIT and free cash flow (defined as tax
effected EBIT plus depreciation and amortization less changes in working capital
and capital expenditures) ("Free Cash Flow") were as follows:
<TABLE>
<CAPTION>
SUMMARY R&D PROJECTIONS ($ IN MILLIONS)
-------------------------------------------
1998 1999 2000 2001 2002
----- ----- ----- ------ ------
<S> <C> <C> <C> <C> <C>
Revenues...................................... 1.6 25.2 64.6 116.2 164.6
EBIT.......................................... 0.5 3.8 12.5 27.7 46.7
Free Cash Flow................................ (0.5) (4.8) (4.3) 1.3 14.1
</TABLE>
Goldman Sachs reported that it had undertaken various analyses of the
Company, which Goldman Sachs did not characterize as a full range of valuation
methodologies, as reflecting the complete analysis shared with the Special
Committee or as its definitive valuation analysis. One of Goldman Sachs'
analyses based on the discounted cash flows of the Company presented a value of
$40.83 to $49.32 per Share for the Base Case Projections (utilizing an exit
multiple range of 14x to 16x 2002 EBIT and a discount rate range of 10% to
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<PAGE> 12
12%), and an incremental value of $10.37 to $13.05 per Share for the R&D
Projections (utilizing an exit multiple range of 17x to 18x 2002 EBIT and a
discount rate range of 25% to 30%).
SEE "THE TENDER OFFER -- CERTAIN INFORMATION CONCERNING THE
COMPANY -- PROJECTIONS" FOR CERTAIN QUALIFYING STATEMENTS REGARDING THE BASE
CASE PROJECTIONS AND THE R&D PROJECTIONS.
On October 1, 1998, members of the Company's management met at the
Company's headquarters with Dr. Adams, executive officers of Parent, and
representatives of Parent's and the Special Committee's respective financial
advisors and legal counsel. The principal purpose of the meeting was to review
the status of the R&D Pipeline, the R&D Projections and the context in which
such projections were assembled. The Company's management stated that, prior to
receiving the Proposal, the Company had never quantified potential revenue and
profit forecasts relating to the R&D Pipeline and, in addition, was unable to
provide meaningful data on the historical productivity of its overall R&D
effort.
At the same meeting, the Company's management explained that in the past
several years, its research and development program generally has focused on
fewer potential products with larger potential value, which are based on the
Company's core competencies and existing customer base; and that in light of
market and technological changes, the Company expected to see its revenues
increasingly be derived from customized services and licensing, rather than the
Company's current line of products.
On October 8, 1998, a telephonic meeting was held among members of the
Company's management, Dr. Adams, executive officers of Parent and
representatives of Parent's and the Special Committee's respective financial
advisors and legal counsel. The principal purpose of the meeting was to consider
questions from Parent and its advisors concerning the Company's Base Case
Projections and planning process. The Company's management noted that the 1998
Strategic Plan consists of a profit plan for 1998 and projections for 1999 and
2000 (all of which had been presented to the Parent Board in December 1997).
They explained that the one-year (1998) profit plan was prepared in great detail
on a product by product basis, but that the two-year projections (1999 and 2000)
were prepared on a very general basis solely by the Company's chief executive
officer, chief financial officer and controller, who had concluded that 9 1/2%
revenue growth and 14-15% earnings growth were appropriate assumptions.
In response to questions, the Company's management said that they expected
the Company to realize its planned 1998 revenue, but that 1998 earnings were
likely to be approximately 3% below the profit plan forecast, due primarily to
costs associated with intellectual property litigation, currency fluctuations
and costs associated with the Special Committee's assessment of the Proposal,
offset in part by a reduction in the Company's tax rate. They also stated their
belief that a 9 1/2% revenue growth projection through 2002 was reasonable
without expecting any contribution from the R&D Pipeline. They explained that,
of such 9 1/2% revenue growth, 6% was expected to come from overall market
growth, 1 1/2% from the Company's gain in market share and 2% from the
commercialization of research and development projects not part of the R&D
Pipeline. They also confirmed that the R&D Pipeline results were not included in
the Company's Base Case Projections even though the R&D Projections were
significant in the 1998 Strategic Plan years of 1999 and 2000.
On October 14, 1998, the Parent Board held a special telephonic meeting to
receive reports on the Proposal from Parent's management and its financial
advisor on the Special Committee's response to the Proposal and related matters.
On October 15, 1998, Merrill Lynch met with Goldman Sachs to discuss the
Goldman Sachs' analysis and provide Goldman Sachs with Parent's position on the
Proposal. Merrill Lynch explained that Parent and Merrill Lynch did not believe
that the methodology used by the Special Committee and its advisors to evaluate
the Proposal was appropriate. In particular, Parent and Merrill Lynch did not
believe that the R&D Projections were reliable indicators of potential revenue
and profitability incremental to the Base Case Projections nor did they believe
the Special Committee utilized appropriate probability factors or valuation
techniques when determining the value of the Base Case and R&D Projections.
Accordingly, Merrill Lynch informed Goldman Sachs that Parent, after
consultation with Merrill Lynch, believed $37.00 per Share
8
<PAGE> 13
continued to be a full and fair offer. For more information regarding the
presentation by Merrill Lynch to Goldman Sachs, see "SPECIAL FACTORS -- Fairness
of the Offer" and "-- Analysis of Financial Advisor to Parent."
On October 20, 1998, representatives of Goldman Sachs advised
representatives of Merrill Lynch that, after reviewing the information exchanged
at an October 15, 1998 meeting with the Special Committee, further work was
required to respond to the Proposal but that no time for such response could be
established.
On October 23, 1998, at a regular meeting of the Parent Board, Parent's
management and representatives of Parent's financial advisors and legal counsel
reviewed with the Parent Board the status and fairness of the Proposal. See
"Certain Factors -- Fairness of the Offer". Mr. Walker advised the Parent Board
that he had convened a special telephonic meeting of the Company Board for
Tuesday, October 27, 1998, to receive a report on the status of the Special
Committee's review of the Proposal from the Special Committee. The Parent Board
authorized Mr. Walker to withdraw the Proposal if he believed that to be in
Parent's best interest; the Parent Board also authorized Parent to proceed with
the Offer if the Proposal was withdrawn.
On October 26, 1998, a telephonic meeting was held among representatives of
Goldman Sachs and Merrill Lynch. Goldman Sachs reported it had held a telephonic
meeting with the Special Committee and representatives of the Special
Committee's legal counsel on the preceding Friday, October 23. Goldman Sachs
reported that the Special Committee had reviewed the issues raised by Merrill
Lynch on October 15, 1998 and had reaffirmed its beliefs in regard to the
Proposal, and in particular, the need for a greater recognition of the R&D
Pipeline value in the Proposal. Goldman Sachs also said that application of the
valuation methodologies it utilized presented a composite value of $36.00 to
$52.00 per Share, after giving effect to both the Base Case Projections and the
R&D Projections.
In the morning of October 27, 1998, Goldman Sachs advised Merrill Lynch
that the Special Committee would not recommend approval of any price per Share
"in the $30s." Goldman Sachs also said that, although the Special Committee
believed that its valuations would support a price per Share "in the $50's," the
committee would be willing to consider a price per Share "in the $40s."
In the afternoon of October 27, 1998, a special telephonic meeting of the
Company Board was held, with all members of the Board and representatives of
Parent's and the Special Committee's respective legal counsel in attendance. Dr.
Adams reported that additional work of the Special Committee and its advisors
had reinforced the Special Committee's views as to the value of the Shares and
that it would not recommend approval of the Proposal or any other price "in the
$30s." In response to questions, Dr. Adams stated that, although the Company's
underlying values would support a broad range of prices, including prices per
Share "in the $50s," he believed that the Special Committee would be able to
respond to a proposed price per Share "in the $40s." However, Dr. Adams did not
give the Company Board an indication of an exact price that the Special
Committee would recommend.
Mr. Walker then read the following letter from Parent withdrawing the
Proposal:
I am writing to advise you that Dexter Corporation ("Dexter") is
withdrawing its July 7, 1998 proposal to acquire all of the outstanding
shares of Life Technologies, Inc. ("LTI") that it does not currently own
for $37.00 per share in cash through a tender offer and subsequent merger
that would be approved by the Board of Directors of LTI.
As you know, Dexter has attempted to obtain a definitive response to
its July 7 proposal from the Special Committee appointed by the LTI Board
of Directors. At this point, the Special Committee has not accepted the
proposal.
Based upon meetings with LTI management, our internal analysis and
consultation with our financial advisor, Merrill Lynch & Co., we continue
to believe that $37.00 per share in cash would be a full and fair price for
LTI public stockholders. The price would represent a 19.4% premium over the
closing price of LTI immediately prior to the announcement of our proposal
and, in Dexter's belief, a significantly larger premium based on conditions
affecting the market since that time.
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<PAGE> 14
Dexter has determined that it is desirable to initiate a process to
enable the LTI public stockholders to accept this attractive price in a
timely manner and to end the uncertainties which have arisen over the past
three-and-a-half months. Accordingly, Dexter will shortly commence a tender
offer for all of the outstanding shares of LTI that it does not currently
own at a cash price of $37.00 per share.
Mr. Walker next stated that, because the Proposal had been withdrawn, there
appeared to be no purpose in continuing the existence of the Special Committee.
The Company Board then adopted a resolution dissolving the Special Committee.
All Parent-affiliated directors voted in favor of the motion, Dr. Adams and
Messrs. Samuel and Wylie voted against the motion, and Dr. Thompson abstained.
On October 28, 1998, Parent issued the following press release:
Dexter Corporation (NYSE:DEX) today announced that it intends to
commence a tender offer, for $37 per share in cash, for all outstanding
shares of common stock of Life Technologies, Inc. (NASDAQ: LTEK) that it
does not currently own.
Dexter Corporation, a leading specialty materials producer, currently
owns approximately 52 percent of Life Technologies' outstanding common
shares. On July 7, 1998 Dexter proposed a cash tender offer and subsequent
merger in which it would acquire the minority Life Technologies shares for
$37 per share with the approval of Life Technologies' Board of Directors.
On October 27, 1998, a special committee of independent directors of the
Life Technologies Board that had been considering Dexter's proposal advised
Dexter that it would not recommend approval of its offer.
K. Grahame Walker, Chairman and Chief Executive Officer of Dexter
Corporation, said: "We are disappointed that the special committee will not
recommend approval of our $37 per share proposal because we continue to
believe that this price is full and fair for the Life Technologies public
shareholders. As we have previously informed the Life Technologies Board of
Directors, we have no interest in selling our controlling block of Life
Technologies shares. Our objective is still to own 100% of Life
Technologies."
"We also have a responsibility to Dexter's shareholders to end their
uncertainty about the proposed transaction, which we believe will better
position Dexter to achieve its long-term growth objectives. Dexter has
confidence in Life Technologies' management and employees and intends to
continue its strong support for growth of Life Technologies' business."
"Accordingly, we feel we have no choice but to move forward with our
tender offer and permit the Life Technologies shareholders to take
immediate advantage of the premium we offered. Dexter's offer of $37 per
share represents a 19.4 percent premium over Life Technologies' closing
price immediately prior to the July 7 announcement and, in Dexter's belief,
is a significantly larger premium based on conditions affecting the market
since that date."
Consummation of the tender offer will be conditioned upon Dexter
receiving sufficient shares to own at least 80 percent of all outstanding
Life Technologies shares, but will not be conditioned upon financing or any
approval of the Life Technologies Board of Directors or any committee
thereof. The offer is expected to begin within five business days.
Dexter intends to acquire any shares not tendered in the offer through
a merger in which the remaining shareholders would receive the same price
as is paid in the tender offer. The timing and actual terms of the merger
will depend upon the results of the tender offer.
Dexter Corporation is a global speciality materials supplier with
three operating segments: speciality polymers, nonwovens, and a majority
ownership in Life Technologies. The company supplies specialty materials to
the aerospace, electronics, food packaging and medical markets.
Life Technologies, Inc. develops, manufactures and supplies more than
3,000 products used principally in life sciences research and commercial
manufacture of genetically engineered products. The company is a leading
supplier of sera and other cell growth media, as well as enzymes and other
biological products necessary for recombinant DNA procedures.
10
<PAGE> 15
FAIRNESS OF THE OFFER
Because Parent currently owns a majority of the outstanding Shares of the
Company, Parent and Purchaser are deemed "affiliates" of the Company under Rule
12b-2 of the Exchange Act. Accordingly, in compliance with Rule 13e-3 under the
Exchange Act, Purchaser and Parent have considered the fairness of the Offer to
the stockholders of the Company other than Purchaser and Parent and, in
connection with the Offer, have filed with the Commission a Rule 13e-3
Transaction Statement on Schedule 13E-3 (the "Schedule 13E-3").
Purchaser and Parent believe the Offer to be fair to the Company's
stockholders other than Parent. In making this determination, Purchaser and
Parent have considered the analysis of Merrill Lynch set forth below (see
"Analysis of Financial Advisor to Parent") in addition to the following factors:
(i) the Offer Price represents a significant premium over both the closing price
for the Shares on July 7, 1998, the last full trading day prior to announcement
of the Proposal (the "Pre-Announcement Date") and over the average trading price
of the Shares for the 12-month period ending on the Pre-Announcement Date; (ii)
since the Pre-Announcement Date, trading prices on the New York Stock Exchange,
American Stock Exchange and NASDAQ have declined, as evidenced by the following
declines in widely followed market averages from the Pre-Announcement Date to
the trading day preceding the announcement of the Offer: Dow Jones Industrial
Average: 7.9%; Standard & Poor's 500 Index: 7.7%; and NASDAQ index: 10.0%; (iii)
the Offer Price is at the higher end of the ranges of the implied value of the
Shares derived from the analyses performed by Merrill Lynch and described below;
(iv) the Offer is an all-cash offer for all Publicly-held Shares which the
holders thereof can accept or reject voluntarily; and (v) the Offer provides
stockholders who are considering selling their Shares with the opportunity to do
so without incurring the transaction costs typically associated with market
sales.
Because the Company has represented a significant investment for Parent for
many years, Parent is familiar with the Company's financial information and
historical performance and believes it is able to make informed judgments
regarding the positive and negative aspects of the Company. As a consequence, in
reaching its conclusion as to fairness, Parent and Purchaser, in consultation
with Merrill Lynch, evaluated the methodology used by the Special Committee and
its advisors to review the Offer Price. See "SPECIAL FACTORS -- Background of
the Offer." Based on such evaluation, Parent does not believe that such
methodology is appropriate. In particular, Parent does not believe that the
growth and profitability prospects delineated in the Base Case Projections and
the R&D Projections are reliable indicators of the Company's future financial
performance.
The following sets out Parent's beliefs, based in part upon the advice of
Merrill Lynch, in regard to the fairness of the Offer, the projections and the
analyses set forth by Goldman Sachs as financial advisor to the Special
Committee:
General Fairness Considerations
- a forecast which encompasses 9.5% revenue growth and approximately 14%
EBIT growth (as presented in the Base Case Projections) is consistent
with the Company's publicly-stated goals, the 1998 Strategic Plan and
recent experience and best represents the realistic financial prospects
of the Company including commercialization of projects in the R&D
Pipeline;
- the Offer Price of $37.00 compares favorably within a discounted cash
flow valuation range referred to below under "SPECIAL FACTORS -- Analysis
of Financial Advisor to Parent" of $30 to $40 per Share derived from the
Base Case Projections, a 4% to 6% perpetual growth rate after 2002 and an
11% discount rate;
- the Offer Price of $37.00 implies multiples of (i) price to estimated
1999 earnings ("1999 PE") to estimated five-year earnings growth; (ii)
enterprise value (defined as market value of equity plus long-term debt,
short-term debt, and the market value of preferred stock and minority
interests, less cash and cash equivalents) to estimated 1998 EBIT; and
(iii) enterprise value to estimated 1998 earnings before interest, taxes,
depreciation and amortization ("EBITDA") of 1.39x, 14.8x and 12.0x,
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respectively, which exceed the median multiples of 0.97x, 11.7x and 9.8x,
respectively, for the Public Comparables (as defined below) by
approximately 25% to 40% and were at the high end of the respective
multiple ranges for such Public Comparables based on their closing share
prices on October 21, 1998;
- the Offer Price of $37.00 represented a premium of 19.4% to the closing
price of the Shares on the Pre-Announcement Date (July 7, 1998);
- the market in general, and for the Public Comparables in particular, has
declined since the Proposal was made on July 7, 1998; based on the
average reduction in market prices for the Public Comparables of
approximately 10% from July 7 to October 21, 1998, the Offer Price of
$37.00 would represent a hypothetical premium of approximately 32.6%;
- as a result of Parent's existing ownership of the Company's voting
securities, the proposed transaction does not encompass a change of
control, and therefore no premium should be paid by reason of any
transfer of control of the Company; notwithstanding Parent's existing
ownership, the Offer Price of $37.00 represents multiples of enterprise
value to the last twelve months prior to the announcement of the
transaction ("LTM") EBITDA of 13.0x which compares favorably to median
multiples paid in change of control acquisition transactions,
specifically, enterprise value to LTM EBITDA multiples of 12.3x and 11.3x
for the Life Sciences Comparable Transactions (as defined below) and the
Chemical Industry Comparable Transactions (as defined below),
respectively.
Parent Response to Goldman Sachs Analysis
Combined Base Case and R&D Projections
- when aggregating the Base Case Projections and the R&D Projections
(together, the "Combined Projections") for the years 1998 through 2002,
the Combined Projections set forth growth rates and EBIT margins in
excess of the Company's stated goals and historical experience; the
Combined Projections show revenues rising from $363.0 million in 1998 to
$684.1 million in 2002 implying a compound annual growth rate of 17.2%
and EBIT rising from $60.2 million in 1998 to $146.5 million in 2002
implying a compound annual growth rate of 24.9%; additionally, the
Combined Projections show EBIT margins increasing by 4.8 percentage
points from 16.6% in 1998 to 21.4% in 2002;
- the Goldman Sachs preliminary aggregate valuation range for the Base Case
Projections and R&D Projections of $51.20 to $62.37 implies multiples in
excess of selected publicly traded comparable companies and is
significantly higher than the discounted cash flow valuations deemed
appropriate by Parent.
Base Case Projections
- the Base Case Projections give weight to significant R&D productivity in
the Company's existing business segments;
- the Company is unlikely to realize the Base Case Projections without any
contribution from the R&D Pipeline, which is excluded from the Base Case
Projections;
- continued pricing pressure, the redirection of focus from the existing
business to the R&D Pipeline and current economic conditions will
continue to place pressure on growth rates;
- the Base Case Projections exit multiple range of 14x to 16x 2002 EBIT is
in excess of those of selected publicly traded comparable companies; a
more appropriate exit valuation parameter would be a perpetual growth
rate range of 4% to 6% which implies an exit multiple range of 9x to 13x
EBIT (at a discount rate of 11%);
- when sensitized for perpetual growth rates of 4% to 6% and an overall
revenue growth decrease of 1% (based broadly on considerations discussed
above), the discounted cash flow valuation range of the Base Case
Projections is approximately $28 to $39 per Share.
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<PAGE> 17
R&D Projections
- the R&D Projections include projects which are not part of the Company's
historical business focus and which will compete with products and
services offered by well established market leaders, some of whom have
greater technical and financial resources than the Company;
- the R&D Projections are characterized as incremental to the Base Case
Projections which already give weight to significant R&D productivity in
the Company's existing business segments;
- the Company has never prepared projections for the R&D Pipeline prior to
receiving the Proposal and accordingly there is no meaningful measure of
the reliability of the R&D Projections prepared in response to the
Proposal;
- the Company has historically experienced significantly lower R&D
productivity than that projected by the R&D Projections and much of the
historical R&D productivity was generated by projects based on product
line extensions and purchased technologies;
- the Company has no history of simultaneously and successfully
commercializing a number of major new projects of the scale reflected in
the R&D Projections;
- only two of the 21 projects in the R&D Pipeline are projected to produce
revenues in 1998, which will aggregate only $1.6 million;
- over 75% of the cumulative 1998 to 2002 revenues from the R&D Pipeline
are forecast for the last two years (2001 to 2002);
- the cumulative Free Cash Flow from the R&D Projections from 1998 to 2002
is only $5.8 million;
- the average probability of success factor of the R&D Pipeline projects
(weighted by projected 2002 revenues) is 73%, which is in excess of
probability of success factors for projects with the technological and
competitive risks inherent in the R&D Pipeline;
- the 2002 revenue of $164.6 million and 2002 EBIT of $46.7 million
projected to be generated by the R&D Pipeline would represent 24% and 32%
of combined Company results, respectively, when added to the Base Case
Projections; these gross results and percentages are significantly in
excess of historical revenue and profit contribution from new projects
developed and commercialized by the Company;
- the R&D Pipeline valuation exit multiple range of 17x to 18x EBIT implies
perpetual growth rates of approximately 21% to 26% (based on a discount
rate range of 25% to 30%) which fail to adequately reflect competitive
response, technological risk and market saturation; a more appropriate
range of perpetual growth rates would be 6% to 8%;
- the Goldman Sachs valuation of the R&D Projections of $10.37 to $13.05
per Share implies a gross value for the R&D Pipeline of approximately
$255 million to $320 million, respectively, which represents 33% to 42%
of the total equity value of the Company based on its closing stock price
on the Pre-Announcement Date (July 7, 1998);
- when sensitized for a perpetual growth rate of 6% to 8% and a more
appropriate implied weighted average probability factor of 43% based on
2002 revenues (as opposed to an implied weighted average probability
factor of 73% in the R&D Projections), the valuation utilizing a
discounted cash flow methodology of the R&D Projections is reduced to
approximately $1 per Company share.
SEE "SPECIAL FACTORS -- BACKGROUND OF THE OFFER." SEE "THE TENDER OFFER --
CERTAIN INFORMATION CONCERNING THE COMPANY -- PROJECTIONS" FOR CERTAIN
QUALIFYING STATEMENTS REGARDING THE BASE CASE PROJECTIONS AND THE R&D
PROJECTIONS.
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ANALYSIS OF FINANCIAL ADVISOR TO PARENT
Parent retained Merrill Lynch to act as its financial advisor (and not the
advisor to or agent of any other person) in connection with a possible proposal
by Parent to acquire the Publicly-held Shares. In connection with that
retention, Parent requested that Merrill Lynch perform certain valuation
analyses with respect to the Company and make a presentation to the Parent Board
at its October 23, 1998 meeting. Parent did not request that Merrill Lynch
provide any opinion as to the fairness of the Offer to Parent or its
stockholders, the Company or the holders of the Publicly-held Shares or perform
any independent examination or investigation of the Company's business or
assets. Merrill Lynch's presentation does not constitute a recommendation to the
holders of the Publicly-held Shares as to whether such stockholders should or
should not tender Shares pursuant to the Offer. The Company had no role in
Parent's selection of Merrill Lynch or in formulating any of the terms under
which Merrill Lynch was to prepare its presentation.
In preparing its presentation, Merrill Lynch, among other things: (1)
reviewed certain publicly available business and financial information relating
to the Company that Merrill Lynch deemed to be relevant; (2) reviewed certain
information relating to the business, earnings, cash flow, assets and prospects
of the Company furnished to Merrill Lynch by members of Parent's management who
monitor the operations of the Company; (3) conducted discussions with members of
Parent's management who monitor the operations of the Company concerning the
matters described in clauses (1) and (2) above, as well as the Company's
business and prospects; (4) reviewed the Base Case Projections, the R&D
Projections and the Combined Projections and discussed such projections with
representatives of Goldman Sachs, members of the Company's management and
members of Parent's management who monitor the operations of the Company; (5)
reviewed the historical market prices and trading activity for the Shares and
compared them with those of certain publicly traded companies which Merrill
Lynch deemed to be relevant; (6) reviewed the results of operations of the
Company and compared them with those of certain companies which Merrill Lynch
deemed to be relevant; (7) reviewed premiums paid in certain transactions
involving the acquisitions of minority interests which Merrill Lynch deemed to
be relevant; and (8) reviewed such other financial studies and analyses and took
into account such other matters as Merrill Lynch deemed necessary or
appropriate, including its assessment of general economic, market and monetary
conditions.
In preparing its presentation, Merrill Lynch assumed and relied on the
accuracy and completeness of all information supplied or otherwise made
available to it, discussed with or reviewed by or for it, or publicly available,
and Merrill Lynch did not assume any responsibility for independently verifying
such information or undertaking any independent evaluation or appraisal of the
assets or liabilities of the Company. In addition, Merrill Lynch did not assume
any obligation to conduct any physical inspection of the properties or
facilities of the Company. The Merrill Lynch presentation was necessarily based
upon market, economic and other conditions as they existed and could be
evaluated on, and the information made available to Merrill Lynch as of, the
date thereof. In preparing the Merrill Lynch presentation, Merrill Lynch had
only limited access to the management of the Company.
At the October 23, 1998 meeting of the Parent Board, Merrill Lynch, in
order to assist the Parent Board in its consideration of the fairness of the
Proposal, delivered a written and oral presentation analyzing from a financial
point of view the $37 per Share offered to the holders of the Publicly-held
Shares pursuant to the Proposal. Merrill Lynch, prior to making its oral
presentation to the Parent Board, distributed to the members of the Parent Board
copies of its written presentation. In delivering its presentation to the Parent
Board of Directors, Merrill Lynch discussed certain financial and comparative
analyses contained in its written presentation and other matters it deemed
relevant. Among various analyses that Merrill Lynch presented to the Board were
the following:
Historical Stock Price Analyses. Merrill Lynch reviewed the trading
performance of the Shares for the period from July 7, 1998 (the last trading
date before the public announcement of the proposal) to October 21, 1998 in
light of the trading performance of the Standard & Poor's 500 Index and a broad
group of publicly traded companies that Merrill Lynch deemed to be reasonably
similar to the Company (the "Public Comparables"). The Public Comparables
consisted of Beckman Coulter, Inc., Bio-Rad Laboratories, Inc., C.R. Bard, Inc.,
Cambrex Corp., Dionex Corp., Millipore Corp., Nycomed Amersham plc, Perkin Elmer
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<PAGE> 19
Corp., Sigma-Aldrich Corp., Techne Corp., Thermo BioAnalysis Corp., VWR
Scientific Products Corp. and Waters Corp. Merrill Lynch noted that during this
period, the price of the Shares increased 8.9%, while the Standard & Poor's 500
Index declined 7.3% and the Public Comparables declined 10.0%.
Projected Financial Results. Merrill Lynch summarized the key assumptions
to the financial projections reviewed by it and noted that Parent's management
had received the Base Case Projections from Goldman Sachs and that such
projections were based on the Company's 1998 Profit Plan and an extrapolation of
such plan for the years 1999 to 2002. Such projections were based upon 9.5%
annual revenue growth, stable gross margins, constant research and development
expenditures of 6% of total sales and the leveraging of selling, general and
administrative expenses, all of which were projected to improve EBIT margins
from 16.5% in 1998 to 19.2% in 2002. Merrill Lynch also stated that it and
Parent's management had reviewed the R&D Projections provided by Goldman Sachs,
which projections had been characterized by Goldman Sachs as incremental to the
Base Case Projections. Merrill Lynch noted that Parent's management had
disagreed with several key underlying assumptions to the R&D Projections,
including market penetration, attainment of margins and probability of success
assessments, as well as the characterization that such results would be
incremental to the Base Case Projections. Based on this review, Merrill Lynch
stated its and Parent's management's belief that the Base Case Projections
reflect the best assessment of the Company's overall business prospects and that
such Base Case Projections give weight to the commercialization of new projects,
including those projects in the R&D Projections.
Merrill Lynch also summarized the Base Case Projections that were provided
to Merrill Lynch by Goldman Sachs. These projections set forth net sales rising
at a compound annual growth rate of 9.5% from $361.4 million in 1998 to $519.5
million in 2002; EBITDA rising at a compound annual growth rate of 12.3% from
$74.0 million in 1998 to $117.8 million in 2002; EBIT rising at a compound
annual growth rate of 13.7% from $59.7 million in 1998 to $99.8 million in 2002;
net income rising at a compound annual growth rate of 14.3% from $38.1 million
in 1998 to $65.0 million in 2002; and diluted earnings per share ("EPS") rising
at a compound annual growth rate of 14.3% from $1.55 per Share in 1998 to $2.65
per Share in 2002 (before giving effect to the dilutive impact of the future
issuance of options). See "-- Review of Goldman Sachs Analysis."
Analysis of Selected Comparable Publicly Traded Companies. Using publicly
available information and estimates of future financial results published by
First Call Corporation and selected brokerage firms, Merrill Lynch reviewed
certain financial and operating information and ratios for the Company with the
corresponding financial and operating information and ratios for the Public
Comparables. Merrill Lynch compared as of October 21, 1998 (1) the ratio for
each of the Public Comparables (except for Nycomed Amersham plc, for which an
estimated growth rate was not available) of such company's estimated 1999 PE to
estimated five-year earnings growth (as published by First Call Corporation);
(2) the enterprise value of each of the Public Comparables (except for Techne
Corp., for which projected information was not available) as a multiple of
estimated 1998 EBIT; and (3) the enterprise value of each of the Public
Comparables (except for Techne Corp., for which projected information was not
available) as a multiple of estimated 1998 EBITDA. The following multiples were
derived from such calculations: (1) for the ratio of estimated 1999 PE to
estimated five-year growth in EPS, a range of 0.31x to 1.74x, with a mean of
0.99x and a median of 0.97x (as compared to the multiple implied by the Proposal
of 1.39x); (2) for enterprise value as a multiple of estimated 1998 EBIT, a
range of 5.0x to 18.8x, with a mean of 12.7x and a median of 11.7x (as compared
to the multiple implied by the Proposal of 14.8x); and (3) for enterprise value
as a multiple of estimated 1998 EBITDA, a range of 3.8x to 15.6 x, with a mean
of 10.2x and a median of 9.8x (as compared to the multiple implied by the
Proposal of 12.0x).
Analysis of Change of Control Acquisitions. Using publicly available
information, Merrill Lynch reviewed the purchase prices and multiples paid in
selected mergers and acquisitions transactions in the life sciences industry and
in the chemical industry. The acquisitions (acquired company/acquiror) in the
life sciences industry were Amicon Separation Science Business of W.R. Grace &
Co./Millipore Corp. (November 1996); HemoCue Intressenter, AB/IMCERA Group Inc.
(September 1992); Coulter Corp./ Beckman Instruments Inc. (September 1997);
Synectics Medical AB/Medtronic, Inc. (March 1996); Applied Biosystems
Inc./Perkin-Elmer Corp. (October 1992); Nycomed ASA/Amersham International plc
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<PAGE> 20
(July 1997); BioWhittaker, Inc./Cambrex Corp. (August 1997); and Life Sciences
International plc/Thermo Instrument Systems Inc. (January 1997) (collectively,
the "Life Sciences Comparable Transactions"). The acquisitions in the chemical
industry were Allied Colloids Group plc/Ciba Specialty Chemicals Holding Inc.
(January 1998); Loctite Corp./Henkel KGaA (October 1996); Petrolite Corp./Baker
Hughes Inc. (February 1997); Unilever Specialty Chemicals Division of Unilever
plc and Unilever NV/Imperial Chemical Industries plc (May 1997); Thompson Minwax
Holding Corp./The Sherwin-Williams Co. (November 1996); and CPS Chem./Allied
Colloids Group plc (November 1996) (collectively, the "Chemical Industry
Comparable Transactions").
With respect to both the Life Sciences Comparable Transactions and the
Chemical Industry Comparable Transactions, Merrill Lynch reviewed the ratio of
the transaction value (defined as the offer value plus net debt assumed) of each
acquisition to LTM EBITDA of the acquired company. For the Life Sciences
Comparable Transactions, this analysis yielded a range of multiples of 8.9x to
23.1x, with a mean of 14.7x and a median of 12.3x (as compared to the multiple
implied by the Proposal of 13.0x). For the Chemical Industry Comparable
Transactions, this analysis yielded a range of multiples of 10.1x to 14.4x, with
a mean of 11.8x and a median of 11.3x (as compared to the multiple implied by
the Proposal of 13.0x). Merrill Lynch noted for the Parent Board that the Life
Sciences Comparable Transactions and the Chemical Industry Comparable
Transactions involved the acquisition of control and therefore may not be
directly comparable to acquisitions of a minority interest such as that
contemplated by the Proposal or the Offer.
Discounted Cash Flow Analysis. Merrill Lynch calculated ranges of value
for the Shares based upon the sum of (1) the discounted present value of the
four-year (1999-2002) stream of projected after-tax cash flows of the Company,
using a discount rate of 11% and (2) the present value per Share of the terminal
value of the Company in 2002 (assuming perpetual growth rates of the Company's
after-tax cash flows of from 4% to 6%), using a discount rate of 11%. For
purposes of its discounted cash flow analysis, Merrill Lynch used the Base Case
Projections. Such analysis yielded a per Share value range of from $30.00 to
$40.00.
Analysis of Premiums Paid for Comparable Acquisitions of Minority
Interests. Merrill Lynch reviewed publicly available information for certain
transactions involving the purchase of a minority interest which were announced
between January 1, 1995 and October 21, 1998 which were deemed by Merrill Lynch
to be relevant (the "Minority Interest Comparables"). For each of the Minority
Interest Comparables, Merrill Lynch calculated the premium over the
pre-announcement trading price represented by the acquisition price. Relative to
trading prices one week prior to announcement, premiums paid for the Minority
Interest Comparables ranged from 0.5% to 69.6%, with a mean of 24.8% and a
median of 23.5%. Relative to trading prices one day prior to announcement,
premiums ranged from 0.4% to 60.4%, with a mean of 21.2% and a median of 18.9%.
Merrill Lynch noted that the proposed Offer Price represented a premium of 17.9%
over the trading price of the Shares one week prior to the announcement of the
Proposal and a premium of 19.4% over the trading price of the Shares one day
prior to the announcement of the Proposal. Merrill Lynch also calculated an
adjusted premium for each Share, which reflects an average decrease in the
closing price of the Public Comparables of 10.0% between July 7, 1998 and
October 21, 1998. Based on this decrease, the hypothetical adjusted price per
Share on July 7, 1998 (the last trading day prior to the announcement of the
Proposal) would have been $27.90, which resulted in an implied adjusted one-week
premium for the Shares of 31.0% and an implied adjusted one-day premium for the
Shares of 32.6%.
Review of Goldman Sachs Analysis. Merrill Lynch reviewed for the Parent
Board the Base Case Projections, the R&D Projections and the Combined
Projections, each as presented by Goldman Sachs, the Special Committee's
financial advisor. As part of this review, Merrill Lynch summarized the R&D
Projections that were provided to Merrill Lynch by Goldman Sachs. These
projections set forth risk-adjusted revenues rising at an implied compound
annual growth rate of 217.2% from $1.6 million in 1998 to $164.6 million in
2002, and EBIT rising at an implied compound annual growth rate of 208.5% from
$0.5 million in 1998 to $46.7 million in 2002. Merrill Lynch also reviewed for
the Parent Board the views of Goldman Sachs as to the value of the Shares, which
views were presented by Goldman Sachs to Merrill Lynch on September 17, 1998.
Merrill Lynch noted that Goldman Sachs had characterized these views as its
preliminary views and that Goldman Sachs' analysis was based primarily on an
analysis of the Company's discounted cash flows. Merrill Lynch also noted that
these views did not reflect the complete valuation analysis of Goldman Sachs
shared
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with the Special Committee. Based on the foregoing, Merrill Lynch believed these
valuations may represent Goldman Sachs and the Special Committee's "negotiating"
views of value. Merrill Lynch reported that under the Base Case Projections,
Goldman Sachs had calculated a preliminary value range for each Share of $41 to
$49 as of August 31, 1998. Merrill Lynch further reported that under the R&D
Projections, Goldman Sachs had calculated a preliminary additional incremental
value range for each Share of $10 to $13 as of August 31, 1998.
Merrill Lynch reviewed for the Parent Board a hypothetical sensitivity
analysis of Goldman Sachs' discounted cash flow valuation of the Shares assuming
the Base Case Projections. For purposes of this analysis, Merrill Lynch analyzed
the sensitivity of the discounted cash flows analysis to changes in (i) year
2002 terminal value multiples and (ii) the assumed annual growth rate of the
Company's revenues during the forecast period under the Base Case Projections.
Such analysis demonstrated that calculating the terminal value based on a
perpetual growth rate of 4.0% to 6.0% (which implies a multiple range of 2002
EBIT of approximately 9x to 13x at a discount rate of 11%), as opposed to the
terminal EBIT multiples used in the Base Case Projections of 14x to 16x (which
imply a perpetual growth rate of approximately 6.0% to 7.0% at a discount rate
of 11%), yielded a decrease in the value per Share ranging from approximately
$14 to $9 at the low end and high end of the valuation range, respectively. Such
analysis also demonstrated that incrementally reducing the revenue growth rate
by one percentage point to 8.5% in each year of the forecast period, as opposed
to an annual revenue growth rate assumed in the Base Case Projections of 9.5%,
yielded a decrease in the value of each Share of approximately $1. This
sensitivity analysis for the Base Case Projections yielded a decrease in the
value per Share ranging from approximately $15 to $10 at the low end and high
end of the valuation range, respectively.
Merrill Lynch also reviewed for the Parent Board a hypothetical sensitivity
analysis of Goldman Sachs' discounted cash flow valuation of the Shares assuming
the R&D Projections. For purposes of this analysis, Merrill Lynch analyzed the
sensitivity of the discounted cash flow analysis to changes in (i) the assumed
annual growth rate in perpetuity after 2002 of the Company's cash flows which is
attributable to the R&D Projections and (ii) the weighted average probability of
success factor that R&D Projections will be successfully generated. Such
analysis demonstrated that using assumed annual perpetual growth rates of 6.0%
to 8.0% after the year 2002, as opposed to the implied annual perpetual growth
rates assumed in the R&D Projections of from 21% to 26% (based on EBIT multiples
of 17x to 18x), yielded a decrease in the value per Share ranging from
approximately $10 to $11 at the low end and high end of the valuation range,
respectively. Such analysis also demonstrated that incrementally decreasing the
weighted average probability of success factor of the R&D Projections by 30
percentage points to 43% based on 2002 revenue (as compared to 73% set forth in
the R&D Projections) yielded a decrease in the value per Share ranging from
approximately $1 to $2 at the low end and high end of the valuation range,
respectively. This sensitivity analysis for the R&D Projections yielded an
aggregate decrease in the value per Share ranging from approximately $11 to $13
at the low end and high end of the valuation range, respectively.
Merrill Lynch noted that adjusting Goldman Sachs' implied per Share
valuation of from $55 to $63 (derived by Merrill Lynch as of December 31, 1998
by using the mid-point of the range of discount rates for the Base Case
Projections and the range of discount rates for the R&D Projections used by
Goldman Sachs in its analysis) for the cumulative decrease per Share (as derived
above for the Base Case and R&D Projections) of approximately $26 to $23 (as
derived above) at the low end and high end of the valuation range, respectively,
yielded an adjusted implied valuation per Share of approximately $29 to $40, as
compared to the consideration proposed to be paid pursuant to the Proposal and
the Offer of $37 per Share.
The summary set forth above does not purport to be a complete description
of the analyses performed by Merrill Lynch in arriving at its October 23, 1998
presentation. The preparation of the presentation made by Merrill Lynch is a
complex process and is not necessarily susceptible to partial or summary
description. Merrill Lynch believes that its analysis must be considered as a
whole and that selecting portions of its analyses and the factors considered by
it, without considering all such factors and analyses, could create a misleading
view of the processes underlying the Merrill Lynch presentation. Merrill Lynch
did not assign relative weights to any of its analyses in preparing its
presentation. The matters considered by Merrill Lynch in its analyses were based
on numerous macroeconomic, operating and financial assumptions with respect to
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<PAGE> 22
industry performance, general business and economic conditions and other
matters, many of which are beyond the control of Parent, Purchaser, the Company
and Merrill Lynch and involve the application of complex methodologies and
educated judgment. Any estimates contained in the analyses performed by Merrill
Lynch are not necessarily indicative of actual past or future results or values,
which may be significantly more or less favorable than such estimates. Estimated
values do not purport to be appraisals and do not necessarily reflect the prices
at which businesses or companies may be sold in the future, and such estimates
are inherently subject to uncertainty.
No public company utilized as a comparison is identical to the Company, and
none of the Comparable Transactions utilized as a comparison is identical to the
Offer. In addition, the multiples of estimated 1999 PE to estimated 5-year
growth in EPS and the multiples of enterprise value to estimated 1998 EBIT and
1998 EBITDA are based on projections prepared by research analysts using only
publicly available information. Such estimates may or may not prove to be
accurate. An analysis of publicly traded companies, comparable business
combinations and comparable minority interest transactions is not mathematical;
rather it involves complex considerations and judgments concerning differences
in financial and operating characteristics of the comparable companies and other
factors that could affect the public trading value of the comparable companies
or the company to which they are being compared.
The Parent Board retained Merrill Lynch on the basis of its experience and
expertise. Merrill Lynch is an internationally recognized investment banking and
advisory firm which, as a part of its investment banking business, regularly is
engaged in the valuation of businesses and securities in connection with mergers
and acquisitions, negotiated underwritings, competitive biddings, secondary
distributions of listed and unlisted securities, private placements and
valuations for corporate and other purposes. Merrill Lynch has in the past
provided financial advisory services to Parent and has been compensated for such
services. In addition, in the ordinary course of its business, Merrill Lynch may
actively trade the equity securities of Parent and the Company for its own
account and for the accounts of its customers and, accordingly, may at any time
hold a long or short position in such securities.
The full text of Merrill Lynch's written presentation delivered to the
Parent Board on October 23, 1998 has been included as Exhibit (b) to the
Schedule 13E-3, and the foregoing summary is qualified in its entirety by
reference to such exhibit. For a description of the fees payable to Merrill
Lynch in connection with its engagement, see "THE TENDER OFFER -- Fees and
Expenses."
SEE "THE TENDER OFFER -- CERTAIN INFORMATION CONCERNING THE
COMPANY -- PROJECTIONS" FOR CERTAIN QUALIFYING STATEMENTS REGARDING THE BASE
CASE PROJECTIONS AND THE R&D PROJECTIONS.
PURPOSE AND STRUCTURE OF THE OFFER; PLANS FOR THE COMPANY AFTER THE OFFER
Purpose. The purpose of the Offer is to enable Parent and Purchaser to
acquire the entire equity interest in the Company. Parent desires to own the
Publicly-held Shares at this time as part of its long-term strategy to focus its
efforts and resources on businesses with strong market positions. See "Plans for
the Company after the Offer" below.
Structure. The Offer is structured so that no approval of the holders of
the Publicly-held Shares (other than satisfaction of the Minimum Condition) or
of the Company Board or any committee thereof is required. Purchaser will,
subject to the conditions of the Offer, accept for payment Shares properly
tendered in accordance with this Offer to Purchase and the Letter of
Transmittal.
Plans for the Company after the Offer. Depending upon the number of Shares
purchased pursuant to the Offer and the aggregate market value of any Shares not
purchased pursuant to the Offer, the Shares may no longer meet the standards for
continued listing for quotation on the Nasdaq National Market System and may,
upon the initiative of the National Association of Securities Dealers, Inc. (the
"NASD"), be delisted therefrom. The Nasdaq National Market System published
guidelines indicate that the Nasdaq National Market System would consider
delisting the Shares if, among other things, the number of holders of Shares
should fall below 400 or if the number of Publicly-held Shares would fall below
750,000 or if the aggregate
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<PAGE> 23
market value of the Publicly-held Shares should fall below $5,000,000. In the
event that the Shares are no longer included in the Nasdaq National Market
System, 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, however, depend on 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 shares
under the Exchange Act, as described below, and other factors. To the extent the
Shares are delisted from the Nasdaq National Market System, the market for
Shares could be adversely affected. Further, Purchaser cannot predict whether
the reduction in the number of Shares that might otherwise trade publicly, if
any, effected by the Offer would have an adverse or beneficial effect on the
market price for or marketability of the Shares or whether it would cause future
market prices to be greater or less than the Offer Price. See "THE TENDER
OFFER -- Certain Effects of the Transaction."
Following consummation of the Offer, Parent and Purchaser currently intend
to have the Company consummate the Second Step Merger. In such event, in
accordance with the relevant provisions of the DGCL, Purchaser would be merged
with and into the Company. The purpose of the Second Step Merger would be to
acquire all Publicly-held Shares not tendered and purchased pursuant to the
Offer or otherwise held by Purchaser or Parent. In the Second Step Merger, each
then-outstanding Share (other than Shares owned by the Company as treasury
stock, Shares owned by Parent or Purchaser, or Shares with respect to which
appraisal rights are properly exercised under Delaware law) would be converted
into the right to receive the Merger Consideration. See "SPECIAL
FACTORS -- Appraisal Rights in the Merger." Following consummation of the Second
Step Merger, the Company would continue as the Surviving Corporation and be a
wholly-owned subsidiary of Parent.
If Purchaser owns at least 90% of the outstanding Shares following
consummation of the Offer (assuming the transfer of Parent's currently-owned
Shares to Purchaser), Purchaser would have the ability to consummate the Second
Step Merger without a meeting or vote of the Company Board or of the
stockholders of the Company pursuant to the "short form" merger provisions of
Section 253 of the DGCL. In such circumstances, Purchaser currently intends to
so effectuate the Second Step Merger as soon as practicable. See "SPECIAL
FACTORS -- Purpose and Structure of the Offer; Plans for the Company after the
Offer."
If Parent and Purchaser own less than 90% of the outstanding Shares
following consummation of the Offer, consummation of the Second Step Merger
would require the approval by the Company Board of a Merger Agreement and the
adoption of a Merger Agreement by the holders of at least 80% of the outstanding
Shares. If Parent and Purchaser own less than 90% of the outstanding Shares
following consummation of the Offer, Parent and Purchaser currently intend to
either (i) promptly use their best efforts to take such steps as are necessary
to cause the Second Step Merger to be effective pursuant to a Merger Agreement,
including voting the Shares owned by them for adoption of the Merger Agreement,
which will, if the Shares remain registered under the Exchange Act, require
filing with the Commission of certain disclosure materials prior to adoption of
the Second Step Merger by the Company's stockholders, or (ii) for an
indeterminate period, delay the Second Step Merger and engage in certain open
market or privately negotiated purchases, at prices which may be greater or less
than the Offer Price, in order to increase Parent and Purchaser's combined
ownership to or above 90% of the outstanding Shares, so as to enable Purchaser
to effect the Second Step Merger as a "short form" merger. Any such acquisition
of Shares by Purchaser would have to be made in accordance with applicable legal
requirements, including those of Regulation 13D and Rules 10b-18 and 13e-3 under
the Exchange Act. See "THE TENDER OFFER -- Certain Effects of the Transaction."
As a consequence, no assurance can be given as to whether or when Purchaser will
cause the Second Step Merger to be consummated and, similarly, no assurance can
be given as to whether or when the Merger Consideration will be paid to
stockholders who do not tender their Shares in the Offer. IN NO EVENT WILL ANY
INTEREST BE PAID ON THE MERGER CONSIDERATION. After completion or termination of
the Offer, Parent and Purchaser also reserve the right, but have no current
intention, to sell Shares in open market or negotiated transactions.
Purchaser is not offering to acquire outstanding Options in the Offer. Each
holder of a Company Option that is vested may exercise such Company Option prior
to the consummation of the Offer and the Shares received upon such exercise may
be tendered pursuant to the Offer. It is Parent's intention that each Company
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<PAGE> 24
Option that is vested and outstanding immediately prior to the consummation of
the Second Step Merger will no longer be exercisable for the purchase of Shares
but will entitle each holder thereof, in cancellation and settlement therefor,
to a cash payment promptly after the consummation of the Second Step Merger
equal to the product of (x) the total number of Shares subject to such Company
Option and (y) the excess, if any, of the Merger Consideration over the exercise
price per Share subject to such Company Option. It is also Parent's intention
that action be taken in accordance with the Company's plans so that each
unexpired Company Option that is unvested immediately prior to the consummation
of the Second Step Merger will no longer be exercisable for the purchase of
Shares but will be converted to a Parent Option to purchase Parent Shares. Each
Company Option would be converted into a Parent Option to acquire a number of
Parent Shares equal to (a) the number of shares subject to such Company Option
multiplied by (b) the Conversion Fraction (defined below). The exercise price
applicable to such Parent Option would be equal to (x) the exercise price
applicable to the Company Option divided by (y) the Conversion Fraction. The
Conversion Fraction would have a numerator equal to the Merger Consideration
(per share) and a denominator equal to the closing price for Parent's Shares on
the day the Second-Step Merger becomes effective.
Since prior to 1986, the Company has been operated as an independent public
company. Except for the participation by Parent's designees on the Company Board
and for certain corporate staff functions customary for a public company and its
majority stockholder, neither Parent nor Purchaser has had any involvement in
the management of the Company. See "THE TENDER OFFER -- Certain Transactions
Between Parent and the Company." Following the Second Step Merger, the Company
would be a wholly-owned subsidiary of Parent. Parent and Purchaser currently
intend to seek to retain all management and other personnel employed by the
Company, to retain the Company's headquarters and other facilities at their
present locations, and, except as described below, continue the Company's
employee benefit plans for the foreseeable future. Parent currently intends to
terminate the Company stock option plan and include appropriate employees in
Parent's stock option plan. Because of differences in the policies under which
the two plans are operated, this change would result in Parent options being
granted to fewer Company employees and in smaller amounts than under the past
operation of the Company's stock option plans. Parent currently intends to
continue to operate the Company as an independent subsidiary and has no plans to
integrate its operations and research and development activities with those of
Parent or Parent's other subsidiaries. However, Parent anticipates that there
will be greater cooperative activity between the Company's corporate staff
functions (such as treasury, tax and legal) and those of Parent. See "SPECIAL
FACTORS -- Background of the Offer."
Except as otherwise described in this Offer to Purchase, Parent and
Purchaser have no current plans or proposals which relate to or would result in:
(a) an extraordinary corporate transaction, such as a merger, reorganization or
liquidation involving the Company; (b) a sale or transfer of a material amount
of assets of the Company; (c) any change in the Company Board or management of
the Company, including, but not limited to, any plan or proposal to change the
number or term of directors, to fill any existing vacancy on the Company Board
or any change to any material term of the employment contract of any executive
officer; (d) any material change in the present dividend rate or policy or
indebtedness or capitalization of the Company; (e) any other material change in
the Company's corporate structure or business; (f) a class of equity securities
of the Company becoming eligible for termination of registration pursuant to
Section 12(g)(4) of the Exchange Act; or (g) the suspension of the Company's
obligation to file reports pursuant to Section 15(d) of the Exchange Act.
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of the principal federal income tax consequences
of the Offer and the Second Step Merger to holders whose Shares are purchased
pursuant to the Offer or whose Shares are converted to cash in the Second Step
Merger (including pursuant to the exercise of appraisal rights). The discussion
applies only to holders of Shares in whose hands Shares are capital assets, and
may not apply to Shares received pursuant to the exercise of employee stock
options or otherwise as compensation, or to holders of Shares who are in special
tax situations (such as insurance companies, tax-exempt organizations,
non-United States persons or persons who have engaged in "straddles" or other
hedging transactions with respect to their Shares).
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<PAGE> 25
THE FEDERAL INCOME TAX CONSEQUENCES SET FORTH BELOW ARE INCLUDED FOR
GENERAL INFORMATIONAL PURPOSES ONLY AND ARE BASED UPON CURRENT LAW. BECAUSE
INDIVIDUAL CIRCUMSTANCES MAY DIFFER, EACH HOLDER OF SHARES SHOULD CONSULT SUCH
HOLDER'S OWN TAX ADVISOR TO DETERMINE THE APPLICABILITY OF THE RULES DISCUSSED
BELOW TO SUCH HOLDER AND THE PARTICULAR TAX EFFECTS OF THE OFFER AND THE SECOND
STEP MERGER, INCLUDING THE APPLICATION AND EFFECT OF STATE, LOCAL, FOREIGN AND
OTHER INCOME TAX LAWS.
The receipt of cash for Shares pursuant to the Offer or the Second Step
Merger (including pursuant to the exercise of appraisal rights) will be a
taxable transaction for federal income tax purposes under the Internal Revenue
Code of 1986, as amended (the "Code"), and also may be a taxable transaction
under applicable state, local, foreign and other income tax laws. In general,
for federal income tax purposes, a holder of Shares will recognize gain or loss
equal to the difference between his or her adjusted tax basis in the Shares sold
pursuant to the Offer or converted to cash in the Second Step Merger and the
amount of cash received therefor. Gain or loss must be determined separately for
each block of Shares (i.e., Shares acquired at the same cost in a single
transaction) sold pursuant to the Offer or converted to cash in the Second Step
Merger. Such gain or loss generally will be capital gain or loss provided the
Shares are a capital asset in the hands of the stockholders and will be
long-term capital gain or loss if, on the date of sale (or, if applicable, the
date of the Second Step Merger), the Shares were held for more than one year. If
a holder exercises such holder's appraisal rights and receives an amount treated
as interest for federal income tax purposes, such amount will be taxed as
ordinary income.
The Taxpayer Relief Act of 1997 (the "1997 Act") and the Internal Revenue
Service Restructuring and Reform Act of 1998 (the "1998 Act") created new
categories of capital gains applicable to noncorporate taxpayers. Under prior
law, noncorporate taxpayers were generally taxed at a maximum rate of 28% on net
capital gain (generally, the excess of net long-term capital gain over net
short-term capital loss). Noncorporate taxpayers are now generally taxed at a
maximum rate of 20% on net capital gain attributable to the sale of property
held for more than twelve months. The 1997 Act and the 1998 Act did not affect
the treatment of short-term capital gain or loss (generally, gain or loss
attributable to capital assets held for one year or less) and did not affect the
taxation of capital gains in the hands of corporate taxpayers.
Payments in connection with the Offer or the Second Step Merger may be
subject to "backup withholding" at a rate of 31%. Backup withholding generally
applies if the holder (a) fails to furnish such holder's social security number
or taxpayer identification number ("TIN"), (b) furnishes an incorrect TIN, (c)
is subject to backup withholding due to previous failures to include reportable
interest or dividend payments on such holder's federal income tax return, or (d)
under certain circumstances, fails to provide a certified statement, signed
under penalties of perjury, that the TIN provided is such holder's correct
number and that such holder is not subject to backup withholding. Backup
withholding is not an additional tax, but rather it is an advance tax payment
that is subject to refund if and to the extent that it results in an overpayment
of tax. Certain taxpayers are generally exempt from backup withholding,
including corporations and financial institutions. Certain penalties apply for
failure to furnish correct information and for failure to include reportable
payments in income. Each holder of Shares should consult with his or her own tax
advisor as to his or her qualification for exemption from backup withholding and
the procedure for obtaining such exemption. Tendering holders of Shares may be
able to prevent backup withholding by completing the Substitute Form W-9
included in the Letter of Transmittal. See "THE TENDER OFFER -- Procedure for
Tendering Shares."
APPRAISAL RIGHTS IN THE MERGER
No appraisal rights are available in connection with the Offer. If the
Second Step Merger is consummated, however, stockholders of the Company who have
not tendered their Shares will have certain rights under the DGCL to dissent and
demand appraisal of, and to receive payment in cash of the fair value of, their
Shares (the "Appraisal Shares"). Stockholders who perfect such rights by
complying with the procedures set forth in Section 262 of the DGCL ("Section
262") will have the fair value of their Appraisal Shares (exclusive of any
element of value arising from the accomplishment or expectation of the Second
Step
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<PAGE> 26
Merger) determined by the Delaware Court of Chancery and will be entitled to
receive a cash payment equal to such fair value from the Surviving Corporation.
In addition, such dissenting stockholders may be entitled to receive payment of
a fair rate of interest from the date of consummation of the Second Step Merger
on the amount determined to be the fair value of their Appraisal Shares. THE
PRESERVATION AND EXERCISE OF DISSENTERS' APPRAISAL RIGHTS REQUIRE STRICT
ADHERENCE TO THE APPLICABLE PROVISIONS OF THE DGCL. Annex A attached to this
Offer to Purchase sets forth Section 262 regarding appraisal rights, which will
only be available in connection with the Second Step Merger.
Under Section 262, if the Second Step Merger is submitted to the
stockholders of the Company at a meeting thereof, the Company must, not less
than 20 days prior to the meeting held for the purpose of obtaining stockholder
approval of the Second Step Merger, notify each of the Company stockholders
entitled to appraisal rights that such rights are available, and must include in
such notice a copy of Section 262. If no stockholder vote is required or if
stockholder approval is obtained by written consent in lieu of a meeting, the
Company, either before the effective date of the Second Step Merger or within
ten days thereafter, must notify each of the stockholders entitled to appraisal
rights of the effective date of the Second Step Merger and that appraisal rights
are available, and must include in such notice a copy of Section 262.
A holder of Appraisal Shares wishing to exercise such holder's appraisal
rights will be required to deliver to the Company before the taking of the vote
on the Second Step Merger, or to the Company within 20 days after the date of
mailing the notice described in the preceding paragraph, as the case may be, a
written demand for appraisal of such holder's Appraisal Shares. A holder of
Appraisal Shares wishing to exercise such holder's appraisal rights must be the
record holder of such Appraisal Shares on the date the written demand for
appraisal (as described below) is made and must continue to hold such Appraisal
Shares of record through the Effective Time. Accordingly, a holder of Appraisal
Shares who is the record holder of Appraisal Shares on the date the written
demand for appraisal is made (if such demand is made prior to the effectiveness
of the Second Step Merger), but who thereafter transfers such Appraisal Shares
prior to the consummation of the Second Step Merger, will lose any right to
appraisal in respect of such Appraisal Shares.
Within 120 days after the Effective Time, but not thereafter, the Surviving
Corporation or any stockholder who has complied with the statutory requirements
summarized above and who is otherwise entitled to appraisal rights may file a
petition in the Delaware Chancery Court demanding a determination of the fair
value of the Appraisal Shares. Purchaser is under no obligation to file a
petition with respect to the appraisal of the fair value of the Appraisal Shares
and does not intend to do so. Accordingly, it will be the obligation of the
stockholders seeking appraisal rights to initiate all necessary action to
perfect any appraisal rights within the time prescribed in Section 262.
If a petition for appraisal is timely filed, after hearing on such
petition, the Delaware Chancery Court will determine the stockholders entitled
to appraisal rights and will appraise the fair value of their Appraisal Shares,
exclusive of any element of value arising from the accomplishment or expectation
of the Second Step Merger, together with a fair rate of interest, if any, to be
paid upon the amount determined to be the fair value. In determining the fair
value of the Appraisal Shares, the court is required to take into account all
relevant factors. Accordingly, such determination could be based upon
considerations other than, or in addition to, the market value of the Appraisal
Shares, including, among other things, asset values and earning capacity. In
Weinberger v. UOP, Inc., the Delaware Supreme Court stated that "proof of value
by any techniques or methods which are generally considered acceptable in the
financial community and otherwise admissible in court" should be considered in
an appraisal proceeding. The Weinberger court also noted that under Section 262,
fair value is to be determined "exclusive of any element of value arising from
the accomplishment or expectation of the merger."
Several decisions by Delaware courts have held that, in certain
circumstances, a controlling stockholder of a company involved in a merger has a
fiduciary duty to other stockholders that requires that the merger be "entirely
fair" to such other stockholders. In determining whether a merger is fair to
minority stockholders, Delaware courts have considered, among other things, the
type and amount of consideration to be received by the stockholders and whether
there was fair dealing among the parties. The Delaware Supreme Court stated in
Weinberger and in Rabkin v. Philip A. Hunt Chemical Corp. that although the
remedy ordinarily available to
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<PAGE> 27
minority stockholders in a cash-out merger is the right to appraisal described
above, monetary damages, injunctive relief or such other relief as the court may
fashion may be available if a merger is found to be the product of unfairness,
including fraud, misrepresentation or other misconduct.
The costs of the proceeding may be determined by the Delaware Chancery
Court and taxed upon the parties as the Delaware Chancery Court deems equitable
in the circumstances. Upon application of a stockholder, the Delaware Chancery
Court may also order all or a portion of the expenses incurred by any
stockholder in reasonable attorneys' fees and the fees and expenses of experts,
to be charged pro rata against the value of all of the Appraisal Shares entitled
to appraisal.
Any holder of Appraisal Shares who has duly demanded an appraisal in
compliance with Section 262 will not, from and after the Effective Time of the
Second Step Merger, be entitled to vote the Appraisal Shares subject to such
demand for any purpose or to receive payment of dividends or other distributions
on those Appraisal Shares (except dividends or other distributions payable to
stockholders of record at a date which is prior to the Effective Time.)
If any stockholder who properly demands appraisal of such holder's
Appraisal Shares under Section 262 fails to perfect, or effectively withdraws or
loses, such holder's right to appraisal, as provided in the DGCL, the Appraisal
Shares of such stockholder will be converted into the right to receive the
Merger Consideration. A stockholder will fail to perfect, or effectively lose or
withdraw, such stockholder's right to appraisal if, among other things, no
petition for appraisal is filed within 120 days after the consummation of the
Second Step Merger, or if the stockholder delivers to the Surviving Corporation
a written withdrawal of such stockholder's demand for appraisal. Any such
attempt to withdraw an appraisal demand more than 60 days after the consummation
of the Second Step Merger will require the written approval of Purchaser.
THE TENDER OFFER
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), Purchaser will accept for payment and pay for all Shares validly
tendered prior to the Expiration Date (as defined below) and not theretofore
withdrawn in accordance with "THE TENDER OFFER -- Withdrawal Rights." The term
"Expiration Date" means 12:00 Midnight, New York City time, on December 1, 1998,
unless Purchaser shall have extended the period of time for which the Offer is
open, in which event the term "Expiration Date" shall mean the latest time and
date at which the Offer, as so extended by Purchaser, shall expire. UNDER NO
CIRCUMSTANCES WILL ANY INTEREST BE PAID ON THE OFFER PRICE FOR TENDERED SHARES,
REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING SUCH PAYMENT.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, SATISFACTION OF THE
MINIMUM CONDITION AND CERTAIN OTHER CONDITIONS. SEE "THE TENDER OFFER -- CERTAIN
CONDITIONS OF THE OFFER."
THE OFFER IS NOT CONDITIONED ON THE AVAILABILITY OF FINANCING OR ON THE
APPROVAL OF THE BOARD OF DIRECTORS OF THE COMPANY OR ANY COMMITTEE THEREOF.
Purchaser reserves the right (but shall not be obligated), in accordance
with applicable rules and regulations of the Commission, to waive any condition
of the Offer. If any of the conditions described in "THE TENDER OFFER -- Certain
Conditions of the Offer" have not been satisfied by 12:00 Midnight, New York
City time, on December 1, 1998 (or any other time then set as the Expiration
Date), Purchaser may elect to (1) extend the Offer and, subject to applicable
withdrawal rights, retain all tendered Shares until the expiration of the Offer,
as extended, (2) subject to complying with applicable rules and regulations of
the Commission, waive such condition and accept for payment all Shares so
tendered and not extend the Offer or (3) terminate the Offer and not accept for
payment any Shares and return all tendered Shares to tendering stockholders.
Assuming the prior satisfaction or waiver of the conditions of the Offer and
subject to the
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<PAGE> 28
preceding sentence, Purchaser will, and Parent will cause Purchaser to, accept
for payment and pay for Shares validly tendered and not withdrawn pursuant to
the Offer as soon as legally permitted after the commencement thereof.
Purchaser reserves the right (but will not be obligated), at any time or
from time to time in its sole discretion, to extend the period during which the
Offer is open by giving oral or written notice of such extension to the
Depositary and by making a public announcement of such extension. There can be
no assurance that Purchaser will exercise its right to extend the Offer. Any
extension of the period during which the Offer is open, delay in acceptance for
payment or payment, termination or amendment of the Offer will be followed, as
promptly as practicable, by public announcement thereof, such announcement in
the case of an extension to be issued not 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 Rules 14d-4(c) and
14e-1(d) under the Exchange Act. Without limiting the obligation of Purchaser
under such rules or the manner in which Purchaser may choose to make any public
announcement, Purchaser currently intends to make announcements by issuing a
press release to the Dow Jones News Service and making any appropriate filing
with the Commission.
Subject to the applicable rules and regulations of the Commission,
Purchaser also expressly reserves the right, at any time and from time to time,
(i) to delay payment of any Shares regardless of whether such Shares were
theretofore accepted for payment or to terminate the Offer and not to accept for
payment or pay for any Shares not theretofore accepted for payment or paid for,
upon the occurrence of any of the conditions specified in "THE TENDER
OFFER -- Certain Conditions of the Offer," by giving oral or written notice of
such delay or termination to the Depositary and (ii) at any time and from time
to time, to amend the Offer in any respect. Purchaser's right to delay payment
for any Shares or not to pay for any Shares theretofore accepted for payment is
subject to the applicable rules and regulations of the Commission, including
Rule 14e-1(c) of the Exchange Act, relating to Purchaser's obligation to pay for
or return tendered Shares promptly after the termination or withdrawal of the
Offer.
If Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer or if it waives a material condition of the
Offer, Purchaser will disseminate additional tender offer materials and extend
the Offer if and to the extent required by Rules 14d-4(c), 14d-6(d) and 14e-1
under the Exchange Act or otherwise. The minimum period during which a tender
offer must remain open following material changes in the terms of the Offer or
the information concerning the Offer, other than a change in price or a change
in percentage of securities sought, will depend upon the facts and
circumstances, including the relative materiality of the terms or information
changes. With respect to a change in price or a change in percentage of
securities sought, a minimum ten business day period is generally required to
allow for adequate dissemination to stockholders and investor response.
Requests have been made to the Company for use of the Company's stockholder
list and security position listings for disseminating the Offer to holders of
Shares and communicating with holders of Shares in connection with the Offer.
This Offer to Purchase and related Letter of Transmittal and other relevant
materials will be mailed to record holders of Shares, and will be furnished to
brokers, dealers, commercial banks, trust companies and similar persons whose
names, or the names of whose nominees, appear on the stockholder 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.
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 extension or
amendment), Purchaser will accept for payment, and will pay for all Shares
validly tendered prior to the Expiration Date and not theretofore withdrawn in
accordance with "THE TENDER OFFER -- Withdrawal Rights" promptly after the
latest to occur of (a) the Expiration Date, (b) the satisfaction of the Minimum
Condition, and (c) subject to compliance with the applicable rules and
regulations of the Commission, including Rule 14e-1(c) under the Exchange Act,
the satisfaction or waiver of the other conditions to the Offer set forth under
"THE TENDER OFFER -- Certain Conditions of
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<PAGE> 29
the Offer." Subject to such compliance, Purchaser expressly reserves the right
to delay payment for Shares in order to comply in whole or in part with any
applicable law. In all cases, payment for Shares accepted for payment pursuant
to the Offer will be made only after timely receipt by the Depositary of (i) the
Share certificates or timely confirmation (a "Book-Entry Confirmation") of a
book-entry transfer of such Shares into the Depositary's account at The
Depository Trust Company (the "Book-Entry Transfer Facility") pursuant to the
procedures set forth in "THE TENDER OFFER -- Procedure for Tendering Shares,"
(ii) a properly completed and duly executed Letter of Transmittal (or a manually
signed facsimile thereof), with all required signature guarantees, or in the
case of the book-entry transfer, an Agent's Message and (iii) any other
documents required by the Letter of Transmittal. The term "Agent's Message"
means a message transmitted by a Book-Entry Transfer Facility to, and received
by, the Depositary and forming a part of a Book-Entry Confirmation, which states
that the Book-Entry Transfer Facility has received an express acknowledgment
from the participant in the Book-Entry Transfer Facility tendering the Shares
that are the subject of such Book-Entry Confirmation, that such participant has
received and agrees to be bound by the terms of the Letter of Transmittal, and
that Purchaser may enforce such agreement against the participant.
For purposes of the Offer, Purchaser will be deemed to have accepted for
payment, and thereby purchased, the Shares validly tendered to Purchaser and not
withdrawn as, if and when Purchaser gives oral or written notice to the
Depositary of Purchaser's acceptance of such Shares for payment. In all cases,
payment for Shares purchased pursuant to the Offer will be made by deposit of
the purchase price with the Depositary, which will act as agent for tendering
stockholders for the purpose of receiving payment from Purchaser and
transmitting such payment to tendering stockholders. Upon the deposit of funds
with the Depositary for the purpose of making payments to tendering
stockholders, Purchaser's obligation to make such payment shall be satisfied,
and tendering stockholders must thereafter look solely to the Depositary for
payment of amounts owed to them by reason of the acceptance for payment of
Shares pursuant to the Offer. If, for any reason whatsoever, acceptance for
payment of any Shares tendered pursuant to the Offer is delayed, or Purchaser is
unable to accept for payment Shares tendered pursuant to the Offer, then,
without prejudice to Purchaser's rights under "THE TENDER OFFER -- Terms of the
Offer," the Depositary may, nevertheless, on behalf of Purchaser, retain
tendered Shares, and, subject to compliance with the applicable rules and
regulations of the Commission, including Rule 14e-1(c) under the Exchange Act,
such Shares may not be withdrawn, except to the extent that the tendering
stockholders are entitled to withdrawal rights as described in "THE TENDER
OFFER -- Withdrawal Rights" below. UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID
BY PURCHASER, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING
SUCH PAYMENT.
If any tendered Shares are not accepted for payment pursuant to the terms
and conditions of the Offer for any reason or if certificates are submitted
representing more Shares than are tendered, certificates representing such
unpurchased or untendered Shares will be returned, without expense, to the
tendering stockholder (or, in the case of Shares delivered by book-entry
transfer to the Book-Entry Transfer Facility, such Shares will be credited to an
account maintained within the Book-Entry Transfer Facility) as promptly as
practicable following the expiration, termination or withdrawal of the Offer.
Purchaser reserves the right to transfer or assign, in whole or from time
to time in part, to one or more of its affiliates the right to purchase Shares
tendered pursuant to the Offer, but any such transfer or assignment will not
relieve Purchaser of its obligations under the Offer or prejudice the rights of
tendering stockholders to receive payment for Shares validly tendered and
accepted for payment.
PROCEDURE FOR TENDERING SHARES
Valid Tenders. For Shares to be validly tendered pursuant to the Offer, a
properly completed and duly executed Letter of Transmittal (or a manually signed
facsimile thereof), with any required signature guarantees, or in the case of a
book entry transfer, an Agent's Message, and any other required documents, 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, or the tendering
stockholder must comply with the guaranteed delivery procedure set forth below.
In addition, either (i) certificates representing such Shares must be received
by the Depositary along with the Letter of Transmittal or such Shares must be
tendered pursuant to the procedure for
25
<PAGE> 30
book-entry transfer set forth below, and a Book-Entry Confirmation must be
received by the Depositary, in each case prior to the Expiration Date, or (ii)
the guaranteed delivery procedure set forth below must be complied with. No
alternative, conditional or contingent tenders will be accepted. DELIVERY OF
DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE WITH THE BOOK-ENTRY
TRANSFER FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
Book-Entry Transfer. The Depositary will make a request to establish an
account with respect to the Shares at the Book-Entry Transfer Facility for
purposes of the Offer within two business days after the date of this Offer to
Purchase. Any financial institution that is a participant in 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 at the Book-Entry Transfer Facility in accordance with the Book-Entry
Transfer Facility's procedures for such transfer. Although delivery of Shares
may be effected through book-entry at the Book-Entry Transfer Facility prior to
the Expiration Date, (i) the Letter of Transmittal (or a manually signed
facsimile thereof), properly completed and duly executed with any required
signature guarantees, or an Agent's Message in connection with a book-entry
transfer, 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 (ii) the
guaranteed delivery procedures described below must be complied with.
Signature Guarantees. Signatures on the Letter of Transmittal must be
guaranteed by a member in good standing of the Securities Transfer Agents
Medallion Program, or by any other bank, broker, dealer, credit union, savings
association or other entity which is an "eligible guarantor institution," as
such term is defined in Rule 17Ad-15 under the Exchange Act (each of the
foregoing being referred to as an "Eligible Institution" and, collectively, as
"Eligible Institutions"), unless the Shares tendered thereby are tendered (i) by
a registered holder of Shares who has not completed either the box labeled
"Special Delivery Instructions" or the box labeled "Special Payment
Instructions" on the Letter of Transmittal or (ii) for the account of any
Eligible Institution. If the certificates evidencing Shares are registered in
the name of a person or persons other than the signer of the Letter of
Transmittal, or if payment is to be made, or delivered to, or certificates for
unpurchased Shares are to be issued or returned to, a person other than the
registered owner or owners, then the tendered certificates must be endorsed or
accompanied by duly executed stock powers, in either case signed exactly as the
name or names of the registered owner or owners appear on the certificates, with
the signatures on the certificates or stock powers guaranteed by an Eligible
Institution as provided in the Letter of Transmittal. See Instructions 1 and 5
to the Letter of Transmittal.
Guaranteed Delivery. If a stockholder desires to tender Shares pursuant to
the Offer and such stockholder's certificates for Shares are not immediately
available or time will not permit all required documents to reach the Depositary
prior to the Expiration Date or the procedure for book-entry transfer cannot be
completed on a timely basis, such Shares may nevertheless be tendered if all of
the following guaranteed delivery procedures are duly complied with:
(i) the tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by Purchaser herewith, is
received by the Depositary, as provided below, prior to the Expiration
Date; and
(iii) the certificates for all tendered Shares, in proper form for
transfer (or a Book-Entry Confirmation), together with a properly completed
and duly executed Letter of Transmittal (or a manually signed facsimile
thereof) and 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
NASDAQ trading days after the date of execution of such Notice of
Guaranteed Delivery. A "NASDAQ trading day" is any day on which The Nasdaq
Stock Market, Inc.'s Nasdaq National Market is open for business.
26
<PAGE> 31
The Notice of Guaranteed Delivery may be delivered by hand, or may be
transmitted by telegram, 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.
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 OPTION AND RISK OF THE STOCKHOLDER TENDERING SUCH SHARES. IF DELIVERY
IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED IS
RECOMMENDED.
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 (i) certificates for such Shares or a Book-Entry
Confirmation, (ii) a properly completed and duly executed Letter of Transmittal
(or a manually signed facsimile thereof), with all required signature guarantees
or, in the case of book-entry transfer, an Agent's Message, and (iii) any other
documents required by the Letter of Transmittal.
Backup Federal Income Tax Withholding. To prevent backup federal income
tax withholding with respect to payment of the Offer Price of Shares purchased
pursuant to the Offer, each tendering stockholder must provide the Depositary
with his or her correct TIN and certify that such stockholder is not subject to
backup federal income tax withholding by completing the Substitute Form W-9
included in the Letter of Transmittal. See "SPECIAL FACTORS -- Certain United
States Federal Income Tax Consequences" of this Offer to Purchase and
Instruction 8 of the Letter of Transmittal. If the stockholder is a nonresident
alien or foreign entity not subject to back-up withholding, the stockholder must
give the Depositary a completed Form W-8 Certificate of Foreign Status prior to
receipt of any payments.
Determination of Validity. All questions as to the form of documents and
the validity, eligibility (including time of receipt) and acceptance for payment
of any tender of Shares will be determined by Purchaser in its sole discretion,
and its determination will be final and binding on all parties. Purchaser
reserves the absolute right to reject any or all tenders of any Shares that are
determined by it not to be in proper form or the acceptance of or payment for
which may, in the opinion of Purchaser, be unlawful. Purchaser also reserves the
absolute right to waive any of the conditions of the Offer or any defect or
irregularity in the tender of any Shares. 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 on all parties. No tender of
Shares will be deemed to have been validly made until all defects and
irregularities have been cured or waived. None of Purchaser, Parent, the
Depositary, the Information Agent, the Dealer Manager or any other person will
be under any duty to give notification of any defects or irregularities in
tenders or incur any liability for failure to give any such notification.
Appointment; Release. By executing the Letter of Transmittal as set forth
above (including through delivery of an Agent's Message), a tendering
stockholder irrevocably appoints designees of Purchaser as such stockholder's
attorneys-in-fact and proxies, each with full power of substitution, in the
manner set forth in the Letter of Transmittal, to the full extent of such
stockholder's rights with respect to the Shares tendered by such stockholder and
accepted for payment by Purchaser (and with respect to any and all other Shares
or other securities or rights issued or issuable in respect of such Shares on or
after November 2, 1998). All such powers of attorney and proxies shall be
considered coupled with an interest in the tendered Shares. This appointment is
effective upon the acceptance for payment of the Shares by Purchaser. Upon
acceptance for payment, all prior powers of attorney and proxies given by the
stockholder with respect to such Shares or other securities or rights will,
without further action, be revoked, and no subsequent proxies may be given or
written consent executed (and if given or executed will not be deemed
effective). The designees of Purchaser will, with respect to the Shares and
other securities or rights be empowered to exercise all voting and other rights
of such stockholder as they in their sole judgment deem proper in respect of any
annual or special meeting of the Company's stockholders, any adjournment or
postponement thereof, actions by written consent in lieu of any such meeting or
otherwise. Purchaser reserves the right to require that, in order for Shares to
be deemed validly tendered, immediately upon Purchaser's acceptance for payment
for such Shares, Purchaser must be able to exercise full voting, consent and
other rights with respect to such Shares, including voting at any
27
<PAGE> 32
meeting of stockholders (whether annual or special or whether or not adjourned)
or acting by written consent without a meeting in respect of such Shares.
A tender of Shares pursuant to any one of the procedures described above
will constitute the tendering stockholder's acceptance of the terms and
conditions of the Offer, as well as the tendering stockholder's representation
and warranty that (i) such stockholder has the full power and authority to
tender, sell, assign and transfer the tendered Shares (and any and all other
Shares or other securities issued or issuable in respect of such Shares on or
after November 2, 1998), and (ii) when the same are accepted for payment by
Purchaser, Purchaser will acquire good and unencumbered title thereto, free and
clear of all liens, restrictions, charges and encumbrances and not subject to
any adverse claims. Purchaser's acceptance for payment of Shares tendered
pursuant to the Offer will constitute a binding agreement between the tendering
stockholder and Purchaser upon the terms and subject to the conditions of the
Offer.
By accepting the Offer through the tender of Publicly-held Shares and the
receipt of payment for Publicly-held Shares, a tendering stockholder is (under
Parent's and Purchaser's view of applicable law) barred from thereafter
attacking in any legal proceeding the fairness of the consideration received by
stockholders in the Offer. For this reason, the Letter of Transmittal to be
executed by tendering stockholders includes a release of any such claims, which
will be effective upon receipt of payment for Publicly-held Shares.
WITHDRAWAL RIGHTS
Except as otherwise provided in this section, tenders of Shares made
pursuant to the Offer are irrevocable. Shares tendered pursuant to the Offer may
be withdrawn at any time prior to the Expiration Date, and, unless theretofore
accepted for payment pursuant to the Offer, may also be withdrawn at any time
after January 1, 1999. If purchase of or payment for Shares is delayed for any
reason or if Purchaser is unable to purchase or pay for Shares for any reason,
then, without prejudice to Purchaser's rights under the Offer, tendered Shares
may be retained by the Depositary on behalf of Purchaser, and may not be
withdrawn except to the extent that tendering stockholders are entitled to
withdrawal rights as set forth in this section, subject to Rule 14e-1(c) under
the Exchange Act, which provides that no person who makes a tender offer shall
fail to pay the consideration offered or return the securities deposited by or
on behalf of security holders promptly after the termination or withdrawal of
the offer.
For a withdrawal to be effective, a written, telegraphic, telex or
facsimile transmission notice of withdrawal must be timely received by the
Depositary at one of its addresses set forth on the back cover of this Offer to
Purchase. Any notice of withdrawal must specify the name of the person who
tendered the Shares to be withdrawn, the number of Shares to be withdrawn and
the name in which the certificates representing such Shares are registered, if
different from that of the person who tendered the Shares. If certificates for
Shares to be withdrawn 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 procedure for book-entry transfer set
forth in "THE TENDER OFFER -- Procedure for Tendering Shares", any notice of
withdrawal also must specify the name and number of the account at the
Book-Entry Transfer Facility to be credited with the withdrawn Shares. All
questions as to the form and validity (including time of receipt) of notices of
withdrawal will be determined by Purchaser in its sole discretion, and its
determination will be final and binding on all parties. None of Purchaser,
Parent, the Depositary, the Information Agent, the Dealer Manager or any other
person will be under any duty to give notification of any defects or
irregularities in any notice of withdrawal, or incur any liability for failure
to give any such notification.
Any Shares properly withdrawn will be deemed not validly tendered for
purposes of the Offer, but may be retendered at any subsequent time prior to the
Expiration Date by following any of the procedures described in "THE TENDER
OFFER -- Procedure for Tendering Shares."
28
<PAGE> 33
PRICE RANGE OF THE SHARES; DIVIDENDS
According to the Company's 10-K, the Shares are quoted on The National
Association of Securities Dealers Automated Quotation System National Market
under the symbol "LTEK." The following table sets forth, for the periods
indicated, the reported high and low sales prices of the Shares on the Nasdaq
National Market as reported in the Company's 10-K with respect to periods
occurring in 1996 and 1997, and as reported thereafter by published financial
sources with respect to the periods ending in 1998:
<TABLE>
<CAPTION>
HIGH LOW
---- ----
<S> <C> <C>
Year Ended December 31, 1996:
First Quarter............................................. $21 1/3 $15 1/3
Second Quarter............................................ $21 5/6 $18
Third Quarter............................................. $25 3/4 $20 1/6
Fourth Quarter............................................ $26 1/2 $21 1/8
Year Ended December 31, 1997:
First Quarter............................................. $28 3/4 $24 1/4
Second Quarter............................................ $30 $25 5/16
Third Quarter............................................. $31 1/4 $26 7/8
Fourth Quarter............................................ $35 7/8 $29 1/2
Year Ending December 31, 1998:
First Quarter............................................. $38 1/2 $30
Second Quarter............................................ $39 1/2 $30 3/4
Third Quarter............................................. $39 3/8 $30 1/2
</TABLE>
The Company declared (and later paid) dividends on each Share in the amount
of $.04 in each of the third and fourth quarters, respectively, of the fiscal
year 1996, $.04 in each of the first and second quarters, and $.05 in each of
the third and fourth quarters, respectively, of the fiscal year 1997, and $.05
in each of the first, second and third quarters, respectively, of the fiscal
year 1998.
According to published sources, on July 7, 1998, the last full trading day
prior to Parent's public announcement of the Proposal, and on October 27, 1998,
the last full day of trading before Parent's public announcement of the Offer,
the last closing price of the Shares on the Nasdaq National Market System was
$31.00 per Share and $35.00 per Share, respectively. STOCKHOLDERS ARE URGED TO
OBTAIN A CURRENT MARKET QUOTATION FOR THE SHARES.
CERTAIN EFFECTS OF THE TRANSACTION
Effect upon the Shares. The purchase of Publicly-held Shares by Purchaser
pursuant to the Offer will reduce the number of Shares that might otherwise
trade publicly and will reduce the number of holders of Shares, which could
adversely affect the liquidity and market value of the remaining Publicly-held
Shares. According to the Company's 10-K, as of February 20, 1998 there were
approximately 553 holders of record of the Shares.
Depending upon the number of Shares purchased pursuant to the Offer and the
aggregate market value of any Shares not purchased pursuant to the Offer, the
Shares may no longer meet the standards for continued listing for quotation on
the Nasdaq National Market System and may, upon the initiative of the NASD, be
delisted therefrom. The Nasdaq National Market System published guidelines
indicate that the NASD would consider delisting the Shares if, among other
things, the number of holders of Shares should fall below 400 or if the number
of publicly held Shares should fall below 750,000 or if the aggregate market
value of the Publicly-held Shares should fall below $5,000,000.
In the event that the Shares are no longer included in the Nasdaq National
Market System, 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
29
<PAGE> 34
quotations would, however, depend on the number of holders of Shares remaining
at such time, the interest in maintaining a market in the 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. To the extent the
Shares are delisted from quotation on the Nasdaq National Market System, the
market for the Shares could be adversely affected. Further, Purchaser cannot
predict whether the reduction in the number of Shares that might otherwise trade
publicly, if any, effected by the Offer would have an adverse or beneficial
effect on the market price for or marketability of the Shares or whether it
would cause future market prices to be greater or less than the Offer Price.
The Shares are currently registered under the Exchange Act. Such
registration may be terminated upon application by the Company to the Commission
if there are fewer than 300 holders of record of Shares. If such registration
were terminated, the Company would no longer legally be required to disclose
publicly in proxy materials distributed to stockholders the information which it
now must provide under the Exchange Act or to make public disclosure of
financial and other information in annual, quarterly and other reports required
to be filed with the Commission under the Exchange Act; and the executive
officers and directors of the Company and beneficial owners of more than 10% of
the Shares would no longer be subject to the "short-swing" insider trading
reporting and profit recovery provisions of the Exchange Act. Furthermore, if
such registration were terminated, persons holding "restricted securities" of
the Company may be deprived of their ability to dispose of such securities under
Rule 144 or 144A promulgated under the Securities Act of 1933, as amended.
If the registration of the Shares is not terminated and the Shares are not
delisted after consummation of the Offer and prior to the Second Step Merger,
then the Shares will cease to be listed on the Nasdaq National Market System,
and the registration of the Shares under the Exchange Act will be terminated,
following the Second Step Merger.
Increased Interest in Stockholders' Equity and Net Income of the
Company. In the event that the Offer is consummated, the interest of Purchaser
and Parent in the stockholders' equity and net income of the Company, in terms
of both percentages and dollar amounts, will increase in direct proportion to
the increase in the percentage of outstanding Shares owned by Purchaser and
Parent resulting from the Share acquisitions pursuant to the Offer. If all of
the outstanding Shares are purchased pursuant to the Offer, Purchaser's and
Parent's beneficial interest in the stockholders' equity and net income of the
Company at June 30, 1998, as reflected in the Company's Quarterly Report on Form
10-Q for the fiscal quarter ended June 30, 1998 (the "Company's 10-Q") would
increase to 100%, or $227.7 million and $18.1 million, respectively. If all of
the outstanding Shares are purchased pursuant to the Offer, Purchaser's and
Parent's beneficial interest in the stockholders' equity and net income of the
Company at December 31, 1997, as reflected in the Company's 10-K would increase
to 100%, or $208.7 million and $32.2 million, respectively. See "THE TENDER
OFFER -- Certain Information Concerning the Company" and "-- Certain Information
Concerning Parent."
CERTAIN INFORMATION CONCERNING THE COMPANY
The Company is a Delaware corporation with its principal offices located at
9800 Medical Center Drive, Rockville, Maryland 20850. The following description
of the Company's business has been taken from and is qualified in its entirety
by reference to the Company's 10-K.
Life Technologies, Inc. (the "Company"), originally incorporated in
Ohio in 1915 and reincorporated in Delaware in 1986, develops, manufactures
and supplies more than 3,000 products used in life sciences research and
commercial manufacture of genetically engineered products. The Company's
products include sera, other cell growth media, biochemicals and enzymes
and other biological products necessary for recombinant DNA procedures.
These and related products and services provided by the Company are used in
cellular biochemistry and molecular biology research and in the production
of genetically engineered pharmaceuticals such as interferons, interleukins
and tissue plasminogen activator ("t-PA").
The Company's products are sold to more than 20,000 customers
consisting of laboratories generally associated with universities, medical
research centers, and government institutions as well as biotechnol-
30
<PAGE> 35
ogy, pharmaceutical, energy, agricultural and chemical companies. The
Company sells its products principally through its own direct sales
organization which is supplemented by a network of distributors.
The Company is subject to the informational filing requirements of the
Exchange Act and, in accordance therewith, is required to file periodic reports,
proxy statements and other information with the Commission relating to its
business, financial condition and other matters. Certain information, as of
particular dates, concerning the Company's directors and officers (including
their remuneration, stock options granted to them and shares held by 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 and annual reports distributed to the Company's stockholders and
filed with the Commission. Such reports, proxy statements and other information
are available for inspection and copying at the public reference facilities of
the Commission located in Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549, and at the regional offices of the Commission located in Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661, and Seven
World Trade Center, Suite 1300, New York, New York 10048. Copies of this
material may also be obtained by mail, upon payment of the Commission's
customary fees from the Commission's principal office at 450 Fifth Street, N.W.,
Washington, D.C. 20549. The Commission also maintains an Internet site on the
World Wide Web at <http://www.sec.gov> that contains reports, proxy statements
and other information. The Common Stock of the Company is traded on the Nasdaq
National Market System. Reports, proxy statements and other information
concerning the Company should also be available for inspection at the National
Association of Securities Dealers, Inc., at 1735 K Street, N.W., Washington D.C.
20006.
The name, address, principal occupation or employment, five-year employment
history and citizenship of each director and executive officer of the Company is
set forth in Schedule I hereto.
The following tables set forth certain summary financial information with
respect to the Company derived from the audited financial statements contained
in the Company's 10-K and the unaudited financial statements contained in the
Company's 10-Q and the Company's Quarterly Report on Form 10-Q for the fiscal
quarter ended June 30, 1997. The following summary is qualified in its entirety
by reference to the more comprehensive financial information included in such
documents, including the financial statements and related notes contained
therein as well as other documents filed by the Company with the Commission,
which are available for inspection in the manner set forth above under "THE
TENDER OFFER -- Certain Information Concerning the Company."
ALTHOUGH NEITHER PARENT NOR THE PURCHASER HAS ANY KNOWLEDGE THAT ANY SUCH
INFORMATION IS UNTRUE, NEITHER PARENT NOR THE PURCHASER TAKES ANY RESPONSIBILITY
FOR THE ACCURACY OR COMPLETENESS OF INFORMATION CONTAINED IN THIS OFFER TO
PURCHASE WITH RESPECT TO THE COMPANY OR ANY OF ITS SUBSIDIARIES OR AFFILIATES OR
FOR ANY FAILURE BY THE COMPANY TO DISCLOSE EVENTS WHICH MAY HAVE OCCURRED OR MAY
AFFECT THE SIGNIFICANCE OR ACCURACY OF ANY SUCH INFORMATION.
31
<PAGE> 36
THE COMPANY
SELECTED HISTORICAL CONSOLIDATED FINANCIAL INFORMATION
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
FOR THE SIX MONTHS FOR THE FISCAL YEAR
ENDED JUNE 30, ENDED DECEMBER 31,
-------------------------- --------------------------------
1998 1997 1997 1996 1995
----------- ----------- -------- -------- --------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Revenues............................ $181,025 $165,531 $332,808 $310,339 $272,299
Operating income.................... 28,164 25,681 50,934 46,101 34,152
Income before extraordinary items... 18,072 16,176 32,235 28,700 22,277
Net income.......................... 18,072 16,176 32,235 28,700 22,277
Per share
Income per common share before
extraordinary items............ 0.77 0.70 1.39 1.25 0.99
Extraordinary items............... -- -- -- -- --
Net income per common share --
basic.......................... 0.77 0.70 1.39 1.25 0.99
Net income per common share --
diluted........................ 0.75 0.68 1.35 1.22 0.97
Cash dividends declared per common
share.......................... $ 0.10 $ 0.08 $ 0.18 $0.15 1/3 $0.13 1/3
Ratio of earnings to fixed
charges........................... 1,580:1 808:1 734:1 526:1 461:1
</TABLE>
<TABLE>
<CAPTION>
JUNE 30, JUNE 30, DECEMBER 31, DECEMBER 31,
1998 1997 1997 1996
----------- ----------- ------------ ------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents................... $ 20,363 $ 19,139 $ 19,076 $ 15,326
Working capital............................. 111,769 94,590 100,927 84,196
Total assets................................ 298,697 272,935 280,274 253,931
Total assets less deferred research and
development charges and excess of cost of
assets over book value.................... 287,153 259,802 267,909 239,887
Long-term debt.............................. -- 4,612 4,564 4,668
Stockholders' equity........................ 227,667 197,099 208,724 182,919
Per share................................. $ 9.65 $ 8.50 $ 8.94 $ 7.97
Shares outstanding.......................... 23,581 23,188 23,351 22,951
</TABLE>
On October 13, 1998, the Company publicly announced net income of $8.8
million for the quarter ended September 30, 1998, an increase of 11% over the
comparable period in 1997. Diluted earnings per share of $0.36 for the quarter
ended September 30, 1998 were 9% greater than diluted earnings per share of
$0.33 in the comparable period of 1997. Excluding approximately $0.3 million of
expenses related to the Proposal, net income of the Company was $8.9 million for
the quarter ended September 30, 1998, an increase of 14%, and diluted net income
per share was $0.37, an increase of 12%, over the comparable period in 1997.
Revenues were $89.6 million for the quarter ended September 30, 1998, an
increase of 7% over the comparable period in 1997.
Projections. Goldman Sachs presented to Merrill Lynch a financial model
derived from information provided by the Company's management. The model
contained projected income and cash flow statements for the Company's business
for each year from 1998 through 2002. According to the Special Committee's
financial advisors, these Base Case Projections were based on the 1998 Strategic
Plan. The financial forecast for the years 2001 and 2002 were described as
simplified extrapolations of the 1998 Strategic Plan. These
32
<PAGE> 37
projections set forth revenues rising at a compound annual rate of 9.5% from
$361.4 million in 1998 to $519.5 million in 2002, net income rising at a
compound annual rate of 14.3% from $38.1 million in 1998 to $65.0 million in
2002, EBIT rising at a compound annual rate of 13.7% from $59.7 million in 1998
to $99.8 million in 2002, and free cash flow rising at a compound annual rate of
37.1% from $13.7 million in 1998 to $48.6 million in 2002.
In addition, Goldman Sachs presented to Merrill Lynch a financial model
which contained projections of additional revenues, EBIT and Free Cash Flow to
be realized from the R&D Pipeline each year from 1998 through 2002. According to
Goldman Sachs, these R&D Projections were developed with the Company's
management after its appointment as financial advisor to the Special Committee.
The R&D Projections provided by Goldman Sachs, which were risk adjusted,
included the following projections, which were represented as being incremental
to the Base Case Projections:
<TABLE>
<CAPTION>
SUMMARY R&D PROJECTIONS ($ IN MILLIONS)
-------------------------------------------
1998 1999 2000 2001 2002
----- ----- ----- ------ ------
<S> <C> <C> <C> <C> <C>
Revenues...................................... 1.6 25.2 64.6 116.2 164.6
EBIT.......................................... 0.5 3.8 12.5 27.7 46.7
Free Cash Flow................................ (0.5) (4.8) (4.3) 1.3 14.1
</TABLE>
See generally, "SPECIAL FACTORS -- Background of the Offer" and
"-- Fairness of the Offer" for information about Company projections and other
related information.
THE MATTERS DISCUSSED ABOVE UNDER THIS HEADING, "THE TENDER OFFER --
CERTAIN INFORMATION CONCERNING THE COMPANY -- PROJECTIONS" TOGETHER WITH OTHER
MATTERS SET FORTH UNDER THE HEADING, "SPECIAL FACTORS -- BACKGROUND OF THE
OFFER", "-- FAIRNESS OF THE OFFER" AND "-- ANALYSIS OF FINANCIAL ADVISOR TO
PARENT" ARE FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND UNCERTAINTIES.
WITH RESPECT TO SUCH FORWARD-LOOKING STATEMENTS, PURCHASER AND PARENT CLAIM THE
PROTECTION OF THE DISCLOSURE LIABILITY SAFE HARBOR FOR FORWARD-LOOKING
STATEMENTS CONTAINED IN THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995.
STOCKHOLDERS ARE CAUTIONED THAT, IN ADDITION TO OTHER FACTORS SET FORTH UNDER
"SPECIAL FACTORS -- BACKGROUND OF THE OFFER", "-- FAIRNESS OF THE OFFER" AND
"-- ANALYSIS OF FINANCIAL ADVISOR TO PARENT", THE FOLLOWING FACTORS MAY CAUSE
THE COMPANY'S ACTUAL FINANCIAL PERFORMANCE TO DIFFER MATERIALLY FROM THOSE
EXPRESSED IN SUCH FORWARD-LOOKING STATEMENTS; PRESSURE ON GROWTH RATES FROM
COMPETITION AND REDIRECTED FOCUS FROM CORE BUSINESS; CURRENT ECONOMIC
CONDITIONS; HISTORICALLY LOWER R&D PRODUCTIVITY THAN THAT PROJECTED IN THE R&D
PROJECTIONS UTILIZED BY GOLDMAN SACHS; ABSENCE OF HISTORY OF THE COMPANY'S
SUCCESSFUL COMMERCIALIZATION OF THE SIGNIFICANT NUMBER OF MAJOR NEW PRODUCTS
REFLECTED IN SUCH R&D PROJECTIONS; TECHNOLOGICAL RISKS INHERENT IN THE R&D
PIPELINE; AND ABSENCE OF HISTORY OF REVENUE AND PROFIT CONTRIBUTION FROM NEW
PROJECTS COMPARABLE TO THAT PROJECTED IN THE R&D PROJECTIONS.
THE PROJECTIONS SET FORTH ABOVE WERE NOT PREPARED BY PARENT OR PURCHASER OR
WITH A VIEW TO PUBLIC DISCLOSURE OR COMPLIANCE WITH PUBLISHED GUIDELINES OF THE
COMMISSION OR THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS FOR
PROSPECTIVE FINANCIAL INFORMATION. THE PROJECTIONS ARE INCLUDED HEREIN SOLELY
BECAUSE SUCH INFORMATION WAS FURNISHED TO PARENT. FOR THE REASONS SET FORTH AND
REFERRED TO UNDER THE HEADINGS, "SPECIAL FACTORS -- BACKGROUND OF THE OFFER",
"-- FAIRNESS OF THE OFFER" AND "-- ANALYSIS OF FINANCIAL ADVISOR TO PARENT" THE
INCLUSION OF THE PROJECTIONS
33
<PAGE> 38
IN THIS OFFER TO PURCHASE SHOULD NOT BE REGARDED AS AN INDICATION THAT PARENT,
PURCHASER OR PARENT'S FINANCIAL ADVISOR, OR THEIR RESPECTIVE OFFICERS AND
DIRECTORS, CONSIDER SUCH INFORMATION TO BE ACCURATE OR RELIABLE AND NONE OF SUCH
PERSONS OR ENTITIES ASSUMES ANY RESPONSIBILITY FOR THE ACCURACY THEREOF.
CERTAIN INFORMATION CONCERNING PARENT AND PURCHASER
Parent is a Connecticut corporation with its principal office located at
One Elm Street, Windsor Locks, Connecticut 06096. Parent is a specialty
materials company principally serving the worldwide aerospace, electronics, food
packaging, and medical markets with products based on proprietary technologies.
Parent was founded in 1767 and incorporated in the state of Connecticut in 1914.
Purchaser is a Delaware corporation with its principal executive offices
located at One Elm Street, Windsor Locks, Connecticut 06096. Purchaser is a
wholly owned subsidiary of Parent which was organized to acquire the Company and
has not conducted any unrelated activities since its organization.
The name, business address, citizenship, present principal employment or
occupation and five-year employment history of each of the executive officers of
Parent and Purchaser are set forth in Schedule II hereto.
Except as described in this Offer to Purchase (i) none of Parent or
Purchaser nor, to the best of Parent's knowledge, any of the persons listed in
Schedule II hereto, or any associate or majority-owned subsidiary of Parent or
any of the persons so listed, beneficially owns or has any right to acquire
directly or indirectly any Shares or has any contract, arrangement,
understanding or relationship with any other person with respect to any Shares,
including, but not limited to, any contract, arrangement, understanding or
relationship concerning the transfer or the voting of any Shares, joint
ventures, loan or option arrangements, puts or calls, guaranties of loans,
guaranties against loss, or the giving or withholding of proxies, and (ii) none
of Parent or Purchaser nor, to the best knowledge of Parent, any of the other
persons referred to above, or any of the respective directors, executive
officers or subsidiaries of any of the foregoing, has effected any transaction
in any Shares during the past 60 days.
Except as set forth in this Offer to Purchase, since January 1, 1995,
neither Parent or Purchaser nor, to the best knowledge of Parent, any of the
persons listed on Schedule II hereto, has had any transaction with the Company
or any of its executive officers, directors or affiliates that is required to be
reported under the rules and regulations of the Commission applicable to the
Offer. Except as set forth in this Offer to Purchase, since January 1, 1995
there have been no contacts, negotiations or transactions between Parent,
Purchaser, or any of their subsidiaries or, to the best knowledge of Parent, any
of the persons listed in Schedule II to this Offer to Purchase, on the one hand,
and the Company or its affiliates, on the other hand, concerning an acquisition,
consolidation or merger; a tender offer for or other acquisition of securities
of any class of the Company; an election of directors of the Company; or a sale
or other transfer of a material amount of assets of the Company or any of its
subsidiaries.
The following tables set forth certain selected consolidated financial
information with respect to Parent and its subsidiaries excerpted from the
information contained in Parent's 1997 Annual Report on Form 10-K for the fiscal
year ended December 31, 1997 and Parent's Quarterly Reports on Form 10-Q for the
periods ended June 30, 1998 and 1997. The following summary is qualified in its
entirety by reference to the more comprehensive financial information included
in such documents, including the financial statements and related notes
contained therein as well as other documents filed by Parent with the
Commission, which are incorporated by reference and available for inspection in
the manner set forth under "THE TENDER OFFER -- Certain Information Concerning
the Company."
34
<PAGE> 39
PARENT AND SUBSIDIARIES
SELECTED HISTORICAL CONSOLIDATED FINANCIAL INFORMATION
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED
JUNE 30, FOR THE FISCAL YEAR ENDED DECEMBER 31,
-------------------------- --------------------------------------
1998 1997 1997 1996 1995
----------- ----------- ---------- ---------- ----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net Sales.................... $592,528 $565,485 $1,147,055 $1,100,185 $1,088,905
Net Income................... 30,647 28,869 56,427 48,722 40,578
Per share -- basic......... 1.33 1.25 2.45 2.06 1.67
Per share -- diluted....... 1.31 1.23 2.41 2.03 1.66
</TABLE>
<TABLE>
<CAPTION>
JUNE 30, JUNE 30, DECEMBER 31, DECEMBER 31,
1998 1997 1997 1996
----------- ----------- ------------ ------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
BALANCE SHEET DATA:
Total assets............................. $1,002,210 $959,847 $961,776 $953,804
Long-term debt........................... 179,764 188,807 180,030 209,952
Total stockholders' equity............... 393,803 360,671 372,861 374,115
</TABLE>
Parent is subject to the informational requirements of the Exchange Act
and, in accordance therewith, files reports relating to its business, financial
condition and other matters. Information, as of particular dates, concerning
Parent's directors and officers, their remuneration, stock options and other
matters, the principal holders of Parent's securities and any material interest
of such persons in transactions with Parent is required to be 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 is set forth under "THE TENDER OFFER -- Certain
Information Concerning the Company."
SOURCE AND AMOUNT OF FUNDS
Purchaser estimates that the total amount of funds required to purchase the
Outstanding Shares not currently owned by Parent and the Option Shares pursuant
to the Offer and the Second Step Merger will be approximately $440 million
(after giving effect to the payment of the exercise price on the vested and
exercisable Options and excluding $3.8 million for payment of estimated costs
and expenses).
Parent received a financing commitment for credit facilities (the "Credit
Facilities") of up to $600 million from The First National Bank of Chicago
("First Chicago" and, in its capacity as administrative agent, the
"Administrative Agent"). First Chicago's affiliate, First Chicago Capital
Markets, Inc., acting as arranger (the "Arranger") with respect to the Credit
Facilities, undertook to syndicate the Credit Facilities to a group of financial
institutions (the "Lenders"). As of the date hereof, the Lenders have committed
to provide the entire amount of the Credit Facilities.
The Credit Facilities will consist of an unsecured 364-Day credit facility
of up to $300 million (the "364-Day Facility") and an unsecured five-year
revolving credit facility of up to $300 million (the "Revolving Credit
Facility") that will be made available to Parent. A portion of the proceeds of
both the 364-Day Facility and the Revolving Credit Facility will be used to
finance the Offer. Parent will contribute approximately $170 million of proceeds
from the 364-Day Facility and approximately $270 million of proceeds of the
Revolving Credit Facility to Purchaser (assuming all Outstanding Shares not
currently owned by Parent and the Option Shares are purchased, after giving
effect to the payment of the exercise price on the vested and exercisable
Options), which funds will be used by Purchaser to pay for Shares accepted for
payment in the Offer. Existing cash and the balance of the proceeds of the
364-Day Facility and the Revolving Credit Facility will be used by
35
<PAGE> 40
Parent to pay certain expenses and costs related to the Offer and to provide
financing for the general corporate purposes of Parent and its subsidiaries
after consummation of the Offer.
The availability of the Credit Facilities is subject to the following
conditions: (i) no amendment, waiver or modification of the terms of the Offer
which are not reasonably acceptable to the Administrative Agent; (ii) there
shall have been tendered for purchase pursuant to the Offer, and Purchaser shall
have accepted for payment pursuant to the Offer, at least that number of common
shares of the Company which, when added to the common shares of the Company
already owned by Parent constitutes at least 80% of the outstanding capital
stock of the Company; (iii) the absence of any injunction or restraining order
which, in the reasonable judgment of the Administrative Agent, would prohibit
the funding of the Credit Facilities or the successful consummation of the Offer
or the Scheduled Asset Sale (hereinafter defined); (iv) the absence of material
litigation; (v) the absence of any material adverse change with respect to
Parent or Parent's principal operating subsidiaries and (vi) certain other
conditions customary for credit facilities of this type.
Parent expects that the Credit Facilities will provide sufficient
availability to finance the Offer and related costs and expenses and, together
with other financing sources available to Parent, to provide for Parent's and
its subsidiaries' (including, after the Second Step Merger, the Company's)
ongoing working capital and general corporate needs.
The interest rates on the Credit Facilities will be, at Parent's election,
either the Alternate Base Rate (defined as the higher of First Chicago's base
rate and the Federal Funds rate plus 1/2% per annum) or the Eurodollar Rate
(defined as the sum of (i) the quotient of First Chicago's London interbank
offering rate divided by one minus the maximum aggregate reserve requirement
imposed under Regulation D on Eurocurrency liabilities, plus (ii) the applicable
percentage rate per annum as set forth in the pricing schedule attached to the
credit agreement (the "Pricing Schedule")). During the continuance of a default,
the interest rate on any loan under the Credit Facilities will be the otherwise
applicable interest rate plus 2% per annum. A facility fee will accrue at a per
annum rate as set forth in the Pricing Schedule on the daily average commitment
of such lender until and including the termination date of the Credit
Facilities. A utilization fee will accrue for each day until and including the
later of the termination date of the Credit Facilities and date all loans are
paid in full, such utilization fee to be equal to the applicable utilization fee
rate as set forth in the Pricing Schedule for such date multiplied by the
aggregate principal amount of the loans and aggregate letter of credit
obligations outstanding on such date, payable on each payment date and the
termination date of the Credit Facilities.
The Lenders' aggregate commitments under the 364-Day Facility will be
reduced by (i) 100% of the net proceeds realized upon closing of the Scheduled
Asset Sale (defined below) and (ii) 100% of the net proceeds realized upon the
issuance or incurrence of indebtedness for borrowed money (exclusive of loans
under the Credit Facilities), but only to the extent that such application of
the proceeds described in the foregoing clauses (i) and (ii) is necessary to
reduce the aggregate commitments of the Lenders under the 364-Day Facility to
$100,000,000.
The Credit Facilities will include certain representations and warranties
and covenants customary for facilities of this type, including: (i) financial
covenants consisting of a minimum net worth requirement and a maximum leverage
ratio; (ii) preservation of corporate existence, compliance with laws, payment
of taxes, maintenance of properties and insurance and financial and other
reporting requirements; and (iii) limitations (subject to certain exceptions) on
indebtedness, contingent obligations (including guarantees), liens, mergers and
acquisitions, sales of assets, joint ventures and other investments, and
transactions with affiliates. The Credit Facilities will also include customary
events of default, including payment defaults, breaches of representations and
warranties, covenant defaults, cross defaults to other indebtedness, bankruptcy
events, defaults in satisfaction of money judgments, material adverse change,
certain events under the Employee Retirement Income Security Act of 1974, as
amended, and a change of control of the Parent.
On August 25, 1998, Parent announced that it had entered into a definitive
agreement to sell its packaging coatings business to The Valspar Corporation
(the "Scheduled Asset Sale"). The transaction is presently expected to close
prior to December 31, 1998. Under the terms of the 364-Day Facility, the net
proceeds to Parent from such sale must be used to reduce the 364-Day Facility to
a maximum of
36
<PAGE> 41
$100,000,000. Parent has made no additional plans or arrangements to finance or
repay the Credit Facilities other than in accordance with the terms of the
Credit Facilities as described herein.
Purchaser's obligation to purchase Shares tendered pursuant to the Offer is
not subject to financing.
CERTAIN CONDITIONS OF THE OFFER
Notwithstanding any other term or provision of the Offer, Purchaser shall
not be required to accept for payment, or, subject to any applicable rules and
regulations of the Commission, including Rule 14e-1(c) under the Exchange Act
(relating to Purchaser's obligation to pay for or return tendered Shares
promptly after termination or withdrawal of the Offer), accept for payment,
purchase or pay for any Shares of the Company tendered, and may terminate or
amend the Offer and may postpone the acceptance for payment of and payment for
any Shares, if (i) the Minimum Condition has not been satisfied, or (ii) at any
time prior to the expiration of the Offer and before the time of acceptance for
payment for any such Shares any of the following shall occur or exist:
(a) there shall have been threatened, instituted or be pending any
action, proceeding, application, claim or counterclaim by any government or
governmental authority or agency, domestic or foreign, or by any other
person, domestic or foreign, before any court or governmental regulatory or
administrative agency, authority or tribunal, domestic or foreign, (i)
challenging the acquisition by Parent or Purchaser of the Shares, seeking
to restrain or prohibit the making or consummation of the Offer or the
Second Step Merger; (ii) seeking to obtain from Parent or Purchaser any
damages, fines or legal sanctions relating to the Offer or the Second Step
Merger; (iii) seeking to prohibit or limit the ownership or operation by
Parent or Purchaser or any of their affiliates of any portion of the
business or assets of the Company or to compel Parent or Purchaser or any
of their affiliates to dispose of or hold separate all or any portion of
the business or assets of the Company or of Purchaser or seeking to impose
any limitation on the ability of Parent or Purchaser or any of their
affiliates to conduct such business or own such assets; (iv) seeking to
impose or confirm limitations on the ability of Parent or Purchaser or any
of their affiliates effectively to exercise full rights of ownership of the
Shares, including, without limitation, the right to vote any Shares
acquired or owned by Parent or Purchaser or any of their affiliates on all
matters properly presented to the Company's stockholders; (v) seeking to
require divestiture by Parent or Purchaser or any of their affiliates of
any Shares; or (vi) which would otherwise in the sole judgment of Purchaser
or Parent, materially adversely affect the Company or adversely affect the
benefits which Purchaser or Parent expects to derive from the successful
completion of the Offer and/or the Second Step Merger; or
(b) there shall be any statute, rule, regulation, legislation,
interpretation, judgment, order or injunction proposed, enacted,
promulgated, entered, enforced, issued or deemed applicable to the Offer,
the Second Step Merger, or other similar business combination by Purchaser
or any affiliate of Parent with the Company, or any other action shall have
been taken by any government, governmental authority or agency or court
with respect to a proceeding described in paragraph (a) above, domestic or
foreign, that has, or, in Parent's sole discretion, could be expected to
result in, any of the consequences referred to in paragraph (a) above; or
(c) any approval, permit, authorization, favorable review or consent
of any court or governmental entity shall not have been obtained on terms
satisfactory to Purchaser in its sole discretion or Purchaser is advised,
or otherwise has reason to believe, that any such approval, permit,
authorization, review or consent will be denied or substantially delayed,
or will not be given other than upon terms or conditions that would, in
Purchaser's sole judgment, make it impracticable to proceed with the Offer;
or
(d) any change shall have occurred or been threatened (or any
condition, event or development shall have occurred or been threatened
involving a prospective change) in the business, properties, assets,
liabilities, capitalization, stockholders' equity, condition (financial or
otherwise), operations, licenses or franchises, results of operations or
prospects of the Company that, in the sole judgment of Parent, is or may be
materially adverse to the Company or to the value of the Shares to
Purchaser, Parent or any other affiliate of Parent or Purchaser, or Parent
shall have become aware of any facts that, in the sole judgment
37
<PAGE> 42
of Parent, have or may have material adverse significance with respect to
either the value of the Company or the value of the Shares to Purchaser,
Parent or any other affiliate of Parent; or
(e) there shall have occurred or been threatened (i) any general
suspension of trading in, or limitation on prices for, securities on the
New York Stock Exchange, Inc., any other national securities exchange or in
the over-the-counter market in the United States; (ii) the declaration of a
banking moratorium or any suspension of payments in respect of banks in the
United States (whether or not mandatory); (iii) any extraordinary or
material adverse change in the financial markets or major stock exchange
indices in the United States or abroad or in the market price of Shares;
(iv) any material change in United States currency exchange rates or any
other currency exchange rates or a suspension of, or limitation on, the
markets therefor; (v) the commencement of a war or armed hostilities or
other international calamity directly or indirectly involving the United
States; or (vi) in the case of any of the foregoing existing at the time of
the commencement of the Offer, a material acceleration or worsening
thereof; or
(f) unless Parent shall have consented in writing, the Company shall
have (i) split, combined or otherwise changed, or authorized or proposed a
split, combination or other change of, the Shares or its capitalization;
(ii) issued, distributed, pledged or sold, or authorized, proposed or
announced the issuance, distribution, pledge or sale of (A) any shares of
capital stock (including, without limitation, the Shares), or securities
convertible into any such shares, or any rights, warrants or options to
acquire any such shares or convertible securities, or (B) any other
securities in respect of, in lieu of, or in substitution for Shares; (iii)
purchased or otherwise acquired or caused a reduction in the number of, or
proposed or offered to purchase or otherwise acquire or cause a reduction
in the number of, any outstanding Shares or other securities of the
Company; (iv) declared or paid any dividend or distribution on any shares
of capital stock or issued, or authorized, recommended or proposed the
issuance of, any other distribution in respect of the Shares, whether
payable in cash, securities or other property, or altered or proposed to
alter any material term of any outstanding security; (v) issued, or
announced its intention to issue, any debt securities or any rights,
warrants or options entitling the holder thereof to purchase or otherwise
acquire any debt securities, or incurred, or announced its intention to
incur, any debt other than in the ordinary course of business and
consistent with its past practice; (vi) authorized, recommended, proposed
or publicly announced its intention to enter into (A) any merger,
consolidation, liquidation, dissolution, business combination, acquisition
of assets or securities or disposition of assets or securities other than
in the ordinary course of business, (B) any material change in its
capitalization, (C) any release or relinquishment of any material contract
rights, or (D) any comparable event not in the ordinary course of business;
(vii) authorized, recommended or proposed or announced its intention to
authorize, recommend or propose any transaction which could adversely
affect the value of the Shares; (viii) proposed, adopted or authorized any
amendment to its Certificate of Incorporation or Bylaws or similar
organizational documents or Purchaser or Parent shall have learned about
any such proposal or amendment which shall not have been previously
disclosed; (ix) entered into any new material contracts or canceled or
substantially changed the terms of any existing material contracts; or (x)
agreed in writing or otherwise to take any of the foregoing actions; or
(g) the Company shall have (i) entered into any employment, severance
or similar agreement, arrangement or plan with any of its employees other
than in the ordinary course of business; (ii) entered into or amended any
agreements, arrangements or plans so as to provide for increased or
accelerated benefits to any employee as a result of or in connection with
the transactions contemplated by the Offer, the Second Step Merger or other
business combination; or (iii) except as may be required by law, taken any
action to terminate or amend any employee benefit plan (as defined in
Section 3(2) of the Employee Retirement and Income Security Act of 1974, as
amended) of the Company, or Purchaser shall have become aware of any such
action that was not disclosed in publicly available filings prior to the
date of this Offer to Purchase; or
(h) Purchaser, Parent or another affiliate of Parent and the Company
shall have entered into an agreement that the Offer be terminated or
amended or Purchaser, Parent or another affiliate of Parent
38
<PAGE> 43
shall have entered into an agreement with the Company providing for a
merger or other business combination with the Company,
which, in the sole judgment of Parent or Purchaser in any such case, and
regardless of the circumstances (including any action or inaction by Purchaser,
Parent or any affiliate of Parent) giving rise to any such condition makes it
inadvisable to proceed with the Offer and/or with such acceptance for payment or
payment.
The foregoing conditions are for the sole benefit of Parent and Purchaser
and may be asserted by Parent or Purchaser regardless of the circumstances
giving rise to any such condition and may be waived by Parent or Purchaser, in
whole or in part, at any time and from time to time, in its sole discretion. The
failure by Parent or Purchaser at any time to exercise any of the foregoing
rights will not be deemed a waiver of any such right, and the waiver of such
right with respect to any particular facts or circumstances shall not be deemed
a waiver with respect to any other facts or circumstances, and each such right
will be deemed an ongoing right which may be asserted at any time and from time
to time. Any determination by Parent or Purchaser concerning the events
described above will be final and binding upon all parties.
Should the Offer be terminated pursuant to the foregoing provisions, all
tendered Shares not theretofore accepted for payment shall forthwith be returned
by the Depositary to the tendering stockholders.
CERTAIN TRANSACTIONS BETWEEN PARENT AND THE COMPANY
In 1997 the Company received the benefit of certain services performed by
Parent's corporate personnel, including insurance, risk management advice and
internal audit, for which the Company paid Parent $25,000. Parent also purchased
principally all insurance for the Company for which the Company was charged its
pro rata share of the cost of such insurance. As set forth in Schedule I hereto,
five members of the Company's Board of Directors are executive officers or
Directors of Parent.
According to the Company's Proxy Statement, dated March 16, 1998, for its
annual meeting of stockholders filed on Schedule 14A with the Commission (the
"Company's 1998 Proxy Statement"), (a) each member of the Company Board (other
than Mr. Walker, Mr. Beatt and Ms. Burdett) who is not an officer of the Company
is paid an annual retainer fee of $10,000 for membership on the Company Board,
an additional fee of $1,000 for each Company Board meeting, and a fee of $1,000
in the event of a committee meeting which occurs apart from a regular Company
Board meeting; (b) each Committee Chairman receives $2,000 for each committee
meeting attended; and (c) each non-employee Director (other than Mr. Walker, Mr.
Beatt and Ms. Burdett) also receives an award of 150 Shares twice annually and
was granted an option (pursuant to the Company's 1996 Non-Employee Directors'
Stock Option Plan (the "1996 Plan")) to purchase 6,750 Shares on October 1, 1997
exercisable in equal installments on the first, second and third anniversary of
the date of grant. In addition, in April 1998 and August 1998, respectively,
each of Dr. Whitesides and Mr. Kelly was granted an option to purchase 6,750
Shares under the terms of the 1996 Plan.
INTERESTS OF CERTAIN PERSONS IN THE OFFER
The Company's Common Stock is the Company's only outstanding class of
voting securities. The following table is derived from the Company's 1998 Proxy
Statement, dated March 16, 1998, for its annual meeting of stockholders held on
April 23, 1998 and sets forth certain information as of January 1, 1998 with
respect to the beneficial ownership of the Company's Common Stock by (i) certain
executive officers and directors of the Company; (ii) certain persons
controlling the Company; and (iii) certain executive officers and directors of
any corporation ultimately in control of the Company. The terms "control" and
"controlling" have the meanings set forth in Rule 12b-2 promulgated under the
Exchange Act.
39
<PAGE> 44
<TABLE>
<CAPTION>
PERCENTAGE
AMOUNT AND NATURE OF OF
NAME AND ADDRESS OF BENEFICIAL OWNERSHIP OF COMMON
BENEFICIAL OWNER COMMON STOCK STOCK
- ------------------- ----------------------- -------------
<S> <C> <C>
Dexter Corporation.......................................... 12,246,664 shares(1) 52.5%
One Elm Street
Windsor Locks, CT 06096
Thomas H. Adams, Ph.D....................................... 2,951 shares(2) *
Bruce H. Beatt.............................................. 1,000 shares *
Kathleen Burdett............................................ 2,500 shares *
Rita R. Colwell, Ph.D....................................... 2,951 shares(3) *
Frank E. Samuel, Jr......................................... 2,951 shares(4) *
J. Stark Thompson, Ph.D..................................... 372,740 shares(5) 1.6%
K. Grahame Walker........................................... 1,500 shares *
George M. Whitesides, Ph.D.................................. -- --
Iain C. Wylie............................................... 4,500 shares(6) *
Thomas M. Coutts............................................ 38,167 shares(7) *
Joseph C. Stokes, Jr........................................ 66,531 shares(8) *
John V. Cooper.............................................. 46,089 shares(9) *
Brian D. Graves............................................. 74,564 shares(10) *
</TABLE>
- ---------------
* Less than 1%
(1) Excludes 23,090, 41,773, 183,887 and 3,265 Parent Shares beneficially owned
by Mr. Beatt, Ms. Burdett, Mr. Walker and Dr. Whitesides, respectively,
constituting an aggregate of approximately 1.09% of the outstanding Parent
Shares, as of January 1, 1998. The Parent Shares beneficially owned by Mr.
Beatt, Ms. Burdett and Mr. Walker include 10,334, 14,334 and 86,834 Parent
Shares, respectively, which Mr. Beatt, Ms. Burdett and Mr. Walker may
acquire upon the exercise of stock options.
(2) Includes 2,250 Shares which Dr. Adams may acquire upon the exercise of
Company Options.
(3) Includes 2,250 Shares which Dr. Colwell may acquire upon the exercise of
Company Options.
(4) Includes 2,250 Shares which Mr. Samuel may acquire upon the exercise of
Company Options.
(5) Includes 327,836 Shares which Dr. Thompson may acquire upon the exercise of
Company Options. Also includes 450 Shares owned by Dr. Thompson's wife and
300 Shares owned by Dr. Thompson's son, of which he may be deemed to be the
beneficial owner. Dr. Thompson disclaims beneficial ownership of these 750
Shares.
(6) Includes 2,250 Shares which Mr. Wylie may acquire upon the exercise of
Company Options.
(7) Includes 38,167 Shares which Mr. Coutts may acquire upon the exercise of
Company Options.
(8) Includes 41,408 Shares which Mr. Stokes may acquire upon the exercise of
Company Options. Also includes 4,587 Shares owned by Mr. Stokes' wife, of
which Mr. Stokes may be deemed to be the beneficial owner. Mr. Stokes
disclaims beneficial ownership of these 4,587 Shares.
(9) Includes 46,089 Shares which Mr. Cooper may acquire upon the exercise of
Company Options.
(10) Includes 74,168 Shares which Mr. Graves may acquire upon the exercise of
Company Options.
As of January 1, 1998, Mr. John D. Thompson (Senior Vice President,
Strategic and Business Development of Parent) beneficially owned 42,124 Shares
and may be deemed to have owned beneficially 33,469 Shares owned by his wife and
1,500 Shares owned by his son; and as of January 1, 1998, Mr. Dale J. Ribaudo
(Treasurer of Parent) may be deemed to have owned beneficially 200 Shares owned
by his wife. As of January 1, 1998, Mr. Peter G. Kelly beneficially owned 5,194
Parent Shares.
Parent has been advised that it is the present intention of the directors
and executive officers of Parent named under "THE TENDER OFFER -- Interest of
Certain Persons in the Offer" to tender their Shares in accordance with the
Offer.
40
<PAGE> 45
CERTAIN LEGAL MATTERS; REGULATORY APPROVALS
Except as set forth herein, neither Purchaser nor Parent is aware of any
approval or other action by any governmental, administrative or regulatory
agency or authority or public body, domestic or foreign, that would be required
for the Second Step Merger or ownership of Shares by Purchaser pursuant to the
Offer. Should any such approval or other action be required, it is presently
contemplated that such approval or action would be sought, but Purchaser has no
current intention to delay acceptance for payment of Shares tendered pursuant to
the Offer pending the outcome of any such matter, subject, however, to
Purchaser's right to decline to purchase Shares if any of the conditions
specified in "THE TENDER OFFER -- Certain Conditions of the Offer" shall have
occurred. There can be no assurance that any such approval or other action, if
needed, would be obtained without substantial conditions or that adverse
consequences might not result to the Company's business or that certain parts of
the Company's business might not have to be disposed of in the event that such
approvals were not obtained or such other actions were not taken or in order to
obtain any such approval or other action, any of which could cause Purchaser to
decline to accept for payment or pay for any Shares tendered. Purchaser's
obligation under the Offer to accept for payment and pay for Shares is subject
to the conditions, including conditions relating to legal matters discussed
under this heading entitled "THE TENDER OFFER -- Certain Legal Matters;
Regulatory Approvals."
State Takeover Laws. A number of states (including Delaware where the
Company is incorporated) have adopted takeover laws and regulations which
purport, to varying degrees, to be applicable to attempts to acquire securities
of corporations which are incorporated in such states or which have substantial
assets, stockholders, principal executive offices or principal places of
business therein. To the extent that certain provisions of certain of these
state takeover statutes purport to apply to the Offer or the Second Step Merger,
Parent and Purchaser believe that such laws conflict with federal law and
constitute an unconstitutional burden on interstate commerce. In 1982, the
Supreme Court of the United States, in Edgar v. Mite Corp., invalidated on
constitutional grounds the Illinois Business Takeovers Statute, which as a
matter of state securities law made takeovers of corporations meeting certain
requirements more difficult. The reasoning in such decision is likely to apply
to certain other state takeover statutes. In 1987, however, in CTS Corp. v.
Dynamics Corp. of America, the Supreme Court of the United States held that the
State of Indiana could as a matter of corporate law and, in particular, those
aspects of corporate law concerning corporate governance, constitutionally
disqualify a potential acquiror from voting on the affairs of a target
corporation without the prior approval of the remaining stockholders, provided
that such laws were applicable only under certain conditions. Subsequently, a
number of Federal courts ruled that various state takeover statutes were
unconstitutional insofar as they apply to corporations incorporated outside the
state of enactment.
Neither Parent nor Purchaser has attempted to comply with any state
takeover statutes in connection with the Offer or the Second Step Merger and
believes none of such laws to be applicable to the Offer or the Second Step
Merger. Parent and Purchaser reserve the right to challenge the validity or
applicability of any state law allegedly applicable to the Offer, and nothing in
this Offer to Purchase nor any action taken in connection herewith is intended
as a waiver of that right. In the event that it is asserted that one or more
takeover statutes apply to the Offer, and it is not determined by an appropriate
court that such statute or statutes do not apply or are invalid as applied to
the Offer, as applicable, Parent and Purchaser may be required to file certain
documents with, or receive approvals from, the relevant state authorities, and
Purchaser might be unable to accept for payment or purchase Shares tendered
pursuant to the Offer or be delayed in continuing or consummating the Offer. In
such case, Purchaser may not be obligated to accept for purchase, or pay for,
any Shares tendered.
Appraisal Rights. Holders of the Shares do not have appraisal rights as a
result of the Offer. However if the Second Step Merger is consummated, holders
of the Shares in connection with the Second Step Merger will have certain rights
pursuant to the provisions of Section 262 of the DGCL to dissent and demand
appraisal of their Shares. Under Section 262, dissenting stockholders who comply
with the applicable statutory procedures will be entitled to receive a judicial
determination of the fair value of their Shares (exclusive of any element of
value arising from the Second Step Merger and to receive payment of such fair
value in cash, together with a fair rate of interest, if any. Any such judicial
determination of the fair value of the shares could
41
<PAGE> 46
be based upon factors other than, or in addition to, the price per share to be
paid in the Second Step Merger or the market value of the Shares. The value so
determined could be more or less than the price per share to be paid in the
Second Step Merger. See "SPECIAL FACTORS -- Appraisal Rights in the Merger" and
Annex A to this Offer to Purchase.
Going Private Transactions. The Offer constitutes a "going private"
transaction under Rule 13e-3 of the Exchange Act. Consequently, Purchaser and
Parent have filed with the Commission the Schedule 13E-3, together with
exhibits, in addition to filing with the Commission a Tender Offer Statement on
Schedule 14D-1 (the "Schedule 14D-1"). Pursuant to Rule 13e-3, this Offer to
Purchase contains information relating to, among other matters, the fairness of
the Offer to the Company's stockholders.
Legal Proceedings. Neither Purchaser nor Parent is aware of any pending or
overtly threatened legal proceedings which would affect the Offer or the Second
Step Merger other than as described under "SPECIAL FACTORS -- Background of the
Offer." If any such matters were to arise, Purchaser could decline to accept for
payment or pay for any Shares tendered in the Offer. See "THE TENDER OFFER --
Certain Conditions of the Offer."
Foreign Approvals. According to publicly available information, the
Company conducts business in a number of other foreign countries and
jurisdictions. In connection with the acquisition of the Shares pursuant to the
Offer, the laws of certain of those foreign countries and jurisdictions may
require the filing of information with, or the obtaining of the approval or
consent of, governmental authorities in such countries and jurisdictions. The
governments in such countries and jurisdictions might attempt to impose
additional conditions on the Company's operations conducted in such countries
and jurisdictions as a result of the acquisition of the Shares pursuant to the
Offer. If such approvals or consents are found to be required, the parties
currently intend to make the appropriate filings and applications. In the event
such a filing or application is made for the requisite foreign approvals or
consents, there can be no assurance that such approvals or consents will be
granted and, if such approvals or consents are received, there can be no
assurance as to the date of such approvals or consents. In addition, there can
be no assurance that the Purchaser will be able to cause the Company or its
subsidiaries to satisfy or comply with such laws or that compliance or
noncompliance will not have adverse consequences for the Company or any
subsidiary after the acquisition of the Shares pursuant to the Offer.
FEES AND EXPENSES
Parent and Purchaser have engaged Merrill Lynch as the Dealer Manager in
connection with the Offer. In addition, Merrill Lynch is acting as financial
advisor to Parent in connection with the proposed acquisition of shares of the
Company. In consideration for these services, Parent has agreed to pay Merrill
Lynch a fee equal to (i) $100,000, which was payable upon Parent's announcement
of the Proposal, (ii) $500,000, payable upon commencement of the Offer and (iii)
$2,900,000 (against which the fees in clauses (i) and (ii) will be credited),
payable upon consummation of a transaction in which Parent or its affiliates
acquire at least 30% of the then outstanding capital stock of the Company not
currently owned by Parent or upon the occurrence of certain other transactions
involving the acquisition by Parent of the Company. Purchaser also has agreed to
reimburse Merrill Lynch for its expenses, including reasonable counsel fees, and
to indemnify it against certain liabilities and expenses, including certain
liabilities under the federal securities laws.
Purchaser has retained MacKenzie Partners, Inc. to act as the Information
Agent and BankBoston, N.A. to act as the Depositary in connection with the
Offer. The Information Agent may contact holders of Shares by mail, telephone,
telegraph and personal interview and may request brokers, dealers and other
nominee stockholders to forward the Offer materials to beneficial owners. The
Information Agent will receive a fee for services as Information Agent estimated
to be $15,000 and will be reimbursed for certain out-of-pocket expenses. The
Depositary will receive reasonable and customary compensation for services
relating to the Offer and will be reimbursed for certain out-of-pocket expenses.
Purchaser has also agreed to indemnify the Information Agent and the Depositary
against certain liabilities and expenses in connection with the Offer, including
certain liabilities under the federal securities laws.
42
<PAGE> 47
Neither Purchaser nor Parent, nor any officer, director, stockholder, agent
or other representative of Purchaser or Parent, will pay any fees or commissions
to any broker or dealer or any other person for soliciting tenders of Shares
pursuant to the Offer (other than to the Information Agent and the Dealer
Manager). Brokers, dealers, commercial banks, trust companies and other nominees
will, upon request, be reimbursed by Purchaser for customary mailing and
handling expenses incurred by them in forwarding offering materials to their
customers.
Expenses estimated to be incurred by Parent and Purchaser in connection
with the Offer are as follows:
<TABLE>
<S> <C>
Financial Advisor fees and expenses......................... $3,200,000
Depositary.................................................. $ 20,000
Information Agent........................................... $ 15,000
Legal Fees.................................................. $ 300,000
Printing, mailing and distribution expenses................. $ 100,000
Commission filing fee....................................... $ 92,306
Miscellaneous fees and expenses............................. $ 25,000
Total............................................. $3,752,306
</TABLE>
MISCELLANEOUS
Neither Parent nor Purchaser is aware of any state where the making of the
Offer is prohibited by administrative or judicial action pursuant to any valid
state statute. If Parent or Purchaser becomes aware of any valid state statute
prohibiting the making of the Offer or the acceptance of Shares pursuant
thereto, Parent and Purchaser will make a good faith effort to comply with such
state statute. If, after such good faith effort, the Offer cannot comply with
such state statute, the Offer will not be made to (nor will tenders be accepted
from or on behalf of) the holders of Shares in such state. Each of Parent or
Purchaser may, in its discretion, however, take such action as it may deem
necessary to make the Offer in any jurisdiction and extend the Offer to holders
of Shares in any such jurisdiction. In any jurisdiction where the securities,
blue sky or other laws require the offer to be made by a licensed broker or
dealer, the Offer shall be deemed to be made on behalf of Purchaser by the
Dealer Manager or one or more registered brokers or dealers licensed under the
laws of such jurisdiction.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION ON BEHALF OF 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. NEITHER THE DELIVERY OF THIS
OFFER TO PURCHASE NOR ANY PURCHASE PURSUANT TO THE OFFER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF PURCHASER, PARENT OR THE COMPANY SINCE THE DATE AS OF WHICH
INFORMATION IS FURNISHED OR THE DATE OF THIS OFFER TO PURCHASE.
Purchaser and Parent have filed with the Commission a Tender Offer
Statement on Schedule 14D-1, together with exhibits, pursuant to Rule 14d-3
under the Exchange Act, furnishing certain additional information with respect
to the Offer. In addition, Parent and Purchaser have filed with the Commission
the Schedule 13E-3, together with exhibits, pursuant to Rule 13e-3 under the
Exchange Act. Such Schedules and any amendments thereto, including exhibits, may
be inspected and copies may be obtained from the Commission in the manner set
forth herein (except that they will not be available at the regional offices of
the Commission).
DEXTER ACQUISITION DELAWARE, INC.
November 2, 1998
43
<PAGE> 48
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
The following table sets forth, for each executive officer and director of
the Company, the name, business or residence address, principal occupation or
employment at the present time and during the last five years, the name of any
corporation or other organization in which such employment is conducted. Except
as otherwise indicated, all of the persons listed below are citizens of the
United States of America. Each occupation set forth opposite a person's name,
unless otherwise indicated, refers to employment with the Company. Unless
otherwise indicated, the principal business address of each director or
executive officer of the Company is 9800 Medical Center Drive, Rockville,
Maryland 20850. Directors of the Company are indicated with an asterisk (*).
Unless otherwise indicated, none of the persons listed below has bought or sold
any Shares within the past 60 days.
<TABLE>
<CAPTION>
NAME, CITIZENSHIP AND MATERIAL POSITIONS HELD
CURRENT BUSINESS ADDRESS PRESENT OCCUPATION OR EMPLOYMENT DURING THE PAST FIVE YEARS
- ------------------------ -------------------------------- -------------------------------
<S> <C> <C>
J. Stark Thompson, Ph.D.*... President and Chief Executive
Officer (since 1988)
John V. Cooper.............. Vice President and General
Manager, U.S. Research Products
Division (since 1993)
Thomas M. Coutts............ Senior Vice President and
(British citizen) General Manager, European
Division (since 1989)
Brian D. Graves............. Vice President and General
Manager, U.S. Industrial
Bioproducts Division (since
1990)
Timothy E. Pierce, Ph.D. ... Vice President and General
Manager, Asia Pacific Division
(since 1990)
Joseph C. Stokes, Jr. ...... Senior Vice President and Chief Vice President, Finance
Financial Officer (since 1996);
Secretary and Treasurer
Rosemary J. Versteegen, Vice President (since 1991)
Ph.D. ....................
Derek E. Woods, Ph.D. ...... Vice President, Research and Research and business
Development (since 1997) development executive, Johnson
& Johnson
Thomas H. Adams, Ph.D.*..... Chairman Emeritus, Genta Chairman of the Board and Chief
17645 El Vielo Incorporated; Director, Biosite Executive Officer, Genta
Rancho Santa Fe, Diagnostics; Director, La Jolla Incorporated; Chairman of the
California 92067 Pharmaceuticals, Inc. Board and Chief Executive
Officer, Gen-Probe Incorporated
Bruce H. Beatt*............. Vice President, General Counsel
Dexter Corporation and Secretary of Parent (since
One Elm Street 1992)
Windsor Locks, Connecticut
06096
</TABLE>
I-1
<PAGE> 49
<TABLE>
Kathleen Burdett*. Vice President and Chief Financial Vice President and Controller of
Dexter Corporation Officer of Parent Parent
One Elm Street (since 1995)
Windsor Locks, Connecticut
06096
<S> <C> <C>
Peter G. Kelly*............. Chairman, Updike, Kelly & Chairman, Black, Manafort, Stone
Updike, Kelly & Spellacy, Spellacy, P.C.; Chairman, Meridian & Kelly; Managing Director,
P.C. Worldwide, L.L.C.; Chairman, Black, Kelly, Scruggs & Healy
One State Street Professional Advisory Council of
P. O. Box 31277 C.I.S. Strategies, Ltd.; Director,
Hartford, Connecticut Phillips Screw Corp.; Director of
06103 Parent
Frank E. Samuel, Jr.*....... President, Edison BioTechnology Independent consultant on
Edison BioTechnology Center; Director, Protocol Medical Technology, Health Care
Center Systems, Inc.; Director, STERIS and Public Policy
11000 Cedar Avenue Corporation
Cleveland, Ohio 44106
K. Grahame Walker*.......... Chairman (since 1993); Chairman of
(British and United States Parent (since 1993); President and
citizen) Chief Executive Officer of Parent
Dexter Corporation (since 1989); Director of Parent
One Elm Street
Windsor Locks, Connecticut
06096
George M. Whitesides, Professor of Chemistry, Harvard
Ph.D.*.................... University (since 1982); Director,
Harvard University Advanced Magnetics, Inc.;
12 Oxford Street Director, Hyperion Catalysis,
Cambridge, Massachusetts Inc.; Director, Geltex, Inc.;
02138 Director, Advanced Medicine, Inc.;
Director of Parent
Iain C. Wylie*.............. International Business Consultant
(British citizen) and Lecturer
31, High Point
Pirton Road
Hitchin, Herts SG5 2BH
England
</TABLE>
I-2
<PAGE> 50
SCHEDULE II
DIRECTORS AND EXECUTIVE OFFICERS OF PARENT AND PURCHASER
The following table sets forth, for each executive officer and director of
Parent, the name, business or residence address, principal occupation or
employment at the present time and during the last five years, and the name of
any corporation or other organization in which such employment is conducted or
was conducted. Except as otherwise indicated, all of the persons listed below
are citizens of the United States of America. Each occupation set forth opposite
a person's name, unless otherwise indicated, refers to employment with Parent.
Unless otherwise indicated, the principal business address of each director or
executive officer is One Elm Street, Windsor Locks, Connecticut 06096. Directors
of Parent are indicated with an asterisk (*). Unless otherwise indicated, none
of the persons listed below has bought or sold any Shares within the past 60
days.
<TABLE>
<CAPTION>
NAME AND CURRENT PRESENT OCCUPATION MATERIAL POSITIONS HELD
BUSINESS ADDRESS OR EMPLOYMENT DURING THE PAST FIVE YEARS
- ---------------- ----------------------------- -----------------------------
<S> <C> <C>
K. Grahame Walker*............... Chairman (since 1993);
(British and United States President and Chief Executive
citizen) Officer (since 1989);
Chairman of the Company
(since 1993); Director of the
Company
Bruce H. Beatt................... Vice President, General
Counsel and Secretary (since
1992); Director of the
Company
Ronald C. Benham................. Vice President; President,
Electronic Materials Business
(since 1992)
Kathleen Burdett................. Vice President and Chief Vice President and Controller
Financial Officer (since
1995); Director of the
Company
T. Daniel Clark.................. Vice President; President, Vice President, Corporate
Packaging Coatings Business Development
(since 1994)
R. Barry Gettins, Ph.D. ......... Senior Vice President, Senior Vice President,
(British citizen) Operations and Technology Operations Development; Vice
Development (since 1997) President; Senior Division
President, Nonwovens Division
David G. Gordon.................. Vice President; President, President, D & S Plastics
(British citizen) Nonwoven Materials Business International
(since 1996)
Jeffrey W. McClelland............ Vice President (since 1998);
President of Adhesive and
Coating Systems Business
Lawrence D. McClure.............. Vice President, Human Vice President, Organization
Resources (since 1995) Capabilities, Aetna Life &
Casualty Company; Vice
President, Human Resources,
Pratt & Whitney, a division
of United Technologies
Corporation
Dale J. Ribaudo.................. Treasurer
John D. Thompson................. Senior Vice President, Vice President, Corporate
Strategic and Business Services; Vice President,
Development (since 1995) Financial Services
</TABLE>
II-1
<PAGE> 51
<TABLE>
<CAPTION>
NAME AND CURRENT PRESENT OCCUPATION MATERIAL POSITIONS HELD
BUSINESS ADDRESS OR EMPLOYMENT DURING THE PAST FIVE YEARS
- ---------------- ----------------------------- -----------------------------
<S> <C> <C>
David Woodhead................... Vice President (since 1998);
President of Magnetic
Technologies and Polymer
Systems Business
Charles H. Curl*................. President, Curl & Associates
Curl & Associates
137 Thacher Lane
South Orange, New Jersey 07079
Henrietta Holsman Fore*.......... Chairman and Chief Executive
Holsman International Officer, Holsman
2600 Virginia Avenue, N.W. International; Chairman and
Suite 511 President, Stockton Products,
Washington, D.C. 20037 formerly Stockton Wire
Products
Bernard M. Fox*.................. Retired; Director, CIGNA Chairman, President and Chief
1 Langley Park Corporation Executive Officer, Northeast
Farmington, Connecticut 06032 Utilities
Robert M. Furek*................. Chairman of the State Board President and Chief Executive
One State Street for the Hartford Public Officer, Heublein Inc.
Suite 2310 School System (since 1997);
Hartford, Connecticut 06103 Director, Massachusetts
Mutual Life Insurance Company
Martha Clark Goss*............... Vice President and Chief Senior Vice President, The
Booz, Allen & Hamilton, Inc. Financial Officer, Booz, Prudential Insurance Company
Four Wood Hollow Road Allen & Hamilton Inc.; of America; Enterprise
Parsippany, New Jersey 07054 Director, Foster Wheeler Control Officer, The
Corporation Prudential Insurance Company
of America; President,
Prudential Asset Management
Company
Edgar G. Hotard*................. Chief Operating Officer,
Praxair, Inc. Praxair, Inc.; President,
39 Old Ridgebury Road Praxair, Inc.; Director,
Danbury, Connecticut 06810 Praxair, Inc.; Director,
Aquarion Company; Director,
Iwatani Industrial Gases
Corp.
Peter G. Kelly*.................. Chairman, Updike, Kelly & Chairman, Black, Manafort,
Updike, Kelly & Spellacy, P.C. Spellacy, P.C.; Chairman, Stone & Kelly; Managing
One State Street Meridian Worldwide, L.L.C.; Director, Black, Kelly,
P. O. Box 31277 Chairman, Professional Scruggs & Healy
Hartford, Connecticut 06103 Advisory Council of C.I.S.
Strategies, Ltd.; Director,
Phillips Screw Corp.;
Director of the Company
</TABLE>
II-2
<PAGE> 52
<TABLE>
<CAPTION>
NAME AND CURRENT PRESENT OCCUPATION MATERIAL POSITIONS HELD
BUSINESS ADDRESS OR EMPLOYMENT DURING THE PAST FIVE YEARS
- ---------------- ----------------------------- -----------------------------
<S> <C> <C>
Jean-Francois Saglio*............ President, French National Senior Vice President, CEA
(French citizen) Institute for the Industrie
143, rue de la Pompe Environment; President, ERSO
75116 Paris, France
George M. Whitesides, Ph.D.*..... Professor of Chemistry,
Harvard University Harvard University; Director,
12 Oxford Street Advanced Magnetics, Inc.;
Cambridge, Massachusetts 02138 Director, Hyperion Catalysis,
Inc.; Director, Geltex, Inc.;
Director, Advanced Medicine,
Inc.; Director of the Company
</TABLE>
The following table sets forth, for each executive officer and director of
Purchaser, the name, business or residence address, principal occupation or
employment at the present time and during the last five years, and the name of
any corporation or other organization in which such employment is conducted or
was conducted. Except as otherwise indicated, all of the persons listed below
are citizens of the United States of America. Each occupation set forth opposite
a person's name, unless otherwise indicated, refers to employment with
Purchaser. Unless otherwise indicated, the principal business address of each
director or executive officer is One Elm Street, Windsor Locks, Connecticut
06096. Directors of Purchaser are indicated with an asterisk (*). Unless
otherwise indicated, none of the persons listed below has bought or sold any
Shares within the past 60 days.
<TABLE>
<CAPTION>
NAME, CITIZENSHIP AND PRESENT OCCUPATION MATERIAL POSITIONS HELD
CURRENT BUSINESS ADDRESS OR EMPLOYMENT DURING THE PAST FIVE YEARS
- ------------------------ ----------------------------- -----------------------------
<S> <C> <C>
K. Grahame Walker*............... President; Chairman of Parent President and Chief Executive
(British and United States (since 1993), President and Officer of Parent
citizen) Chief Executive Officer of
Parent (since 1989); Chairman
of the Company (since 1993);
Director of the Company
Kathleen Burdett*................ Treasurer; Vice President and Vice President and Controller
Chief Financial Officer of of Parent
Parent (since 1995); Director
of the Company
Bruce H. Beatt*.................. Secretary; Vice President,
General Counsel and Secretary
of Parent (since 1992);
Director of the Company
</TABLE>
II-3
<PAGE> 53
ANNEX A
Set forth below is Section 262 of the General Corporation Law of the State
of Delaware regarding appraisal rights, which rights will only be available in
connection with the Second Step Merger.
SECTION 262 OF THE GENERAL CORPORATION LAW OF THE STATE OF DELAWARE
Section 262 Appraisal Rights -- (a) Any stockholder of a corporation of
this State who holds shares of stock on the date of the making of a demand
pursuant to subsection (d) of this section with respect to such shares, who
continuously holds such shares through the effective date of the merger or
consolidation, who has otherwise complied with subsection (d) of this section
and who has neither voted in favor of the merger or consolidation nor consented
thereto in writing pursuant to sec. 228 of this title shall be entitled to an
appraisal by the Court of Chancery of the fair value of the stockholder's shares
of stock under the circumstances described in subsection (b) and (c) of this
section. As used in this section, the word "stockholder" means a holder of
record of stock in a stock corporation and also a member of record of a nonstock
corporation; the words "stock" and "share" mean and include what is ordinarily
meant by those words and also membership or membership interest of a member of a
nonstock corporation; and the words "depository receipt" mean a receipt or other
instrument issued by a depository representing an interest in one or more
shares, or fractions thereof, solely of stock of a corporation, which stock is
deposited with the depository.
(b) Appraisal rights shall be available for the shares of any class or
series of stock of a constituent corporation in a merger or consolidation to be
effected pursuant to sec. 251 (other than a merger effected pursuant to sec.
251(g) of this title), sec. 252, sec. 254, sec. 257, sec. 258, sec. 263 or sec.
264 of this title:
(1) Provided, however, that no appraisal rights under this section
shall be available for the shares of any class or series of stock, which
stock, or depository receipts in respect thereof, at the record date fixed
to determine the stockholders entitled to receive notice of and to vote at
the meeting of stockholders to act upon the agreement of merger or
consolidation, were either (i) listed on a national securities exchange or
designated as a national market system security on an interdealer quotation
system by the National Association of Securities Dealers, Inc. or (ii) held
of record by more than 2,000 holders; and further provided that no
appraisal rights shall be available for any shares of stock of the
constituent corporation surviving a merger if the merger did not require
for its approval the vote of the stockholders of the surviving corporation
as provided in subsection (f) of sec. 251 of this title.
(2) Notwithstanding paragraph (1) of this subsection, appraisal rights
under this section shall be available for the shares of any class or series
of stock of a constituent corporation if the holders thereof are required
by the terms of an agreement of merger or consolidation pursuant to
sec.sec. 251, 252, 254, 257, 258, 263 and 264 of this title to accept for
such stock anything except:
a. Shares of stock of the corporation surviving or resulting from
such merger or consolidation, or depository receipts in respect thereof;
b. Shares of stock of any other corporation, or depository receipts
in respect thereof, which shares of stock (or depository receipts in
respect thereof) or depository receipts at the effective date of the
merger or consolidation will be either listed on a national securities
exchange or designated as a national market system security on an
interdealer quotation system by the National Association of Securities
Dealers, Inc. or held of record by more than 2,000 holders;
c. Cash in lieu of fractional shares or fractional depository
receipts described in the foregoing subparagraphs a. and b. of this
paragraph; or
d. Any combination of the shares of stock, depository receipts and
cash in lieu of fractional shares or fractional depository receipts
described in the foregoing subparagraphs a., b. and c. of this
paragraph.
A-1
<PAGE> 54
(3) In the event all of the stock of a subsidiary Delaware corporation
party to a merger effected under sec. 253 of this title is not owned by the
parent corporation immediately prior to the merger, appraisal rights shall
be available for the shares of the subsidiary Delaware corporation.
(c) Any corporation may provide in its certificate of incorporation that
appraisal rights under this section shall be available for the shares of any
class or series of its stock as a result of an amendment to its certificate of
incorporation, any merger or consolidation in which the corporation is a
constituent corporation or the sale of all or substantially all of the assets of
the corporation. If the certificate of incorporation contains such a provision,
the procedures of this section, including those set forth in subsections (d) and
(e) of this section, shall apply as nearly as is practicable.
(d) Appraisal rights shall be perfected as follows:
(1) If a proposed merger or consolidation for which appraisal rights
are provided under this section is to be submitted for approval at a
meeting of stockholders, the corporation, not less than 20 days prior to
the meeting, shall notify each of its stockholders who was such on the
record date for such meeting with respect to shares for which appraisal
rights are available pursuant to subsections (b) or (c) hereof that
appraisal rights are available for any or all of the shares of the
constituent corporations, and shall include in such notice a copy of this
section. Each stockholder electing to demand the appraisal such
stockholder's shares shall deliver to the corporation, before the taking of
the vote on the merger or consolidation, a written demand for appraisal of
such stockholder's shares. Such demand will be sufficient if it reasonably
informs the corporation of the identity of the stockholder and that the
stockholder intends thereby to demand the appraisal of his shares. A proxy
or vote against the merger or consolidation shall not constitute such a
demand. A stockholder electing to take such action must do so by a separate
written demand as herein provided. Within 10 days after the effective date
of such merger or consolidation, the surviving or resulting corporation
shall notify each stockholder of each constituent corporation who has
complied with this subsection and has not voted in favor of or consented to
the merger or consolidation of the date that the merger or consolidation
has become effective; or
(2) If the merger or consolidation was approved pursuant to sec. 228
or sec. 253 of this title, each constituent corporation, either before the
effective date of the merger or consolidation or within ten days
thereafter, shall notify each of the holders of any class or series of
stock of such constituent corporation who are entitled to appraisal rights
of the approval of the merger or consolidation and that appraisal rights
are available for any or all shares of such class or series of stock of
such constituent corporation, and shall include in such notice a copy of
this section; provided that, if the notice is given on or after the
effective date of the merger or consolidation, such notice shall be given
by the surviving or resulting corporation to all such holders of any class
or series of stock of a constituent corporation that are entitled to
appraisal rights. Such notice may, and, if given on or after the effective
date of the merger or consolidation, shall, also notify such stockholders
of the effective date of the merger or consolidation. Any stockholder
entitled to appraisal rights may, within twenty days after the date of
mailing of such notice, demand in writing from the surviving or resulting
corporation the appraisal of such holder's shares. Such demand will be
sufficient if it reasonably informs the corporation of the identity of the
stockholder and that the stockholder intends thereby to demand the
appraisal of such holder's shares. If such notice did not notify
stockholders of the effective date of the merger or consolidation, either
(i) each such constituent corporation shall send a second notice before the
effective date of the merger or consolidation notifying each of the holders
of any class or series of stock of such constituent corporation that are
entitled to appraisal rights of the effective date of the merger or
consolidation or (ii) the surviving or resulting corporation shall send
such a second notice to all such holders on or within 10 days after such
effective date; provided, however, that if such second notice is sent more
than 20 days following the sending of the first notice, such second notice
need only be sent to each stockholder who is entitled to appraisal rights
and who has demanded appraisal of such holder's shares in accordance with
this subsection. An affidavit of the secretary or assistant secretary or of
the transfer agent of the corporation that is required to give either
notice that such notice has been given shall, in the absence of fraud, be
prima facie evidence of the facts stated therein. For purposes of
determining the stockholders entitled to receive either notice, each
constituent corporation may fix, in advance, a record date that shall be
not more than 10 days prior to the
A-2
<PAGE> 55
date the notice is given, provided, that if the notice is given on or after
the effective date of the merger or consolidation, the record date shall be
such effective date. If no record date is fixed and the notice is given
prior to the effective date, the record date shall be the close of business
on the day next preceding the day on which the notice is given.
(e) Within 120 days after the effective date of the merger or
consolidation, the surviving or resulting corporation or any stockholder who has
complied with subsections (a) and (d) hereof and who is otherwise entitled to
appraisal rights, may file a petition in the Court of Chancery demanding a
determination of the value of the stock of all such stockholders.
Notwithstanding the foregoing, at any time within 60 days after the effective
date of the merger or consolidation, any stockholder shall have the right to
withdraw his demand for appraisal and to accept the terms offered upon the
merger or consolidation. Within 120 days after the effective date of the merger
or consolidation, any stockholder who has complied with the requirements of
subsections (a) and (d) hereof, upon written request, shall be entitled to
receive from the corporation surviving the merger or resulting from the
consolidation a statement setting forth the aggregate number of shares not voted
in favor of the merger or consolidation and with respect to which demands for
appraisal have been received and the aggregate number of holders of such shares.
Such written statement shall be mailed to the stockholder within 10 days after
his written request for such a statement is received by the surviving or
resulting corporation or within 10 days after expiration of the period for
delivery of demands for appraisal under subsection (d) hereof, whichever is
later.
(f) Upon the filing of any such petition by a stockholder, service of a
copy thereof shall be made upon the surviving or resulting corporation, which
shall within 20 days after such service file in the office of the Register in
Chancery in which the petition was filed a duly verified list containing the
names and addresses of all stockholders who have demanded payment for their
shares and with whom agreements as to the value of their shares have not been
reached by the surviving or resulting corporation. If the petition shall be
filed by the surviving or resulting corporation, the petition shall be
accompanied by such a duly verified list. The Register in Chancery, if so
ordered by the Court, shall give notice of the time and place fixed for the
hearing of such petition by registered or certified mail to the surviving or
resulting corporation and to the stockholders shown on the list at the addresses
therein stated. Such notice shall also be given by 1 or more publications at
least 1 week before the day of the hearing, in a newspaper of general
circulation published in the City of Wilmington, Delaware or such publication as
the Court deems advisable. The forms of the notices by mail and by publication
shall be approved by the Court, and the costs thereof shall be borne by the
surviving or resulting corporation.
(g) At the hearing on such petition, the Court shall determine the
stockholders who have complied with this section and who have become entitled to
appraisal rights. The Court may require the stockholders who have demanded an
appraisal for their shares and who hold stock represented by certificates to
submit their certificates of stock to the Register in Chancery for notation
thereon of the pendency of the appraisal proceedings; and if any stockholder
fails to comply with such direction, the Court may dismiss the proceedings as to
such stockholder.
(h) After determining the stockholders entitled to an appraisal, the Court
shall appraise the shares, determining their fair value exclusive of any element
of value arising from the accomplishment or expectation of the merger or
consolidation, together with a fair rate of interest, if any, to be paid upon
the amount determined to be the fair value. In determining such fair value, the
Court shall take into account all relevant factors. In determining the fair rate
of interest, the Court may consider all relevant factors, including the rate of
interest which the surviving or resulting corporation would have had to pay to
borrow money during the pendency of the proceeding. Upon application by the
surviving or resulting corporation or by any stockholder entitled to participate
in the appraisal proceeding, the Court may, in its discretion, permit discovery
or other pretrial proceedings and may proceed to trial upon the appraisal prior
to the final determination of the stockholder entitled to an appraisal. Any
stockholder whose name appears on the list filed by the surviving or resulting
corporation pursuant to subsection (f) of this section and who has submitted his
certificates of stock to the Register in Chancery, if such is required, may
participate fully in all proceedings until it is finally determined that he is
not entitled to appraisal rights under this section.
A-3
<PAGE> 56
(i) The Court shall direct the payment of the fair value of the shares,
together with interest, if any, by the surviving or resulting corporation to the
stockholders entitled thereto. Interest may be simple or compound, as the Court
may direct. Payment shall be so made to each such stockholder, in the case of
holders of uncertificated stock forthwith, and the case of holders of shares
represented by certificates upon the surrender to the corporation of the
certificates representing such stock. The Court's decree may be enforced as
other decrees in the Court of Chancery may be enforced, whether such surviving
or resulting corporation be a corporation of this State or of any state.
(j) The costs of the proceeding may be determined by the Court and taxed
upon the parties as the Court deems equitable in the circumstances. Upon
application of a stockholder, the Court may order all or a portion of the
expenses incurred by any stockholder in connection with the appraisal
proceeding, including, without limitation, reasonable attorney's fees and the
fees and expenses of experts, to be charged pro rata against the value of all
the shares entitled to an appraisal.
(k) From and after the effective date of the merger or consolidation, no
stockholder who has demanded his appraisal rights as provided in subsection (d)
of this section shall be entitled to vote such stock for any purpose or to
receive payment of dividends or other distributions on the stock (except
dividends or other distributions payable to stockholders of record at a date
which is prior to the effective date of the merger or consolidation); provided,
however, that if no petition for an appraisal shall be filed within the time
provided in subsection (e) of this section, or if such stockholder shall deliver
to the surviving or resulting corporation a written withdrawal of such
stockholder's demand for an appraisal and an acceptance of the merger or
consolidation, either within 60 days after the effective date of the merger or
consolidation as provided in subsection (e) of this section or thereafter with
the written approval of the corporation, then the right of such stockholder to
an appraisal shall cease. Notwithstanding the foregoing, no appraisal proceeding
in the Court of Chancery shall be dismissed as to any stockholder without the
approval of the Court, and such approval may be conditioned upon such terms as
the Court deems just.
(l) The shares of the surviving or resulting corporation to which the
shares of such objecting stockholders would have been converted had they
assented to the merger or consolidation shall have the status of authorized and
unissued shares of the surviving or resulting corporation.
A-4
<PAGE> 57
Manually signed facsimile copies of the Letter of Transmittal will be
accepted. Letters of Transmittal and certificates for Shares should be sent or
delivered by each stockholder of the Company or his broker, dealer, commercial
bank or trust company to the Depositary at one of its addresses set forth below:
The Depositary for the Offer is:
BANKBOSTON, N.A.
<TABLE>
<S> <C> <C>
By Mail: By Hand: By Overnight Delivery:
BankBoston, N.A Securities Transfer & Reporting BankBoston, N.A.
P. O. Box 9573 Services, Inc. 40 Campanelli Drive
Boston, Massachusetts 02205-9573 c/o Boston EquiServe L.P. Braintree, Massachusetts 02184
Attention: Corporate 100 Williams Street Attention: Corporate
Reorganization Galleria Reorganization
New York, New York 10038
Attention: Corporate
Reorganization
</TABLE>
By Facsimile Transmission:
(Eligible Institutions Only)
(781) 794-6333
Confirm Fax by Telephone:
(781) 794-6388
Questions and requests for assistance should be directed to the Information
Agent at its respective address or telephone numbers set forth below. Additional
copies of this Offer to Purchase, the Letter of Transmittal and all other tender
offer materials may be obtained from the Information Agent as set forth below,
and will be furnished promptly at the Purchasers' expense. You may also contact
your broker, dealer, commercial bank, trust company or other nominee for
assistance concerning the Offer.
The Information Agent for the Offer is:
[MACKENZIE LOGO]
156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (Call Collect)
or
CALL TOLL-FREE (800) 322-2885
The Dealer Manager for the Offer is:
MERRILL LYNCH & CO.
World Financial Center
North Tower
New York, New York 10281-1314
(212) 449-8971 (Call Collect)
<PAGE> 1
LETTER OF TRANSMITTAL
EXHIBIT (a)(2)
<PAGE> 2
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
OF
LIFE TECHNOLOGIES, INC.
PURSUANT TO THE OFFER TO PURCHASE
DATED NOVEMBER 2, 1998
BY
DEXTER ACQUISITION DELAWARE, INC.
A WHOLLY-OWNED SUBSIDIARY OF
DEXTER CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON TUESDAY, DECEMBER 1, 1998,
UNLESS THE OFFER IS EXTENDED.
The Depositary for the Offer is:
BANKBOSTON, N.A.
<TABLE>
<S> <C> <C>
By Mail: By Hand: By Overnight Delivery:
BankBoston, N.A. Securities Transfer & Reporting BankBoston, N.A.
P.O. Box 9573 Services, Inc. 40 Campanelli Drive
Boston, Massachusetts 02205-9573 c/o Boston EquiServe L.P. Braintree, Massachusetts 02184
Attention: Corporate 100 Williams Street Attention: Corporate
Reorganization Galleria Reorganization
New York, New York 10038
Attention: Corporate
Reorganization
</TABLE>
By Facsimile Transmission:
(Eligible Institutions Only)
(781) 794-6333
Confirm Fax by Telephone:
(781) 794-6388
-----------------------
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS, OR TRANSMISSION OF
INSTRUCTIONS VIA FACSIMILE, OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A
VALID DELIVERY TO THE DEPOSITARY. YOU MUST SIGN THIS LETTER OF TRANSMITTAL WHERE
INDICATED BELOW AND COMPLETE THE SUBSTITUTE FORM W-9 PROVIDED BELOW.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be completed by stockholders of Life
Technologies, Inc. (the "Company") if certificates representing Shares (as
defined below) ("Share Certificates") are to be forwarded herewith or, unless an
Agent's Message (as defined in the Offer to Purchase) is utilized, if delivery
of Shares is to be made by book-entry transfer to the Depositary's account at
The Depository Trust Company ("DTC") (the "Book-Entry Transfer Facility")
pursuant to the procedures set forth in the section entitled "THE TENDER
OFFER -- Procedure for Tendering Shares" of the Offer to Purchase.
Stockholders whose Share Certificates are not immediately available or who
cannot deliver their Share Certificates and all other documents required hereby
to the Depositary prior to the Expiration Date (as defined in the Offer to
Purchase) or who cannot comply with the book-entry transfer procedures on a
timely basis, may nevertheless tender their Shares pursuant to the guaranteed
delivery procedures set forth in the section entitled "THE TENDER OFFER --
Procedure for Tendering Shares" of the Offer to Purchase. See Instruction 2.
DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE
DELIVERY TO THE DEPOSITARY.
<PAGE> 3
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED OWNER(S)
(PLEASE FILL IN, IF BLANK, EXACTLY AS NAME(S) APPEAR(S) ON CERTIFICATE(S))
<S> <C>
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
(TAX IDENTIFICATION OR SOCIAL SECURITY NO.)
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
DESCRIPTION OF SHARES ENCLOSED
- -----------------------------------------------------------------------------------------------------------------
CERTIFICATE(S) ENCLOSED
(ATTACH ADDITIONAL LIST IF NECESSARY)
<S> <C>
- -----------------------------------------------------------------------------------------------------------------
TOTAL NUMBER OF SHARES
CERTIFICATE NUMBER(S) REPRESENTED BY CERTIFICATE(S)
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
TOTAL SHARES TENDERED*
- -----------------------------------------------------------------------------------------------------------------
TOTAL SHARES
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
* UNLESS OTHERWISE INDICATED, IT WILL BE ASSUMED THAT ALL SHARES REPRESENTED BY ANY CERTIFICATES DELIVERED TO
THE DEPOSITARY ARE BEING TENDERED. SEE INSTRUCTION 4.
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
[ ] CHECK HERE IF SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO THE
DEPOSITARY'S ACCOUNT AT THE BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE
FOLLOWING:
Name of Tendering Institution:
-----------------------------------------------------------------------------
Account Number at DTC:
-----------------------------------------------------------------------------
Transaction Code Number:
-----------------------------------------------------------------------------
[ ] CHECK HERE IF SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED
DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING:
Name(s) of Registered Holder(s):
-----------------------------------------------------------------------------
Window Ticket No. (if any): ------------------------------------------------
Date of Execution of Notice of Guaranteed Delivery: ------------------------
Name of Institution which Guaranteed Delivery: -----------------------------
<PAGE> 4
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
Ladies and Gentlemen:
The undersigned hereby tenders to Dexter Acquisition Delaware, Inc., a
Delaware corporation ("Purchaser"), and a wholly-owned subsidiary of Dexter
Corporation, a Connecticut corporation ("Parent"), the above-described shares of
common stock, par value $0.01 per share (the "Shares"), of Life Technologies,
Inc., a Delaware corporation (the "Company"), not owned by Parent, pursuant to
Purchaser's offer to purchase all outstanding Shares at a purchase price of
$37.00 per Share (the "Offer Price"), net to the seller in cash, without
interest, upon the terms and subject to the conditions set forth in the Offer to
Purchase dated November 2, 1998 (the "Offer to Purchase"), receipt of which is
hereby acknowledged, and in this Letter of Transmittal (which, together with the
Offer to Purchase, constitute the "Offer").
Subject to, and effective upon, acceptance for payment of the Shares
tendered herewith, the undersigned hereby sells, assigns and transfers to, or
upon the order of Purchaser, all right, title and interest in and to all the
Shares that are being tendered hereby and any and all other Shares or securities
issued or issuable in respect thereof on or after November 2, 1998 (a
"Distribution") and appoints the Depositary the true and lawful agent and
attorney-in-fact of the undersigned with respect to such Shares (and any
Distributions) with full power of substitution (such power of attorney being
deemed to be an irrevocable power coupled with an interest), to (a) deliver
Share Certificates (and any Distributions), or transfer ownership of such Shares
(and any Distributions) 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 Purchaser, (b) present such
Shares (and any Distributions) for transfer on the books of the Company and (c)
receive all benefits and otherwise exercise all rights of beneficial ownership
of such Shares, all in accordance with the terms of and subject to the
conditions of the Offer.
The undersigned hereby irrevocably appoints designees of Purchaser as the
attorneys and proxies of the undersigned, each with full power of substitution,
to exercise all voting and other rights of the undersigned in such manner as
each such attorney and proxy or his substitute shall in his sole judgment deem
proper, with respect to all of the Shares tendered hereby which have been
accepted for payment by Purchaser prior to the time of any vote or other action
(and any Distributions), at any meeting of stockholders of the Company (whether
annual or special and whether or not an adjourned meeting) or otherwise. This
power of attorney and proxy are irrevocable, are coupled with an interest in the
Shares tendered hereby and are granted in consideration of, and effective upon,
the acceptance for payment of such Shares by Purchaser in accordance with the
terms of the Offer. Such acceptance for payment shall revoke any other proxy and
written consent granted by the undersigned at any time with respect to such
Shares (and any Distributions) and no subsequent proxies will be given or
written consents executed by the undersigned (and if given or executed will be
not be deemed effective).
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the Shares
tendered hereby (and any Distributions) and that, when the same are accepted for
payment by Purchaser, Purchaser will acquire good and unencumbered title
thereto, free and clear of all liens, restrictions, charges and encumbrances and
not subject to any adverse claims. The undersigned will, upon request, execute
and deliver any additional documents deemed by the Depositary or Purchaser to be
necessary or desirable to complete the sale, assignment and transfer of the
Shares tendered hereby (and any Distributions). All authority herein conferred
or agreed to be conferred shall survive the death or incapacity of the
undersigned and any obligation of the undersigned hereunder shall be binding
upon the heirs, personal representatives, successors and assigns of the
undersigned. Except as stated in the Offer, this tender is irrevocable.
The undersigned understands that tenders of Shares pursuant to any one of
the procedures described in the section entitled "THE TENDER OFFER -- Procedure
for Tendering Shares" of the Offer to Purchase and in the instructions hereto
will constitute an agreement between the undersigned and Purchaser upon the
terms and subject to the conditions of the Offer. The undersigned acknowledges
that no interest will be paid on the Offer Price for tendered Shares regardless
of any extension of the Offer or any delay in making such payment.
<PAGE> 5
Unless otherwise indicated herein in the box entitled "Special Payment
Instructions," please issue the check for the purchase price of any Shares
purchased, and return any Share Certificates evidencing any Shares not tendered
or not purchased, in the name(s) of the undersigned (and, in the case of Shares
tendered by book-entry transfer, by credit to the account at the Book-Entry
Transfer Facility). Similarly, unless otherwise indicated in the box entitled
"Special Delivery Instructions," please mail the check for the purchase price of
any Shares purchased and return any Share Certificates not tendered or not
purchased (and accompanying documents, as appropriate) to the undersigned at the
address shown below the undersigned's signature(s). In the event that the boxes
entitled "Special Delivery Instructions" and "Special Payment Instructions" are
both completed, please issue the check for the purchase price of any Shares
purchased and return any Share Certificates evidencing any Shares not tendered
or not purchased in the name(s) of, and mail said check and Share Certificates
to, the person(s) so indicated. The undersigned acknowledges that Purchaser has
no obligation, pursuant to the "Special Payment Instructions," to transfer any
Shares from the name of the registered holder(s) thereof if Purchaser does not
accept for payment any of the Shares so tendered.
Effective upon the receipt of payment for tendered Shares by the
undersigned stockholder(s), the undersigned stockholder(s), on behalf of
themselves and on behalf of any beneficial owner of the tendered Shares, and on
behalf of all spouses, heirs, predecessors, successors, assigns,
representatives, agents, parent or subsidiary corporations of such tendering
stockholder(s) or such beneficial owner of the tendered Shares (including
without limitation any trust of which the undersigned tendering stockholder(s)
is the trustee or which is for the benefit of any undersigned tendering
stockholder(s) or member of his family), releases and discharges any and all
claims that any such person or entity has, had or may have against Parent,
Purchaser, the Company and, without limitation, the Other Related Persons (as
defined in the following sentence) arising out of, or related to, the price
offered in the Offer or the consideration received by tendering stockholder(s)
in the Offer. The term "Other Related Persons" as used in the preceding sentence
shall mean each of Purchaser's past or present directors, officers, employees,
partners, principals, agents, insurers or co-insurers, controlling stockholders,
parent or subsidiary corporations, affiliates, attorneys, advisors, legal
representatives, and assigns.
<PAGE> 6
------------------------------------------------------------
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if the check for the purchase price of Shares
purchased or Share Certificates evidencing Shares not tendered or not
purchased are to be issued in the name of someone other than the
undersigned, or if Shares tendered hereby and delivered by book-entry
transfer which are not purchased are to be returned by credit to an
account at the Book-Entry Transfer Facility other than that designated
above.
Issue [ ] Check [ ] Share Certificate(s) to:
Name:
----------------------------------------------------
(PLEASE PRINT)
Address:
--------------------------------------------------
------------------------------------------------------------
------------------------------------------------------------
(INCLUDE ZIP CODE)
------------------------------------------------------------
(TAXPAYER IDENTIFICATION OR SOCIAL SECURITY
NUMBER) (SEE SUBSTITUTE FORM W-9)
------------------------------------------------------------
------------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if the check for the purchase price of Shares
purchased or Share Certificates evidencing Shares not tendered or not
purchased are to be mailed to someone other than the undersigned, or to
the undersigned at an address other than that shown under the
undersigned's signature.
Mail [ ] Check [ ] Share Certificate(s) to:
Name:
----------------------------------------------------
(PLEASE PRINT)
Address:
--------------------------------------------------
------------------------------------------------------------
------------------------------------------------------------
(INCLUDE ZIP CODE)
------------------------------------------------------------
(TAXPAYER IDENTIFICATION OR SOCIAL SECURITY
NUMBER) (SEE SUBSTITUTE FORM W-9)
------------------------------------------------------------
<PAGE> 7
IMPORTANT
STOCKHOLDERS: SIGN HERE
(PLEASE COMPLETE SUBSTITUTE FORM W-9 BELOW)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(SIGNATURE(S) OF STOCKHOLDER(S))
Dated:
- ---------------------------
(Must be signed by registered holder(s) exactly as name(s) appear(s) on share
certificate(s) 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 a trustee, executor, administrator, guardian,
attorney-in-fact, agent, officer of a corporation or other person acting in a
fiduciary or representative capacity, please provide the following information
and see Instruction 5.)
Name(s) ------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(PLEASE PRINT)
Capacity (Full Title)
----------------------------------------------------------------
Address-------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(INCLUDE ZIP CODE)
Area Code and Telephone Number ( )
------------------------------------------------
Tax Identification or Social Security Number:
----------------------------------------------
(SEE SUBSTITUTE FORM W-9 BELOW)
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 5)
Authorized Signature
----------------------------------------------------------------
Name --------------------------------------------------------------------------
(PLEASE PRINT OR TYPE)
Title---------------------------------------------------------------------------
Name of Firm
---------------------------------------------------------------------
Address-------------------------------------------------------------------------
(INCLUDE ZIP CODE)
Area Code and Telephone Number ( )
------------------------------------------------
Dated:
- ---------------------------
<PAGE> 8
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. Guarantee of Signatures. Except as otherwise provided below,
signatures on all Letters of Transmittal must be guaranteed by a firm that is a
bank, broker, dealer, credit union, savings association or other entity which is
a member in good standing of the Securities Transfer Agents Medallion Program or
by any other bank, broker, dealer, credit union, savings association or other
entity which is an "eligible guarantor institution," as such term is defined in
Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended (each of the
foregoing constituting an "Eligible Institution"), unless the Shares tendered
thereby are tendered (i) by a registered holder of Shares who has not completed
either the box labeled "Special Payment Instructions" or the box labeled
"Special Delivery Instructions" on the Letter of Transmittal or (ii) for the
account of an Eligible Institution. See Instruction 5. If Share Certificates are
registered in the name of a person or persons other than the signer of this
Letter of Transmittal, or if payment is to be made or delivered to, or
certificates evidencing unpurchased Shares are to be issued or returned to, a
person other than the registered owner or owners, then the tendered Share
Certificates must be endorsed or accompanied by duly executed stock powers, in
either case signed exactly as the name or names of the registered owner or
owners appear on the Share Certificates or stock powers, with the signatures on
the Share Certificates or stock powers guaranteed by an Eligible Institution as
provided herein. See Instruction 5.
2. Delivery of Letter of Transmittal and Share Certificates. This Letter
of Transmittal is to be used either if Share Certificates are to be forwarded
herewith or, unless an Agent's Message (as defined in the Offer to Purchase) is
utilized, if the delivery of Shares is to be made by book-entry transfer
pursuant to the procedures set forth in the section entitled "THE TENDER
OFFER -- Procedure for Tendering Shares" of the Offer to Purchase. Certificates
for all physically delivered Shares, or a confirmation of a book-entry transfer
into the Depositary's account at the Book-Entry Transfer Facility of all Shares
delivered electronically, as well as a properly completed and duly executed
Letter of Transmittal (or a manually signed facsimile thereof) and any other
documents required by this Letter of Transmittal, or an Agent's Message in the
case of a book-entry delivery, must be received by the Depositary at one of its
addresses set forth on the front page of this Letter of Transmittal by the
Expiration Date. Stockholders who cannot deliver their Share Certificates and
all other required documents to the Depositary by the Expiration Date may tender
their Shares pursuant to the guaranteed delivery procedure set forth in the
section entitled "THE TENDER OFFER -- Procedure for Tendering Shares" of the
Offer to Purchase. Pursuant to such procedure: (i) such tender must be made by
or through an Eligible Institution; (ii) a properly completed and duly executed
Notice of Guaranteed Delivery, substantially in the form provided by Purchaser,
must be received by the Depositary prior to the Expiration Date; and (iii) the
Share Certificates for all tendered Shares in proper form for tender or a
confirmation of a book-entry transfer into the Depositary's account at the
Book-Entry Transfer Facility of all Shares delivered electronically, as well as
a properly completed and duly executed Letter of Transmittal (or a manually
signed facsimile thereof), and any other documents required by this Letter of
Transmittal, must be received by the Depositary within three NASDAQ trading days
after the date of execution of such Notice of Guaranteed Delivery, all as
provided in the section entitled "THE TENDER OFFER -- Procedure for Tendering
Shares" of the Offer to Purchase. A "NASDAQ trading day" is any day on which The
Nasdaq Stock Market, Inc.'s Nasdaq National Market is open for business.
THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, SHARE CERTIFICATES
AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY
TRANSFER FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING PERSON AND THE
DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF
DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY
INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO
ENSURE TIMELY DELIVERY.
No alternative, conditional or contingent tenders will be accepted. By
execution of this Letter of Transmittal (or a manually signed facsimile
thereof), all tendering stockholders waive any right to receive any notice of
the acceptance of their Shares for payment.
3. Inadequate Space. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares should be listed on a separate
schedule attached hereto.
<PAGE> 9
4. Partial Tenders. (Not applicable to stockholders who tender by
book-entry transfer.) If fewer than all the Shares represented by any Share
Certificate delivered to the Depositary are to be tendered, fill in the number
of Shares which are to be tendered on the line entitled "Total Shares Tendered."
In such case, a new Share Certificate(s) for the remainder of the Shares
represented by the old Share Certificate(s) will be sent to the person(s)
signing this Letter of Transmittal, unless otherwise provided in the box
entitled "Special Delivery Instructions" herein, as promptly as practicable
following the expiration or termination of the Offer. All Shares represented by
Share 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(s) of the Shares
tendered hereby, the signature(s) must correspond exactly with the name(s) as
written on the face of the certificates without alteration, enlargement or any
change whatsoever.
If any of the Shares tendered hereby are owned of record by two or more
persons, all such persons must sign this Letter of Transmittal.
If any of the Shares tendered hereby are registered in different names on
different 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 is signed by the registered holder(s) of the
Shares tendered hereby, no endorsements of Share Certificate(s) or separate
stock powers are required, unless payment of the purchase price is to be made or
Share Certificate(s) evidencing Shares not tendered or not purchased are to be
returned, in the name of any person other than the registered holder(s).
Signatures on any such Share 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 holder(s) of the Shares tendered hereby, the Share Certificate(s)
evidencing the Shares tendered hereby must be endorsed or accompanied by,
appropriate stock powers, in either case, signed exactly as the name(s) of the
registered holder(s) appear(s) on such Share Certificate(s). Signature(s) on any
such Share Certificate(s) or stock powers must be guaranteed by an Eligible
Institution.
If this Letter of Transmittal or any Share Certificate or stock power is
signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or representative
capacity, such person should so indicate when signing, and proper evidence
satisfactory to Purchaser of the authority of such person so to act must be
submitted.
6. Stock Transfer Taxes. Purchaser will pay any stock transfer taxes with
respect to the transfer and sale of any Shares to it or its order pursuant to
the Offer. If, however, payment of the purchase price is to be made to, or
Shares not tendered or not purchased are to be returned in the name of, any
person other than the registered holder(s), then the amount of any stock
transfer taxes (whether imposed on the registered holder(s), such person or
otherwise) payable on account of the transfer to such person 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 CERTIFICATE(S) LISTED IN THIS LETTER OF TRANSMITTAL.
7. Special Payment and Delivery Instructions. If the check for the
purchase price is to be issued, or any Shares not tendered or not purchased are
to be returned in the name of a person other than the person(s) signing this
Letter of Transmittal or if the check or any Share Certificates not tendered or
not purchased are to be mailed to someone other than the person(s) signing this
Letter of Transmittal or to the person(s) signing this Letter of Transmittal at
an address other than that shown above, the appropriate boxes on this Letter of
Transmittal should be completed. Persons tendering Shares by book-entry transfer
may request that Shares not purchased be credited to such account at the
Book-Entry Transfer Facility. If no such instructions are given, any such Shares
not purchased will be returned by crediting the account at the Book-Entry
Transfer Facility.
8. Substitute Form W-9. The tendering holder of Shares is required to
provide the Depositary with such holder's correct taxpayer identification number
("TIN") on Substitute Form W-9, which is provided below, unless an exemption
applies. In the case of such a holder who has completed the box entitled
"Special Payment Instructions" above, however, the correct TIN or Substitute
Form W-9 should be provided for the recipient of the payment pursuant to such
instructions. Failure to provide the information on the Substitute Form W-9 may
subject the tendering holder of Shares to a $50 penalty and to 31% federal
income tax backup withholding on the payment of the purchase price for the
Shares.
<PAGE> 10
9. Questions and Requests for Assistance or Additional Copies. Questions
and requests for assistance may be directed to the Information Agent or the
Dealer-Manager at their respective addresses and telephone numbers set forth on
the back cover of the Offer to Purchase. Additional copies of the Offer to
Purchase, the Letter of Transmittal, the Notice of Guaranteed Delivery and other
related materials may be obtained from the Information Agent or from brokers,
dealers, commercial banks and trust companies.
10. Lost, Destroyed or Stolen Certificates. If any Share Certificate(s)
evidencing Shares has been lost, destroyed or stolen, the stockholder should
promptly notify the Depositary. The stockholder will then be instructed as to
the steps that must be taken in order to replace the Share Certificate(s). This
Letter of Transmittal and related documents cannot be processed until the
procedures for replacing lost or destroyed certificates have been followed.
THIS LETTER OF TRANSMITTAL (OR A MANUALLY SIGNED FACSIMILE HEREOF),
TOGETHER WITH SHARE CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND ALL
OTHER REQUIRED DOCUMENTS OR NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED BY
THE DEPOSITARY, ON OR PRIOR TO THE EXPIRATION DATE (AS DEFINED IN THE OFFER TO
PURCHASE.)
IMPORTANT TAX INFORMATION
Under the federal income tax law, a holder of Shares whose tendered Shares
are accepted for payment is required to provide the Depositary (as payer) with
such holder's correct TIN on Substitute Form W-9 below. The holder of Shares
must also state that (i) such holder has not been notified by the Internal
Revenue Service that such holder is subject to backup withholding as a result of
a failure to report all interest or dividends or (ii) the Internal Revenue
Service has notified such holder that such holder is no longer subject to backup
withholding. If the Depositary is not provided with the correct TIN, the
shareholder may be subject to a $50 penalty imposed by the Internal Revenue
Service and payments that are made to such holder may be subject to backup
withholding.
Certain holders of shares (including, among others, all corporations and
certain foreign individuals) are not subject to these backup withholding and
reporting requirements. In order for a foreign individual to qualify as an
exempt recipient, such individual must submit a statement, signed under
penalties of perjury, attesting to such individual's exempt status. Forms of
such statements can be obtained from the Depositary. See the enclosed Guidelines
for Certification of Taxpayer Identification Number on Substitute Form W-9 for
additional instructions.
If backup withholding applies, the Depositary is required to withhold 31%
of any payments made to the holder of shares. Backup withholding is not an
additional tax. Rather, the tax withheld pursuant to backup withholding rules
will be available as a credit against such holder's tax liabilities from the
Internal Revenue Service. If withholding results in an overpayment of taxes, a
refund may be obtained from the Internal Revenue Service.
WHAT NUMBER TO GIVE THE DEPOSITARY
If the holder of Shares is an individual, the correct TIN is his or her
social security number. In other cases, the correct TIN may be the employer
identification number of the record holder of the Shares tendered hereby. If the
Shares are 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 tendering holder of Shares has not been issued a TIN and has applied for
a number or intends to apply for a number in the near future, the holder should
write "Applied For" in the space provided for the TIN in Part I, and sign and
date the Substitute Form W-9. If "Applied For" is written in Part I and the
Depositary is not provided with a TIN within 30 days, the Depositary may
withhold 31% of all payments of the purchase price to such holder until a TIN is
provided to the Depositary.
<PAGE> 11
<TABLE>
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------
PAYER'S NAME: BANKBOSTON, N.A.
- ------------------------------------------------------------------------------------------------------------------------
SUBSTITUTE PART I--PLEASE PROVIDE YOUR TIN IN THE BOX AT RIGHT -------------------------------
FORMW-9 AND CERTIFY BY SIGNING AND DATING BELOW. Social Security Number
OR
-------------------------------
Employer Identification Number
(If awaiting TIN write "Applied
For")
-------------------------------------------------------------------------------------------
Department of the
Treasury
Internal Revenue PART II--For Payees exempt from backup withholding, see the enclosed Guidelines for
Service Certification of Taxpayer Identification Number on Substitute Form W-9 and complete as
PAYER'S REQUEST FOR instructed therein.
TAXPAYER IDENTIFICATION
NUMBER (TIN) AND CERTIFICATION--Under penalties of perjury, I certify that:
CERTIFICATION
(1) The number shown on this form is my correct Taxpayer Identification Number (or 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 ("IRS") 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 within thirty (30) days, 31% of all reportable
payments made to me hereafter will be withheld until I provide a number), and
(2) I am not subject to backup withholding because (a) I am exempt from backup
withholding, (b) I have not been notified by the IRS that I am subject to backup
withholding as a result of failure to report all interest 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) 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 return. However, if after being notified by the IRS that you
were subject to backup withholding you received another notification from the IRS that
you are no longer subject to backup withholding, do not cross out item (2). (Also see
instructions in the enclosed Guidelines.)
-----------------------------------------------------------------------------------------
SIGNATURE:-------------------------------------------
DATE:-----------------------
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THE SUBSTITUTE FORM W-9 MAY RESULT IN
BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE
OFFER TO PURCHASE. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION
OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL
DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU ARE AWAITING (OR WILL
SOON APPLY FOR) A TAXPAYER IDENTIFICATION NUMBER
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number has
not been issued to me, and either (1) 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 (2) I intend to mail
or deliver an application in the near future. I understand that if I do not
provide a taxpayer identification number within thirty (30) days, 31% of all
reportable payments made to me will be withheld.
Signature ---------------------------------------------- Date ------------------
<PAGE> 12
If you have any questions regarding the Offer, please contact the
Information Agent or the Dealer Manager.
The Information Agent for the Offer is:
[MACKENZIE LOGO]
156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (Call Collect)
or
CALL TOLL-FREE (800) 322-2885
The Dealer Manager for the Offer is:
MERRILL LYNCH & CO.
World Financial Center
North Tower
New York, New York 10281-1314
(212) 449-8971 (Call Collect)
<PAGE> 1
NOTICE OF GUARANTEED DELIVERY
EXHIBIT (a)(3)
<PAGE> 2
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK
OF
LIFE TECHNOLOGIES, INC.
TO
DEXTER ACQUISITION DELAWARE, INC.
A WHOLLY-OWNED SUBSIDIARY OF
DEXTER CORPORATION
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON TUESDAY, DECEMBER 1, 1998, UNLESS THE OFFER IS EXTENDED.
This Notice of Guaranteed Delivery, or one substantially in the form
hereof, must be used to accept the Offer (as defined below) if certificates
evidencing shares of common stock, par value $0.01 per share (the "Shares"), of
Life Technologies, Inc., 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 if time will not permit all required documents to
reach the Depositary on or prior to the Expiration Date (as defined in the Offer
to Purchase dated November 2, 1998 (the "Offer to Purchase")). Such form may be
delivered by hand or facsimile transmission or mail to the Depositary. See the
section entitled "THE TENDER OFFER--Procedure for Tendering Shares" of the Offer
to Purchase.
The Depositary for the Offer is:
BANKBOSTON, N.A.
<TABLE>
<S> <C> <C>
By Mail: By Hand: By Overnight Delivery:
BankBoston, N.A. Securities Transfer & Reporting BankBoston, N.A.
P.O. Box 9573 Services, Inc. 40 Campanelli Drive
Boston, Massachusetts 02205-9573 c/o Boston EquiServe L.P. Braintree, Massachusetts 02184
Attention: Corporate 100 Williams Street Attention: Corporate
Reorganization Galleria Reorganization
New York, New York 10038
Attention: Corporate
Reorganization
</TABLE>
By Facsimile Transmission:
(Eligible Institutions Only)
(781) 794-6333
Confirm Fax by Telephone:
(781) 794-6388
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS, OR
TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE, OTHER THAN AS SET FORTH ABOVE WILL
NOT CONSTITUTE A VALID DELIVERY TO THE DEPOSITARY.
THIS NOTICE OF GUARANTEED DELIVERY 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 INSTRUCTION THERETO, SUCH
SIGNATURE GUARANTEE MUST APPEAR IN THE APPLICABLE SPACE PROVIDED IN THE
SIGNATURE BOX ON THE LETTER OF TRANSMITTAL.
<PAGE> 3
Ladies and Gentlemen:
The undersigned hereby tenders to Dexter Acquisition Delaware, Inc., a
Delaware corporation (the "Purchaser") and a wholly-owned subsidiary of Dexter
Corporation, a Connecticut corporation, upon the terms and subject to the
conditions set forth in the Offer to Purchase and the related Letter of
Transmittal (which, as amended and supplemented from time to time, together
constitute the "Offer"), receipt of which are hereby acknowledged, the number of
Shares specified below pursuant to the guaranteed delivery procedures described
in the section entitled "THE TENDER OFFER -- Procedure for Tendering Shares" of
the Offer to Purchase.
Number of Shares Tendered:
---------------------------
Certificate No(s). (if available):
-----------------------------------------------------------
-----------------------------------------------------------
-----------------------------------------------------------
Account Number at The Depository Trust Company:
-----------------------------------------------------------
Dated:
---------------------------------------------------
Name(s) of Holder(s) (Please Type or Print):
- -----------------------------------------------------------
- -----------------------------------------------------------
Address(es) (incl. Zip Code):
- -----------------------------------------------------------
- -----------------------------------------------------------
Area Code and Telephone No.:
- -------------------------
Signature(s) of Holder(s):
- ------------------------------
- -----------------------------------------------------------
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a bank, broker, dealer, credit union, savings
association or other entity which is a member in good standing of the
Securities Transfer Agents Medallion Program or a bank, broker, dealer, credit
union, savings association or other entity which is an "eligible guarantor
institution," as such term is defined in Rule 17Ad-15 under the Securities
Exchange Act of 1934, as amended, guarantees the delivery to the Depositary of
the Shares tendered hereby, together with a properly completed and duly
executed Letter of Transmittal (or manually signed facsimile(s) thereof) and
any other required documents, or an Agent's Message (as defined in the Offer
to Purchase) in the case of a book-entry delivery of Shares, all within three
NASDAQ trading days of the date hereof.
The Eligible Institution that completes this form must communicate the
guarantee to the Depositary and must deliver the Letter of Transmittal and
certificates representing 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
-----------------------------------------------------
City, State
-----------------------------------------------------
Zip Code
-----------------------------------------------------
Area Code and Tel. No.
-----------------------------------------------------
Authorized Signature
-----------------------------------------------------
Title
Name: -----------------------------------------------------
Please Type or Print
Dated:
- ----------------------------------------------
NOTE: DO NOT SEND SHARE CERTIFICATES WITH THIS NOTICE.
SHARE CERTIFICATES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.
<PAGE> 1
LETTER TO BROKERS, DEALERS, COMMERCIAL BANKS, TRUST COMPANIES
AND OTHER NOMINEES
EXHIBIT (a)(4)
<PAGE> 2
World Financial Center
North Tower
New York, New York 10281-1314
(212) 449-8971 (Call Collect)
[Merrill Lynch Logo]
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
LIFE TECHNOLOGIES, INC.
AT
$37.00 NET PER SHARE IN CASH
BY
DEXTER ACQUISITION DELAWARE, INC.
A WHOLLY-OWNED SUBSIDIARY OF
DEXTER CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON TUESDAY, DECEMBER 1, 1998, UNLESS THE OFFER IS EXTENDED.
November 2, 1998
To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees:
Dexter Acquisition Delaware, Inc., a Delaware corporation ("Purchaser"),
and a wholly-owned subsidiary of Dexter Corporation, a Connecticut corporation
("Parent"), is offering to purchase all outstanding shares of common stock, par
value $0.01 per share (the "Shares"), of Life Technologies, Inc., a Delaware
corporation (the "Company"), not owned by Parent, at a purchase price of $37.00
per share, net to the seller in cash, without interest, upon the terms and
subject to the conditions set forth in the Offer to Purchase dated November 2,
1998 (the "Offer to Purchase") and in the related Letter of Transmittal (which
together constitute the "Offer" enclosed herewith). All capitalized terms used
but not defined herein shall have the meanings ascribed to them in the Offer to
Purchase.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE HAVING BEEN
VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION DATE AT LEAST THAT
NUMBER OF SHARES THAT WOULD, WHEN AGGREGATED WITH THE SHARES OWNED DIRECTLY OR
INDIRECTLY BY PARENT, REPRESENT AT LEAST 80% OF ALL SHARES THEN OUTSTANDING ON A
FULLY-DILUTED BASIS AS DESCRIBED IN THE OFFER TO PURCHASE (THE "MINIMUM
CONDITION"). THE OFFER IS ALSO SUBJECT TO CERTAIN OTHER CONDITIONS. SEE "THE
TENDER OFFER -- CERTAIN CONDITIONS OF THE OFFER" OF THE OFFER TO PURCHASE.
THE OFFER IS NOT CONDITIONED ON THE AVAILABILITY OF FINANCING OR ON THE
APPROVAL OF THE BOARD OF DIRECTORS OF THE COMPANY OR ANY COMMITTEE THEREOF.
Holders of Shares whose certificates for such Shares ("Share Certificates")
are not immediately available or who cannot deliver their Share Certificates and
all other required documents to the Depositary or complete the procedures for
book-entry transfer prior to the Expiration Date must tender their Shares
according to the guaranteed delivery procedures set forth in the section
subtitled "THE TENDER OFFER -- Procedure for Tendering Shares" of the Offer to
Purchase.
Please furnish copies of the enclosed materials to those of your clients
for whose accounts you hold Shares in your name or in the name of your nominee.
Enclosed herewith for your information and for forwarding to your clients
are copies of the following documents:
1. The Offer to Purchase dated November 2, 1998.
2. The Letter of Transmittal to tender Shares for your use and for the
information of your clients. Facsimile copies of the Letter of Transmittal
(with manual signatures) may be used to tender Shares.
<PAGE> 3
3. The Notice of Guaranteed Delivery for Shares to be used to accept
the Offer if neither of the two procedures for tendering Shares set forth
in the Offer to Purchase can be completed on a timely basis.
4. A printed form of letter that may be sent to your clients for whose
accounts you hold Shares registered in your name, with space provided for
obtaining such clients' instructions with regard to the Offer.
5. Guidelines of the Internal Revenue Service for Certification of
Taxpayer Identification Number on Substitute Form W-9.
6. A return envelope addressed to the Depositary.
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS
PROMPTLY AS POSSIBLE. THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00
MIDNIGHT, NEW YORK CITY TIME, ON TUESDAY, DECEMBER 1, 1998, UNLESS THE OFFER IS
EXTENDED (THE "EXPIRATION DATE").
Please note the following:
1. The tender price is $37.00 per Share, net to the seller in cash,
without interest.
2. The Offer is being made for all of the outstanding Shares.
3. The Offer is conditioned upon the satisfaction of the Minimum
Condition. The Offer is also subject to certain other conditions. See "THE
TENDER OFFER -- Certain Conditions of the Offer" of the Offer to Purchase.
4. The Offer is not conditioned on the availability of financing or on
the approval of the Board of Directors of the Company or any committee
thereof.
5. Tendering stockholders will not be obligated to pay brokerage fees
or commissions or, except as set forth in the Letter of Transmittal, stock
transfer taxes on the transfer of Shares pursuant to the Offer.
In order to take advantage of the Offer, (i) a duly executed and properly
completed Letter of Transmittal (or a manually signed facsimile thereof) and any
required signature guarantees or, in the case of a book-entry transfer, an
Agent's Message, and any other required documents should be sent to the
Depositary and (ii) Share Certificates representing the tendered Shares or a
timely Book-Entry Confirmation should be delivered to the Depositary in
accordance with the instructions set forth in the Offer to Purchase.
If holders of Shares wish to tender, but it is impracticable for them to
forward their Share Certificates or other required documents or complete the
procedures for book-entry transfer prior to the Expiration Date, a tender may be
effected by following the guaranteed delivery procedures specified in the
section subtitled "THE TENDER OFFER -- Procedure for Tendering Shares" in the
Offer to Purchase.
Neither Purchaser, Parent, nor any officer, director, stockholder, agent or
other representative of Purchaser will pay any fees or commissions to any
broker, dealer or other person (other than the Depositary, the Dealer-Manager
and the Information Agent as described in the Offer to Purchase) for soliciting
tenders of Shares pursuant to the Offer. Purchaser will, however, upon request,
reimburse you for customary mailing and handling expenses incurred by you in
forwarding any of the enclosed materials to your clients. Purchaser will pay or
cause to be paid any transfer taxes payable on the transfer of Shares to it,
except as otherwise provided in the Letter of Transmittal.
Any inquiries you may have with respect to the Offer should be addressed to
MacKenzie Partners, Inc. at 156 Fifth Avenue, New York, New York 10010, (212)
929-5500 (Call Collect) or (800) 322-2885 (Toll-Free).
Requests for copies of the enclosed materials may be directed to the
Information Agent at the above address and telephone number.
Very truly yours,
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR
ANY OTHER PERSON AS THE AGENT OF PARENT, PURCHASER, THE DEPOSITARY, THE
INFORMATION AGENT, THE DEALER MANAGER OR ANY AFFILIATE OF ANY OF THEM, OR
AUTHORIZE YOU OR ANY OTHER PERSON TO MAKE ANY STATEMENT OR USE ANY DOCUMENT ON
BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE ENCLOSED
DOCUMENTS AND THE STATEMENTS CONTAINED THEREIN.
<PAGE> 1
LETTER TO CLIENTS FOR USE BY BROKERS, DEALERS, COMMERCIAL BANKS,
TRUST COMPANIES AND OTHER NOMINEES
EXHIBIT (a)(5)
<PAGE> 2
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
LIFE TECHNOLOGIES, INC.
AT
$37.00 NET PER SHARE IN CASH
BY
DEXTER ACQUISITION DELAWARE, INC.
A WHOLLY-OWNED SUBSIDIARY OF
DEXTER CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON TUESDAY, DECEMBER 1, 1998, UNLESS THE OFFER IS EXTENDED.
November 2, 1998
To Our Clients:
Enclosed for your consideration is an Offer to Purchase, dated November 2,
1998 (the "Offer to Purchase"), and the related Letter of Transmittal (which, as
amended and supplemented from time to time, together constitute the "Offer")
relating to an offer by Dexter Acquisition Delaware, Inc., a Delaware
corporation ("Purchaser"), and a wholly-owned subsidiary of Dexter Corporation,
a Connecticut corporation ("Parent"), to purchase all outstanding shares of
common stock, par value $0.01 per share (the "Shares"), of Life Technologies,
Inc., a Delaware corporation (the "Company"), not owned by Parent, at a purchase
price of $37.00 per Share (the "Offer Price"), net to the seller in cash,
without interest, upon the terms and subject to the conditions set forth in the
Offer.
This material is being forwarded to you as the beneficial owner of Shares
carried by us in your account but not registered in your name.
A TENDER OF SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD AND
PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR
YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER SHARES HELD BY US FOR
YOUR ACCOUNT.
Accordingly, we request instructions as to whether you wish to tender any
or all of the Shares held by us for your account, upon the terms and conditions
set forth in the Offer.
Please note the following:
1. The tender price is $37.00 per Share, net to the seller in cash,
without interest.
2. The Offer is being made for all of the outstanding Shares.
3. The Offer and withdrawal rights will expire at 12:00 midnight, New
York City time, on Tuesday, December 1, 1998, unless the Offer is extended
(the "Expiration Date").
4. The Offer is conditioned upon, among other things, there having
been validly tendered and not withdrawn prior to the Expiration Date at
least that number of Shares that would, when aggregated with the Shares
owned directly or indirectly by Parent, represent at least 80% of all
Shares then outstanding on a fully-diluted basis as described in the Offer
to Purchase. The Offer is also subject to certain other conditions set
forth in the Offer to Purchase.
5. The Offer is not conditioned on the availability of financing or
on the approval of the Board of Directors of the Company or any committee
thereof.
<PAGE> 3
6. Tendering stockholders will not be obligated to pay brokerage fees
or commissions or, except as set forth in the Letter of Transmittal, stock
transfer taxes on the transfer of Shares pursuant to the Offer.
If you wish to have us tender any or all of your Shares, please so instruct
us by completing, executing, attaching and returning to us the instruction form
contained in this letter. An envelope to return your instruction form to us is
enclosed. If you authorize tender of your Shares, all such Shares will be
tendered unless otherwise indicated in such instruction form. PLEASE FORWARD
YOUR INSTRUCTIONS TO US AS SOON AS POSSIBLE TO ALLOW US AMPLE TIME TO TENDER
YOUR SHARES ON YOUR BEHALF PRIOR TO THE EXPIRATION OF THE OFFER.
The Offer is made solely by the Offer to Purchase and the related Letter of
Transmittal and any supplements or amendments thereto. The Offer is not being
made to, nor will tenders be accepted from or on behalf of, holders of Shares
residing in any jurisdiction in which the making of the Offer or acceptance
thereof would not be in compliance with the securities laws of such
jurisdiction.
<PAGE> 4
INSTRUCTIONS WITH RESPECT TO THE OFFER
TO PURCHASE FOR CASH ALL OUTSTANDING SHARES OF COMMON STOCK
OF
LIFE TECHNOLOGIES, INC.
The undersigned acknowledge(s) receipt of your letter and the enclosed
Offer to Purchase dated November 2, 1998 (the "Offer to Purchase") and the
related Letter of Transmittal (which, as amended and supplemented from time to
time, together constitute the "Offer") in connection with the Offer by Dexter
Acquisition Delaware, Inc., a Delaware corporation ("Purchaser"), and a
wholly-owned subsidiary of Dexter Corporation, a Connecticut corporation, to
purchase all outstanding shares of common stock, par value $0.01 per share (the
"Shares"), of Life Technologies, Inc., a Delaware corporation, not owned by
Parent.
This will instruct you to tender to Purchaser the number of Shares
indicated below (or if no number is indicated below, all Shares) which are held
by you for the account of the undersigned, upon the terms and subject to the
conditions set forth in the Offer to Purchase.
Date:
-------------------------
NUMBER OF SHARES OF COMMON STOCK TO BE TENDERED:
--------- SHARES*
Account Number:
---------------------
SIGN HERE
------------------------------------------
------------------------------------------
Signature(s)
------------------------------------------
------------------------------------------
Print Name(s)
------------------------------------------
------------------------------------------
Print Address(es)
------------------------------------------
Area Code and Telephone Number(s)
------------------------------------------
Taxpayer Identification or Social Security
Number(s)
- ---------------
* Unless otherwise indicated, it will be assumed that all Shares held by us for
your account are to be tendered.
<PAGE> 1
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
EXHIBIT (a)(6)
<PAGE> 2
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: 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, the
first individual on
the account(1)
3. Custodian account of a minor The minor(2)
(Uniform Gift to Minors Act)
4. 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
5. Sole proprietorship account The owner(3)
6. Sole proprietorship The owner(3)
7. A valid, estate, or pension trust The legal entity
(Do not furnish the
identifying number
of the personal
representative or
trustee unless the
legal entity itself
is not designated
in the account
title.)(4)
- ------------------------------------------------------------
- ------------------------------------------------------------
GIVE THE EMPLOYER
FOR THIS TYPE OF ACCOUNT: IDENTIFICATION
NUMBER OF--
- ------------------------------------------------------------
8. Corporate account The corporation
9. Religious, charitable or The organization
educational organization account
10. Partnership account held in the The partnership
name of the partnership
11. Association, club, or other tax- The organization
exempt organization
12. A broker or registered nominee The broker or
nominee
13. 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) You must show your individual name, but you may also enter your business or
"doing business as" name. You may use either your social security number or
employer identification number.
(4) List first and circle the name of the legal trust, estate, or pension trust.
NOTE: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
<PAGE> 3
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
OBTAINING A NUMBER
If you do not have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card (for
individuals), or Form SS-4, Application for Employer Identification Number (for
business and all other entities), at the local office of the Social Security
Administration or the Internal Revenue Service.
To complete Substitute Form W-9 if you do not have a taxpayer identification
number, write "Applied For" in the space for the taxpayer identification number
in Part I, sign and date the Form, and give it to the requester. Generally, you
will then have 60 days to obtain a taxpayer identification number and furnish it
to the requester. If the requester does not receive your taxpayer identification
number within 60 days, backup withholding, if applicable, will begin and
continue until you furnish your taxpayer identification number to the requester.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
The following is a list of payees exempt from backup withholding. For interest
and dividends, all listed payees are exempt except item (9). For broker
transactions, payees listed in items (1) through (13) and a person registered
under the Investment Advisers Act of 1940 who regularly acts as a broker are
exempt. Payments subject to reporting under sections 6041 and 6041A are
generally exempt from backup withholding only if made to payees described in
items (1) through (7), except a corporation that provides medical and health
care services or bills and collects payments for such services is not exempt
from backup withholding. Only payees described in items (2) through (6) are
exempt from backup withholding for barter exchange transactions, patronage
dividends, and payments by certain fishing boat operators.
(1) A corporation
(2) An organization exempt from tax under section 501(a), or an IRA, or a
custodial account under section 403(b)(7).
(3) The United States or any of its agencies or instrumentalities.
(4) A state, the District of Columbia, a possession of the United States, or
any of their political subdivisions or instrumentalities.
(5) A foreign government or any of its political subdivisions, agencies, or
instrumentalities.
(6) An international organization or any of its agencies or
instrumentalities.
(7) A foreign central bank of issue.
(8) A dealer in securities or commodities required to register in the United
States or a possession of the United States.
(9) A futures commission merchant registered with the Commodity Futures
Trading Commission.
(10) A real estate investment trust.
(11) An entity registered at all times during the tax year under the
Investment Company Act of 1940.
(12) A common trust fund operated by a bank under section 584(a).
(13) A financial institution.
(14) A middleman known in the investment community as a nominee or listed in
the most recent publication of the American Society of Corporate
Securities, Inc., Nominee List.
(15) A trust exempt from tax under section 664 or described in section 4947.
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 partnership not engaged in a trade or business in the United
States 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 of the Code.
- Payments made by certain foreign organizations.
- Mortgage interest paid to you.
EXEMPT PAYEES DESCRIBED ABOVE SHOULD FILE SUBSTITUTE 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, SIGN AND
DATE THE FORM AND RETURN IT TO THE PAYER.
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 Sections 6041, 6041(a), 6042, 6044, 6045, 6049 and
6050A and 6050N of the Code and the regulations promulgated therein.
PRIVACY ACT NOTICE.--Section 6109 requires recipients of dividends, interest, or
other payments to give taxpayer identification numbers to payers who must report
the payments to IRS. The IRS uses the numbers for identification purposes and to
help verify the accuracy of your tax return. Payers must be given the numbers
whether or not recipients are required to file tax returns. Payers must
generally withhold 31% of taxable interest, dividends, 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) 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 penalty of $500.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Willfully 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
TEXT OF PRESS RELEASE ISSUED BY PARENT DATED NOVEMBER 2, 1998
EXHIBIT(A)(7)
<PAGE> 2
Contact:
<TABLE>
<CAPTION>
Investors Media
- --------- -----
<S> <C>
Kathleen Burdett Michael Freitag
John D. Thompson Mark Semer
Dexter Corporation Kekst and Company
(860) 292-7675 (212) 521-4800
</TABLE>
or
Mark Harnett
MacKenzie Partners, Inc.
(212) 929-5877
For Immediate Release
DEXTER CORPORATION COMMENCES $37.00 PER SHARE TENDER OFFER FOR THE 48% OF LIFE
TECHNOLOGIES, INC. IT DOES NOT CURRENTLY OWN
WINDSOR LOCKS, CONNECTICUT, November 2, 1998 -- Dexter Corporation
(NYSE:DEX) today announced that it has commenced a tender offer, for $37 per
share in cash, for all outstanding shares of common stock of Life Technologies,
Inc. (NASDAQ:LTEK) that it does not currently own.
Dexter Corporation, a leading specialty materials producer, currently owns
approximately 52 percent of Life Technologies' outstanding common shares.
Consummation of the tender offer is conditioned upon Dexter receiving sufficient
shares to own at least 80 percent of all outstanding Life Technologies shares on
a fully-diluted basis (as defined in the offer documentation), but is not
conditioned upon financing or any approval of the Life Technologies Board of
Directors or any committee thereof. The offer is scheduled to expire on Tuesday,
December 1, 1998, at 12:00 midnight, New York City time, unless extended.
Dexter's offer of $37 per share represents a 19.4 percent premium over Life
Technologies' closing price immediately prior to the July 7 announcement in
which Dexter made its original proposal of a cash tender offer and merger.
K. Grahame Walker, Chairman and Chief Executive Offer of Dexter
Corporation, said: "Nearly four months after first making our proposal, we
continue to believe that this price is full and fair for the Life Technologies
shareholders and, in Dexter's belief, is a significantly larger premium based on
conditions affecting the market since that date. This tender offer provides Life
Technologies' public shareholders with an opportunity to realize a substantial
and immediate premium for their shares."
Merrill Lynch & Co. is the Dealer Manager and MacKenzie Partners, Inc. is
Information Agent for the tender offer.
Dexter intends to acquire shares not tendered in the offer through a merger
in which the remaining shareholders would receive the same price as is paid in
the tender offer. The timing and actual terms of the merger will depend upon the
results of the tender offer.
Dexter Corporation is a global specialty materials supplier with three
operating segments: specialty polymers, nonwovens, and a majority ownership in
Life Technologies. The company supplies specialty materials to the aerospace,
electronics, food packaging and medical markets.
Life Technologies, Inc. develops, manufactures and supplies more than 3,000
products used principally in life sciences research and commercial manufacture
of genetically engineered products. The company is a leading supplier of sera
and other cell growth media, as well as enzymes and other biological products
necessary for recombinant DNA procedures.
<PAGE> 1
SUMMARY ADVERTISEMENT, DATED NOVEMBER 2, 1998
EXHIBIT (a)(8)
<PAGE> 2
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 November 2, 1998, and the related Letter of Transmittal, and is being made
to all holders of Shares. Purchaser is not aware of any state where the making
of the Offer is prohibited by administrative or judicial action pursuant to any
valid state statute. If Purchaser becomes aware of any valid state statute
prohibiting the making of the Offer or the acceptance of Shares pursuant
thereto, Purchaser will make a good faith effort to comply with such state
statute. If, after such good faith effort, the Purchaser cannot comply with such
state statute, the Offer will not be made to (nor will tenders be accepted from
or on behalf of) the holders of Shares in such state. In any jurisdiction where
the securities, blue sky or other laws require the Offer to be made by a
licensed broker or dealer, the Offer shall be deemed to be made on behalf of
Purchaser by Merrill Lynch, Pierce, Fenner & Smith Incorporated or one or more
registered brokers or dealers licensed under the laws of such jurisdiction.
Notice of Offer to Purchase for Cash
All Outstanding Shares of Common Stock
of
Life Technologies, Inc.
at
$37.00 Net Per Share
by
Dexter Acquisition Delaware, Inc.
a wholly-owned subsidiary of
Dexter Corporation
Dexter Acquisition Delaware, Inc., a Delaware corporation ("Purchaser")
and a wholly-owned subsidiary of Dexter Corporation, a Connecticut corporation
("Parent"), is offering to purchase all outstanding shares of common stock, par
value $0.01 per share (the "Shares"), of Life Technologies, Inc., a Delaware
corporation (the "Company"), not owned by Parent, at a purchase price of $37.00
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 the Offer to
Purchase dated November 2, 1998 (the "Offer to Purchase") and in the related
Letter of Transmittal (which, as amended and supplemented from time to time,
together constitute the "Offer"). Following the Offer, Purchaser intends to seek
to have the Company effect the Second Step Merger described below.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON TUESDAY, DECEMBER 1, 1998, UNLESS THE OFFER IS EXTENDED.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE HAVING BEEN
VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION DATE AT LEAST THAT
NUMBER OF SHARES THAT WOULD, WHEN AGGREGATED WITH THE SHARES OWNED DIRECTLY OR
INDIRECTLY BY PARENT, REPRESENT AT LEAST 80% OF ALL SHARES THEN OUTSTANDING ON A
FULLY-DILUTED BASIS AS DESCRIBED IN THE OFFER TO PURCHASE. THE OFFER IS ALSO
SUBJECT TO CERTAIN OTHER CONDITIONS. SEE "THE TENDER OFFER--CERTAIN CONDITIONS
OF THE OFFER" OF THE OFFER TO PURCHASE.
THE OFFER IS NOT CONDITIONED ON THE AVAILABILITY OF FINANCING OR ON THE
APPROVAL OF THE BOARD OF DIRECTORS OF THE COMPANY OR ANY COMMITTEE THEREOF.
Parent currently beneficially owns 12,246,664 Shares, representing
approximately 51.5% of the outstanding shares at October 29, 1998. Parent has
negotiated with the Company, represented by a special committee of the Board of
Directors of the Company (the "Special Committee"), as to the terms of the
acquisition of the Shares not owned by Parent. These negotiations have been
unsuccessful to date. Accordingly, the Offer has not been approved and its
acceptance is not being recommended by the Board of Directors of the Company or
the Special Committee.
Parent and Purchaser currently intend, following the consummation of
the Offer, to seek to have the Company effect a merger (the "Second Step
Merger") in accordance with the relevant provisions of the General Corporation
Law of the State of Delaware (the "DGCL"), in which Purchaser will be merged
with and into the Company. At the effective time of the Second Step Merger, each
Share not tendered pursuant to the Offer (other than Shares owned by the Company
as treasury stock, Shares owned by Parent or Purchaser or any subsidiary
thereof, or Shares with respect to which appraisal rights are properly exercised
under Delaware law) would be converted into the right to receive an amount in
cash equal to the Offer Price. Following consummation of the Second Step Merger,
the Company would continue as the surviving corporation and would be a
wholly-owned subsidiary of Parent. If Purchaser owns at least 90% of the
outstanding Shares following consummation of the Offer (assuming the transfer of
Parent's currently-owned Shares to Purchaser), Purchaser would have the ability
to consummate the Second Step Merger without a meeting or vote of the Board of
Directors of the Company or any committee thereof or of the stockholders of the
Company, pursuant to the "short form" merger provisions of Section 253 of the
DGCL. In such circumstances, Purchaser currently intends to so effectuate the
Second Step Merger as soon as practicable. If Parent and Purchaser own less than
90% of the outstanding Shares following consummation of the Offer, consummation
of the Second Step Merger would require the approval by the Board of Directors
of the Company of an agreement between the Company, Parent and Purchaser with
respect to the Second Step Merger (the "Merger Agreement") and the adoption of
the Merger Agreement by the holders of at least 80% of the outstanding Shares.
As a consequence, no assurance can be given as to whether or when Purchaser will
cause the Second Step Merger to be consummated and, similarly, no assurance can
be given as to whether or when an amount in cash equal to the Offer Price will
be paid to stockholders who do not tender their Shares in the Offer. The timing
of the Second Step Merger is set forth in the section entitled "SPECIAL
FACTORS--Purpose and Structure of the Offer; Plans for the Company after the
Offer" of the Offer to Purchase.
<PAGE> 3
For purposes of the Offer, Purchaser will be deemed to have accepted
for payment, and thereby purchased, the Shares validly tendered to Purchaser and
not withdrawn as, if and when Purchaser gives oral or written notice to
BankBoston, N.A. (the "Depositary") of Purchaser's acceptance of such Shares for
payment pursuant to the Offer. Upon the terms and subject to the conditions of
the Offer, payment for Shares accepted for payment pursuant to the Offer will be
made by deposit of the purchase price therefor with the Depositary, which will
act as agent for tendering stockholders for the purpose of receiving payment
from Purchaser and transmitting such payment to tendering stockholders whose
Shares have been accepted for payment. Under no circumstances will interest on
the purchase price for the Shares be paid, regardless of any extension of the
Offer or any delay in making such payment. In all cases, payment for Shares
tendered and accepted for payment pursuant to the Offer will be made only after
timely receipt by the Depositary of (i) the certificates evidencing such Shares
(the "Share Certificates") or timely confirmation (a "Book-Entry Confirmation")
of a book-entry transfer of such Shares into the Depositary's account at a
Book-Entry Transfer Facility (as defined in the section entitled "THE TENDER
OFFER--Acceptance for Payment and Payment of Shares" of the Offer to Purchase)
pursuant to the procedures set forth in the section entitled "THE TENDER
OFFER--Procedure for Tendering Shares" of the Offer to Purchase, (ii) the Letter
of Transmittal (or a facsimile thereof), properly completed and duly executed,
with any required signature guarantees or an Agent's Message, as defined below,
in connection with a book-entry transfer and (iii) any other documents required
under the Letter of Transmittal. The term "Agent's Message" means a message,
transmitted by a Book-Entry Transfer Facility to, and received by, the
Depositary and forming a part of a Book-Entry Confirmation, which states that
the Book-Entry Transfer Facility has received an express acknowledgment from the
participant in such Book-Entry Transfer Facility tendering the Shares that are
the subject of such Book-Entry Confirmation, that such participant has received
and agrees to be bound by the terms of the Letter of Transmittal and that
Purchaser may enforce such agreement against the participant.
Purchaser expressly reserves the right (but will not be obligated), at
any time or from time to time in its sole discretion, to extend the period of
time during which the Offer is open, including upon the occurrence of any
condition specified in the section entitled "THE TENDER OFFER--Certain
Conditions of the Offer" of the Offer to Purchase, by giving oral or written
notice of such extension to the Depositary. Any such extension will be followed
as promptly as practicable by public announcement thereof, such announcement to
be made not later than 9:00 a.m., New York City time, on the next business day
after the previously scheduled expiration date of the Offer. During any such
extension, all Shares previously tendered and not withdrawn will remain subject
to the Offer and to the rights of a tendering stockholder to withdraw such
stockholder's Shares.
Tenders of Shares made pursuant to the Offer are irrevocable except
that such Shares may be withdrawn at any time prior to 12:00 Midnight, New York
City time, on December 1, 1998 (or the latest time and date at which the Offer,
if extended by Purchaser, shall expire) and, unless theretofore accepted for
payment pursuant to the Offer, may also be withdrawn at any time after January
1, 1999. For a withdrawal to be effective, a written, telegraphic, telex or
facsimile transmission notice of withdrawal must be timely received by the
Depositary at its address set forth on the back cover page of the Offer to
Purchase. Any such notice of withdrawal must also specify the name of the person
who tendered the Shares to be withdrawn, the number of Shares to be withdrawn
and the name of the registered holder of such Shares, if different from that of
the person who tendered such Shares. If Share Certificates evidencing Shares to
be withdrawn have been delivered or otherwise identified to the Depositary,
then, prior to the physical release of such Share Certificates, the serial
numbers shown on such Share Certificates must be submitted to the Depositary,
and the signature(s) on the notice of withdrawal must be guaranteed by an
Eligible Institution (as defined in the section entitled "THE TENDER
OFFER--Procedure for Tendering Shares" of the Offer to Purchase), unless such
Shares have been tendered for the account of an Eligible Institution. If Shares
have been tendered pursuant to the procedures for book-entry transfer as set
forth in the section entitled "THE TENDER OFFER--Procedure for Tendering Shares"
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 must otherwise comply with the Book-Entry Transfer
Facility's procedures. All questions as to the form and validity (including the
time of receipt) of any notice of withdrawal will be determined by Purchaser, in
its sole discretion, whose determination will be final and binding on all
parties.
The information required to be disclosed by Rule 14d-6(e)(1)(vii) and
Rule 13e-3(e)(1) of the General Rules and Regulations under the Securities
Exchange Act of 1934, as amended, is contained in the Offer to Purchase and is
incorporated herein by reference.
Requests are being made to the Company for use of the Company's
stockholder list and security position listings for disseminating the Offer to
holders of Shares and communicating with holders of Shares in connection with
the Offer. The Offer to Purchase and the related Letter of Transmittal will be
mailed to record holders of Shares whose names appear on the Company's
stockholder's list and will be furnished to brokers, dealers, commercial banks,
trust companies and similar persons whose names, or the names of whose nominees,
appear on the stockholder list or, if applicable, who are listed as participants
in a clearing agency's security position listing for subsequent transmittal to
beneficial owners of Shares.
The Offer to Purchase and the related Letter of Transmittal contain
important information which should be read carefully before any decision is made
with respect to the Offer.
Questions and requests for assistance may be directed to the
Information Agent or the Dealer Manager as set forth below and additional copies
of the Offer to Purchase and the related Letter of Transmittal and other tender
offer materials may be obtained from the Information Agent and will be furnished
promptly at Purchaser's expense. No fees or commissions will be paid to brokers,
dealers or other persons (other than the Information Agent and the Dealer
Manager) for soliciting tenders of Shares pursuant to the Offer.
The Information Agent for the Offer is:
[MacKenzie Partners Logo]
156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (Call Collect)
or
Call Toll-Free (800) 322-2885
The Dealer Manager for the Offer is:
Merrill Lynch & Co.
World Financial Center
North Tower
New York, New York 10281-1314
(212) 449-8971 (Call Collect)
November 2, 1998
<PAGE> 1
July 6, 1998
Dexter Corporation
One Elm Street
Windsor Locks, CT 06096-2334
Attention: Ms. Kathleen Burdett
Vice President and
Chief Financial Officer
Gentlemen/Ladies:
Dexter Corporation (the "Borrower") has requested senior unsecured credit
facilities (the "Facilities") in the aggregate principal amount of $600,000,000
(the "Aggregate Commitment") to refinance existing indebtedness, to finance the
acquisition of the common stock of Life Technologies, Inc. ("LTI" or the
"Target") not currently owned by the Borrower (the "Acquisition"), and for
working capital and general corporate purposes. The Facilities will aggregate
$600,000,000 and consist of (a) a $300,000,000 364-day revolving credit
facility, and (b) a $300,000,000 five year (5) revolving credit loan facility
(collectively, the "Facilities").
The First National Bank of Chicago (the "Agent") is pleased to act as the
Administrative Agent (the "Administrative Agent") under the Facilities and to
confirm its commitment to make loans and issue letters of credit for the benefit
of the Borrower in an amount up to $600,000,000 on the terms set forth in the
term sheet attached hereto (the "Term Sheet") and subject to the conditions set
forth in this commitment letter (the "Commitment Letter"). The Agent's
affiliate, First Chicago Capital Markets, Inc. is pleased to act as the arranger
(the "Arranger") with respect to the Facilities and to provide the Borrower with
its undertaking to syndicate all or a portion of the Facilities to the Lenders
(as hereafter defined). While the Agent's agreement herein is to provide the
entire amount of the Facilities on a fully underwritten basis, the Arranger
reserves the right to syndicate all or a portion of the Facilities to additional
Lenders with a corresponding reduction in the Agent's commitment. The Agent
also reserves the right to allocate its commitment among its respective
affiliates.
The Agent and the Arranger have each reviewed certain historical financial
statements of
<PAGE> 2
the Borrower and of the Target which were prepared by or on behalf
of the Borrower and the Target, respectively, and presented to the Agent and the
Arranger by the Borrower. Neither the Agent nor the Arranger have had the
opportunity to complete their due diligence review, inspection, and evaluation
of the assets and liabilities of the Borrower and its subsidiaries and the
Target, and their respective financial condition and prospects. The Agent and
the Arranger (and their respective agents, officers, and employees) will have
the right to share with each other information received from the Borrower and
their affiliates and their respective agents, officers, and employees.
The Borrower agrees to (i) reimburse the Agent and the Arranger for all
reasonable out-of-pocket expenses (including the reasonable fees of outside
counsel and reasonable time charges for inside counsel) incurred in connection
with this Commitment Letter, the Fee Letter (as hereinafter defined), the Term
Sheet (the Commitment Letter, Fee Letter, and Term Sheet collectively the
"Commitment") the transactions contemplated by the Commitment, and the Agent's
and the Arranger's ongoing due diligence in connection therewith including,
without limitation, reasonable costs incurred in connection with the
preparation, negotiation, execution, administration, syndication, and
enforcement of any document relating to this transaction and its role hereunder;
(ii) indemnify and hold harmless the Agent, the Arranger, each Lender and their
respective officers, employees, agents, and directors (collectively, the
"Indemnified Persons") against any and all losses, claims, damages, or
liabilities of every kind whatsoever to which the Indemnified Persons may become
subject in connection in any way with the transaction which is the subject of
this Commitment including, without limitation, reasonable expenses incurred in
connection with defending against any liability or action as a party thereto,
except to the extent any of the foregoing is found in a final judgment by a
court of competent jurisdiction to have arisen solely from such Indemnified
Person's gross negligence or wilful misconduct; and (iii) assert no claim
against any Indemnified Person seeking consequential damages on any theory of
liability in connection in any way with the transaction which is the subject of
this Commitment. The obligations described in this paragraph are independent of
all other obligations of the Borrower hereunder and under the Loan Documents,
shall survive the expiration, revocation, or termination of this Commitment, and
shall be payable whether or not the financing transactions contemplated by this
Commitment shall close. The Agent's and the Arranger's respective obligations
under this Commitment are enforceable solely by the party signing this
Commitment and may not be relied upon by any other person. For purposes of
enforcing this indemnity, the Borrower irrevocably submits to the non-exclusive
jurisdiction of any State or Federal court in Illinois in which a claim arising
out of or relating to the services provided under this Commitment is properly
brought against the Agent, the Arranger, or the Lenders and irrevocably waive
any objection as to venue or inconvenient forum. IF THIS COMMITMENT, OR ANY ACT,
OMISSION, OR EVENT DESCRIBED IN THIS PARAGRAPH BECOMES THE SUBJECT OF A DISPUTE,
THE PARTIES HERETO EACH HEREBY WAIVE TRIAL BY JURY. The Borrower agrees not to
settle any claim, litigation, or proceeding relating to this
<PAGE> 3
transaction (to the extent that the Agent or the Arranger are a party thereto)
unless such settlement releases all Indemnified Persons from any and all
liability in respect of such transaction.
The Agent's Commitment and the Arranger's undertaking are subject to (i) the
preparation, execution, and delivery of a mutually acceptable credit agreement
(the "Credit Agreement") and other loan documents (collectively, the "Loan
Documents") incorporating, without limitation, substantially the terms and the
conditions outlined in the Commitment, (ii) the Agent's and the Arranger's
respective determination that (a) there is an absence of a material adverse
change in the business, condition (financial or otherwise), operations,
performance, properties, or prospects of the Borrower and the Target since March
31, 1998, and (b) there is an absence of any material adverse change prior to
the Closing Date in the primary and secondary loan syndication markets or
capital markets generally that would materially impair the syndication of the
Facilities and (iii) receipt by the Borrower of a rating on its senior,
unsecured long term debt by Standard & Poor's and Moody's which would place the
Borrower at a point not lower than Level III on the Pricing Grid set forth in
the Term Sheet prior to the execution of the Credit Agreement (it being
understood that if the Borrower receives a rating that would place it at Level
IV or V on the Pricing Grid, the Agent and the Arranger reserve the right to
modify the structure and the pricing of the Facilities).
The Arranger will, in consultation with the Borrower, manage all aspects of the
syndication including, without limitation, decisions as to the selection of
institutions to be approached and when they will be approached, when their
commitments will be accepted, which institutions will participate, the
allocations of the commitments among the lenders (collectively, together with
the Agent in its capacity as a lender, the "Lenders"), and the amount and
distribution of the fees discussed herein among the Lenders. To assist the
Arranger in its syndication efforts, the Borrower shall (a) provide and cause
their advisors to provide the Arranger upon request with all information deemed
reasonably necessary by it to complete successfully the syndication including,
without limitation, all information and projections prepared by the Borrower or
on the Borrower's behalf relating to the transactions contemplated hereby; (b)
cause their advisors and the management of the Borrower to actively participate
in, both the preparation of an information package regarding the operations and
prospects of the Borrower and the presentation of the information to prospective
Lenders; (c) without the consent of the Arranger unless required by applicable
law, not make any statement publicly about the Commitment or the Facilities
which might negatively affect the Arranger's ability to syndicate the Facilities
and (d) assist, if the Arranger so requests, restructuring in a manner mutually
acceptable to the Agent, the Arranger and the Borrower, of the terms and
conditions of the Facilities, if in the Arranger's judgment, any portion of the
syndication shall have been unsuccessful.
Please indicate your acceptance of this Commitment by the Agent and undertaking
by the
<PAGE> 4
Arranger in the spaces indicated below and return a copy of this letter so
executed to the Agent and the Arranger. This Commitment and undertaking will
expire at 5:00 p.m. (CDT) on July 7, 1998, unless on or prior to such time the
Agent and the Arranger shall have received a copy of this letter executed by the
Borrower. Notwithstanding timely acceptance of the Commitment pursuant to the
preceding sentence, the Commitment will automatically terminate unless
definitive Loan Documents are executed on or before October 15, 1998. By its
acceptance hereof, the Borrower agrees to pay the Agent and the Arranger the
fees described in the fee letter ("Fee Letter") of even date herewith.
By accepting this Commitment, the Borrower hereby agrees that, prior to
executing this Commitment Letter, the Borrower will not disclose either
expressly or impliedly, without the Agent's and the Arranger's consent, to any
person any of the terms of this Commitment, or the fact that this Commitment or
the financing proposal represented thereby exists except that the Borrower may
disclose any of the foregoing to any Board member, employee, financial advisor
(BUT NOT TO ANY FINANCIAL ADVISOR WHICH MAY BE A PROVIDER OF SENIOR DEBT IN THIS
TRANSACTION), or attorney of the Borrower to whom, in each case, it is necessary
to disclose such information so long as any such Board member, employee,
financial advisor, or attorney is directed to observe this confidentiality
obligation. Upon the Borrower's execution of this Commitment Letter, the
Borrower may make public disclosure of the existence and the amount of the
Aggregate Commitment; and the Borrower may file a copy of the Commitment Letter
and Term Sheet (but not the Fee Letter), or make such other disclosures if such
disclosure is, in the opinion of the Borrower's counsel, required by law.
Without limiting the generality of the foregoing, the Borrower will not make a
public disclosure of the Fee Letter without a written opinion of its counsel
indicating such disclosure is required by law or regulation. If the Borrower
does not accept this Commitment, the Borrower is to immediately return the
Commitment Letter, the Term Sheet and the Fee Letter and all copies of said
items to the Agent.
This Commitment Letter and Term Sheet supersede any and all prior versions
thereof. This Commitment Letter shall be governed by the internal laws of the
State of Illinois, and may only be amended by a writing signed by each of the
parties set forth below.
Yours truly,
The First National Bank of Chicago
(individually and as Agent)
By: /s/ Frank L. Grossman
____________________________
<PAGE> 5
Title: Managing Director
____________________________
First Chicago Capital Markets, Inc.
(as Arranger)
By: /s/ Frank L. Grossman
____________________________
Title: Managing Director
____________________________
Accepted and Agreed:
Dexter Corporation
By: /s/ Kathleen Burdett
_____________________________________________
Title: Vice President and Chief Financial Officer
_____________________________________________
_____________________________________________
Date: July 6, 1998
_____________________________________________
<PAGE> 6
Dexter Corporation Confidential
- -------------------------------------------------------------------------------
Summary of Terms and Conditions
- -------------------------------------------------------------------------------
Dexter Corporation
$600,000,000 Senior Unsecured Credit Facilities
July 6, 1998
This Term Sheet is delivered with a Commitment Letter and a Fee Letter of even
date herewith. Capitalized terms herein shall have the meaning set forth in the
Commitment Letter.
Borrower: Dexter Corporation (the "Borrower").
Guarantor: After the Acquisition, the Facilities will
be guaranteed by all material subsidiaries
of the Borrower, including Life
Technologies, Inc. ("LTI").
Arranger: First Chicago Capital Markets, Inc.
("FCCM").
Administrative The First National Bank of Chicago ("First
Agent: Chicago").
Lenders: A group of lenders mutually acceptable to
Borrower and the Arranger (collectively,
together with the Administrative Agent in
its capacity as a lender, the "Lenders").
Facilities: $600,000,000 (the "Aggregate Bank
Commitment"), comprised of two separate
facilities as described below:
(i) $300,000,000 364-day Credit Facility
(the "364-Day Facility"); and
(ii) $300,000,000 five year (5) Revolving
Credit Facility (the "Revolving Credit
Facility"); (collectively, the
"Facilities").
Final allocation between the 364-Day
Facility and the Revolving Credit Facility
to be determined before the Closing Date,
but under no circumstances will the 364-Day
Facility be less than $300,000,000 and the
Revolving Credit Facility be greater than
$300,000,000.
Closing Date: On or about October 15, 1998 (to be agreed
upon between the Borrower and the Agent).
Documentation: The Facilities will be evidenced by a Credit
Agreement, Notes and other Loan Documents
mutually satisfactory to the Borrower, the
Agent and the Lenders.
- --------------------------------------------------------------------------------
First Chicago Capital Markets, Inc. July 1998
A subsidiary of First Chicago NBD Corporation
2.1
<PAGE> 7
Dexter Corporation Confidential
- --------------------------------------------------------------------------------
Management Syndication: The Arranger will, in consultation with the
Borrower, manage all aspects of the
syndication of the Facilities, including,
without limitation, the timing of offers to
potential Lenders, the amounts offered to
potential Lenders, the acceptance and
allocation of commitments, and the
compensation provided, all as set forth in
the Commitment Letter.
The Bank Facilities
-------------------
The 364-Day Revolving Credit Facility:
Amount: $300,000,000 (the "364-Day Revolving Credit
Commitment").
Purpose: To provide funds (i) to refinance existing
indebtedness, (ii) for capital expenditures,
(iii) for working capital, and (iv) for
general corporate purposes, including,
without limitation, friendly acquisitions.
The 364-Day Revolving Credit Commitment will
be repaid from the net after tax proceeds
realized upon the sale of the Borrower's
Packaging Coatings business and Dexter S.A.
(the "Scheduled Asset Sale"), which is
expected to be sold on or before December
31, 1998, from the proceeds of long term
capital market transactions and from
operating cash flow generated by the
Borrower in the ordinary course of business.
Maturity Date: The date occurring 364 days subsequent to
the Closing Date (the "364-Day Facility
Maturity Date").
The Revolving Credit Facility:
Amount: $300,000,000 five (5) year revolving credit
facility (the "Revolving Credit
Commitment").
Purpose: To provide funds (i) to refinance existing
indebtedness, (ii) for capital expenditures
and (iii) for general corporate purposes,
including, without limitation, friendly
acquisitions (including the acquisition of
all of the common shares of Life
Technologies, Inc. not currently owned by
the Company (the "Acquisition")) and
commercial paper back-up.
Maturity Date: December 31, 2003 (the "Revolving Credit
Maturity Date"). The Revolving Credit
Maturity Date may be extended for up to
three, one year terms, at the option of the
Company on terms and conditions acceptable
to the Lenders.
- --------------------------------------------------------------------------------
First Chicago Capital Markets, Inc. July 1998
A subsidiary of First Chicago NBD Corporation
2.2
<PAGE> 8
Dexter Corporation Confidential
- --------------------------------------------------------------------------------
Letters of Credit: Sublimit for letters of credit to be agreed
upon.
Interest and Fees
-----------------
Borrowing Options: The Facilities will be available as either
Eurodollar Loans or Base Rate Loans, at the
Borrower's option (collectively referred to
as "Loans").
Interest Payments: Interest shall be payable in arrears on the
last day of each interest period and, in the
event that the Borrower has selected the ABR
borrowing option, interest shall be payable
on the last day of each month. Interest and
fees on Eurodollar Loans will be computed on
the basis of actual days elapsed on a
360-day year basis, payable in arrears.
Interest Periods: Eurodollar Loans will be available for
interest periods of one, two, three, or six
months (or such other periods acceptable to
the Lenders), at the Borrower's option.
Facility Fee The Borrower shall pay a facility fee (in
and Pricing: basis points) on each Lender's commitment,
irrespective of usage, as set forth in the
table below, payable quarterly in arrears,
to the Lenders ratably from the Closing Date
until termination of the each Credit
Facility Commitment.
The Facilities shall bear interest at the
Eurodollar Rate or the ABR, at the
Borrower's option, plus an interest margin
(the "Applicable Margin") based upon the
rating established from time to time by
Standard & Poor's and Moody's with respect
to the Borrower's senior, unsecured, long
term debt (the "Reference Ratings"), as set
forth in the table in Appendix A attached
hereto. In the event that a split occurs
between the two ratings, then the rating
corresponding to the higher of the two
ratings shall apply. However, if the split
is greater than one level, then the pricing
shall be based upon the average of the two
ratings; if the split is greater than two
levels, then the pricing shall be based upon
the rating one level above the lowest of the
two ratings. In the event that one of the
ratings is BB+ or Ba1, then the pricing
shall be based upon the lowest of the two
ratings.
The Applicable Margin will be fixed at Level
III for the initial two complete fiscal
quarters subsequent to the Closing Date. The
Eurodollar Rate will not be made available
for period longer than 14 days, at the
Agent's sole option, until the earlier to
occur of (i) 90 days following the initial
funding of the Loans or (ii) the completion
of the syndication.
- --------------------------------------------------------------------------------
First Chicago Capital Markets, Inc. July 1998
A subsidiary of First Chicago NBD Corporation
2.3
<PAGE> 9
Dexter Corporation Confidential
- --------------------------------------------------------------------------------
Upon the incurrence of a payment or
bankruptcy default, the interest rate on
all Loans or letters of credit under the
Facilities shall be equal to the rate then
in effect under such Facility plus a margin
of 2% per annum.
Increased Costs/ The Credit Agreement will contain customary
Change of provisions protecting the Lenders in the
Circumstances: event of unavailability of funding,
illegality, increased costs, capital
adequacy charges and funding losses; and
will provide for withholding tax gross-up
and general indemnification of the Agent and
the Arranger (and their respective
affiliates) and the Lenders (and their
respective assignees and participants) by
the Borrower.
Letters of Credit
-----------------
Letters of Credit: The fee for letters of credit shall be equal
to the same rate as for Eurodollar Loans
under the Revolving Credit Facility.
Tenor: No letter of credit shall have an expiration
date greater than one year after the date of
issuance. Any letter of credit with a
one-year tenor and which does not have an
expiration date beyond the Revolving Credit
Maturity Date may provide for the renewal
thereof for additional one-year periods.
Fronting Banks: Each letter of credit to be issued under the
Revolving Credit Facility shall be issued by
the Agent or another qualified Lender, at
the option of Borrower (the "Issuing Bank").
The Borrower shall pay to the Issuing Bank,
in addition to any Letter of Credit Fees, a
fronting fee of 0.125% per annum on the face
amount of such letters of credit, payable
quarterly in arrears, for the term of such
letter of credit.
Prepayments
-----------
Mandatory Prepayments: Upon (i) the issuance of any long term debt
security by the Borrower or its subsidiaries
after the Closing Date (with customary
exceptions); or (ii) the completion of the
Scheduled Asset Sale, the Borrower shall
make a mandatory prepayment of the 364 Day
Facility in an amount equal to (i) 100% of
the net proceeds from such debt security
issuance and 100% of the net after tax
proceeds of such Scheduled Asset Sale.
Application of All mandatory prepayments made by the
Prepayments: Borrower shall be applied to the prepayment
of the 364-Day Facility, until such Facility
is paid down to $100,000,000.
Voluntary ABR Loans may be prepaid in whole or in part
Prepayments: without premium upon same-day notice,
provided that such payments will be in
amounts of at least $10,000,000, or such
lesser amount as may be outstanding.
- --------------------------------------------------------------------------------
First Chicago Capital Markets, Inc. July 1998
A subsidiary of First Chicago NBD Corporation
2.4
<PAGE> 10
Dexter Corporation Confidential
- --------------------------------------------------------------------------------
Eurodollar Loans may be prepaid on five
days' prior written notice, provided such
payments will be in an amount of at least
$10,000,000 or such lesser amount as may
then be outstanding, and provided that the
Borrower compensate the Lenders for any
funding losses incurred as a result of any
such prepayment made on a date other than
the last day of an Interest Period.
Voluntary The Revolving Credit Facility Commitment may
Commitment be permanently reduced by the Borrower
Reductions: without premium on five days' prior written
notice, provided such reductions will be
in an amount of at least $10,000,000 or such
lesser amount as may then be outstanding.
The Credit Agreement
--------------------
Documentation: The Loan Documents shall be in form and
substance acceptable to the Lenders. The
Credit Agreement shall include, without
limitation, conditions precedent,
representations and warranties, covenants,
events of default, indemnification (of the
Agent, Arranger, Administrative Agent and
Lenders) and other provisions customary for
such financings.
Conditions Precedent: Usual conditions to each Loan, including,
without limitation, those set forth below.
Approvals: Evidence satisfactory to the Agent that the
Borrower's and Target's directors shall have
approved the Acquisition, that sufficient
shares of the Target shall have been
tendered to allow the Borrower to cause a
merger between the Borrower and the Target
to occur, the Borrower's directors shall
have approved this financing; and all
regulatory and legal approvals pertaining to
the Acquisition and this financing shall
have been obtained.
Acquisition The material terms and conditions of the
Agreement: Acquisition Agreement, including
without limitation, the consideration and
structure of the Acquisition, shall be
reasonably acceptable to the Agent, the
representations and warranties in the
Acquisition Agreement shall be accurate in
all material respects as of the date of the
Acquisition closing and the conditions
therein shall have been satisfied (or waived
with the consent of the Agent, which consent
shall not be unreasonably withheld) and
Agent must have received an opinion of
counsel reasonably satisfactory to it as to
the enforceability of the Acquisition
Agreement and its compliance with all
applicable law.
- --------------------------------------------------------------------------------
First Chicago Capital Markets, Inc. July 1998
A subsidiary of First Chicago NBD Corporation
2.5
<PAGE> 11
Dexter Corporation Confidential
- --------------------------------------------------------------------------------
Litigation: Absence of injunction or temporary
restraining order which, in the reasonable
judgment of the Agent, would prohibit the
making of the Loans or the successful
completion of the Acquisition or the
Scheduled Asset Sale; and absence of
litigation which would reasonably be
expected to result in a material adverse
effect on the Borrower and its subsidiaries,
taken as a whole.
Due Diligence: Satisfactory results of due diligence
investigation of the Borrower and its
material subsidiaries (including LTI) by the
Agent, including, without limitation,
contingent liabilities, contractual
obligations, joint venture liability,
product liability, patents, license
agreements and Year 2000 compliance
implementation programs. All legal,
financial, accounting, tax, and fiduciary
aspects of the proposed financing and the
Acquisition must be reasonably acceptable to
the Agent.
Other Debt: The terms of any existing senior or
subordinated debt and preferred stock must
be reasonably acceptable to the Agent.
Financial The Agent shall have received not less than
Statements: five business days prior to the Closing Date
(i) pro forma opening balance sheet and
projections giving effect to the
Acquisition, the Scheduled Asset Sale and
the proposed financing which must not be
materially less favorable, in the Agents'
reasonable judgment, than the projections
previously provided to them and which must
demonstrate, in the Agents reasonable
judgment, together with all other
information then available to the Agent,
that the Borrower and its subsidiaries can
repay their debts and satisfy their
respective other obligations as and when
due, and can comply with the financial
covenants acceptable to the Agent, (ii)
audited financial statements of Borrower and
its subsidiaries for the year ended December
31, 1997 and unaudited for the quarter ended
June 30, 1998, and (iii) such additional
information as the Agent may reasonably
request.
Valuation/ The Agent shall have received a solvency
Solvency: certificate and other appropriate factual
information in form and substance
satisfactory to it from the Chief Financial
Officer of the Borrower.
Existing Prepayment of all obligations under all
Facilities: existing bank credit facilities, including
the cancellation of all committed and
substantially all uncommitted credit
facilities currently made available to the
Borrower and its subsidiaries, including LTI
(with exceptions to be agreed upon).
Legal: All legal (including tax implications and
ERISA, if applicable) and regulatory matters
shall be satisfactory to the Agent.
Environmental: The Agent shall have received, to the extent
it deems reasonable and necessary, an
environmental review report, satisfactory to
it, from an environmental review firm
acceptable to it, as to any environmental
hazards or liabilities including in respect
of the Borrower's plans with respect
thereto.
- --------------------------------------------------------------------------------
First Chicago Capital Markets, Inc. July 1998
A subsidiary of First Chicago NBD Corporation
2.6
<PAGE> 12
Dexter Corporation Confidential
- --------------------------------------------------------------------------------
Regulations: Compliance with all applicable requirements
of Regulations U, T, and X of the Board of
Governors of the Federal Reserve System.
No Default; No default or unmatured default shall exist
No Mac: on the Closing Date and no material adverse
change in the business, condition (financial
or otherwise), operations, performance,
properties or prospects of the Borrower or
any of its subsidiaries and the Target since
June 30, 1998, shall have occurred.
Customary Receipt of other customary closing
Documents: documentation including, without limitation,
legal opinions of the Borrower's counsel,
acceptable to the Agent.
Covenants
---------
Affirmative and The Credit Agreement will contain customary
Negative Covenants: affirmative and negative covenants,
including, without limitation, restrictions
on the following, subject to exceptions as
appropriate, to be negotiated:
- liens and encumbrances
- guarantees
- sale of assets
- consolidations and mergers
- investments and acquisitions
- insurance
- indebtedness and additional
indebtedness
- compliance with pension,
- environmental, and other law
- transactions with affiliates
- changes in line of business
- material agreements
- permit inspection of records and
assets
Financial Covenants: The Credit Agreement will contain financial
covenants containing limitations to be
negotiated, including, without limitation,
covenants pertaining to the following:
Minimum The Borrower will maintain at all times Net
Net Worth: Worth of not less than 80 of its Net Worth
as of the Closing Date (after giving effect
to non cash in-process R&D charges of up to
$150,000,000), plus (i) 50% of cumulative
Net Income (if positive) subsequent to the
Closing Date, plus (ii) 75% proceeds
received upon the issuance and sale of any
common or preferred stock.
- --------------------------------------------------------------------------------
First Chicago Capital Markets, Inc. July 1998
A subsidiary of First Chicago NBD Corporation
2.7
<PAGE> 13
Dexter Corporation Confidential
- --------------------------------------------------------------------------------
Maximum The Borrower will not permit at any time the
Leverage: ratio of Consolidated Indebtedness to EBITDA
to exceed (i) prior to the completion of the
Scheduled Asset Sale, 4.50 times during the
first year subsequent to the Closing Date,
4.25 times during the second year subsequent
to the Closing Date and 4.00 times
thereafter, and (ii) after the completion of
the Scheduled Asset Sale, 3.75 times during
the first year subsequent to the Closing
Date, 3.50 times during the second year
subsequent to the Closing Date and 3.25
times thereafter.
Representations Usual representations and warranties in
and Warranties: connection with each loan shall be
included in the Credit Agreement including,
but not limited to, absence of material
adverse change, absence of material
litigation, absence of default or unmatured
default, representations regarding
environmental issues, compliance with all
material requirements of law and contracts,
and compliance with Regulations U, T, and X.
Events of Default: The Credit Agreement shall contain customary
events of default including, without
limitation, cross-default to occurrence of a
default beyond any applicable grace period
(whether or not resulting in acceleration)
under any other agreement governing
indebtedness of the Borrower or any of its
subsidiaries in the amount of $10,000,000 or
more in the aggregate, ERISA compliance, and
change of control of Borrower.
Assignments and Each Lender may, in its sole discretion,
Participations: sell participations and may, in a manner
acceptable to the Administrative Agent, sell
assignments in the Loans and in its
commitment and disclose information to
prospective participants and assignees, and
share, at its option, any fees with such
participants and assignees. No assignments
shall be made without the consent of the
Borrower, which consent shall not be
unreasonably withheld (provided that no such
consent shall be required after a default).
The minimum assignment amount to an
institution not already a Lender shall be
$10,000,000 (provided that no such limit
shall be required after a default). The
assignor shall pay an assignment fee of
$3,500 to the Administrative Agent upon any
assignment.
Expenses: Reasonable costs and expenses, including
attorneys' fees (including costs and
expenses of outside counsel and the costs
and expenses of in-house counsel) and other
appropriate independent professionals that
may be deemed necessary by the Agent, the
Administrative Agent and the Arranger in
connection with this transaction, incurred
at any time by the Agent, the Administrative
Agent and the Arranger in the negotiation,
syndication, documentation, and the closing
of the Facilities as well as the ongoing
administration of the Facilities, shall be
paid by the Borrower. The Borrower shall
also pay all reasonable costs and expenses,
including reasonable legal costs, incurred
by the Agent, the Administrative Agent and
any Lender in enforcing any loan document.
- --------------------------------------------------------------------------------
First Chicago Capital Markets, Inc. July 1998
A subsidiary of First Chicago NBD Corporation
2.8
<PAGE> 14
Dexter Corporation Confidential
- --------------------------------------------------------------------------------
Governing Law: The Credit Agreement and the Facilities
shall be governed by the laws of the State
of Illinois.
Required Lenders: 51%.
- --------------------------------------------------------------------------------
First Chicago Capital Markets, Inc. July 1998
A subsidiary of First Chicago NBD Corporation
2.9
<PAGE> 15
Appendix A
----------
================================================================================
364-Day Revolving Credit Facility
Pricing Grid
================================================================================
<TABLE>
<CAPTION>
LEVEL I LEVEL II LEVEL III LEVEL IV LEVEL V
-------- ------------ ----------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Reference Rating A- or A3 BBB+ or Baa1 BBB or Baa2 BBB- or Baa3 <BBB- or Baa3
-------- ------------ ----------- ------------ -------------
Facility Fee 6.0 8.0 10.0 12.5 17.5
-------- ------------ ----------- ------------ -------------
Applicable Margin 24.0 27.0 32.5 40.0 57.5
-------- ------------ ----------- ------------ -------------
All-in Drawn Cost 30.0 35.0 42.5 52.5 75.0
-------- ------------ ----------- ------------ -------------
Usage fee > 25% 5.0 5.0 5.0 5.0 5.0
-------- ------------ ----------- ------------ -------------
Usage fee > 50% 10.0 10.0 10.0 10.0 10.0
=================================================================================================================
</TABLE>
Revolving Credit Facility
Pricing Grid
================================================================================
<TABLE>
<CAPTION>
LEVEL I LEVEL II LEVEL III LEVEL IV LEVEL V
-------- ------------ ----------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Reference Rating A- or A3 BBB+ or Baa1 BBB or Baa2 BBB- or Baa3 <BBB- or Baa3
-------- ------------ ----------- ------------ -------------
Facility Fee 8.0 10.0 12.5 15.0 20.0
-------- ------------ ----------- ------------ -------------
Applicable Margin 22.0 25.0 30.0 37.0 55.0
-------- ------------ ----------- ------------ -------------
All-in Drawn Cost 30.0 35.0 42.5 52.5 75.0
-------- ------------ ----------- ------------ -------------
Usage fee > 25% 5.0 5.0 5.0 5.0 5.0
-------- ------------ ----------- ------------ -------------
Usage fee > 50% 10.0 10.0 10.0 10.0 10.0
=================================================================================================================
</TABLE>
- --------------------------------------------------------------------------------
First Chicago Capital Markets, Inc. July 1998
A subsidiary of First Chicago NBD Corporation
2.10
<PAGE> 16
Dexter Corporation Confidential
- --------------------------------------------------------------------------------
Definitions
-----------
ABR i.e., Alternate Base Rate, is defined as the
higher of (I) the corporate base rate of
interest ("CBR") announced by the Agent from
time to time, and (ii) 0.50% per annum above
the Federal Funds Rate. Any change in the
CBR shall take effect at the opening of
business on the date specified in the public
announcement of such change, or on a daily
basis in the case of (ii) above.
EBITDA is defined as Net Income plus, to the extent
deducted from revenues in determining Net
Income, (i) interest expense, (ii) expense
for taxes paid or accrued, (iii)
depreciation, (iv) amortization, (v) all
other non cash charges, including up to
$150,000,000 in-process R&D non cash charges
incurred in connection with the Acquisition,
(vi) Transaction Costs and (vii)
extraordinary losses incurred other than in
the ordinary course of business, minus, to
the extent included in Net Income,
extraordinary gains realized other than in
the ordinary course of business, all
calculated for the Borrower and its
subsidiaries on a consolidated basis and in
each instance, determined at the end of each
fiscal quarter subsequent to the Closing
Date and calculated for the period
consisting of the four consecutive fiscal
quarters then most recently ended.
Eurodollar is defined as the rate per annum offered by
the Administrative Agent at 11:00 a.m.
London time, two business days prior to the
borrowing date for one, two, three, or
six-month (or such other period reasonably
requested by the Borrower and acceptable to
the Agent) U.S. dollar deposits in the
London interbank market, in the amount of,
and for a maturity corresponding to, the
amount of the Loans, as adjusted for maximum
statutory reserves.
Indebtedness of a person is defined as such person's (i)
obligations for borrowed money, (ii)
obligations representing the deferred
purchase price of property or services
(other than accounts payable arising in the
ordinary course of such person's business
payable on terms customary in the trade),
(iii) obligations, whether or not assumed,
secured by liens or payable out of the
proceeds or production from property now or
hereafter owned or acquired by such person,
(iv) obligations which are evidenced by
notes, acceptances, or other instruments,
(v) obligations of such person to purchase
securities or other property arising out of
or in connection with the sale of the same
or substantially similar securities or
property, (vi) capitalized lease
obligations, (vii) any other obligation for
borrowed money or other financial
accommodation which in accordance with
generally accepted accounting principles
would be shown as a liability on the
consolidated balance sheet of such person,
(viii) letters of credit, (ix) any material
repurchase obligation or liability of such
person with respect to accounts or notes
receivable sold by such person and (x) net
amounts payable under rate hedging
obligations.
- --------------------------------------------------------------------------------
First Chicago Capital Markets, Inc. July 1998
A subsidiary of First Chicago NBD Corporation
2.11
<PAGE> 17
Dexter Corporation Confidential
- --------------------------------------------------------------------------------
Leverage Ratio means, as at the end of any fiscal quarter,
the ratio of (i) Indebtedness (excluding net
amounts payable under rate hedging
obligations) of the Borrower and it
subsidiaries as of the end of such fiscal
quarter to (ii) EBITDA for the period
consisting of the four consecutive fiscal
quarters then most recently ended.
Net Income means, with reference to any period, the net
income (or loss) of the Borrower and its
subsidiaries calculated on a consolidated
basis for such period.
Net Worth means, the aggregate amount of common
shareholders equity as determined from a
consolidated balance sheet of the Borrower
and its subsidiaries, prepared in accordance
with generally accepted accounting
principles.
- --------------------------------------------------------------------------------
First Chicago Capital Markets, Inc. July 1998
A subsidiary of First Chicago NBD Corporation
2.12
<PAGE> 18
October 14, 1998
Dexter Corporation
One Elm Street
Windsor Locks, Connecticut 06096-2334
Attention: Ms. Kathleen Burdett
Vice President and
Chief Financial Officer
Gentlemen/Ladies:
Reference is made to the letter (the "Commitment Letter") dated July 6, 1998
from The First National Bank of Chicago (the "Agent") and First Chicago Capital
Markets, Inc. (the "Arranger") to the Dexter Corporation (the "Borrower"),
which letter was accepted and agreed to by the Borrower on July 6, 1998.
Capitalized terms not defined in this amendment letter (the "Amendment") shall
have the same meanings as set forth in the Commitment Letter.
The Agent and the Arranger hereby agree that the references to October 15, 1998
on the second page of the Commitment Letter and the second page of the Term
Sheet attached thereto shall each be replaced with a reference to December 1,
1998. Except as specifically modified hereby, the Commitment Letter and Fee
Letter shall remain in full force and effect.
Yours truly,
The First National Bank of Chicago
(individually and as Agent)
By: /s/ Frank L. Grossman
----------------------------------
Title: Managing Director
-------------------------------
First Chicago Capital Markets, Inc.
(as Arranger)
By: /s/ Frank L. Grossman
---------------------------------
Title: Managing Director
------------------------------
<PAGE> 19
Dexter Corporation
October 14, 1998
Page 2
Accepted and Agreed:
Dexter Corporation
By: /s/ Kathleen Burdett
---------------------------------------------
Title: Vice President and Chief Financial Officer
------------------------------------------
Date: October 14, 1998
-------------------------------------------
<PAGE> 20
Syndicated Loans Division
One First National Plaza
Mail Suite 0429
Chicago, Illinois 60670-0429
Telephone: 312-732-5080
Fax: 312-732-7455
Christine Frank
Managing Director
October 20, 1998
Dexter Corporation
One Elm Street
Windsor Locks, Connecticut 06096-2334
Attention: Ms. Kathleen Burdett
Vice President and Chief Financial Officer
Gentlemen/Ladies:
Dexter Corporation (the "Borrower"), The First National Bank of Chicago (the
"Agent") and First Chicago Capital Markets (the "Arranger") are party to a
certain commitment letter (as amended, the "Commitment Letter") dated July 6,
1998. The Commitment Letter relates to proposed Credit Facilities aggregating
$600,000,000 (the "Facilities") to be used by Dexter for various corporate
purposes, including the financing of the acquisition of Life Technologies, Inc.
In order to accommodate certain potential changes in the transactions
contemplated by the Commitment Letter, the Borrower has asked the Agent and the
Arranger to agree to certain amendments to the Term Sheet (as defined in the
Commitment Letter) and to seek the consent to such amendments of the Lenders
which have previously committed to participate in the Facilities. Subject to the
following sentence, upon the acceptance of this letter by the Borrower, the Term
Sheet shall be amended as set forth on Exhibit A to this letter. Notwithstanding
the foregoing, the Term Sheet shall not be amended, and this letter shall be
without effect, unless and until such time as the Exhibit A changes to the Term
Sheet have also been agreed to by lenders that have previously committed an
aggregate amount of not less than $600 million to the Facilities.
Except as provided herein, the Commitment Letter and Term Sheet shall be
unmodified and remain in full force and effect.
<PAGE> 21
Amendment Letter
October 20, 1998
Page Two
Please sign and return the acceptance copy of this letter to the Agent to
evidence your agreement herewith. The proposed amendment shall not become
effective unless the Borrower has accepted this letter on or prior to October
22, 1998.
Yours truly,
The First National Bank of Chicago
By: /s/ Frank L. Grossman
____________________________
Title: Managing Director
____________________________
First Chicago Capital Markets, Inc.
By: /s/ Christine S. Frank
____________________________
Title Managing Director
____________________________
Accepted and Agreed:
Dexter Corporation
By: /s/ Kathleen Burdett
______________________________________________
Title: Vice President and Chief Financial Officer
______________________________________________
Date: October 20, 1998
______________________________________________
EXHIBIT A
---------
The Term Sheet shall be amended as follows:
1. The "Purpose" section under the heading "The 364-Day Revolving Credit
Facility" on page 2 of the Term Sheet is amended in its entirety to
read as follows:
Purpose: To provide funds (i) to refinance existing indebtedness,
(ii) for capital expenditures, (iii) for working capital,
(iv) for general corporate purposes, including, without
limitation, friendly acquisitions and (v) for the
acquisition of all of the common shares of Life
Technologies, Inc. not currently owned by the Company (the
"Acquisition"), which acquisition may be effected through a
unilateral tender offer. The 364-Day Revolving Credit
Commitment will be repaid from the net after tax proceeds
realized upon the sale of the Borrower's Packaging Coatings
business and Dexter S.A. (the "Scheduled Asset Sale"), which
is expected to be sold on or before December 31, 1998, from
the proceeds of long term capital market transactions and
from operating cash flow generated by the Borrower in the
ordinary course of business.
2. The "Purpose" section under the heading "The Revolving Credit Facility"
on pages 2 and 3 of the Term Sheet is amended in its entirety to read
as follows:
Purpose: To provide funds (i) to refinance existing indebtedness,
(ii) for capital expenditures, (iii) for general corporate
purposes, (including, without
<PAGE> 22
limitation, friendly acquisitions and the Acquisition) and
commercial paper back-up.
3. The following language is added at the conclusion of the "Conditions
Precedent" section under the heading "The Credit Agreement":
In the event that the Borrower elects to effect the Acquisition through a
unilateral tender offer (i.e. without the approval of the board of directors of
the Target or without the execution of a Merger Agreement) then, in lieu of the
conditions set forth above under "Approvals" and "Acquisition Agreement", the
following conditions shall be applicable:
Approvals: Evidence satisfactory to the Agent that the Borrower's
directors shall have approved the Acquisition and the
financing contemplated hereby and all regulatory and
legal approvals pertaining to the Acquisition and this
financing shall have been obtained.
Acquisition: The material terms and conditions of the offer to
purchase pursuant to which the Acquisition is to be
effected, including, without limitation the
consideration for and structure of the Acquisition,
shall be reasonably acceptable to the Agent, and the
conditions therein shall have been satisfied (or waived
with the consent of the Agent, which consent shall not
be unreasonably withheld). After giving effect to the
consummation of the offer to purchase, the Borrower
shall own not less than 80% of the shares of each
outstanding class of equity securities of the Target,
and there shall exist no legal or practical impediment
to the consummation of such merger.
<PAGE> 23
October 30, 1998
Dexter Corporation
One Elm Street
Windsor Locks, Connecticut 06096-2334
Attention: Ms. Kathleen Burdett
Vice President and
Chief Financial Officer
Gentlemen/Ladies:
Reference is made to the letter dated July 6, 1998 from The First National Bank
of Chicago (the "Agent") and First Chicago Capital Markets, Inc. (the
"Arranger") to the Dexter Corporation (the "Borrower"), which letter was
accepted and agreed to by the Borrower on July 6, 1998 (as amended by the letter
agreements dated October 14, 1998 and October 20, 1998, the "Commitment
Letter"). Capitalized terms not defined in this amendment letter (the
"Amendment") shall have the same meanings as set forth in the Commitment Letter.
The Agent and the Arranger hereby agree that the references to December 1, 1998
on the second page of the Commitment Letter and the second page of the Term
Sheet attached thereto shall each be replaced with a reference to December 15,
1998. Except as specifically modified hereby, the Commitment Letter and Fee
Letter shall remain in full force and effect.
Yours truly,
The First National Bank of Chicago
(individually and as Agent)
By: /s/ Catherine V. Frank
__________________________________
Title: Director
________________________________
First Chicago Capital Markets, Inc.
(as Arranger)
By: /s/ Catherine V. Frank
__________________________________
Title: Director
________________________________
<PAGE> 24
Accepted and Agreed:
Dexter Corporation
By: /s/ Kathleen Burdett
________________________________
Title: Vice President and Chief
Financial Officer
_____________________________
Date: 10/30/98
_____________________________
