<PAGE> 1
As filed with the Securities and Exchange Commission on February 22, 2000.
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------
SCHEDULE TO
TENDER OFFER STATEMENT PURSUANT TO SECTION 14(D)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
AND
SCHEDULE 13D
(AMENDMENT NO. 1)
PURSUANT TO SECTION 13(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
-----------------
IMTEC INC.
(NAME OF SUBJECT COMPANY)
-----------------
BRADY CORPORATION
IMTC ACQUISITION CORP.
(NAMES OF FILING PERSONS - OFFERORS)
-----------------
COMMON STOCK, PAR VALUE $.01 PER SHARE
(TITLE OF CLASS OF SECURITIES)
452909-10-4
(CUSIP NUMBER OF CLASS OF SECURITIES)
-----------------
THOMAS E. SCHERER
BRADY CORPORATION
6555 WEST GOOD HOPE ROAD
MILWAUKEE, WI 53223
(414) 358-6600
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO
RECEIVE NOTICES AND COMMUNICATIONS ON BEHALF OF FILING PERSONS)
-----------------
COPY TO:
CONRAD G. GOODKIND, ESQ.
QUARLES & BRADY LLP
411 EAST WISCONSIN AVENUE
MILWAUKEE, WISCONSIN 53202
(414) 277-5000
===============================================================================
<PAGE> 2
CALCULATION OF FILING FEE
- ----------------------------------------------------------------------------
TRANSACTION VALUATION: $22,134,156* AMOUNT OF FILING FEE: $4,426.84
- ----------------------------------------------------------------------------
* Estimated for purposes of calculating the amount of the filing fee
only. The amount assumes the purchase of 1,844,513 shares of common
stock, par value $0.01 per share of Imtec Inc., a Delaware corporation
(the "Company"), on a fully diluted basis (consisting of 1,635,313
shares currently issued and outstanding plus an additional 209,200
shares issuable upon exercise of outstanding options) at $12.00 in cash
per share. The amount of the filing fee, calculated in accordance with
Regulation 240.0-11 of the Securities Exchange Act of 1934, as amended,
equals 1/50th of one percent of the value of the transaction.
|_| Check the box if any part of the fee is offset as provided by Rule
0-11(a)(2) and identify the filing with which the offsetting fee was
previously paid. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
AMOUNT PREVIOUSLY PAID: NOT APPLICABLE
FORM OR REGISTRATION NO.: NOT APPLICABLE
FILING PARTY: NOT APPLICABLE
DATE FILED: NOT APPLICABLE
|_| Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.
Check the appropriate boxes below to designate any transactions to which
the statement relates:
|X| third-party tender offer subject to Rule 14d-1.
|_| issuer tender offer subject to Rule 13e-4.
|_| going-private transaction subject to Rule 13e-3.
|X| amendment to Schedule 13D under Rule 13d-2.
Check the following box if the filing is a final amendment reporting the
result of the tender offer: |_|
<PAGE> 3
CUSIP NO. 452909-10-4 13D
---------------------
- --------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS/I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
(ENTITIES ONLY)
Brady Corporation
39-0178960
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(See Instructions)
(a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS (See Instructions)
WC
- --------------------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) OR 2(e) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Wisconsin
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
-0-** (984,703 assuming full exercise of the options to
purchase shares of common stock described below.)**
SHARES -----------------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
-0-
OWNED BY EACH -----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
REPORTING
-0-** (984,703 assuming full exercise of the options to
purchase shares of common stock described below.)**
PERSON -----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
WITH
-0-
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
-0-** (984,703 assuming full exercise of the options to
purchase shares of common stock described below.)**
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (See Instructions) [ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0%** (57.9% of the shares of common stock as computed in accordance with
Rule 13d-3(d)(1)(i) under the Act assuming full exercise of the options to
purchase shares of common stock described below.)**
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON (See Instructions)
CO
- --------------------------------------------------------------------------------
** On December 9, 1999, Brady Corporation, a Wisconsin corporation ("Brady"),
entered into a Shareholder Option Agreement ("Shareholder Option Agreement #
1") with certain shareholders of Imtec Inc., a Delaware corporation
("Imtec"), including all of the directors and one executive officer of Imtec
and all but one holder of greater than five percent (5%) of Imtec's common
stock (the "Group Shareholders"), who, in the aggregate, own 875,326 shares
of Imtec common stock, including certain options to purchase shares of Imtec
common stock (the "Group Shares"). In addition, on December 9, 1999, Brady
entered into a second Shareholder Option Agreement ("Shareholder Option
Agreement #2" and together with Shareholder Option Agreement #1, the
"Shareholder Option Agreements"), with the remaining holder of greater than
5% of Imtec common stock (the "Individual Shareholder" and together with the
Group Shareholders, the "Shareholders") with respect to 109,377 shares of
Imtec common stock (the "Individual Shares" and together with the Group
Shares, the "Shares"), which constitute a portion of the shares of Imtec
common stock owned by such holder. Pursuant to the Shareholder Option
Agreements, the Shareholders have (i) granted Brady an option to purchase
their Shares at an exercise price $12.00 per Share (subject to adjustment in
certain circumstances) exercisable upon the occurrence of certain events
specified in the Shareholder Option Agreements, (ii) agreed to tender, in
accordance with the terms of the Offer, all of the Option Shares (including
any subsequently acquired Shares with respect to the Group Shareholders) and
(iii) irrevocably granted to, and appointed Brady proxy and attorney-in-fact
to vote the Shares with respect to certain matters. The Shareholder Option
Agreements are described in Section 10 of the Offer to Purchase dated as of
February 22, 2000 filed as Exhibit(a)(1) to this Schedule TO.
3
<PAGE> 4
CUSIP NO. 452909-10-4 13D
---------------------
- --------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS/I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
(ENTITIES ONLY)
IMTC Acquisition Corp.
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(See Instructions)
(a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS (See Instructions)
AF
- --------------------------------------------------------------------------------
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) OR 2(e) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
-0-
SHARES -----------------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
-0-
OWNED BY EACH -----------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
REPORTING
-0-
PERSON -----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
WITH
-0-
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
-0-
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES (See Instructions) [ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON (See Instructions)
CO
- --------------------------------------------------------------------------------
4
<PAGE> 5
ITEM 1. SUMMARY TERM SHEET
The information set forth in the "Summary Term Sheet" of the Offer to
Purchase, dated February 22, 2000 (the "Offer to Purchase"), a copy of which is
filed as Exhibit (a)(1) hereto, is incorporated herein by reference.
ITEM 2. SUBJECT COMPANY INFORMATION
(a) The name of the subject company is Imtec Inc., a Delaware
corporation (the "Company"). The information set forth in Section 7 ("Certain
Information Concerning The Company") of the Offer to Purchase is incorporated
herein by reference.
(b) The information set forth in "Introduction" of the Offer to
Purchase is incorporated herein by reference
(c) The information set forth in Section 6 ("Price Range Of Shares;
Dividends") of the Offer to Purchase is incorporated herein by reference.
ITEM 3. IDENTITY AND BACKGROUND OF FILING PERSON
(a) The name of each of the filing persons are Brady Corporation, a
Wisconsin corporation ("Parent"), and IMTC Acquisition Corp., a Delaware
corporation and indirect, wholly owned subsidiary of Parent (the "Purchaser").
The information set forth in Section 8 ("Certain Information Concerning Parent
And The Purchaser") and "Schedule I" of the Offer to Purchase is incorporated
herein by reference.
(b)-(c) The information set forth in "Introduction," Section 8
("Certain Information Concerning Parent And The Purchaser") and Schedule I of
the Offer to Purchase is incorporated herein by reference. During the past five
years, neither the Purchaser, Parent, nor any of the persons listed in Schedule
I of the Offer to Purchase has been (i) convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) or (ii) a party to any
judicial or administrative proceeding (except for matters that were dismissed
without sanction or settlement) that resulted in a judgment, decree or final
order enjoining future violations of, or prohibiting activities subject to,
federal or state securities laws, or finding of any violation of such laws.
ITEM 4. TERMS OF THE TRANSACTION
(a) The information set forth in "Summary Term Sheet," "Introduction,"
Section 1 ("Terms Of The Offer; Expiration Date"), Section 2 ("Acceptance For
Payment And Payment For Shares"), Section 3 ("Procedures For Accepting The Offer
And Tendering Shares"), Section 4 ("Withdrawal Rights"), Section 5 ("Certain
Federal Income Tax Consequences") and Section 14 ("Certain Conditions Of The
Offer") of the Offer to Purchase is incorporated herein by reference.
ITEM 5. PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS
(a)-(b) The information set forth in "Summary Term Sheet,"
"Introduction," Section 8 ("Certain Information Concerning Parent And The
Purchaser"), Section 10 ("Background Of The Offer; Contacts With The Company;
The Merger Agreement; Shareholder Option Agreements") and Section 11 ("Purpose
Of The Offer; Plans For The Company After The Offer And The Merger") of the
Offer to Purchase is incorporated herein by reference.
ITEM 6. PURPOSE OF THE TRANSACTION AND PLANS OR PROPOSALS
(a) and (c)(1)-(7) The information set forth in "Summary Term Sheet,"
"Introduction," Section 6 ("Price Range Of Shares; Dividends"), Section 10
("Background Of The Offer; Contacts With The Company; The Merger Agreement;
Shareholder Option Agreements"), Section 11 ("Purpose Of The Offer; Plans For
The Company After The Offer And the Merger") and Section 13 ("Effect Of The
Offer On The Market For The Shares; Nasdaq Listing And Exchange Act
Registration") of the Offer to Purchase is incorporated herein by reference.
5
<PAGE> 6
ITEM 7. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
(a) The information set forth in "Summary Term Sheet," "Introduction"
and Section 9 ("Financing Of The Offer And The Merger") of the Offer to Purchase
is incorporated herein by reference.
(b) None.
(d) Not applicable.
ITEM 8. INTEREST IN SECURITIES OF THE SUBJECT COMPANY
(a) The information contained in Items 7, 9, and 11 of the cover pages
hereto is incorporated herein by reference. The information set forth in the
"Introduction," Section 10 ("Background Of The Offer; Contacts With The Company;
The Merger Agreement; Shareholder Option Agreements") and Schedule I of the
Offer to Purchase is incorporated herein by reference.
(b) The information set forth in the "Introduction," Section 10
("Background Of The Offer; Contacts With The Company; The Merger Agreement;
Shareholder Option Agreements")and Schedule I of the Offer to Purchase is
incorporated herein by reference.
ITEM 9. PERSONS/ASSETS, RETAINED, EMPLOYED, COMPENSATED OR USED.
(a) The information set forth in Section 16 ("Fees And Expenses") of
the Offer to Purchase is incorporated herein by reference.
ITEM 10. FINANCIAL STATEMENTS
(a) Not Applicable.
(b) Not Applicable.
ITEM 11. ADDITIONAL INFORMATION
(a) The information contained in Section 14 ("Certain Conditions Of
The Offer") and Section 15 ("Certain Regulatory And Legal Matters") of the
Offer to Purchase are incorporated herein by reference.
(b) Not applicable.
ITEM 12. EXHIBITS
(a)(1) - Offer to Purchase, dated February 22, 2000.
(a)(2) - Form of Letter of Transmittal, dated February 22, 2000.
(a)(3) - Form of Notice of Guaranteed Delivery.
(a)(4) - Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.
(a)(5) - Form of Letter to Clients for use by Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees.
(a)(6) - Form of Guidelines for Certification of Taxpayer Identification Number
on Substitute Form W-9.
(a)(7) - Text of Press Release, dated February 11, 2000. (Incorporated herein
by reference to Exhibit (a)(1) of Schedule TO filed with the Commission
by Brady Corporation and IMTC Acquisition Corp. on February 11, 2000.)
(a)(8) - Text of Press Release, dated December 9, 1999. (Incorporated herein
by reference to Exhibit (a)(2) of Schedule TO filed with the Commission
by Brady Corporation and IMTC Acquisition Corp. on February 11, 2000.)
(a)(9) - Solicitation/Recommendation Statement on Schedule 14D-9 of the
Company, dated February 22, 2000. (Incorporated herein by reference to
Schedule 14D-9 filed by Imtec Inc. with the Commission on February 22,
2000.)
6
<PAGE> 7
(b) - Not Applicable.
(d)(1) - Agreement and Plan of Merger, dated as of February 11, 2000, by and
among Brady Corporation, IMTC Acquisition Corp. and Imtec Inc.
(d)(2) Shareholder Option Agreement, dated December 9, 1999, among Brady
Corporation and the persons listed on Schedule I of such Agreement.
(Incorporated herein by reference to Exhibit 1 of Schedule 13D filed
with the Commission by Brady Corporation on December 20, 1999.)
(d)(3) - Shareholder Option Agreement, dated December 9, 1999, between Brady
Corporation and Laifer Capital Management, Inc. (Incorporated herein by
reference to Exhibit 2 of Schedule 13D filed with the Commission by
Brady Corporation on December 20, 1999.)
(d)(4) - Confidentiality Agreement, dated November 2, 1999, between Brady
Corporation and Imtec Inc.
(g) - Not Applicable.
(h) - Not Applicable.
ITEM 13. INFORMATION REQUIRED BY SCHEDULE 13E-3
Not Applicable.
7
<PAGE> 8
SIGNATURES
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Dated: February 22, 2000
IMTC Acquisition Corp.
BY: /s/ Frank M. Jaehnert
----------------------------------
Frank M. Jaehnert, Vice President
and Treasurer
BRADY CORPORATION.
BY: /s/ Frank M. Jaehnert
----------------------------------
Frank M. Jaehnert, Vice President
and Chief Financial Officer
S-1
<PAGE> 9
EXHIBIT INDEX
EXHIBIT
NO.
(a)(1) - Offer to Purchase, dated February 22, 2000.
(a)(2) - Form of Letter of Transmittal, dated February 22, 2000.
(a)(3) - Form of Notice of Guaranteed Delivery.
(a)(4) - Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.
(a)(5) - Form of Letter to Clients for use by Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees.
(a)(6) - Form of Guidelines for Certification of Taxpayer Identification Number
on Substitute Form W-9.
(a)(7) - Text of Press Release, dated February 11, 2000. (Incorporated herein
by reference to Exhibit (a)(1) of Schedule TO filed with the Commission
by Brady Corporation and IMTC Acquisition Corp. on February 11, 2000.)
(a)(8) - Text of Press Release, dated December 9, 1999. (Incorporated herein
by reference to Exhibit (a)(2) of Schedule TO filed with the Commission
by Brady Corporation and IMTC Acquisition Corp. on February 11, 2000.)
(a)(9) - Solicitation/Recommendation Statement on Schedule 14D-9 of the Company,
dated February 22, 2000. (Incorporated herein by reference to Schedule
14D-9 filed by Imtec Inc. with the Commission on February 22, 2000.)
(b) - Not Applicable.
(d)(1) - Agreement and Plan of Merger, dated as of February 11, 2000, by and
among Brady Corporation, IMTC Acquisition Corp. and Imtec Inc.
(d)(2) - Shareholder Option Agreement, dated December 9, 1999, among Brady
Corporation and the persons listed on Schedule I of such Agreement.
(Incorporated herein by reference to Exhibit 1 of Schedule 13D filed
with the Commission by Brady Corporation on December 20, 1999.)
(d)(3) - Shareholder Option Agreement, dated December 9, 1999, between Brady
Corporation and Laifer Capital Management, Inc. (Incorporated herein by
reference to Exhibit 2 of Schedule 13D filed with the Commission by
Brady Corporation on December 20, 1999.)
(d)(4) - Confidentiality Agreement, dated November 2, 1999, between Brady
Corporation and Imtec Inc.
(g) - Not Applicable.
(h) - Not Applicable.
EI-1
<PAGE> 1
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
IMTEC INC.
AT
$12.00 NET PER SHARE
BY
IMTC ACQUISITION CORP.,
AN INDIRECT, WHOLLY OWNED SUBSIDIARY
OF
BRADY CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,
EASTERN TIME, ON TUESDAY, MARCH 21, 2000, UNLESS THE OFFER IS EXTENDED.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION DATE AT LEAST 75% OF THE
OUTSTANDING SHARES OF COMMON STOCK OF IMTEC INC. MEASURED ON A FULLY DILUTED
BASIS. THE OFFER IS ALSO CONDITIONED UPON CERTAIN OTHER TERMS AND CONDITIONS,
INCLUDING THE EXPIRATION OR TERMINATION OF ALL WAITING PERIODS IMPOSED BY THE
HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED, AND THE
REGULATIONS THEREUNDER. SEE SECTIONS 14 AND 15. THE OFFER IS NOT CONDITIONED ON
THE RECEIPT OF FINANCING.
-------------------------
THE BOARD OF DIRECTORS OF IMTEC INC. HAS UNANIMOUSLY APPROVED THE MERGER
AGREEMENT, THE OFFER AND THE MERGER, HAS DETERMINED THAT THE OFFER AND THE
MERGER ARE FAIR TO AND IN THE BEST INTERESTS OF THE HOLDERS OF SHARES AND
UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS ACCEPT THE OFFER AND TENDER THEIR
SHARES PURSUANT TO THE OFFER.
-------------------------
IMPORTANT
If you desire to tender all or any portion of your shares of Imtec common
stock, you should either (1) complete and sign the Letter of Transmittal (or a
facsimile of it) in accordance with the instructions in the Letter of
Transmittal, including any required signature guarantees, and mail or deliver
the Letter of Transmittal (or facsimile) with the certificate(s) for the
tendered Shares and any other required documents to the Depositary, (2) follow
the procedures for book-entry tender of shares set forth in Section 3, or (3)
request your broker, dealer, commercial bank, trust company or other nominee to
effect the transaction for you. If your Shares are registered in the name of a
broker, dealer, commercial bank, trust company or other nominee you should
contact that person or entity to tender your Shares.
If you desire to tender Shares and your stock certificates are not
immediately available, or if you cannot comply with the procedures for
book-entry transfer on a timely basis, you may tender the Shares by following
the procedures for guaranteed delivery set forth in Section 3.
Questions and requests for assistance may be directed to the Information
Agent at its address and telephone number set forth on the back cover of this
Offer to Purchase. Additional copies of this Offer to Purchase, the Letter of
Transmittal and the Notice of Guaranteed Delivery may also be obtained from the
Information Agent or from brokers, dealers, commercial banks or trust companies.
------------------------
February 22, 2000
<PAGE> 2
SUMMARY TERM SHEET
This Summary Term Sheet highlights the most important or material terms of
the Offer. It may not contain all of the information that is important to you.
To understand the Offer and related transactions more fully, you should read
this entire document carefully, together with the other documents to which we
refer. See "17. MISCELLANEOUS."
<TABLE>
<S> <C>
- - Shares Being Purchased: Imtec Inc. Common Stock
- - Purchase Price: $12.00 net per Share, in cash
- - Amount Sought: 100% of the outstanding Shares. It is a condition of the
Offer that at least 75% of the outstanding Shares measured
on a fully diluted basis be tendered (1,383,385 outstanding
Shares), unless waived by the Purchaser. Certain insiders
have promised to tender or sell to the Purchaser an
aggregate of 984,703 Shares (53.4% of the outstanding Shares
on a fully diluted basis). See "10. BACKGROUND OF THE OFFER;
CONTACTS WITH THE COMPANY; THE MERGER AGREEMENT; SHAREHOLDER
OPTION AGREEMENTS."
- - Purchaser: IMTC Acquisition Corp., an indirect, wholly owned subsidiary
of Brady Corporation
</TABLE>
- - The Purchaser has the financial resources to complete the Offer, so there is
no financing condition. The most significant conditions are the minimum amount
sought described above and federal antitrust clearance of the transaction. See
"14. CERTAIN CONDITIONS OF THE OFFER."
- - The Offer will expire at 5:00 p.m. Eastern time on Tuesday, March 21, 2000,
unless extended by the Purchaser in its discretion by notice to the
Depositary, with a press release announcing the extension promptly thereafter.
- - To tender your Shares, you should do one of the following:
- complete, sign and send the Letter of Transmittal, with certificates for
the tendered Shares and any other required documents to the Depositary;
- follow the procedures for book-entry tender of Shares, if applicable; or
- request your broker or other nominee holder to tender your shares for
you.
See "3. PROCEDURES FOR ACCEPTING THE OFFER AND TENDERING SHARES."
- - After tendering Shares, you may withdraw them at any time prior to the
Expiration Date (March 21, 2000, unless extended) and, unless the Purchaser
has accepted them for payment, at any time after April 21, 2000. The
withdrawal notice must satisfy the requirements described under "4. WITHDRAWAL
RIGHTS."
- - Under the Merger Agreement, the Offer will be followed by a merger in which
holders of any Shares that are not tendered will receive $12.00 net per Share,
in cash. No appraisal rights are available in connection with the Offer, but
shareholders may have appraisal rights in connection with the Merger. See "11.
PURPOSE OF THE OFFER; PLANS FOR THE COMPANY AFTER THE OFFER AND THE MERGER."
- - Imtec's board of directors has unanimously approved the Merger Agreement, the
Offer and the Merger, has determined that the Offer and the Merger are fair to
and in the best interests of Imtec's shareholders, and unanimously recommends
that shareholders accept the Offer and tender their Shares pursuant to the
Offer. See "10. BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY; THE MERGER
AGREEMENT; SHAREHOLDER OPTION AGREEMENTS."
- - On December 9, 1999, the last full trading day prior to the issuance of
Brady's press release indicating that a transaction was being negotiated at a
price of $12.00 per Share, the closing bid price of Imtec's Shares on the
Nasdaq/SM market was $5.50. On February 10, 2000, the last full trading day
prior to announcement that the Merger Agreement was signed, the closing price
was $11.125 per Share. See "6. PRICE RANGE OF SHARES; DIVIDENDS."
- - Questions should be directed to Georgeson Shareholder Communications Inc., the
Information Agent, at 1-800-223-2064.
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<C> <S> <C>
INTRODUCTION........................................................... 1
1. Terms Of The Offer; Expiration Date......................... 2
2. Acceptance For Payment And Payment For Shares............... 3
3. Procedures For Accepting The Offer And Tendering Shares..... 4
4. Withdrawal Rights........................................... 6
5. Certain Federal Income Tax Consequences..................... 7
6. Price Range Of Shares; Dividends............................ 8
7. Certain Information Concerning The Company.................. 8
8. Certain Information Concerning Parent And The Purchaser..... 9
9. Financing Of The Offer And The Merger....................... 9
10. Background Of The Offer; Contacts With The Company; The
Merger Agreement; Shareholder Option Agreements............. 10
11. Purpose Of The Offer; Plans For The Company After The Offer
And The Merger.............................................. 18
12. Dividends And Distributions; Stock Issuances................ 19
13. Effect Of The Offer On The Market For The Shares; Nasdaq
Listing And Exchange Act Registration....................... 20
14. Certain Conditions Of The Offer............................. 20
15. Certain Regulatory And Legal Matters........................ 22
16. Fees And Expenses........................................... 25
17. Miscellaneous............................................... 25
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF PARENT AND THE
PURCHASER................................................... I-1
</TABLE>
<PAGE> 4
To the Holders of Common Stock
of Imtec Inc.:
INTRODUCTION
IMTC Acquisition Corp., a Delaware corporation (the "Purchaser"), an
indirect, wholly owned subsidiary of Brady Corporation, a Wisconsin corporation
("Parent"), hereby offers to purchase all of the outstanding shares of common
stock, par value $.01 per share (the "Shares"), of Imtec Inc., a Delaware
corporation (the "Company"), at $12.00 per Share, net to the seller in cash,
without interest thereon (the "Offer Price"), upon the terms and subject to the
conditions set forth in this Offer to Purchase and in the related Letter of
Transmittal (which, as either may be amended or supplemented from time to time,
collectively constitute the "Offer"). Tendering shareholders will not be
obligated to pay brokerage fees or commissions or, subject to Instruction 6 of
the Letter of Transmittal, transfer taxes on the purchase of Shares by the
Purchaser. The Purchaser will pay all charges and expenses of Firstar Bank,
National Association, which firm is acting as the Depositary (the "Depositary"),
and of Georgeson Shareholder Communications Inc., which firm is acting as the
Information Agent (the "Information Agent"), incurred in connection with the
Offer. See Section 16 herein.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION DATE (AS DEFINED IN SECTION
1) A NUMBER OF SHARES REPRESENTING NOT LESS THAN SEVENTY-FIVE PERCENT (75%) OF
THE SHARES THEN OUTSTANDING AND ENTITLED TO VOTE, MEASURED ON A FULLY DILUTED
BASIS (THE "MINIMUM CONDITION"). AS OF THE DATE HEREOF, TENDER OF 1,383,385
SHARES WOULD BE REQUIRED TO SATISFY THE MINIMUM CONDITION. IN ADDITION TO THE
OPTION SHARES DESCRIBED BELOW, THIS WOULD REQUIRE THE TENDER OF 398,682
ADDITIONAL SHARES. THE OFFER IS ALSO CONDITIONED UPON CERTAIN OTHER TERMS AND
CONDITIONS, INCLUDING THE EXPIRATION OR TERMINATION OF ALL WAITING PERIODS
IMPOSED BY THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED
(THE "HSR ACT"), AND THE REGULATIONS THEREUNDER. SEE SECTIONS 14 AND 15. THE
OFFER IS NOT CONDITIONED ON THE RECEIPT OF FINANCING.
The Offer is being made pursuant to an Agreement and Plan of Merger (the
"Merger Agreement"), dated as of February 11, 2000, among the Company, Parent
and the Purchaser, pursuant to which, after the completion of the Offer and the
satisfaction or waiver of certain conditions, the Purchaser will be merged with
and into the Company and each outstanding Share (except as described below) will
be converted into the right to receive $12.00 in cash (the "Merger"). The Merger
Agreement is more fully described in Section 10.
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE MERGER
AGREEMENT, THE OFFER AND THE MERGER, DETERMINED THAT EACH OF THE OFFER AND THE
MERGER IS FAIR TO, AND IN THE BEST INTERESTS OF, THE SHAREHOLDERS OF THE
COMPANY, AND UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS ACCEPT THE OFFER AND
TENDER THEIR SHARES PURSUANT TO THE OFFER.
In order to induce Parent to enter into negotiations with the Company
concerning the Merger and as a pre-condition to making a public announcement
regarding the possible acquisition of the Company by Parent, on December 9,
1999, certain shareholders of the Company, including all of the Company's
directors and one of its executive officers, and all but one holder of greater
than five percent 5% of the Shares (the "Group Shareholders"), who, in the
aggregate, own 875,326 Shares, including certain options to purchase Shares (the
"Group Shares"), entered into a Shareholder Option Agreement ("Shareholder
Option Agreement #1") with Parent. In addition, on December 9, 1999, Parent
entered into a second Shareholder Option Agreement ("Shareholder Option
Agreement #2" and together with Shareholder Option Agreement #1, the
"Shareholder Option Agreements"), with the remaining holder of greater than 5%
of the Shares (the "Individual Shareholder" and together with Group
Shareholders, the "Shareholders") with respect to 109,377 Shares (the
"Individual Shares" and together with the Group Shares, the "Option Shares"),
which constitute a portion of the Shares owned by the Individual Shareholder.
Pursuant to the Shareholder Option Agreements, each Shareholder agreed, among
other things, (a) to grant Parent an irrevocable option (individually an
"Option" and together the "Options") to purchase the Option Shares held by such
Shareholder at an exercise price of $12.00 per Share (subject to adjustment in
certain circumstances), (b) to tender, in accordance with the terms of the
Offer, all of the Option Shares (including any subsequently acquired Shares with
respect to
1
<PAGE> 5
the Group Shareholders) owned by such Shareholder and (c) to vote all of the
Option Shares (including any subsequently acquired Shares with respect to the
Group Shareholders) owned by such Shareholder in favor of the Merger and against
certain other extraordinary transactions. The Option Shares represent
approximately 57.9% of the Shares computed in accordance with Rule
13d-3(d)(1)(i) under the Exchange Act (53.4% of the Shares outstanding on a
fully diluted basis). See Section 10.
The Offer is conditioned upon, among other things, the Minimum Condition
being satisfied. The Company has informed Purchaser that, as of February 11,
2000, there were 1,635,313 Shares issued and outstanding and there were 209,200
Shares subject to issuance pursuant to the Company's stock option and incentive
plans. Parent, the Purchaser and their affiliates do not currently beneficially
own any Shares or rights to acquire Shares other than Parent's rights under the
Shareholder Option Agreements.
Based on the foregoing and assuming no additional Shares (or warrants,
options, or rights exercisable for, or securities convertible into, Shares) have
been issued (other than Shares issued pursuant to such options referred to
above) as of February 11, 2000, Purchaser believes there are approximately
1,844,513 Shares outstanding on a fully diluted basis. Accordingly, if all of
the Shares subject to the Shareholder Option Agreements are tendered into the
Offer and not withdrawn, Purchaser believes that the Minimum Condition would be
satisfied if at least 398,682 additional Shares are validly tendered prior to
the Expiration Date (as defined in Section 1) and not withdrawn.
The purpose of the Offer is to acquire for cash as many outstanding Shares
as possible as a first step in acquiring the entire equity interest in the
Company. As soon as possible after completion of the Offer, Parent intends to
consummate the Merger pursuant to and in accordance with the terms set forth in
the Merger Agreement. The Merger Agreement provides that, among other things, as
soon as practicable after the purchase of Shares pursuant to the Offer and the
satisfaction or waiver of the other conditions set forth in the Merger Agreement
and in accordance with the relevant provisions of the Delaware General
Corporation Law ("DGCL"), the Purchaser will be merged with and into the
Company. Following consummation of the Merger, the Company will continue as the
surviving corporation (the "Surviving Corporation") and will become an indirect,
wholly owned subsidiary of Parent. At the effective time of the Merger (the
"Effective Time"), each Share issued and outstanding immediately prior to the
Effective Time (other than Shares held in the treasury of the Company or owned
by the Purchaser, Parent or any direct or indirect subsidiary of Parent or the
Company, and other than Shares held by shareholders who shall have demanded and
perfected appraisal rights, if any, under the DGCL) will be canceled and
converted automatically into the right to receive $12.00 in cash, without
interest (the "Merger Consideration"). See Sections 10 and 11.
No appraisal rights are available in connection with the Offer; however,
shareholders may have appraisal rights in connection with the Merger. See
Section 11.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION AND SHOULD BE READ IN THEIR ENTIRETY BEFORE ANY DECISION
IS MADE WITH RESPECT TO THE OFFER.
1. TERMS OF THE OFFER; EXPIRATION DATE. Upon the terms and subject to the
conditions set forth in the Offer (including, if the Offer is extended or
amended, the terms and conditions of such extension or amendment), the Purchaser
will accept for payment, and pay for, all Shares validly tendered on or prior to
the Expiration Date and not withdrawn as permitted by Section 2. The term
"Expiration Date" means 5:00 p.m., Eastern time, on Tuesday, March 21, 2000,
unless and until the Purchaser, in its sole discretion, shall have extended the
period of time during which the Offer is open, in which event the term
"Expiration Date" shall mean the latest time and date at which the Offer, as so
extended by the Purchaser, will expire.
The Offer is conditioned upon, among other things, expiration or
termination of all waiting periods imposed by the HSR Act and the Minimum
Condition being satisfied.
The Purchaser expressly reserves the right, in its sole discretion but
subject to the provisions of the Merger Agreement, at any time or from time to
time, to extend the period of time during which the Offer is open by giving oral
or written notice of such extension to the Depositary. See Section 10. Any such
extension will also be publicly announced by press release issued no later than
9:00 a.m., Eastern time, on the next business day after the previously scheduled
Expiration Date. During any such extension, all Shares previously tendered and
not withdrawn will remain subject to the Offer, subject to the right of a
tendering shareholder to
2
<PAGE> 6
withdraw his or her Shares. See Section 4. Subject to the applicable regulations
of the Securities and Exchange Commission (the "Commission"), the Purchaser also
expressly reserves the right, in its sole discretion but subject to the
provisions of the Merger Agreement, at any time or from time to time, (i) to
delay acceptance for payment of or, regardless of whether such Shares were
theretofore accepted for payment, payment for any Shares or to terminate the
Offer and not 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 Section 14 and (ii) to waive any condition or otherwise amend the Offer in
any respect, by giving oral or written notice of such delay, termination, waiver
or amendment to the Depositary and by making a public announcement thereof. See
Section 10. If the Purchaser accepts any Shares for payment pursuant to the
terms of the Offer, it will accept for payment all Shares validly tendered prior
to the Expiration Date and not withdrawn, and, subject to (i) above, will
promptly pay for all Shares so accepted for payment. The Purchaser confirms that
its reservation of the right to delay payment for Shares which it has accepted
for payment is limited by Rule 14e-1(c) under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), which requires that a tender offeror pay
the consideration offered or return the tendered securities promptly after the
termination or withdrawal of a tender offer.
Any extension, delay, 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 no later than 9:00 a.m.,
Eastern time, on the next business day after the previously scheduled Expiration
Date. Subject to applicable law (including Rules 14d-4(d) and 14d-6(c) under the
Exchange Act, which require that any material change in the information
published, sent or given to shareholders in connection with the Offer be
promptly disseminated to shareholders in a manner reasonably designed to inform
shareholders of such change) and without limiting the manner in which the
Purchaser may choose to make any public announcement, the Purchaser shall have
no obligation to publish, advertise or otherwise communicate any such public
announcement other than by making a release to the PR Newswire and making any
appropriate filing with the Commission.
The Purchaser confirms that if it 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, the Purchaser will extend the Offer to the extent
required by Rules 14d-4(d) and 14d-6(c) under the Exchange Act.
If, prior to the Expiration Date, the Purchaser, with the Company's
consent, shall decrease the percentage of Shares being sought or the
consideration offered to holders of Shares, such decrease shall be applicable to
all holders whose Shares are accepted for payment pursuant to the Offer and, if
at the time notice of any decrease is first published, sent or given to holders
of Shares, the Offer is scheduled to expire at any time earlier than the tenth
business day from and including the date that such notice is first so published,
sent or given, the Offer will be extended until the expiration of such ten
business-day period. For purposes of the Offer, a "business day" means any day
other than a Saturday, Sunday or federal holiday and consists of the time period
from 12:01 a.m. through 12:00 Midnight, Eastern time.
The Offer is being mailed to holders of Shares from a list provided to the
Purchaser by the Company pursuant to the Merger Agreement.
2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES. Upon the terms and
subject to the conditions of the Offer (including, if the Offer is extended or
amended, the terms and conditions of any such extension or amendment), the
Purchaser will accept for payment, and will pay for, Shares validly tendered and
not withdrawn as promptly as practicable after the later of (i) the expiration
or termination of the waiting period applicable to the acquisition of Shares
pursuant to the Offer under the HSR Act, and (ii) the Expiration Date. Parent
expects to file a Notification and Report Form under the HSR Act on or about
February 22, 2000, and unless earlier terminated or extended by a request for
additional information, the waiting period under the HSR Act would expire at
11:59 p.m., Eastern time, on the fifteenth day following such filing. See
Section 15. In addition, subject to applicable rules of the Commission, the
Purchaser expressly reserves the right to delay acceptance for payment of or
payment for Shares in order to comply, in whole or in part, with any applicable
law. See Section 14. 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) certificates for such Shares (or a confirmation
3
<PAGE> 7
of a book-entry transfer of such Shares into the Depositary's account at The
Depository Trust Company (the "Book-Entry Transfer Facility")), (ii) a properly
completed and duly executed Letter of Transmittal (or facsimile thereof) and
(iii) any other required documents.
For purposes of the Offer, the Purchaser will be deemed to have accepted
for payment Shares validly tendered and not withdrawn as, if and when the
Purchaser gives oral or written notice to the Depositary of its acceptance for
payment of such Shares pursuant to 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 the tendering
shareholders for purpose of receiving payments from the Purchaser and
transmitting such payments to the tendering shareholders. Under no circumstances
will interest on the purchase price for Shares be paid, regardless of any delay
in making such payment.
If any tendered Shares are not accepted for payment pursuant to the terms
and conditions of the Offer for any reason, or if certificates are submitted for
more Shares than are tendered, certificates for such unpurchased Shares will be
returned, without expense to the tendering shareholder (or, in the case of
Shares tendered by book-entry transfer of such Shares into the Depositary's
account at the Book-Entry Transfer Facility pursuant to the procedures set forth
in Section 3, such Shares will be credited to an account maintained with the
Book-Entry Transfer Facility), as soon as practicable following expiration or
termination of the Offer.
The Purchaser reserves the right to transfer or assign in whole or in part
from time to time to one or more direct or indirect subsidiaries of Parent the
right to purchase all or any portion of the Shares tendered pursuant to the
Offer, but any such transfer or assignment will not relieve the Purchaser of its
obligations under the Offer and will in no way prejudice the rights of tendering
shareholders to receive payment for Shares validly tendered and accepted for
payment pursuant to the Offer.
3. PROCEDURES FOR ACCEPTING THE OFFER AND TENDERING SHARES. In order for a
holder of Shares validly to tender Shares pursuant to the Offer, either (a) a
properly completed and duly executed Letter of Transmittal (or a facsimile
thereof) in accordance with the instructions of the Letter of Transmittal, with
any required signature guarantees, along with certificates for the Shares to be
tendered and any other documents required by the Letter of Transmittal, must be
received by the Depositary at one of its addresses set forth on the back cover
of this Offer to Purchase prior to the Expiration Date, (b) such Shares must be
delivered pursuant to the procedures for book-entry transfer described below
(and a confirmation of such delivery must be received by the Depositary,
including an Agent's Message (as defined herein) if the tendering shareholder
has not delivered a Letter of Transmittal), prior to the Expiration Date, or (c)
the tendering shareholder must comply with the guaranteed delivery procedures
set forth below. The term "Agent's Message" means a message, transmitted by the
Book-Entry Transfer Facility to, and received by, the Depositary and forming a
part of a book-entry confirmation, which states that the Book-Entry Transfer
Facility has received an express acknowledgment from the participant in such
Book-Entry Transfer Facility tendering the Shares which 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 the Purchaser may
enforce such agreement against the participant.
Book-Entry Delivery. The Depositary will establish accounts 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 the Book-Entry Transfer Facility's systems
may make a book-entry transfer of Shares by causing the Book-Entry Transfer
Facility to transfer such Shares into the Depositary's account in accordance
with the Book-Entry Transfer Facility's procedures for such transfer. However,
although delivery of Shares may be effected through book-entry transfer, either
the Letter of Transmittal (or facsimile thereof), properly completed and duly
executed, together with any required signature guarantees, or an Agent's Message
in lieu of the Letter of Transmittal, 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 by the
Expiration Date, or the tendering shareholder must comply with the guaranteed
delivery procedures described below. The confirmation of a book-entry transfer
of Shares into the Depositary's account at the Book-Entry Transfer Facility as
described above is referred to herein as
4
<PAGE> 8
a "Book-Entry Confirmation." 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.
THE METHOD OF DELIVERY OF SHARES, THE LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER FACILITY,
IS AT THE ELECTION AND RISK OF THE TENDERING SHAREHOLDER. SHARES WILL BE DEEMED
DELIVERED ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY (INCLUDING, IN THE CASE
OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION). IF DELIVERY IS BY MAIL,
WE RECOMMEND THAT THE SHAREHOLDER USE PROPERLY INSURED REGISTERED MAIL WITH
RETURN RECEIPT REQUESTED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO
ENSURE TIMELY DELIVERY.
Signature Guarantees. Except as otherwise provided below, all signatures on
a Letter of Transmittal must be guaranteed by a financial institution (including
most commercial banks, savings and loan associations and brokerage houses) that
is a participant in the Securities Transfer Agents Medallion Program, the New
York Stock Exchange Medallion Signature Guarantee Program or the Stock Exchange
Medallion Program (an "Eligible Institution"). Signatures on a Letter of
Transmittal need not be guaranteed (a) if the Letter of Transmittal is signed by
the registered holder of Shares (which term, for purposes of this section,
includes any participant in the Book-Entry Transfer Facility's systems whose
name appears on a security position listing as the owner of the Shares) and such
registered holder has not completed the box entitled "Special Payment
Instructions" or the box entitled "Special Delivery Instructions" on the Letter
of Transmittal or (b) if such Shares are tendered for the account of an Eligible
Institution. See Instructions 1 and 5 of the Letter of Transmittal. If the
certificates for Shares are registered in the name of a person other than the
signer of the Letter of Transmittal, or if payment is to be made or certificates
for Shares not tendered or not accepted for payment are to be returned to a
person other than the registered holder of the certificates surrendered, then
the tendered certificates must be endorsed or accompanied by appropriate stock
powers, in either case signed exactly as the name or names of the registered
holders or owners appear on the certificates, with the signatures on the
certificates or stock powers guaranteed as described above. See Instructions 1
and 5 of the Letter of Transmittal.
Guaranteed Delivery. A shareholder who desires to tender Shares pursuant to
the Offer and whose certificates for Shares are not immediately available, or
who cannot comply with the procedure for book-entry transfer on a timely basis,
or who cannot deliver all required documents to the Depositary prior to the
Expiration Date, may tender such Shares by following all of the procedures set
forth below:
(i) such tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by the Purchaser, 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 with respect to all such Shares),
together with a properly completed and duly executed Letter of Transmittal
(or facsimile thereof), with any required signature guarantees (or, in the
case of a book-entry transfer, an Agent's Message in lieu of the Letter of
Transmittal), and any other required documents, are received by the
Depositary within three (3) New York Stock Exchange Inc. trading days after
the date of execution of such Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand to the
Depositary or transmitted by facsimile transmission or mail to the Depositary
and must include a guarantee by an Eligible Institution in the form set forth in
such Notice of Guaranteed Delivery.
Other Requirements. Notwithstanding any 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 (a) certificates for (or a timely
Book-Entry Confirmation with respect to) such Shares, (b) a Letter of
Transmittal (or facsimile thereof), properly completed and duly executed, with
any required signature guarantees (or, in the case of a book-entry transfer, an
Agent's Message in lieu of the Letter of Transmittal) and (c) any other
documents required by the Letter of Transmittal. Accordingly, tendering
shareholders may be paid at different times depending upon when certificates for
Shares or Book-Entry Confirmations with respect to Shares are actually
5
<PAGE> 9
received by the Depositary. Under no circumstances will interest on the purchase
price of the Shares be paid by the Purchaser, regardless of any extension of the
Offer or any delay in making such payment.
Tender Constitutes An Agreement. The valid tender of Shares pursuant to one
of the procedures described above will constitute a binding agreement between
the tendering shareholder and the Purchaser upon the terms and subject to the
conditions of the Offer.
Appointment. By executing a Letter of Transmittal as set forth above, the
tendering shareholder irrevocably appoints designees of the Purchaser as such
shareholder's proxies, each with full power of substitution, to the full extent
of such shareholder's rights with respect to the Shares tendered by such
shareholder and accepted for payment by the Purchaser and with respect to any
and all other Shares or other securities issued or issuable in respect of such
Shares on or after February 22, 2000. All such proxies will be considered
coupled with an interest in the tendered Shares. Such appointment is effective
when, and only to the extent that, the Purchaser deposits the payment for such
Shares with the Depositary. Upon the effectiveness of such appointment, all
prior powers of attorney, proxies and consents given by such shareholder will be
revoked, and no subsequent powers of attorney, proxies and consents may be given
(and, if given, will not be deemed effective). The Purchaser's designees will,
with respect to the Shares for which the appointment is effective, be empowered
to exercise all voting and other rights of such shareholder as they, in their
sole discretion, may deem proper at any annual, special or adjourned meeting of
the shareholders of the Company, by written consent in lieu of any such meeting
or otherwise. The Purchaser reserves the right to require that, in order for
Shares to be deemed validly tendered, immediately upon the Purchaser's payment
for such Shares, the Purchaser must be able to exercise full voting rights with
respect to such Shares.
Determination Of Validity. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance of any tender of Shares
will be determined by the Purchaser in its sole discretion, which determination
will be final and binding. The Purchaser reserves the absolute right to reject
any and all tenders determined by it not to be in proper form or the acceptance
for payment of or payment for which may, in the opinion of the Purchaser's
counsel, be unlawful. The Purchaser also reserves the absolute right to waive
any defect or irregularity in the tender of any Shares of any particular
shareholder whether or not similar defects or irregularities are waived in the
case of other shareholders. No tender of Shares will be deemed to have been
validly made until all defects and irregularities relating thereto have been
cured or waived. None of the Purchaser, the Depositary, the Information Agent,
or any other person will be under any duty to give notification of any defects
or irregularities in tenders or incur any liability for failure to give any such
notification. The Purchaser's interpretation of the terms and conditions of the
Offer (including the Letter of Transmittal and Instructions thereto) will be
final and binding.
Backup Withholding. In order to avoid "backup withholding" of Federal
income tax on payments of cash pursuant to the Offer, a shareholder surrendering
Shares in the Offer must, unless an exemption applies, provide the Depositary
with such shareholder's correct social security number or other taxpayer
identification number ("TIN") on a Substitute Form W-9 and certify under
penalties of perjury that such TIN is correct and that such shareholder is not
subject to backup withholding. If a shareholder does not provide such
shareholder's correct TIN or fails to provide the certifications described
above, the Internal Revenue Service (the "IRS") may impose a penalty on such
shareholder and payment of cash to such shareholder pursuant to the Offer may be
subject to backup withholding of 31%. All shareholders surrendering Shares
pursuant to the Offer should complete and sign the main signature form and the
Substitute Form W-9 included as part of the Letter of Transmittal to provide the
information and certification necessary to avoid backup withholding (unless an
applicable exemption exists and is proved in a manner satisfactory to the
Purchaser and the Depositary). Certain shareholders (including, among others,
corporations and certain foreign individuals and entities) may not be subject to
backup withholding. Non-corporate foreign shareholders should complete and sign
the main signature form and a Form W-8, Certificate of Foreign Status, a copy of
which may be obtained from the Depositary, in order to avoid backup withholding.
See Instruction 9 to the Letter of Transmittal.
4. WITHDRAWAL RIGHTS. Tenders of Shares made pursuant to the Offer are
irrevocable except that Shares tendered pursuant to the Offer may be withdrawn
pursuant to the procedures set forth below at any time prior
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<PAGE> 10
to the Expiration Date and, unless theretofore accepted for payment by the
Purchaser pursuant to the Offer, may also be withdrawn at any time after April
21, 2000.
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 having tendered the Shares to be
withdrawn, the number of Shares to be withdrawn and the names in which the
certificate(s) evidencing the Shares to be withdrawn are registered, if
different from that of the person who tendered such Shares. The signature(s) on
the notice of withdrawal must be guaranteed by an Eligible Institution, unless
such Shares have been tendered for the account of any Eligible Institution. If
Shares have been tendered pursuant to the procedures for book-entry transfer as
set forth in Section 3, any notice of withdrawal must specify the name and
number of the account at the Depository Institution to be credited with the
withdrawn Shares. If certificates have been delivered or otherwise identified to
the Depositary, the name of the registered holder and the serial numbers of the
particular certificates evidencing the Shares withdrawn must also be furnished
to the Depositary prior to the physical release of such certificates. All
questions as to the form and validity (including time of receipt) of any notice
of withdrawal will be determined by the Purchaser, in its sole discretion, which
determination shall be final and binding. None of the Purchaser, Parent, the
Depositary, the Information Agent, or any other person will be under any duty to
give notification of any defects or irregularities in any notice of withdrawal
or incur any liability for failure to give such notification. Withdrawals of
tenders of Shares may not be rescinded, and any Shares properly withdrawn will
be deemed not to have been validly tendered for purposes of the Offer. However,
withdrawn Shares may be retendered by following one of the procedures described
in Section 3 at any time prior to the Expiration Date.
If the Purchaser extends the Offer, is delayed in its acceptance for
payment of Shares, or is unable to accept for payment Shares tendered pursuant
to the Offer, for any reason, then, without prejudice to the Purchaser's rights
under this Offer but in accordance with any applicable rules or interpretations
of the Commission, the Depositary may, nevertheless, on behalf of the Purchaser,
retain tendered Shares, and such Shares may not be withdrawn except to the
extent that tendering shareholders are entitled to exercise, and do duly
exercise, withdrawal rights as set forth in this Section 4.
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES. The following is a summary of
the material United States Federal income tax consequences to the Company's
shareholders of the sale of Shares pursuant to the Offer and the exchange of
Shares for cash pursuant to the Merger. The summary does not purport to be a
description of all tax consequences that may be relevant to the Company's
shareholders, and assumes an understanding of tax rules of general application.
It does not address special rules which may apply to the Company's shareholders
based on their tax status, individual circumstances or other factors unrelated
to the Offer or the Merger. Shareholders are encouraged to consult their own tax
advisors regarding the Offer and the Merger.
Sales of Shares pursuant to the Offer and the exchange of Shares for cash
pursuant to the Merger will be taxable transactions for Federal income tax
purposes and may also be taxable under applicable state, local, foreign and
other tax laws. For Federal income tax purposes, a shareholder whose Shares are
purchased pursuant to the Offer or who receives cash as a result of the Merger
will realize gain or loss equal to the difference between the adjusted basis of
the Shares sold or exchanged and the amount of cash received therefor. Such gain
or loss will be capital gain or loss if the Shares are held as capital assets by
the shareholder and will be long-term capital gain or loss if the shareholder's
holding period in such Shares for Federal income tax purposes is more than one
year at the time of the sale or exchange.
A shareholder (other than certain exempt shareholders including, among
others, certain corporations, foreign individuals and foreign entities) who
tenders Shares may be subject to 31% backup withholding unless the shareholder
provides its TIN and certifies that such number is correct or properly certifies
that it is awaiting a TIN, or unless an exemption applies. A shareholder that
does not furnish its TIN may be subject to a penalty imposed by the IRS. See
Section 3.
If backup withholding applies to a shareholder, the Depositary is required
to withhold 31% from payments to such shareholder. Backup withholding is not an
additional tax. Rather, the amount of the backup
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<PAGE> 11
withholding can be credited against the Federal income tax liability of the
person subject to the backup withholding, provided that the required information
is given to the IRS. If backup withholding results in an overpayment of tax, a
refund can be obtained by the shareholder upon filing an appropriate income tax
return.
The Federal income tax discussion set forth above is included for general
information only and may not be applicable to shareholders in special situations
such as shareholders who received their Shares upon the exercise of employee
stock options or otherwise as compensation and shareholders who are not United
States persons. Shareholders should consult their own tax advisors with respect
to the specific tax consequences to them of the Offer and the Merger, including
the application and effect of state, local, foreign or other tax laws.
6. PRICE RANGE OF SHARES; DIVIDENDS. The Shares are quoted on The Nasdaq
Stock Market, Inc.'s ("Nasdaq") Small Cap Market tier ("Nasdaq/SM") under the
symbol IMTC. The following table sets forth, for the periods indicated, the high
and low bid prices per Share on the Nasdaq/SM. These quotations represent prices
between dealers, without retail markups, markdowns or commissions and do not
necessarily represent actual transactions:
<TABLE>
<CAPTION>
HIGH LOW
---- ---
<S> <C> <C>
Fiscal Year Ended June 30, 1998:
First Quarter............................................. $ 10.00 $ 8.00
Second Quarter............................................ 12.50 8.50
Third Quarter............................................. 11.50 8.75
Fourth Quarter............................................ 13.00 10.0625
Fiscal Year Ended June 30, 1999:
First Quarter............................................. $12.875 $ 9.25
Second Quarter............................................ 10.875 6.50
Third Quarter............................................. 8.50 5.25
Fourth Quarter............................................ 9.25 5.125
Fiscal Year Ending June 30, 2000:
First Quarter............................................. $ 8.00 $ 6.00
Second Quarter............................................ 14.00 5.50
Third Quarter (through February 18, 2000)................. 11.875 10.25
</TABLE>
On December 9, 1999, the last full trading day prior to Parent's and the
Company's press release indicating that a possible transaction was being
negotiated with Parent at a price of $12.00 per Share, the closing bid price per
Share on the Nasdaq/SM was $5.50. On February 10, 2000, the last full trading
day prior to announcement that the Merger Agreement had been signed, the closing
bid price per Share on the Nasdaq/ SM was $11.125. SHAREHOLDERS ARE URGED TO
OBTAIN CURRENT MARKET QUOTATIONS FOR THE SHARES.
The Company has not paid any cash dividends since its inception. Pursuant
to the terms of the Merger Agreement, the Company is prohibited from paying any
dividends on its capital stock.
7. CERTAIN INFORMATION CONCERNING THE COMPANY. The Company is a Delaware
corporation with its principal executive offices at One Imtec Lane, Bellows
Falls, Vermont 05101, telephone number 802-463-9502. The following description
of the Company's business has been taken from the Company's Form 10-K for the
year ended June 30, 1999:
The Company designs, manufactures and sells labeling systems. These
systems include label printer laminators, label printer applicators,
preprinted labels and labeling supplies. The Company's products are
designed for automated identification (bar coding) applications in the
electronics, pharmaceutical, transportation, textile, automotive and
warehousing industries.
Company Information. Except as otherwise set forth herein, the information
concerning the Company contained in this Offer to Purchase has been taken from
or based upon publicly available documents and records on file with the
Commission and other public sources and is qualified in its entirety by
reference thereto. Although Parent has no knowledge that would indicate that any
statements contained herein based on such documents and records are untrue,
Parent cannot take responsibility for the accuracy or completeness of
8
<PAGE> 12
the information contained in such documents and records, or for any failure by
the Company to disclose events which may have occurred or may affect the
significance or accuracy of any such information but which are unknown to
Parent.
Available Information. The Company is subject to the information and
reporting requirements of the Exchange Act and in accordance therewith is
obligated to file reports and other information with the Commission relating to
its business, financial condition and other matters. Information, as of
particular dates, concerning the Company's directors and officers, their
remuneration, stock options granted to them, the principal holders of the
Company's securities, any material interests of such persons in transactions
with the Company and other matters is required to be disclosed in proxy
statements distributed to the Company's shareholders 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 at 450 Fifth Street, N.W., Room 1024, Judiciary Plaza, Washington, D.C.
20549. Copies may be obtained by mail, upon payment of the Commission's
customary charges, by writing to its principal office at 450 Fifth Street, N.W.,
Room 1024, Judiciary Plaza, Washington, D.C. 20549. The Commission also
maintains an Internet site on the World Wide Web that contains reports, proxy
statements and other information. The address of that site is
http://www.sec.gov.
8. CERTAIN INFORMATION CONCERNING PARENT AND THE PURCHASER. The Purchaser
is a newly incorporated Delaware corporation organized in connection with the
Offer and the Merger and to date has engaged in no activities other than those
incident to its formation and the commencement of the Offer. The Purchaser is an
indirect, wholly owned subsidiary of Parent. The principal offices of the
Purchaser are located at 6555 West Good Hope Road, Milwaukee, Wisconsin 53223,
telephone number 414-358-6600. Until immediately prior to the time that the
Purchaser will purchase Shares pursuant to the Offer, it is not anticipated that
the Purchaser will have any significant assets or liabilities or engage in
activities other than those incident to its formation and capitalization and the
transactions contemplated by the Offer and the Merger. Because the Purchaser is
newly formed and has minimal assets and capitalization, no meaningful financial
information regarding the Purchaser is available.
Parent is a company organized under the laws of the State of Wisconsin with
its principal offices at 6555 West Good Hope Road, Milwaukee, Wisconsin 53223,
telephone number 414-358-6600. Parent's principal business is the manufacturing
and marketing of high-performance identification solutions and specialty coated
materials. Major product categories include: industrial identification and data
collection products; safety and facility identification products; and specialty
materials.
Certain Other Information. The name, citizenship, business address, present
principal occupation or employment, and material positions held during the last
five years for each of the directors and executive officers of the Purchaser and
Parent are set forth in Schedule I hereto.
Available Information. Parent is subject to the informational requirements
of the Exchange Act and in accordance therewith files periodic reports, proxy
statements and other information with the Commission relating to its business,
financial condition and other matters. Such reports, proxy statements and other
information are available for inspection and copying at the public reference
facilities of the Commission in the same manner as set forth with respect to the
Company in Section 7.
9. FINANCING OF THE OFFER AND THE MERGER. The total amount of funds
required by the Purchaser to purchase all of the outstanding Shares (1,844,513
on a fully diluted basis) is approximately $22.1 million. The Purchaser will
obtain all of such funds from Parent or from one or more direct or indirect
wholly owned subsidiaries of Parent, which currently have these funds in
available cash. This Offer is not subject to a financing condition.
9
<PAGE> 13
10. BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY; THE MERGER
AGREEMENT; SHAREHOLDER OPTION AGREEMENTS.
Background Of The Offer.
David W. Schroeder, Parent's Vice President -- Identification Solutions &
Specialty Tapes, and Richard L. Kalich, former President and CEO of the Company,
have known each other for a number of years and discussed from time to time a
possible strategic transaction between the two companies.
As a result of these prior discussions between Messrs. Schroeder and
Kalich, Mr. Schroeder, Katherine M. Hudson, President and CEO, Donald P. DeLuca,
former Chief Financial Officer and Gary L. Johnson, Vice President -- Corporate
Development, all of Parent, met with Mr. Kalich and Ralph E. Crump, Robert W.
Ham and David C. Sturdevant, all of whom were directors of the Company, and
Marjorie Crump, the Company's Assistant Corporate Secretary, in Connecticut on
September 7, 1995 to explore the feasibility of a merger or other business
combination between the Company and Parent. No agreement on price could be
reached during this meeting, which lasted most of the day, because the Company
informed Parent that it wanted $20.00 per share.
Periodic conversations between Mr. Schroeder and Mr. Kalich continued to
take place over the next four years, but none of these discussions led to any
concrete actions or specific proposals by either party.
In late August 1999, Mr. Ham, still a director of the Company, was in
contact with Mr. Schroeder of Parent, regarding a matter unrelated to the
Company. During the course of their conversation, Mr. Schroeder inquired of Mr.
Ham if the Company would have any interest in discussing a possible merger or
other business combination with Parent. Messrs. Ham and Schroeder agreed to
schedule a follow-up meeting.
In early September 1999, Messrs. Schroeder and Ham agreed to meet on
October 6, 1999, at a trade show in Chicago, Illinois to discuss the possibility
of a merger or other business combination between Parent and the Company.
On October 6, 1999, at the trade show, Mr. Schroeder met with Mr. Ham and
Douglas T. Granat, also a director of the Company, to discuss the possibility of
a transaction between Parent and the Company. Messrs. Ham and Granat indicated
that any transaction must provide value to the Company's shareholders. They also
indicated that any offer or proposal would be given due consideration by the
entire Board of Directors of the Company. No understandings or agreements were
reached during this discussion. However, Mr. Granat indicated that the price
would need to be somewhere in the low teens. Mr. Schroeder invited Messrs.
Granat and Ham to visit Parent to get a better understanding of Parent's
business as a basis for further discussions regarding a possible merger or other
business combination with Parent.
On October 19, 1999, Messrs. Schroeder, Johnson and Matthew O. Williamson,
Vice President -- Identification Solutions and Specialty Tapes -- North America,
all of Parent, met with Messrs. Granat and Ham at Parent's headquarters in
Milwaukee to discuss a possible strategic transaction between Parent and the
Company. At this meeting, Mr. Schroeder presented a verbal non-binding
expression of interest in exploring a potential acquisition of all of the
Company's issued and outstanding shares of common stock for cash at a price
ranging from $9.00 to $9.50 per share, subject to customary conditions. Messrs.
Granat and Ham reiterated that any transaction must provide value to the
Company's shareholders and indicated that the proposed price range was below
their expectations. Mr. Granat also indicated that another party was discussing
the potential purchase of the Company. Messrs. Schroeder, Williamson and Johnson
then expressed an interest in learning more about the Company and requested an
on-site visit with a view toward potentially raising its indication of interest
as to an acquisition price. While no formal understandings or agreements were
reached during this discussion, the parties agreed to continue their dialogue
during a visit by Parent's representatives to the Company's headquarters in
Bellows Falls, Vermont.
On November 2, 1999, Parent sent a Confidentiality Agreement to Steven D.
Anton, President and CEO of the Company. Mr. Anton signed the Confidentiality
Agreement on November 2, 1999, and returned it to Parent on November 3, 1999.
Parent then sent Mr. Anton a list of questions seeking further information on
the Company's operations including sales growth, printer applicator historical
sales and sales projections, sales
10
<PAGE> 14
channels and sales force, US Postal Service contract, international activities,
new product development capabilities, marketing activities, manufacturing
capabilities and capacity, facilities and number of employees. Mr. Anton
responded to these questions on November 5, 1999.
On November 9, 1999, Messrs. Schroeder, Williamson and Johnson visited the
Company and met with Mr. Anton for purposes of evaluating the Company and to
form an opinion regarding a possible strategic transaction. During this visit,
they toured the Company's Vermont and New Hampshire facilities with Mr. Anton,
discussed Mr. Anton's response to Parent's inquiries and discussed other
relevant matters pertaining to the Company's operations. Parent presented no new
indication of a possible purchase price at this meeting. After returning from
this trip, Parent prepared a valuation of the Company taking into consideration
various potential cost saving synergies as well as the potential for future
sales growth.
On or about November 18, 1999, Mr. Schroeder telephonically presented
Parent's non-binding expression of interest to purchase the Company's issued and
outstanding shares at $11.00 per share. Mr. Granat responded that he believed a
higher offer was warranted.
On November 29, 1999, Mr. Granat informed Mr. Schroeder that the Company
had received a non-binding verbal offer higher than Parent's last nonbinding
indication of interest at $11.00 per share, but did not identify the offeror.
Mr. Granat stated that the Company's board was scheduled to meet telephonically
on December 2, 1999, to discuss both offers and requested that Parent present
its final offer prior to this meeting.
On December 1, 1999, Parent's management met with the Finance Committee of
its Board of Directors seeking approval to extend a revised nonbinding
indication of interest to acquire the Company for $12.00 per share in cash. The
Finance Committee verbally approved the revised indication of interest during
this meeting. Formal, written approval from Parent's entire Board of Directors
was obtained during the first week of December 1999.
On December 2, 1999, Mr. Schroeder sent a letter to Mr. Granat outlining
the terms of Parent's non-binding expression of interest concerning the possible
acquisition of the Company by Parent for $12.00 per share in cash. Parent
understands that Mr. Granat presented this information to the Company's entire
Board of Directors on December 2, 1999.
On December 3, 1999, Mr. Granat advised Parent that the Company's board was
prepared to accept Parent's indication of interest of $12.00 per share, subject
to negotiation and execution of a definitive merger agreement. Parent indicated
that as a pre-condition to making a public announcement regarding the possible
acquisition of the Company by Parent and in order to induce Parent to enter into
negotiations with the Company concerning a definitive merger agreement, Parent
wished to acquire irrevocable options from the holders of greater than 50% of
the Company's issued and outstanding shares.
Commencing on December 3, 1999, and continuing through December 9, 1999,
Parent's representatives negotiated with a limited number of shareholders to
gain such persons' commitment to tender their shares at the $12.00 per share
price in Parent's eventual tender offer. During such time, draft option
agreements were prepared, commented on and revised by respective counsel for
each of Parent and the Company.
On December 9, 1999, the Company's Board of Directors unanimously approved
the Shareholder Option Agreements, and, subject to the ratification of the final
terms thereof, the Merger Agreement, the Offer and the Merger.
On December 9, 1999, and following the above approval by the Company's
Board of Directors, Parent entered into the Shareholder Option Agreements with
nine persons. On December 9, 1999, Parent and the Company issued a joint press
release announcing that the companies were discussing a possible acquisition at
$12.00 per share in cash.
From early December 1999 through early February 2000, representatives of
Parent and its advisors conducted a due diligence investigation of the Company.
On December 13, 1999, Parent submitted to the Company a proposed Merger
Agreement and the parties and their legal advisors began to negotiate the terms
of the proposed transaction.
11
<PAGE> 15
On February 11, 2000, (i) the Company, Parent and Purchaser entered into
the Merger Agreement, (ii) Parent issued a press release announcing the
execution of the Merger Agreement and that Parent and the Purchaser expected to
commence the Offer no later than February 22, 2000, and (iii) Parent and the
Purchaser filed a Tender Offer Statement on Schedule TO solely for the purpose
of filing the press releases issued on December 9, 1999, and February 11, 2000.
Contacts With The Company. Except for the Shareholder Option Agreements or
as otherwise set forth in this Offer to Purchase none of the Purchaser, Parent
or, to the best of their knowledge, any of the persons listed in Schedule I
hereto, or any associate or majority-owned subsidiary of such persons,
beneficially owns any equity security of the Company, and none of the Purchaser,
Parent or, to the best of their knowledge, any of the other persons referred to
above, or any of the respective directors, executive officers or subsidiaries of
the Purchaser or Parent, has effected any transaction in any equity security of
the Company during the past 60 days.
Except for the Shareholder Option Agreements or as otherwise set forth in
this Offer to Purchase, none of the Purchaser, Parent, or, to the best of their
knowledge, any of the persons listed in Schedule I hereto, has any contract,
arrangement, understanding or relationship with any other person with respect to
any securities of the Company, including, without limitation, any contract,
arrangement, understanding or relationship concerning the transfer or the voting
of any securities of the Company, joint ventures, loan or option arrangements,
puts or calls, guaranties of loans, guaranties against loss or the giving or
withholding of proxies. Except as set forth in this Offer to Purchase, none of
the Purchaser, Parent or, to the best of their knowledge, any of the persons
listed in Schedule I hereto has had any transactions with the Company, or any of
its executive officers, directors or affiliates, that would require reporting
under the rules of the Commission.
Except for the Shareholder Option Agreements or as otherwise set forth in
this Offer to Purchase, there have been no contacts, negotiations or
transactions between the Purchaser or Parent, any of their respective
subsidiaries, or, to the best of their knowledge, any of the persons listed in
Schedule I hereto, on the one hand, and the Company or its executive officers,
directors or affiliates, on the other hand, concerning a merger, consolidation
or acquisition, tender offer or other acquisition of securities, election of
directors, or a sale or other transfer of a material amount of assets that would
require reporting under the rules of the Commission.
Transactions Between Parent and the Company. During its fiscal years ended
July 31, 1999 and 1998, Parent, through one of its subsidiaries, purchased
approximately $537,000 and $729,000 of preprinted labels from the Company. These
purchases are continuing in the present fiscal year and are expected to not
exceed $500,000. All such purchases were at then-current market prices.
The Merger Agreement. The following is a summary of the Merger Agreement, a
copy of which is filed as an Exhibit to the Tender Offer Statement on Schedule
TO on file with the Commission. Such summary is qualified in its entirety by
reference to the Merger Agreement.
The Offer. The Merger Agreement provides for the commencement of the Offer
no later than five business days after the initial public announcement of the
execution of the Merger Agreement. The obligation of the Purchaser to accept for
payment Shares tendered pursuant to the Offer is subject, among other things, to
the satisfaction of the Minimum Condition. See Introduction. The Purchaser and
Parent expressly reserve the right to waive any condition to the Offer
(including the Minimum Condition) without the consent of the Company; provided,
however, that neither the Purchaser nor Parent will, without the prior written
consent of the Board of Directors of the Company, make any change in the Offer
which decreases the price per Share or changes the form of consideration payable
in the Offer, decreases the number of Shares sought pursuant to the Offer,
imposes conditions to the Offer in addition to those set forth in the Merger
Agreement, or modifies or amends any terms of the Offer in a manner adverse to
the Company's shareholders. The Purchaser and Parent have the right to (i)
extend the Offer if at the then scheduled Expiration Date any of the conditions
to the Offer shall not have been satisfied or waived, until such conditions are
satisfied or waived, (ii) extend the Offer for any period required by any rule,
regulation, interpretation or position of the Commission, United States
Department of Justice or United States Federal Trade Commission or the staff of
any such governmental entities applicable to the Offer, and (iii) extend the
Offer for any reason on one or more occasions for an
12
<PAGE> 16
aggregate period of not more than 30 business days (for all such extensions)
beyond the latest Expiration Date that would otherwise be permitted under (i) or
(ii) of this sentence.
Approval of the Company's Board of Directors. The Board of the Directors of
the Company has unanimously determined that the Offer and the Merger, taken
together, are fair to and in the best interests of the Company's shareholders,
and has approved and adopted the Merger Agreement and the transactions
contemplated thereby, including the Offer and the Merger. The Company's Board of
Directors also unanimously resolved to recommend that the Company's shareholders
tender their Shares to the Purchaser in this Offer and, if necessary, approve
and adopt the Merger Agreement and the Merger. The Company has agreed to file
with the Commission a Solicitation/Recommendation Statement on Schedule 14D-9
(the "Schedule 14D-9") containing the recommendation of the Board of Directors
that the Company's shareholders tender their Shares, and mail the Schedule 14D-9
to the Company's shareholders on or about the date of the commencement of the
Offer.
Board Control. The Merger Agreement provides that promptly following the
purchase by the Purchaser pursuant to the Offer or otherwise of such number of
Shares as represents at least a majority of the outstanding shares, Purchaser
shall be entitled to designate such number of directors, rounded up to the next
whole number, on the Board of Directors of the Company as will give Purchaser
representation on the Board of Directors of the Company equal to the product of
the number of directors on the Board of Directors of the Company and the
percentage that such number of Shares so purchased bears to the number of Shares
outstanding. The Company agreed, upon request of Purchaser, promptly to increase
the size of the Board of Directors of the Company or use its best efforts to
secure the resignations of such number of directors as is necessary to provide
Purchaser with such level of representation and to cause Purchaser's designees
to be so elected. There are currently four directors of the Company.
The Company's obligation to appoint the Purchaser's designees to the Board
of Directors of the Company following the purchase by the Purchaser of Shares
pursuant to the Offer is subject to Section 14(f) of the Exchange Act and Rule
14f-1 thereunder (which require that information be furnished to the Company's
shareholders about Purchaser's nominees to the Company's Board of Directors not
later than 10 days prior to the time such nominees take office as directors).
The Company has agreed to take all actions required under such section and rule
in order to effect any such election or appointment of the Purchaser's designees
and to include information about such persons in the Schedule 14D-9. At this
time, Purchaser intends to designate four persons to the Company's Board of
Directors, following the resignation of all four of the Company's current
directors. The Company has indicated that it will include the names and ages of,
and biographical information about, Purchaser's four designees in the Schedule
14D-9.
From and after the time, if any, that Purchaser's designees are appointed
to the Company's Board of Directors and prior to the Effective Time of Merger,
and so long as there is at least one Continuing Director (as defined below), any
amendment of the Merger Agreement requiring action by the Company's board, any
extension of time for performance of any of the obligations of Parent or the
Purchaser thereunder, or any waiver of any condition under the Merger Agreement
for the benefit of the Company may be effected only by the action of a majority
of the directors of the Company then in office who were directors of the Company
on the date of the Merger Agreement (the "Continuing Directors"), which action
will be deemed to constitute the action of the full Board of Directors of the
Company; provided, however, that in no event may the Company, Parent or the
Purchaser amend the provision of the Merger Agreement regarding the continuation
of indemnification and insurance for the Company's officers and directors.
Nothing in this provision prohibits any of the Purchaser's designees to the
Company's Board of Directors from voting on the termination of the Merger
Agreement.
The Merger. The Merger Agreement provides that, upon the terms and subject
to the conditions thereof, and in accordance with the DGCL, at the Effective
Time, the Purchaser shall be merged with and into the Company. As a result of
the Merger, the separate corporate existence of the Purchaser will cease and the
Company will continue as the Surviving Corporation and will become an indirect,
wholly owned subsidiary of Parent.
13
<PAGE> 17
Upon consummation of the Merger, each issued and then outstanding Share
(other than any Shares held in the treasury of the Company, or owned by the
Purchaser, Parent or any direct or indirect wholly owned subsidiary of Parent or
of the Company, or dissenting shares) shall be automatically converted into, and
exchanged for, the right to receive the Merger Consideration.
The Merger Agreement provides that the directors of the Purchaser
immediately prior to the Effective Time will be the initial directors of the
Surviving Corporation and that the officers of the Purchaser immediately prior
to the Effective Time will be the initial officers of the Surviving Corporation.
The Merger Agreement also provides that, at the Effective Time, the Certificate
of Incorporation and Bylaws of the Purchaser, each as in effect immediately
prior to the Effective Time, will be the Certificate of Incorporation and Bylaws
of the Surviving Corporation.
The Merger is subject to the satisfaction of the following conditions
(which may be waived, where permissible): (a) there shall not be in effect any
statute, rule, regulation, executive order, decree, ruling or injunction or
other order of a court or governmental or regulatory agency or competent
jurisdiction directing that the transactions contemplated in the Merger
Agreement not be consummated; provided, however, that prior to invoking this
condition each party shall use its reasonable best efforts to have any such
decree, ruling, injunction or order vacated; (b) all governmental consents,
orders and approvals legally required for the consummation of the Merger and the
transactions contemplated by the Merger Agreement shall have been obtained and
be in effect at the Effective Time; (c) all necessary requirements of the HSR
Act shall have been complied with and any "waiting periods" applicable to the
Merger and to the transactions described in the Merger Agreement which are
imposed by the HSR Act shall have expired prior to the closing date for the
transactions described in the Merger Agreement or shall have been terminated by
the appropriate agency; (d) the Purchaser shall have purchased pursuant to the
Offer all of the Shares validly tendered and not withdrawn; and (e) to the
extent required by applicable law, the Merger Agreement, the Merger and the
transactions contemplated by the Merger Agreement shall have received the
requisite approval and authorization of the Company's shareholders (with Parent
and the Purchaser and their respective affiliates required to vote all of their
Shares in favor of the Merger).
Stock Options and Restricted Stock Awards. From and after the date and time
that the Company executed the Merger Agreement, the Company is prohibited by the
Merger Agreement from granting any options or other rights to acquire Shares.
The Merger Agreement provides that, prior to the consummation of the Offer, the
Company shall take all actions necessary or desirable (including obtaining all
required consents from optionees) to provide for the cancellation, effective at
the Effective Time, of all the outstanding stock options (the "Existing Stock
Options") granted under any stock option, employment or similar plan or
arrangement of the Company or under any such similar plan or agreement which
benefits any person providing services to the Company (the "Stock Option
Plans"), without any payment therefore except as otherwise provided in the
Merger Agreement. At the Effective Time (or such earlier time as Parent shall
designate), each holder of an Existing Stock Option will be entitled, in
settlement therefor, to an amount in cash (subject to any applicable withholding
taxes that may apply to payments made in connection with the performance of
services) equal to the product of (i) the excess of $12.00 over the per share
exercise or purchase price of such Existing Stock Option and (ii) the number of
Shares subject to such Existing Stock Option (the "Option Consideration"). The
Stock Option Plans terminate as of the Effective Time and any and all rights
under any provisions in any other plan, program or arrangement providing for the
issuance or grant of any other interest in respect of the capital stock of the
Company shall be canceled. Notwithstanding the foregoing, no holder of an
Existing Stock Option will be entitled to any payment with respect to any such
Existing Stock Option under the Merger Agreement or otherwise unless he or she
delivers to Purchaser a consent to the cancellation of such Existing Stock
Option in a form to be prescribed by Purchaser.
Prior to the Effective Time, the Merger Agreement provides that the Company
shall take all necessary and appropriate actions (including obtaining all
applicable consents) to provide that, upon the Effective Time, each then
outstanding restricted stock award in respect of Shares and any other stock
based award (the "Stock Awards") which is subject to any vesting requirement and
which was issued pursuant to a Stock Option Plan or any other plan or
arrangement (other than any Existing Stock Option) shall, whether or not then
exercisable or vested, become 100% vested. At the Effective Time, a holder of
Shares underlying any such
14
<PAGE> 18
Stock Award shall be entitled to receive the Merger Consideration (subject to
any applicable withholding taxes that may apply to payments in connection with
the performance of services), upon the surrender of the certificate representing
such Shares. Notwithstanding the foregoing, no holder of a Stock Award will be
entitled to any payment with respect to such Stock Award under the Merger
Agreement or otherwise unless he or she delivers to Purchaser a consent to the
cancellation of such Stock Award in a form to be prescribed by Purchaser.
Acquisition Proposals. The Company has agreed that neither it nor its
officers, directors, employees, agents, affiliates or representatives shall,
directly or indirectly, (a) initiate, solicit or encourage any inquiries
concerning an Acquisition or an Acquisition Proposal (each as defined below);
(b) engage in any negotiations concerning, or provide any confidential
information or data to, or have any discussions with, any person relating to an
Acquisition or an Acquisition Proposal; (c) facilitate any effort or attempt to
make or implement an Acquisition Proposal; or (d) consummate, agree or commit to
consummate any Acquisition or Acquisition Proposal. The term "Acquisition" means
any or all of the following, other than the Offer and the Merger: a merger,
share exchange, consolidation, reorganization, combination or similar
transaction involving the Company; a purchase, exchange or tender offer for
twenty percent (20%) or more of the outstanding Shares; the purchase, lease or
other acquisition of all or any significant portion of the assets or any equity
interest (or any option (other than Existing Stock Options), warrant or security
convertible into any equity interest) of the Company; or any other transaction
the consummation of which could reasonably be expected to impede, interfere
with, prevent or delay the Offer or the Merger. The term "Acquisition Proposal"
means any inquiry, request for information, expression of interest, indication
of a desire to have discussions, or the making of any proposal by any person
concerning an Acquisition.
Notwithstanding the foregoing, the Board of Directors of the Company may
furnish information about the Company to a person making a Superior Proposal (as
defined below) pursuant to a confidentiality agreement in customary form and
participate in discussions and negotiations regarding such Superior Proposal if
the Board of Directors of the Company determines in good faith, upon the written
advice of outside legal counsel, that the failure to take such action would
violate its fiduciary duties to the Company's shareholders under applicable law.
In addition, the Company will be permitted to take and disclose to the Company's
shareholders a position contemplated by Rules 14d-9 and 14e-2(a) under the
Exchange Act with respect to an Acquisition Proposal by means of a tender offer.
The Company must notify Parent orally and in writing of any Acquisition Proposal
within 24 hours from the receipt thereof, specifying all of the material terms
and conditions of such Acquisition Proposal and identifying the person making
such Acquisition Proposal, keep Parent informed of the status and all material
developments and information regarding the Acquisition Proposal, and give Parent
five business days' prior notice and an opportunity to negotiate with the
Company before entering into, executing or agreeing to any Acquisition or
Acquisition Proposal.
The term "Superior Proposal" means a written, bona fide, unsolicited
Acquisition Proposal by any person (other than Parent) which the Board of
Directors of the Company determines in good faith, and in the exercise of
reasonable judgment, to be more favorable to the Company and its shareholders
than the Offer and the Merger from a financial point of view, which proposal is
capable of being consummated without undue delay and has the requisite financing
committed to it or, as determined in good faith, and in the exercise of
reasonable judgment, is reasonably capable of being financed by such person.
Best Efforts. The Merger Agreement provides that, subject to its terms and
conditions, the Company, Parent and the Purchaser will use their reasonable best
efforts to take all actions necessary and proper under applicable law to
consummate the Merger, including using their reasonable best efforts to prevent
any injunction by a government entity relating to consummation of the
transactions contemplated by the Merger Agreement.
Directors And Officers Indemnification And Insurance. Pursuant to the
Merger Agreement, Parent has agreed that for a period ending not sooner than the
third anniversary of the Effective Time, the Surviving Corporation will maintain
all rights to indemnification existing on the date of the Merger Agreement in
favor of the present and former directors and officers of the Company as
provided in the Company's Certificate of Incorporation and Bylaws, in each case
as in effect on the date of the Merger Agreement, and that during such
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period, the Certificate of Incorporation and Bylaws of the Surviving Corporation
will not be amended or repealed or otherwise modified in any manner that would
adversely affect the rights of indemnity afforded to the present and former
directors and officers of the Company unless required by law; provided, however,
that if any claim is asserted within such three-year period, all rights to
indemnification in respect of such claim shall continue until disposition of
such claim.
Under the Merger Agreement, Parent and the Surviving Corporation will
maintain in effect for not less than three years from the Effective Time the
current directors' and officers' liability insurance policies and fiduciary
insurance policies maintained by the Company (provided that Parent may
substitute policies of substantially the same coverage containing terms and
conditions which are no less advantageous to the Company's present or former
directors or officers or other employees covered by such policies prior to the
Effective Time) with respect to matters occurring at or prior to the Effective
Time; provided, however, that in no event will Parent or the Surviving
Corporation be required to pay an annual premium for such insurance greater than
125% of the last annual premium paid prior to the date thereof by the Company
for such insurance.
Termination And Termination Fee. The Merger Agreement provides that it may
be terminated and the Merger and the Offer may be abandoned at any time prior to
the Effective Time: (a) by mutual written agreement duly authorized by the
Boards of Directors of Parent, the Purchaser and the Company, respectively; (b)
by Parent or the Company if (i) any court of competent jurisdiction or any other
governmental body or regulatory authority shall have issued an order, decree or
ruling or taken any other action permanently restraining, enjoining or otherwise
prohibiting the Offer or the Merger and such order, decree, ruling or other
action shall have become final and non-appealable, or (ii) the Purchaser shall
not have purchased Shares pursuant to the Offer on or before June 30, 2000; (c)
by the Company if (i) the Board of Directors of the Company shall have
determined in good faith, upon the written advice of outside legal counsel, that
its fiduciary duties require the termination of the Merger Agreement in order to
pursue a Superior Proposal, or (ii) the Purchaser shall have failed to commence
the Offer within five business days following the date of the Merger Agreement
or terminated the Offer without purchasing Shares pursuant to the Offer; (d) by
the Company if either Parent or the Purchaser shall have breached in any
material respect any of its representations, warranties, covenants or other
agreements contained in the Merger Agreement which breach is incapable of being
cured or, if curable, shall not have been cured within thirty (30) days after
the giving of written notice to Parent and the Purchaser; (e) by Parent if the
Company shall have breached in any material respect any of its representations,
warranties, covenants or other agreements contained in the Merger Agreement
(except to the extent any such breach gives rise to the termination rights
described in (f)(ii) below), which breach is incapable of being cured or, if
curable, shall not have been cured within thirty (30) days after the giving of
written notice to the Company; or (f) by Parent and the Purchaser, if (i) the
Board of Directors of the Company has withdrawn, or materially modified or
changed its favorable recommendation of the Offer, the Merger or the Merger
Agreement, or shall have approved or recommended any Acquisition Proposal or
Acquisition, (ii) the Company shall have breached its obligations to Parent
concerning an Acquisition Proposal, or (iii) the Purchaser shall have otherwise
terminated the Offer in accordance with the Merger Agreement without purchasing
Shares pursuant to the Offer.
In the event of the termination of the Merger Agreement and abandonment of
the Offer, the Merger Agreement provides that all further obligations of the
parties under or pursuant to the Merger Agreement shall terminate without
further liability thereunder on the part of any party except under the
provisions of the Merger Agreement related to fees and expenses described below
and under certain other provisions of the Merger Agreement which survive
termination, provided that each party to the Merger Agreement will retain any
and all remedies which it may have for breach of contract provided by law.
The Merger Agreement provides that upon the occurrence of a Special Event
(as defined below) the Company will pay $25,000 (the "Termination Fee") to
Parent and will reimburse Parent for all documented out-of-pocket costs, fees
and expenses incurred by Parent and the Purchaser in connection with the
preparation and negotiation of the Merger Agreement and the transactions
contemplated thereby. The Termination Fee shall be payable to Parent in
immediately available funds within three business days following the occurrence
of the Special Event. If the Company fails to timely pay the Termination Fee (or
any
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portion thereof) due Parent pursuant to this provision, the Termination Fee (or
portion thereof) will accrue interest at the lesser of the rate of fifteen
percent (15%) per annum or the maximum amount allowed by law until paid.
The term "Special Event" means the occurrence of any of the following on or
prior to December 9, 2000: (a) a person unrelated to Parent shall have
consummated, or shall have publicly announced or proposed and subsequently
consummated, a tender or exchange offer for Shares representing, on a fully
diluted basis, 20% of more of the outstanding Shares; (b) a person unrelated to
Parent shall have consummated an Acquisition or the Company shall have entered
into an agreement with respect to an Acquisition; (c) the Company shall have
terminated the Merger Agreement for the purpose of pursuing an Acquisition
Proposal; (d) Parent shall have terminated the Merger Agreement due to the
Company's breach of its obligations to notify Parent of an Acquisition Proposal
and to negotiate with Parent with respect thereto; (e) the Board of Directors of
the Company shall have withdrawn or materially modified or changed its favorable
recommendation of the Offer, the Merger or the Merger Agreement (whether or not
Parent shall have terminated the Merger Agreement); (f) Parent and Purchaser
shall have terminated the Merger Agreement due to Purchaser's termination of the
Offer pursuant to paragraphs (b), (e), (g) or (h) of Section 14 of this Offer to
Purchase; or (g) the Company shall have terminated the Merger Agreement due to
Purchaser's termination of the Offer pursuant to paragraphs (b), (e), (g) or (h)
of Section 14 of this Offer to Purchase.
The Merger Agreement also contains other restrictions as to the conduct of
business by the Company pending the Merger, as well as representations and
warranties of each of the parties customary in transactions of this kind.
The Shareholder Option Agreements. The Shareholder Option Agreements were
entered into for the purpose of inducing Parent to enter into negotiations for
the acquisition of the Company on the terms and conditions set forth in the
Merger Agreement and as a pre-condition to making a public announcement
regarding the possible acquisition of the Company by Parent. Pursuant to the
Shareholder Option Agreements, each Shareholder has agreed to validly tender in
the Offer and not withdraw all of the Options Shares beneficially owned by such
Shareholder (including any subsequently acquired Shares with respect to each
Group Shareholder), which in the aggregate constitute approximately 57.9% of the
Shares computed in accordance with Rule 13d-3(d)(1)(i) under the Exchange Act.
Each Shareholder has granted Parent an irrevocable Option to purchase the
Option Shares (including any subsequently acquired Shares with respect to the
Group Shareholders) at $12.00 per Share. The Shareholder Option Agreements
provide that the Options are exercisable at any time, in whole or in part, after
(i) February 7, 2000, if the Merger Agreement has not been signed; (ii) the
occurrence of any event as a result of which Parent is entitled to receive the
Termination Fee under the Merger Agreement; or (iii) such time as a Shareholder
shall have breached the Merger Agreement. Each Option that becomes exercisable
shall remain exercisable until the later of (i) the date that is 120 days after
the date such Option becomes exercisable or (ii) the date that is 60 days after
the date that all waiting periods under the HSR Act applicable to the Merger
and/or purchase of the Option Shares shall have expired or been terminated;
provided that if at the expiration of such period there shall be in effect any
injunction or other order issued by any federal, state, local or foreign
governmental unit or agency prohibiting the exercise of such Option, the
exercise period shall be extended until 60 days after the date that no such
injunction or order is in effect.
Each Shareholder has agreed that at any meeting of the shareholders of the
Company or in connection with any written consent of the shareholders of the
Company, such Shareholder will vote (or cause to be voted) all Option Shares
(including any subsequently acquired Shares with respect to each Group
Shareholder), (i) in favor of the Merger Agreement, the Merger and any other
actions contemplated by the Merger Agreement and the applicable Shareholder
Option Agreement and (ii) against any Acquisition Proposal and against any
action or agreement that would impede, frustrate, prevent or nullify the
Shareholder Option Agreements, or result in a breach in any respect of any
covenant, representation or warranty or any other obligation or agreement of the
Company under the Merger Agreement or which would result in any of the
conditions set forth in the Merger Agreement not being fulfilled. Each
Shareholder irrevocably granted to and appointed Parent as such Shareholder's
proxy and attorney-in-fact to vote the Option Shares owned by such
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<PAGE> 21
Shareholder or to grant a consent or approval in respect of such Option Shares
(including any subsequently acquired Shares with respect to the Group
Shareholders), in the manner specified above.
Each Shareholder has agreed that, except as provided by the Merger
Agreement and the applicable Shareholder Option Agreement, such Shareholder will
not (i) offer to transfer, transfer or consent to any transfer, (ii) enter into
any contract, option or other agreement or understanding with respect to any
transfer, (iii) grant any proxy, power-of-attorney or other authorization or
consent or (iv) deposit into a voting trust or enter into a voting agreement or
arrangement, each with respect to all of the Option Shares (including any
subsequently acquired Shares with respect to the Group Shareholders)
beneficially owned by such Shareholder.
Each Shareholder has agreed that such Shareholder shall not encourage,
solicit, initiate or participate in any way in any discussion or negotiation
with, or provide information or otherwise take any action to assist or
facilitate, any person concerning any Acquisition Proposal. Each Shareholder has
agreed to cease any such existing activities and to immediately communicate to
Parent the terms of any Acquisition Proposal.
Each Shareholder has waived any rights of appraisal or rights to dissent
from the Merger.
The Shareholder Option Agreements with respect to each Shareholder shall
terminate upon the earliest of (i) the Effective Time, (ii) December 9, 2000, or
(iii) the termination of the Merger Agreement, unless, in the case of clause
(iii), Parent is or may be entitled to receive the Termination Fee under the
Merger Agreement following such termination or prior to such termination such
Shareholder has breached certain specified agreements contained in the
applicable Shareholder Option Agreement.
The description of the Shareholder Option Agreements set forth herein does
not purport to be complete and is qualified in its entirety by the provisions of
Shareholder Option Agreement #1 and Shareholder Option Agreement #2, copies of
which were filed as Exhibits 1 and 2, respectively, to Parent's Schedule 13D
filed with the Commission on December 9, 1999.
Confidentiality Agreement. On November 2, 1999, the Company and Parent
entered into a Confidentiality Agreement (the "Confidentiality Agreement")
pursuant to which the Company and Parent and each of their respective
representatives agreed to keep confidential certain information concerning the
other party which was furnished to it by the other party (the "Evaluation
Material"). Pursuant to the Confidentiality Agreement, the Company, Parent and
their respective subsidiaries and affiliates having had access to the Evaluation
Material, agreed not to solicit any employee of the other during the term of the
Confidentiality Agreement and for a period of twelve months following notice by
either party that it does not wish to proceed with a transaction between the
parties.
The description of the Confidentiality Agreement set forth herein does not
purport to be complete and is qualified in its entirety by the provisions of
Confidentiality Agreement, a copy of which is filed as an Exhibit to the Tender
Offer Statement on Schedule TO concerning the Offer on file with the Commission.
11. PURPOSE OF THE OFFER; PLANS FOR THE COMPANY AFTER THE OFFER AND THE
MERGER.
Purpose Of The Offer. The purpose of the Offer and the Merger is to enable
Parent to acquire control of, and the entire equity interest in, the Company.
Following the consummation of the Offer, the Purchaser will effect the Merger,
pursuant to which each then issued and outstanding Share (excluding Shares owned
by the Purchaser, Parent or any direct or indirect subsidiary of Parent or the
Company, Shares held in the treasury of the Company and Shares owned by
shareholders who perfect their dissenters' rights under the DGCL, if any), will
be converted into the right to receive an amount in cash equal to the price per
Share paid pursuant to the Offer, and the Company will become an indirect,
wholly owned subsidiary of Parent. The Offer, as the first step in the
acquisition of the Company, is intended to facilitate the acquisition of all
outstanding Shares. The Merger, as the second step in the acquisition of the
Company, is intended to facilitate the acquisition of any Shares not acquired by
the Purchaser in the Offer. Consummation of the Merger will require, except as
set forth below, the affirmative vote of the holders of a majority of the
outstanding Shares entitled to vote upon such matter.
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Under certain circumstances, the Merger could be consummated without the
approval of the Company's shareholders. In particular, the DGCL provides that if
a corporation holds 90% or more of the outstanding shares of each class of stock
of a subsidiary corporation, the corporation may merge with the subsidiary upon
approval of the corporation's board of directors and execution, acknowledgment
and filing of a certificate of ownership and merger and upon complying with
certain notice requirements, but without approval of the shareholders of the
subsidiary (a "Short-Form Merger"). Accordingly, if the Purchaser owns 90% or
more of the outstanding Shares after consummation of the Offer, a Short-Form
Merger could be effected by action of the Board of Directors of the Purchaser
without the approval of the Company's shareholders. Even if the Purchaser does
not own 90% of the outstanding Shares following consummation of the Offer,
Parent and the Purchaser could seek to purchase additional Shares in the open
market or otherwise in order to reach the 90% threshold and effect a Short-Form
Merger. The per Share consideration paid for any Shares so acquired may be
greater or less than that paid in the Offer. Parent and the Purchaser presently
intend to effect a Short-Form Merger if permitted to do so under the DGCL. In
addition, the DGCL and the Company's Bylaws provide that any action that is
required to or may be taken at any annual or special meeting of shareholders of
a corporation may be taken without a meeting, without prior notice and without a
vote, if a consent or consents in writing, setting forth the action so taken,
shall be signed by holders of outstanding stock of the corporation having not
less than the minimum number of votes that would be necessary to authorize or
take such action at a meeting at which all shares entitled to vote thereon were
present and voted. Accordingly, if Purchaser owns more than a majority of the
outstanding Shares after the consummation of the Offer, the Merger could be
effected by a written consent action of the Purchaser without the approval of
the Company's other shareholders. If, following the Offer, Purchaser owns more
than a majority of the outstanding Shares, but less than 90% of the outstanding
Shares, Parent and Purchaser presently intend to effect the Merger by a written
consent action.
Plans For The Company After The Offer And The Merger. In connection with
the Offer, Parent has reviewed, and will continue to review, various possible
business strategies in the event that the Purchaser acquires control of the
Company pursuant to the Offer and the Merger, or otherwise, and will continue to
consider and determine what, if any, changes would be desirable in light of the
circumstances which then exist. Parent intends to undertake a thorough review of
the Company's operations and to study the manner in which operations of the two
companies can best be optimized, and will take such actions as a result of this
review as may be appropriate under the circumstances. Parent may also seek to
achieve efficiencies through the consolidation or elimination of duplicative
functions and/or operations. Actions that may be taken by Parent include, among
other things, changes in the Company's business, corporate structure,
Certificate of Incorporation, Bylaws, capitalization, or management.
Except as described in this Offer to Purchase, Parent and the Purchaser
have no present plans or proposals that would result in an extraordinary
corporate transaction, such as a merger, consolidation, reorganization,
liquidation or sale or transfer of a material amount of assets, involving the
Company or any of its subsidiaries, or any material changes in the Company's
present capitalization, dividend policy, employee benefit plans, corporate
structure or business or any material changes or reductions in the composition
of its management or personnel. Following further review of the Company's
businesses, financial records, personnel, operations and other matters, it is
possible such plans and intentions of Parent and the Purchaser may change.
Appraisal Rights. While no appraisal rights are available in connection
with the Offer, Section 262 of the DGCL ("Section 262") provides appraisal
rights to holders of the Shares, subject to the procedures described therein, to
object to the Merger and demand payment of the "fair value" of their Shares in
cash in connection with the consummation of the Merger. Shareholders of the
Company 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 accomplishment or expectation of the
Merger) and to receive payment of such fair value in cash, together with a fair
rate of interest thereon, if any. Any such judicial determination of the fair
value of the Shares could be based upon factors other than, or in addition to,
the price per Share to be paid in the Merger and 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 Merger.
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The foregoing summary of the rights of dissenting shareholders does not
purport to be a complete statement of the procedures to be followed by
shareholders desiring to exercise their dissenters' rights in connection with
the Merger. The preservation and exercise of dissenters' rights are conditioned
on strict adherence to the applicable provisions of the DGCL.
12. DIVIDENDS AND DISTRIBUTIONS; STOCK ISSUANCES. If on or after February
11, 2000, the Company should (i) issue any additional Shares (except upon the
exercise of Existing Options) or grant any warrants, options or other rights to
subscribe for or acquire any additional Shares or any other shares of capital
stock of the Company, (ii) declare or pay any dividend or make any capital or
surplus distribution of any nature (including special dividends) or directly or
indirectly redeem, purchase or otherwise acquire, split, combine, reclassify the
Shares or any other shares of capital stock of the Company or liquidate in whole
or in part, then Parent and the Purchaser may terminate the Merger Agreement and
refuse to purchase Shares pursuant to the Offer, provided such action has a
Material Adverse Effect (as defined below) on the Company.
13. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES; NASDAQ LISTING AND
EXCHANGE ACT REGISTRATION. The purchase of Shares by the Purchaser pursuant to
the Offer will reduce the number of Shares that might otherwise trade publicly
and may reduce the number of holders of Shares, which could adversely affect the
liquidity and market value of the remaining Shares held by the public.
The Shares are listed on the Nasdaq/SM. According to Nasdaq's published
guidelines the Shares may no longer be included in the Nasdaq/SM if, among other
things, the number of publicly held Shares (excluding Shares held directly or
indirectly by officers, directors and any person who is a beneficial owner of
more than 10% of the Shares) is less than 500,000, the aggregate market value of
publicly held Shares is less than $1,000,000 or there are fewer than 300 round
lots holders. As described below, the Purchaser intends to cause the Company to
terminate its Nasdaq/SM listing and Exchange Act registration if there are fewer
than 300 Shares held of record following consummation of the Offer.
If the Nasdaq/SM were to delist the Shares, the market therefor would be
adversely affected. It is possible that the Shares would be traded on other
securities exchanges or in the over-the-counter market, and that price
quotations would be reported by such exchanges, or through Nasdaq or other
sources. The extent of the public market for the Shares and the availability of
such quotations would, however, depend upon the number of shareholders and/or
the aggregate market value of the 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 and other
factors.
The Shares are currently registered under the Exchange Act. Such
registration may be terminated by the Company upon application to the Commission
if the outstanding Shares are not included for trading in the Nasdaq/SM and if
there are fewer than 300 holders of Shares of record. Termination of
registration of the Shares under the Exchange Act would eliminate the
information required to be furnished by the Company to its shareholders and to
the Commission and would make certain provisions of the Exchange Act, such as
the short-swing profit recovery provisions of Section 16(b) and the requirement
of furnishing a proxy statement in connection with shareholders' meetings
pursuant to Section 14(a) and the related requirement of furnishing an annual
report to shareholders, no longer applicable with respect to the Shares.
Furthermore, the ability of "affiliates" of the Company and persons holding
"restricted securities" of the Company to dispose of such securities pursuant to
Rule 144 under the Securities Act of 1933, as amended, may be impaired or
eliminated. If registration of the Shares under the Exchange Act were
terminated, the Shares would no longer be eligible for Nasdaq reporting. While
the Shares are not currently "margin securities" under the regulations of the
Federal Reserve Board, termination of registration of the Shares under the
Exchange Act would result in the Shares being ineligible for inclusion on the
Federal Reserve Board's list of "margin securities." The Purchaser intends to
cause the Company to apply for termination of registration of the Shares under
the Exchange Act as soon as possible after consummation of the Offer if the
requirements for termination of registration are met.
14. CERTAIN CONDITIONS OF THE OFFER. Notwithstanding any other provision of
the Offer or the Merger Agreement and provided that the Purchaser shall not be
obligated to accept for payment any Shares until (i) expiration of all
applicable waiting periods under the HSR Act and (ii) satisfaction of the
Minimum Condition, the Purchaser shall not be required to accept for payment or,
subject to any applicable rules and
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regulations of the Commission, including Rule 14e-1(c) under the Exchange Act
(relating to the Purchaser's obligation to pay for or return tendered Shares
after termination or withdrawal of the Offer), pay for, or may delay the
acceptance for payment of or payment for, any Shares tendered pursuant to the
Offer, or may, subject to the terms of the Merger Agreement, terminate or amend
the Offer if at any time on or after the date of the Merger Agreement, and at or
before the time of payment for any of such Shares, any of the following
conditions exists:
(a) there shall have occurred and be continuing as of the then
scheduled Expiration Date (i) any general suspension of, or limitation on
prices for, trading in securities on the New York Stock Exchange, or the
Nasdaq National Market, (ii) a declaration of a banking moratorium or any
suspension of payments in respect of banks in the United States, (iii) a
commencement or escalation of a war, armed hostilities or other
international or national calamity directly involving the United States,
(iv) any material limitation (whether or not mandatory) by any governmental
or regulatory authority, agency or commission, domestic or foreign
("Governmental Entity"), on the extension of credit by banks or other
lending institutions in the United States, or (v) in the case of any of the
foregoing existing at the time of the commencement of the Offer, a material
acceleration or worsening thereof;
(b) the Company shall have breached or failed to perform any of its
obligations, covenants or agreements under the Merger Agreement, or any
representation or warranty of the Company set forth in the Merger Agreement
(disregarding all qualifications and exceptions contained therein relating
to knowledge, materiality or Material Adverse Effect (as defined below))
shall not have been true and correct as of the date of the Merger Agreement
and as of the then scheduled Expiration Date as though made on and as of
the then scheduled Expiration Date, provided that all such breaches,
failures to perform and untrue representations or warranties, taken in the
aggregate, shall have or shall be reasonably likely to have a Material
Adverse Effect;
(c) any court or Governmental Entity shall have enacted, issued,
promulgated, enforced or entered any statute, rule, regulation, executive
order, decree, injunction or other order which is in effect and which (i)
restricts (other than restrictions which in the aggregate do not have a
Material Adverse Effect on Parent, the Purchaser or the Company or which do
not materially restrict the ability of Parent and the Purchaser to
consummate the Offer and the Merger as originally contemplated by Parent
and the Purchaser), prevents, prohibits or makes materially more costly the
consummation of the Offer or the Merger, (ii) makes the acceptance for
payment of, or payment for or purchase of some or all of the Shares
pursuant to the Offer illegal, (iii) results in a significant delay in or
restricts the ability of the Purchaser to accept for payment, pay for or
purchase some or all of the Shares pursuant to the Offer or to effect the
Merger, (iv) renders the Purchaser unable to accept for payment or pay for
or purchase some or all of the Shares pursuant to the Offer, (v) prohibits
or limits (other than limits which in the aggregate do not have a Material
Adverse Effect on Parent, the Purchaser or the Company or which do not
materially limit the ability of Parent to own and operate all of the
business and assets of Parent and the Company after the consummation of the
transactions contemplated by the Offer and the Merger Agreement) the
ownership or operation by the Company, Parent or any of their subsidiaries
of all or any material portion of the business or assets of the Company, or
as a result of the Offer or the Merger compels the Company, Parent or any
of their subsidiaries to dispose of or hold separate all or any material
portion of their respective business or assets, (vi) imposes limitations on
the ability of Parent or any subsidiary of Parent to hold, transfer or
dispose of or exercise effectively full rights of ownership of any Shares,
including, without limitation, the right to vote any Shares acquired by the
Purchaser pursuant to the Offer or otherwise on all matters properly
presented to the Company's shareholders including, without limitation, the
approval and adoption of the Merger Agreement and the transactions
contemplated thereby, (vii) requires divestiture by Parent or any affiliate
of Parent of any Shares or (viii) otherwise materially adversely affects
the financial condition, business or results of operations of Parent, the
Purchaser or the Company or otherwise makes consummation of the Offer or
the Merger unduly burdensome;
(d) there shall have been threatened, instituted or pending any
action, proceeding or counterclaim by or before any Governmental Entity,
challenging the making of the Offer or the acquisition by the Purchaser of
the Shares pursuant to the Offer or the consummation of the Merger, or
seeking to obtain
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<PAGE> 25
any material damages, or seeking to, directly or indirectly, result in any
of the consequences referred to in clauses (i) through (viii) of paragraph
(c) above;
(e) Any person or "group" (as such term is used in Section 13(d)(3) of
the Exchange Act) other than Parent or the Purchaser or any of their
affiliates shall have become the beneficial owner (as that term is used in
Rule 13d-3 under the Exchange Act) of more than 25% of the outstanding
Shares;
(f) all consents, registrations, approvals, permits, authorizations,
notices, reports or other filings required to be obtained or made by the
Company, Parent or the Purchaser in connection with the execution and
delivery of the Merger Agreement, the Offer and the consummation of the
transactions contemplated by the Merger Agreement shall not have been made
or obtained as of the then scheduled Expiration Date (other than the
failure to receive any consent, registration, approval, permit or
authorization or to make any notice, report or other filing that, in the
aggregate, is not reasonably likely to have a Material Adverse Effect on
Parent, the Purchaser or the Company, or would not prevent the consummation
of the Offer or the Merger);
(g) there shall have occurred any one or more changes or developments
in the financial condition, properties, business or results of operations
of the Company that, individually or in the aggregate, has had or is
reasonably likely to have a Material Adverse Effect;
(h) the Board of Directors of the Company (or any committee thereof)
shall have withdrawn or amended, or modified in a manner adverse to Parent
and the Purchaser, its recommendation of the Offer or the Merger, or shall
have endorsed, approved or recommended any other Acquisition Proposal, or
the Company shall have entered into any agreement with respect to an
Acquisition, or the Board of Directors of the Company (or any committee
thereof) shall have resolved to take any of the foregoing actions; or
(i) the Merger Agreement shall have been terminated by the Company, or
by Parent or the Purchaser, in accordance with its terms, or Parent or the
Purchaser shall have reached an agreement or understanding in writing with
the Company providing for termination or amendment of the Offer or delay in
payment for the Shares;
which, in the reasonable judgment of Parent and the Purchaser, in any such case,
and regardless of the circumstances (excluding any direct action or inaction by
Parent or the Purchaser which to Parent's and the Purchaser's knowledge is
reasonably likely to cause any of the above conditions to exist) giving rise to
any such conditions, make it inadvisable to proceed with the Offer and/or with
such acceptance for payment of or payment for the Shares.
"Material Adverse Effect" shall mean a material adverse effect on the
condition, business, assets, results of operations or prospects of the Company,
taken individually or as a whole, or of Parent and the Purchaser, taken
individually or as a whole, as the case may be.
The foregoing conditions are for the sole benefit of Parent and the
Purchaser and may be asserted by Parent or the Purchaser regardless of the
circumstances (excluding any direct action or inaction by Parent or the
Purchaser which to Parent's and the Purchaser's knowledge is reasonably likely
to cause any of the above conditions to exist) giving rise to such condition or
may be waived by Parent or the Purchaser, in whole or in part at any time and
from time to time, in its sole discretion. The failure by Parent or the
Purchaser at any time to exercise any of the foregoing rights shall not be
deemed a waiver of any such right, the waiver of any such right with respect to
particular facts and circumstances shall not be deemed a waiver with respect to
any other facts and circumstances and each such right shall be deemed an ongoing
right that may be asserted at any time and from time to time.
A public announcement shall be made of a material change in, or waiver of,
such conditions, and the Offer may, in certain circumstances, be extended in
connection with any such change or waiver. Any determination by the Purchaser
concerning the events described in this Section 14 will be final and binding
upon all parties.
22
<PAGE> 26
15. CERTAIN REGULATORY AND LEGAL MATTERS.
General. Except as otherwise disclosed herein, based upon an examination of
publicly available information filed by the Company with the Commission and the
disclosures made by the Company pursuant to the Merger Agreement, Parent and the
Purchaser are not aware of any licenses or other regulatory permits which appear
to be material to the business of the Company and which might be adversely
affected by the acquisition of Shares by the Purchaser pursuant to the Offer or
of any approval or other action by any governmental, administrative or
regulatory agency or authority which would be required for the acquisition or
ownership of Shares by the Purchaser pursuant to the Offer. Should any such
approval or other action be required, it is currently contemplated that such
approval or action would be sought or taken. There can be no assurance that any
such approval or action, if needed, would be obtained or, if obtained, that it
will be obtained without substantial conditions or that adverse consequences
might not result to the Company's or Parent's business or that certain parts of
the Company's or Parent'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, any
of which could cause the Purchaser to elect to terminate the Offer without the
purchase of the Shares thereunder. The Purchaser's obligation under the Offer to
accept for payment and pay for Shares is subject to certain conditions. See
Section 14.
Antitrust Compliance. Under the HSR Act and the rules that have been
promulgated thereunder by the Federal Trade Commission (the "FTC"), certain
acquisition transactions may not be consummated unless certain information has
been furnished to the Antitrust Division of the Department of Justice (the
"Antitrust Division") and the FTC and certain waiting period requirements have
been satisfied. The acquisition of Shares by the Purchaser is subject to these
requirements. See Section 2 as to the effect of the HSR Act on the timing of the
Purchaser's obligation to accept Shares for payment.
Pursuant to the HSR Act, Parent expects to file a Notification and Report
Form with respect to the acquisition of Shares pursuant to the Offer with the
Antitrust Division and the FTC on or about February 22, 2000. The Company has
informed Parent that it expects to file its Notification and Report Form under
the HSR Act on or about the same day. Under the provisions of the HSR Act
applicable to the purchase of Shares pursuant to the Offer, such purchases may
not be made until the expiration of a 15-day waiting period following the filing
by Parent, unless a request for early termination of the waiting period is
granted or unless the waiting period is extended by Parent's receipt of a
request for additional information or documentary material prior thereto. If
either the FTC or the Antitrust Division were to issue a request for additional
information or documentary material prior to the expiration of the 15-day
waiting period, the waiting period would be extended to expire at 11:59 p.m.,
Eastern time, on the tenth day after the date of substantial compliance by
Parent with such request. Thereafter, the waiting period could be extended only
by agreement or by court order. If the acquisition of Shares is delayed pursuant
to a request by the FTC or the Antitrust Division for additional information or
documentary material pursuant to the HSR Act, the purchase of and payment for
Shares will be deferred until ten days after the request is substantially
complied with unless the waiting period is sooner terminated by the FTC or the
Antitrust Division. See Section 2. Only one extension of the waiting period
pursuant to a request for additional information is authorized by the rules
promulgated under the HSR Act, although the waiting period may also be extended
by agreement or by court order. Any such extension of the waiting period will
not give rise to any withdrawal rights not otherwise provided for by applicable
law. See Section 4. Although the Company is required to file certain information
and documentary material with the Antitrust Division and the FTC in connection
with the Offer, neither the Company's failure to make such filings nor a request
from the Antitrust Division or the FTC for additional information or documentary
material made to the Company will extend the waiting period.
The Antitrust Division and the FTC frequently scrutinize the legality under
the antitrust laws of transactions such as the proposed acquisition of Shares by
the Purchaser pursuant to the Offer and the Merger. At any time before or after
the Purchaser's acquisition of Shares, the Antitrust Division or the FTC could
take such action under the antitrust laws as it deems necessary or desirable in
the public interest, including seeking to enjoin the acquisition of Shares
pursuant to the Offer or seeking divestiture of Shares acquired by the Purchaser
or the divestiture of substantial assets of Parent, the Company or any of their
respective subsidiaries. Private parties and state attorneys general may also
bring legal action under the
23
<PAGE> 27
antitrust laws under certain circumstances. There can be no assurance that a
challenge to the Offer on antitrust grounds will not be made or, if a challenge
is made, what the result will be. See Section 14 for certain conditions to the
Offer that could become applicable in the event of such a challenge.
Delaware Business Combination Law. Section 203 of the DGCL ("Section 203")
provides that a Delaware corporation such as the Company may not engage in any
"Business Combination" (defined to include a variety of transactions, including
a merger) with any "Interested Stockholder" (defined generally as any person
that, directly or indirectly, beneficially owns 15% or more of the outstanding
voting stock of the corporation), or any affiliate of an Interested Stockholder,
for three years after the date on which the Interested Stockholder became an
Interested Stockholder. The three-year prohibition on Business Combinations with
Interested Stockholders (the "Business Combination Prohibition") does not apply
if certain conditions, described below, are satisfied. Section 203 provides that
a beneficial owner of voting stock includes any person who, individually or
together with any of its affiliates or associates, has (i) the right to acquire
voting stock (whether such right is exercisable immediately or only after the
passage of time) pursuant to any agreement, arrangement or understanding or upon
the exercise of conversion rights, exchange rights, warrants or options or
otherwise, (ii) the right to vote such stock pursuant to any agreement,
arrangement or understanding, or (iii) any agreement, arrangement or
understanding for the purposes of acquiring, holding, voting or disposing of
such stock with any other person that beneficially owns, directly or indirectly,
such stock.
The Business Combination Prohibition does not apply to a particular
Business Combination between a corporation and a particular Interested
Stockholder if (i) prior to the date such Interested Stockholder became an
Interested Stockholder, the board of directors of such corporation approves
either the Business Combination or the transaction which resulted in the
stockholder becoming an Interested Stockholder, or (ii) upon consummation of the
transaction which resulted in the stockholder becoming an Interested
Stockholder, the Interested Stockholder owned at least 85% of the voting stock
of the corporation outstanding at the time the transaction commenced, excluding
for purposes of determining the number of shares outstanding those shares owned
by (x) persons who are directors and also officers and (y) employee stock plans
in which employee participants do not have the right to determine confidentially
whether shares held subject to the plan will be tendered in a tender or exchange
offer, or (iii) on or subsequent to the date the stockholder becomes an
Interested Stockholder, the Business Combination is approved by the board of
directors of such corporation and authorized at an annual or special meeting of
stockholders, and not by written consent, by the affirmative vote of at least
66 2/3% of the outstanding voting stock which is not owned by the Interested
Stockholder.
The Board of Directors of the Company has unanimously approved the
Shareholder Option Agreements, the Offer and the Merger. As a result, Section
203 will not apply to the Purchaser's acquisition of Shares pursuant to the
Shareholder Option Agreements or the Offer or the consummation of the Merger
thereafter.
Other State Laws. A number of other states have adopted laws and
regulations applicable to attempts to acquire securities of corporations which
are incorporated, or have substantial assets, shareholders, principal executive
offices or principal places of business, or whose business operations otherwise
have substantial economic effects, in such states. In 1982, in Edgar v. MITE
Corp., the Supreme Court of the United States invalidated on constitutional
grounds the Illinois Business Takeover Statute, which, as a matter of state
securities law, made take-overs of corporations meeting certain requirements
more difficult. However, in 1987, in CTS Corp. v. Dynamics Corp. of America, the
Supreme Court held that the Indiana Control Share Acquisition Act was
constitutional. Such Act, by its terms, is applicable only to corporations that
have a substantial number of shareholders in Indiana and are incorporated there.
Subsequently, a number of federal courts have ruled that various state take-over
statutes are unconstitutional insofar as they apply to corporations incorporated
outside the state of enactment.
The Purchaser does not know whether any state laws other than Section 203
will, by their terms, apply to the Offer, and the Purchaser has not attempted to
comply with any state take-over statutes in connection with the Offer or the
Merger, except as set forth above with respect to Section 203. The Purchaser
reserves the right to challenge the validity or applicability of any state law
allegedly applicable to the Offer or the Merger, and nothing in this Offer to
Purchase nor any action taken in connection herewith is intended as a waiver of
24
<PAGE> 28
that right. In the event that an assertion is made that one or more take-over
statutes apply to the Offer or the Merger, and an appropriate court does not
determine that such statute or statutes do not apply or are invalid as applied
to the Offer or the Merger, as applicable, the Purchaser may be required to file
certain documents with, or receive approvals from, the relevant state
authorities, and the 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 any such case, the Purchaser may not be obligated to
accept for payment or purchase any Shares tendered. See Section 14.
"Going Private" Transactions. The Commission has adopted Rule 13e-3 under
the Exchange Act which is applicable to certain "going private" transactions and
which may under certain circumstances be applicable to a transaction such as the
Merger. However, Rule 13e-3 would be inapplicable if (i) the Shares are
deregistered under the Exchange Act prior to the Merger or (ii) the Merger is
consummated within one year after the purchase of the Shares pursuant to the
Offer and the amount paid per Share in the Merger is at least equal to the
amount paid per Share in the Offer, as the Merger Agreement provides. If
applicable, Rule 13e-3 requires, among other things, that certain financial
information concerning the fairness of the proposed transaction and the
consideration offered to minority shareholders in such transaction be filed with
the Commission and disclosed to shareholders prior to the consummation of the
transaction. The Purchaser and Parent believe the provisions of Rule 13e-3 are
not applicable to the Offer or the Merger.
16. FEES AND EXPENSES. Except as set forth below, neither Parent nor the
Purchaser will pay any fees or commissions to any broker, dealer or other person
for soliciting tenders of Shares pursuant to the Offer.
The Purchaser and Parent have retained Georgeson Shareholder Communication
Inc. to act as the Information Agent and Firstar Bank, National Association to
serve as the Depositary in connection with the Offer. The Information Agent may
contact holders of Shares by mail, telephone, telex, telegraph, the internet and
personal interview, and may request brokers, dealers and other nominee
shareholders to forward material relating to the Offer to beneficial owners of
Shares. The Information Agent and the Depositary each will receive reasonable
and customary compensation for their services, be reimbursed for certain
reasonable out-of-pocket expenses and be indemnified against certain liabilities
in connection therewith, including certain liabilities under the Federal
securities laws.
Neither the Purchaser nor Parent will pay any fees or commissions to any
broker or dealer or other person (other than the Information Agent) in
connection with the solicitation of tenders of Shares pursuant to the Offer.
Brokers, dealers, banks, trust companies and other nominees will be reimbursed
by the Purchaser upon request for customary mailing and handling expenses
incurred by them in forwarding material to their customers.
17. MISCELLANEOUS. The Offer is not being made to (nor will tenders be
accepted from or on behalf of) holders of Shares in any jurisdiction in which
the making of the Offer or the acceptance thereof would not be in compliance
with the laws of such jurisdiction. The Purchaser may, however, in its
discretion, take such action as it may deem necessary to make the Offer in any
jurisdiction and extend the Offer to holders of Shares in such jurisdiction.
Neither the Purchaser nor Parent is aware of any jurisdiction in which the
making of the Offer or the acceptance thereof would not be in compliance with
the laws of such jurisdiction. In any jurisdiction the securities, blue sky or
other laws of which require the Offer to be made by a licensed broker or dealer,
the Offer will be made on behalf of the Purchaser by one or more registered
brokers or dealers licensed under the laws of such jurisdiction.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION ON BEHALF OF THE PURCHASER OR PARENT NOT CONTAINED HEREIN OR IN
THE LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED.
25
<PAGE> 29
The Purchaser and Parent have filed with the Commission a Tender Offer
Statement on Schedule TO pursuant to Rule 14d-3 under the Exchange Act, together
with exhibits, furnishing certain additional information with respect to the
Offer, and may file amendments thereto. Such Schedule TO and any amendments
thereto, including exhibits, may be examined and copies may be obtained from the
principal office of the Commission in Washington, D.C. in the manner set forth
in Section 7 and is also available on-line through the Commission's EDGAR
electronic filing and retrieval system.
IMTC ACQUISITION CORP.
February 22, 2000
26
<PAGE> 30
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS
OF PARENT AND THE PURCHASER
DIRECTORS AND EXECUTIVE OFFICERS OF PARENT. The following table sets forth
the name, business or residence address, principal occupation or employment at
the present time and during the last five years, and the name, principal
business and address of any corporation or other organization in which such
employment is or was conducted for each of the directors and executive officers
of Parent. All directors and executive officers listed below are citizens of the
United States, except for Mr. Jaehnert, who is a German citizen. The business
address of Parent is 6555 West Good Hope Road, Milwaukee, Wisconsin 53223 and
its principal business is described in Section 8 of the Offer to Purchase.
Unless otherwise indicated, all directors and executive officers of Parent have
been in their present principal occupations for the last five years and the
business address of each such person is the address of Parent.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT
NAME, BUSINESS OR RESIDENCE ADDRESS AND MATERIAL OCCUPATION FOR PAST FIVE YEARS
- ----------------------------------- -------------------------------------------
<S> <C>
Katherine M. Hudson President and Chief Executive Officer of Parent since
Director since: 1994 1994
Peter J. Lettenberger Partner of Quarles & Brady LLP, general counsel to
Quarles & Brady LLP Parent, since 1973
411 East Wisconsin Ave
Milwaukee, WI 53202
Director since: 1977
Robert C. Buchanan President of Fox Valley Corporation, a specialty paper
Fox Valley Corporation manufacturer
100 W. Lawrence St
Appleton, Wisconsin 54911
Director since: 1987
Roger D. Peirce Private investor and consultant and Secretary and
The Jor-Mac Company, Inc. Treasurer of The Jor-Mac Company, Inc., a manufacturer of
704 10th Avenue metal goods; President and Chief Executive Officer of
Grafton, Wisconsin 53024 Valuation Research Corporation from 1995 to 1996 (located
Director since: 1988 at 330 East Kilbourn Avenue, Milwaukee, Wisconsin)
Richard A. Bemis President and Chief Executive Officer of Bemis
Bemis Manufacturing Company Manufacturing Company, a manufacturer of molded plastic
300 Mill Street products
Sheboygan Falls, Wisconsin 53085
Director since: 1990
Frank W. Harris Distinguished Professor of Polymer Science and Biomedical
Institute for Polymer Science Engineering at the Institute of Polymer Science,
University of Akron University of Akron and a member of its faculty since
244 Summer Street 1983
Polymer Building 603
Akron, Ohio 44325
Director since: 1991
</TABLE>
I-1
<PAGE> 31
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT
NAME, BUSINESS OR RESIDENCE ADDRESS AND MATERIAL OCCUPATION FOR PAST FIVE YEARS
- ----------------------------------- -------------------------------------------
<S> <C>
Gary E. Nei Chairman of B&B Publishing, a publishing company
B&B Publishing
820 Wisconsin Street
Walworth, Wisconsin 53184
Director since: 1992
Irwin Helford Retired; Former Chairman of Viking Office Products, Inc.
Viking Office Products, Inc. and Vice Chairman of Office Depot, Inc., both of which
950 W. 190th Street are sellers of office products, from August 1998 to 1999;
Torrance, California 90502 prior to 1998 Chairman of the Board and Chief Executive
Director since: 1998 Officer of Viking Office Products, Inc.
Richard L. Fisk Vice President of Parent's Direct Marketing Group since
1987
David R. Hawke Vice President of Parent's Graphics Group since 1995;
Managing Director of Parent's European Operation prior to
1995
Frank M. Jaehnert Vice President and Chief Financial Officer of Parent
since 1996; Finance Director of Parent's Identification
Solutions & Specialty Tapes Group prior to 1996
David W. Schroeder Vice President of Parent's Identification Solutions and
Specialty Tapes Group since 1995; General Manager of
Parent's Industrial Products Division prior to 1995
Conrad G. Goodkind Secretary of Parent since 1999 and Partner of Quarles &
Quarles & Brady LLP Brady LLP, general counsel to Parent, since 1981
411 East Wisconsin Ave
Milwaukee, WI 53202
</TABLE>
Directors and Executive Officers of the Purchaser. Each director and
executive officer of the Purchaser was appointed in December 1999. Katherine M.
Hudson, Conrad G. Goodkind and Frank M. Jaehnert are each directors and are the
President, Secretary and Vice President and Treasurer, respectively, of the
Purchaser. David W. Schroeder is Vice President of the Purchaser. Information
about all of the directors and executive officers of the Purchaser is set forth
above.
I-2
<PAGE> 32
Facsimiles of the Letter of Transmittal, properly completed and duly
executed, will be accepted. The Letter of Transmittal, certificates evidencing
Shares and any other required documents should be sent or delivered by each
shareholder or his or her broker, dealer, commercial bank, trust company or
other nominee to the Depositary at one of its addresses set forth below.
The Depositary for the Offer is:
FIRSTAR BANK, NATIONAL ASSOCIATION
<TABLE>
<S> <C> <C>
By Mail: By Overnight Delivery: By Hand Delivery:
Corporate Trust Services Corporate Trust Services Corporate Trust Services
Box 2077 1555 North River Center Drive 1555 North River Center Drive
Milwaukee, WI 53201 Suite 301 Suite 301
Milwaukee, WI 53212 Milwaukee, WI 53212
</TABLE>
By Facsimile Transmission:
(For Eligible Institutions only)
(414) 905-5049
To Confirm Fax Only:
(414) 905-5300
------------------------
Any questions and requests for assistance may be directed to the
Information Agent at its address and telephone numbers listed below. Additional
copies of this Offer to Purchase, the Letter of Transmittal and the Notice of
Guaranteed Delivery may also be obtained from the Information Agent. A
shareholder may also contact brokers, dealers, commercial banks or trust
companies for assistance concerning the Offer.
The Information Agent for the Offer is:
LOGO
17 State Street
10th Floor
New York, NY 10004
Banks and Brokers Call Collect: (212) 440-9800
All Others Call Toll-Free: (800) 223-2064
<PAGE> 1
LETTER OF TRANSMITTAL
To Tender Shares of Common Stock
of
IMTEC INC.
at $12.00 Net Per Share
Pursuant to the Offer to Purchase
Dated February 22, 2000
by
IMTC ACQUISITION CORP.,
a wholly owned, indirect subsidiary
of
BRADY CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,
EASTERN TIME, ON TUESDAY, MARCH 21, 2000, UNLESS THE OFFER IS EXTENDED.
The Depository for the Offer is:
FIRSTAR BANK, NATIONAL ASSOCIATION
<TABLE>
<CAPTION>
By Mail: By Hand or Overnight Delivery:
<S> <C>
Corporate Trust Services Corporate Trust Services
P.O. Box 2077 1555 N. RiverCenter Drive
Milwaukee, WI 53201 Suite 301
Milwaukee, WI 53212
Facsimile for Eligible Institutions:
(414) 905-5049
To Confirm Facsimile Transmission by Telephone:
(414) 905-5300
</TABLE>
<TABLE>
<S> <C> <C> <C>
DESCRIPTION OF SHARES TENDERED
NAME(S) AND ADDRESS(ES) OF REGISTERED OWNERS
(PLEASE PRINT) (PLEASE MAKE CORRECTIONS IF NECESSARY OR, IF CERTIFICATE(S) TENDERED
BLANK, FILL IN EXACTLY AS NAME(S) APPEAR(S) ON (ATTACH ADDITIONAL LIST, IF NECESSARY)
CERTIFICATE(S)) (SEE INSTRUCTIONS 3 AND 4)
NUMBER OF SHARES
CERTIFICATE REPRESENTED BY NUMBER OF SHARES
NUMBER(S)* CERTIFICATE(S)* TENDERED**
TOTAL SHARES
* Need not be completed by Book-Entry Stockholders.
** Unless otherwise indicated it is assumed that all Shares described above are being tendered. See Instruction 4.
</TABLE>
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE TRANSMISSION TO A
NUMBER OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE COMPLETING THIS LETTER OF TRANSMITTAL.
<PAGE> 2
This Letter of Transmittal is to be completed by holders of Shares (as
defined below) of Imtec Inc. (the "Stockholders") if certificates evidencing
Shares ("Certificates") are to be forwarded with this Letter of Transmittal or
if delivery of Shares is to be made by book-entry transfer to an account
maintained by Firstar Bank, National Association (the "Depositary") at The
Depository Trust Company (the "Book-Entry Transfer Facility") pursuant to the
procedures set forth in Section 3 of the Offer to Purchase (as defined below).
Stockholders whose Certificates are not immediately available or who cannot
deliver either their Certificates for, or a Book-Entry Confirmation (as defined
in Section 3 of the Offer to Purchase) with respect to, their Shares and all
other required documents to the Depositary prior to the Expiration Date (as
defined in Section 1 of the Offer to Purchase) must tender their Shares
according to the guaranteed delivery procedure set forth in Section 3 of the
Offer to Purchase. See Instruction 2 hereof. Delivery of documents to the Book-
Entry Transfer Facility does not constitute delivery to the Depositary.
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO
AN ACCOUNT MAINTAINED BY THE DEPOSITARY WITH THE BOOK-ENTRY TRANSFER
FACILITY, AND COMPLETE THE FOLLOWING (ONLY PARTICIPANTS IN THE BOOK-ENTRY
TRANSFER FACILITY MAY DELIVER SHARES BY BOOK-ENTRY TRANSFER).
Name of Tendering Institution:
-------------------------------------------------------------------------------
Account Number:
-----------------------------------------------------------------------------
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. PLEASE
ENCLOSE A PHOTOCOPY OF SUCH NOTICE OF GUARANTEED DELIVERY.
Name(s) of Registered Holder(s):
--------------------------------------------------------------------------
Window Ticket Number (if any):
---------------------------------------------------------------------------
Date of Execution of Notice of Guaranteed Delivery:
-------------------------------------------------------
Name of Institution That Guaranteed Delivery:
-------------------------------------------------------------
Account Number:
------------------------------------------------------------------------------
Transaction Code Number:
------------------------------------------------------------------------------
NOTE: SIGNATURES MUST BE PROVIDED BELOW. PLEASE READ THE ACCOMPANYING
INSTRUCTIONS CAREFULLY.
<PAGE> 3
Ladies and Gentlemen:
The undersigned hereby tenders to IMTC Acquisition Corp., a Delaware
corporation ("Purchaser") and a wholly owned, indirect subsidiary of Brady
Corporation, a Wisconsin corporation ("Parent"), the above-described shares of
common stock, par value $.01 per share (the "Common Stock"), of Imtec Inc., a
Delaware corporation (the "Company"), pursuant to the Offer to Purchase, dated
February 22, 2000 (the "Offer to Purchase"), at a price of $12.00 per Share, net
to the seller in cash, on the terms and subject to the conditions set forth in
the Offer to Purchase, receipt of which is hereby acknowledged, and this Letter
of Transmittal (which, together with the Offer to Purchase, constitute the
"Offer"). The undersigned understands that Purchaser reserves the right to
transfer or assign, from time to time, in whole or in part, to one or more of
its affiliates, the right to purchase the Shares tendered herewith.
On the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of such extension or
amendment), subject to, and effective upon, acceptance for payment of, and
payment for, the Shares tendered herewith in accordance with the terms of the
Offer, the undersigned hereby sells, assigns and transfers to, or upon the order
of, Purchaser, all right, title and interest in and to all of the Shares being
tendered hereby and any and all cash dividends, distributions, rights, other
Shares or other securities issued or issuable in respect of such Shares on or
after February 22, 2000 (collectively, "Distributions"), and appoints Firstar
Bank, National Association (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 the fullest
extent of such Stockholder's rights with respect to such Shares (and any
Distributions) (a) to deliver such Share Certificates (as defined below) (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 either such case, with all accompanying evidence of transfer and
authenticity, to or upon the order of Purchaser, (b) to present such Shares (and
any Distributions) for transfer on the books of the Company and (c) to receive
all benefits and otherwise exercise all rights of beneficial ownership of such
Shares (and any Distributions), all in accordance with the terms and the
conditions of the Offer.
The undersigned hereby irrevocably appoints the designees of Purchaser, and
each of them, the attorneys-in-fact and proxies of the undersigned, each with
full power of substitution, to the full extent of such Stockholder's rights with
respect to the Shares tendered hereby which have been accepted for payment and
with respect to any Distributions. The designees of Purchaser will, with respect
to the Shares (and any Distributions) for which the appointment is effective, be
empowered to exercise all voting and any other rights of such Stockholder, as
they, in their sole discretion, may deem proper at any annual, special or
adjourned meeting of Stockholders, or by written consent in lieu of any such
meeting or otherwise. This proxy and power of attorney shall be irrevocable and
coupled with an interest in the tendered Shares. Such appointment is effective
when, and only to the extent that, Purchaser deposits the payment for such
Shares with the Depositary. Upon the effectiveness of such appointment, without
further action, all prior powers of attorney, proxies and consents given by the
undersigned with respect to such Shares (and any Distributions) will be revoked
and no subsequent powers of attorney, proxies, consents or revocations may be
given (and, if given, will not be deemed effective). Purchaser reserves the
right to require that, in order for Shares to be deemed validly tendered,
immediately upon Purchaser's acceptance for payment of such Shares, Purchaser
must be able to exercise full voting rights, to the extent permitted under
applicable law, with respect to such Shares (and any Distributions), including
voting at any meeting of Stockholders.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the Shares (and
any Distributions) tendered hereby and, when the same are accepted for payment
by Purchaser, Purchaser will acquire good, marketable and unencumbered title
thereto, free and clear of all liens, restrictions, charges and encumbrances and
the same will not be subject to any adverse claim. 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 (and any Distributions) tendered hereby. In addition, the
undersigned shall promptly remit and transfer to the Depositary for the account
of Purchaser any and all Distributions in respect of the Shares tendered hereby,
accompanied by appropriate documentation of transfer and, pending such
remittance or
<PAGE> 4
appropriate assurance thereof, Purchaser shall be entitled to all rights and
privileges as owner of any such Distributions and may withhold the entire
purchase price or deduct from the purchase price the amount or value thereof, as
determined by Purchaser in its sole discretion.
All authority conferred or agreed to be conferred pursuant to this Letter
of Transmittal shall not be affected by, and 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 to Purchaser, this
tender is irrevocable.
The undersigned understands that the valid tender of Shares pursuant to one
of the procedures described in Section 3 of the Offer to Purchaser will
constitute a binding agreement between the undersigned and Purchaser upon the
terms and subject to the conditions of the Offer.
Unless otherwise indicated herein under "Special Payment Instructions,"
please issue the check for the purchase price and/or return any certificates for
Shares not tendered or accepted for payment in the name(s) of the registered
owner(s) appearing under "Description of Shares Tendered." Similarly, unless
otherwise indicated under "Special Delivery Instructions," please mail the check
for the purchase price and/or return any certificates for Shares not tendered or
accepted for payment (and accompanying documents, as appropriate) to the
address(es) of the registered owner(s) appearing under "Description of Shares
Tendered." In the event that either the Special Delivery Instructions and the
Special Payment Instructions are completed, please issue the check for the
purchase price and/or issue any certificates for Shares not tendered or accepted
for payment (and any accompanying documents, as appropriate) to, the person or
persons so indicated. The undersigned recognizes that Purchaser has no
obligation pursuant to the Special Payment Instructions to transfer any Shares
from the name of the registered owner thereof if Purchaser does not accept for
payment any of the Shares so tendered.
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if certificate(s) for Shares not tendered or not accepted
for payment and/or the check for the purchase price of Shares accepted for
payment are to be issued in the name of someone other than the undersigned.
Issue: [ ] Check and/or [ ] Certificates to:
Name(s)
- --------------------------------------------
(Please Print)
Address
- ---------------------------------------------
(Street Address or P.O. Box)
- -------------------------------------------------------
(City) (State) (Zip Code)
- -------------------------------------------------------
(Tax Identification or Social Security Number)
IF YOU FILL OUT THIS BOX, YOU MUST HAVE
YOUR SIGNATURE GUARANTEED BELOW.
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if certificate(s) for Shares not tendered or not accepted
for payment and/or the check for the purchase price of Shares accepted for
payment are to be sent to someone other than the undersigned or to the
undersigned at an address other than that shown above.
Deliver: [ ] Check and/or [ ] Certificates to:
Name(s)
--------------------------------------------
(Please Print)
Address
- ---------------------------------------------
(Street Address or P.O. Box)
- -------------------------------------------------------
(City) (State) (Zip Code)
- -------------------------------------------------------
(Tax Identification or Social Security Number)
IF YOU FILL OUT THIS BOX, YOU MUST HAVE
YOUR SIGNATURE GUARANTEED BELOW.
<PAGE> 5
IMPORTANT
STOCKHOLDER(S): SIGN HERE
(ALSO COMPLETE SUBSTITUTE FORM W-9 BELOW)
(SEE INSTRUCTION 5)
Name(s):
- --------------------------------------------------------------------------------
(Please Print)
Date:
- ------------------------------- , 2000
- --------------------------------------------------------------------------------
(Signature(s) of Stockholder(s))
(Must be signed by registered owner(s) exactly as name(s) appear(s) on
stock certificate(s) or on a security position listing or by person(s)
authorized to become registered owner(s) by certificates and documents
transmitted herewith. If signature is by trustees, executors, administrators,
guardians, attorneys-in-fact, officers of corporations or others acting in a
fiduciary or representative capacity, please set forth full title 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 No.:
- ---------------------------------------------------------------------
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 5)
Authorized signature:
- --------------------------------------------------------------------------------
Name:
- --------------------------------------------------------------------------------
(Please Type or Print)
Address:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Include Zip Code)
Name of Firm:
- --------------------------------------------------------------------------------
Date:
- ------------------------------- , 2000
<PAGE> 6
TO BE COMPLETED BY ALL TENDERING STOCKHOLDERS
(SEE INSTRUCTION 9)
<TABLE>
<S> <C> <C>
Name:
SUBSTITUTE
FORM W-9 Address:
DEPARTMENT OF THE TREASURY
INTERNAL REVENUE SERVICE
Check appropriate box:
REQUEST FOR TAXPAYER
IDENTIFICATION NUMBER (TIN) Individual [ ] Corporation [ ]
AND CERTIFICATION
Partnership [ ] Other (specify) [ ]
- -----------------------------------------------------------------------------------------------------
SSN:
PART I. Please provide your taxpayer identification number in ------------------------------
the space at right. If awaiting TIN, write "Applied
For" in space at right and complete the Certificate of or
Awaiting Taxpayer Identification Number below.
EIN:
------------------------------
- -----------------------------------------------------------------------------------------------------
PART II.For Payees exempt from backup withholding, see the enclosed "Guidelines for Certification
of Taxpayer Identification Number on Substitute Form W-9," and complete as instructed
therein.
- -----------------------------------------------------------------------------------------------------
</TABLE>
PART III--CERTIFICATION--Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct taxpayer identification
number (or I am waiting for a number to be issued to me) and
(2) I am not subject to backup withholding either because: (a) I am exempt
from backup withholding, or (b) I have not been notified by the Internal
Revenue Service (the "IRS") that I am subject to backup withholding as a
result of a 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 currently subject to backup withholding
because you have failed to report all interest or dividends on your tax
return. However, if after being notified by the IRS that you are 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.
SIGNATURE:
---------------------------------------------------------------- DATE:
------------------------, 2000
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU WROTE "APPLIED FOR" IN PART 1
OF SUBSTITUTE FORM W-9
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER (TIN)
I certify under penalties of perjury that a TIN has not been issued to me, and
either (a) I have mailed or delivered an application to receive a TIN to the
appropriate IRS Center or Social Security Administration Office, or (b) I intend
to mail or deliver an application in the near future. I understand that if I do
not provide a TIN by the time of payment, 31% of all reportable payments made to
me will be withheld; but that such amounts will be refunded to me if I then
provide a TIN within sixty (60) days.
SIGNATURE: _______________________________________________________ DATE: _____
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE TENDER OFFER. PLEASE
REVIEW THE ENCLOSED "GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9" FOR ADDITIONAL DETAILS.
<PAGE> 7
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. Except as otherwise provided below, all
signatures on this Letter of Transmittal must be guaranteed by a financial
institution (including most commercial banks, savings and loan associations and
brokerage houses) that is a participant in the Security Transfer Agents
Medallion Program, the New York Stock Exchange Medallion Signature Guarantee
Program or the Stock Exchange Medallion Program (each, an "Eligible
Institution"). Signatures on this Letter of Transmittal need not be guaranteed
(a) if this Letter of Transmittal is signed by the registered owner(s) (which
term, for purposes of this document, includes any participant in any of the
Book-Entry Transfer Facility's systems whose name appears on a security position
listing as the owner of the Shares) of Shares tendered herewith and such
registered owner has not completed the box titled "Special Payment Instructions"
or the box titled "Special Delivery Instructions" in this Letter of Transmittal
or (b) if such Shares are tendered for the account of an Eligible Institution.
See Instruction 5.
2. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES OR BOOK-ENTRY
CONFIRMATIONS. This Letter of Transmittal is to be used either if certificates
are to be forwarded herewith or, unless an Agent's Message is utilized, if
tenders are to be made pursuant to the procedures for tender by book-entry
transfer set forth in Section 3 of the Offer to Purchaser. Certificates for all
physically tendered Shares ("Share Certificates"), or confirmation of any
book-entry transfer into the Depositary's account at the Book-Entry Transfer
Facility of Shares tendered by book-entry transfer ("Book Entry Confirmation"),
as well as this Letter of Transmittal properly completed and duly executed with
any required signature guarantees, unless an Agent's Message is utilized in the
case of a book-entry transfer, and any other documents required by this Letter
of Transmittal, must be received by the Depositary at one of its addresses set
forth herein on or prior to the Expiration Date (as defined in Section 1 of the
Offer to Purchaser).
Stockholders whose certificates for Shares are not immediately available or
who cannot deliver all other required documents to the Depositary on or prior to
the Expiration Date or who cannot comply with the procedures for book-entry
transfer on a timely basis, may nevertheless tender their Shares by properly
completing and duly executing a Notice of Guaranteed Delivery pursuant to the
guaranteed delivery procedures set forth in Section 3 of the Offer to Purchaser.
Pursuant to such procedure: (a) such tender must be made by or through an
Eligible Institution; (b) a properly completed and duly executed Notice of
Guaranteed Delivery substantially in the form provided by Purchaser must be
received by the Depositary prior to the Expiration Date; and (c) Share
Certificates for all tendered Shares, in proper form for transfer (or a Book
Entry Confirmation with respect to such Shares), as well as a Letter of
Transmittal (or facsimile thereof), properly completed and duly executed with
any required signature guarantees (unless, in the case of a book-entry transfer,
an Agent's Message is utilized), and all other documents required by this Letter
of Transmittal, must be received by the Depositary within three New York Stock
Exchange Inc. trading days after the date of execution of such Notice of
Guaranteed Delivery.
A properly completed and duly executed Letter of Transmittal (or facsimile
thereof) must accompany each such delivery of Share Certificates to the
Depositary.
THE METHOD OF DELIVERY OF SHARE CERTIFICATES AND ALL OTHER REQUIRED
DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER FACILITY, IS AT
THE ELECTION AND RISK OF THE TENDERING STOCKHOLDER. DELIVERY OF ALL SUCH
DOCUMENTS WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY
(INCLUDING, IN THE CASE OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION).
IF SUCH DELIVERY IS BY MAIL, IT IS RECOMMENDED THAT ALL SUCH DOCUMENTS BE SENT
BY PROPERLY INSURED REGISTERED MAIL WITH RETURN RECEIPT REQUESTED. IN ALL CASES,
SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
No alternative, conditional or contingent tenders will be accepted and no
fractional Shares will be purchased. All tendering Stockholders, by execution of
this Letter of Transmittal (or facsimile thereof), waive any right to receive
any notice of the acceptance of their Shares for payment.
<PAGE> 8
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 and separately signed on each page thereof in the same
manner as this Letter of Transmittal is signed.
4. PARTIAL TENDERS (APPLICABLE TO CERTIFICATE STOCKHOLDERS ONLY). If fewer
than all the Shares evidenced by any Share Certificate submitted are to be
tendered, fill in the number of Shares which are to be tendered in the box
titled "Number of Shares Tendered." In such cases, new certificate(s) for the
remainder of the Shares that were evidenced by the old Share Certificate(s) but
not tendered will be sent to the registered owner, unless otherwise provided in
the appropriate box on this Letter of Transmittal, as soon as practicable after
the Expiration Date. 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 owner(s) of the Shares
tendered hereby, the signature(s) must correspond with the name(s) as written on
the face of the Share Certificate(s) without alteration, enlargement or any
other change whatsoever.
If any of the Shares tendered hereby are owned of record by two or more
joint owners, all such owners must sign this Letter of Transmittal.
If any of the tendered Shares are registered in different names on several
Share Certificates, it will be necessary to complete, sign and submit as many
separate Letters of Transmittal (or facsimiles thereof) as there are different
registrations of Share Certificates.
If this Letter of Transmittal or any Share Certificates or stock powers are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing, and proper evidence
satisfactory to Purchaser of their authority so to act must be submitted.
If this Letter of Transmittal is signed by the registered owner(s) of the
Share Certificate(s) listed and transmitted hereby, no endorsements of Share
Certificates or separate stock powers are required unless payment is to be made
to, or certificates for Shares not tendered or accepted for payment are to be
issued in the name of, a person other than the registered owner(s). Signatures
on such certificates or stock powers must be guaranteed by an Eligible
Institution.
If this Letter of Transmittal is signed by a person other than the
registered owner(s) of the Share Certificate(s) listed, the Share Certificate(s)
must be endorsed or accompanied by the appropriate stock powers, in either case,
signed exactly as the name or names of the registered owner(s) or holder(s)
appear(s) on the Share Certificate(s). Signatures on such certificates or stock
powers must be guaranteed by an Eligible Institution.
6. STOCK TRANSFER TAXES. Purchaser will pay any stock transfer taxes with
respect to the transfer and sale of Shares to it or to its order pursuant to the
Offer. If, however, payment of the purchase price is to be made to, or (in the
circumstances permitted hereby) if certificates for Shares not tendered or
accepted for payment are to be registered in the name of, any person other than
the registered owner(s), or if tendered Share Certificates are registered in the
name of any person other than the person signing this Letter of Transmittal, the
amount of any stock transfer taxes (whether imposed on the registered owner(s)
or such person) payable on account of the transfer to such person will be
deducted from the purchase price if satisfactory evidence of the payment of such
taxes, or exemption therefrom, is not submitted.
EXCEPT AS PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY FOR
TRANSFER TAX STAMPS TO BE AFFIXED TO THE SHARE CERTIFICATES LISTED IN THIS
LETTER OF TRANSMITTAL.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check is to be issued in
the name of, and/or certificates for Shares not tendered or accepted for payment
are to be issued or returned to, a person other than the signer(s) of this
Letter of Transmittal or if a check and/or such certificates are to be mailed to
a person other than the signer(s) of this Letter of Transmittal or to an address
other than that shown above under
<PAGE> 9
"Description of Shares Tendered -- Name(s) and Address(es) of Registered
Owners," the appropriate box or boxes on this Letter of Transmittal should be
completed.
8. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions or requests for
assistance may be directed to the Information Agent at its address set forth
below or from your broker, dealer, commercial bank or trust company. Additional
copies of the Offer to Purchase, this Letter of Transmittal, the Notice of
Guaranteed Delivery and other tender offer materials may be obtained from the
Information Agent as set forth below, and will be furnished at Purchaser's
expense.
9. SUBSTITUTE FORM W-9. Each tendering Stockholder is required to provide
the Depositary with a correct Taxpayer Identification Number ("TIN"), generally
the Stockholder's social security or federal employer identification number, on
Substitute Form W-9 above. Failure to provide the information on the form may
subject the tendering Stockholder to 31% federal income tax backup withholding
on the payment of the purchase price. The tendering Stockholder may write
"Applied For" in Part I of the Substitute Form W-9 if the tendering Stockholder
has not been issued a TIN and has applied for a TIN or intends to apply for a
TIN in the near future. If the Stockholder has written "Applied for" in Part I
of the Substitute Form W-9, the Stockholder must also complete the Certificate
of Awaiting Taxpayer Identification Number. Notwithstanding that "Applied For"
is written in Part I of the Substitute Form W-9 and that the Stockholder has
completed the Certificate of Awaiting Taxpayer Identification Number, the
Depositary will withhold 31% of all payments of the purchase price thereafter
until a TIN is provided to the Depositary. See Important Tax Information below.
10. LOST, DESTROYED, MUTILATED OR STOLEN CERTIFICATES. If any Share
Certificate(s) representing Shares has been lost, destroyed, mutilated or
stolen, the Stockholder should promptly notify the Company's stock transfer
agent, American Stock Transfer and Trust Company. 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, mutilated or destroyed Share
Certificates have been followed.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A FACSIMILE COPY HEREOF) OR AN
AGENT'S MESSAGE, TOGETHER WITH SHARE CERTIFICATES OR BOOK-ENTRY CONFIRMATION OR
A PROPERLY COMPLETED AND DULY EXECUTED NOTICE OF GUARANTEED DELIVERY AND ALL
OTHER REQUIRED DOCUMENTS, MUST BE RECEIVED BY THE DEPOSITARY ON OR PRIOR TO THE
EXPIRATION DATE.
IMPORTANT TAX INFORMATION
Under the federal income tax law, a Stockholder whose tendered Shares are
accepted for purchase is required by law to provide the Depositary with such
Stockholder's correct TIN on Substitute Form W-9 above and to certify that such
TIN is correct (or that such Stockholder is awaiting a TIN) or otherwise
establish a basis for exemption from backup withholding. If such Stockholder is
an individual, the TIN is his or her social security number. If a Stockholder
fails to provide a correct TIN to the Depositary, such Stockholder may be
subject to a $50.00 penalty imposed by the Internal Revenue Service. In
addition, payments that are made to such Stockholder with respect to Shares
purchased pursuant to the Offer may be subject to backup withholding of 31%.
Certain Stockholders (including, among others, all corporations and certain
foreign individuals) may not be subject to these backup withholding and
reporting requirements. In order for a foreign individual to qualify as an
exempt recipient, that Stockholder must generally submit a Form W-8, signed
under penalties of perjury, attesting to that individual's exempt status. A Form
W-8 can be obtained from the Depositary.
If backup withholding applies, the Depositary is required to withhold 31%
of any payments made to the Stockholder or payee. Backup withholding is not an
additional tax. Rather, the federal income tax liability of persons subject to
backup withholding will be reduced by the amount of tax withheld. If withholding
results in an overpayment of taxes, a refund may be obtained from the Internal
Revenue Service.
<PAGE> 10
If "Applied for" is written in Part I of the Substitute Form W-9 and the
Stockholder has completed the Certificate of Awaiting Taxpayer Identification
Number, the Depositary will retain 31% of any payment of the purchase price for
tendered Shares during the 60-day period following the date of the Substitute
Form W-9. If a Stockholder's TIN is provided to the Depositary within 60 days of
the date of the Substitute Form W-9, payment of such retained amounts will be
made to such Stockholder. If a Stockholder's TIN is not provided to the
Depositary within such 60-day period, the Depositary will remit such retained
amounts to the Internal Revenue Service as backup withholding and shall withhold
31% of any payment of the purchase price for the tendered Shares made to such
Stockholder thereafter unless such Stockholder furnishes a TIN to the Depositary
prior to such payment.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments made to a Stockholder whose
tendered Shares are accepted for purchase, the Stockholder should complete and
sign the Substitute Form W-9 included in this Letter of Transmittal and provide
the Stockholder's correct TIN and certify, under penalties of perjury, that the
TIN provided on such form is correct (or that such Stockholder is awaiting a
TIN) and that (i) such Stockholder is exempt from backup withholding; (ii) such
Stockholder has not been notified by the Internal Revenue Service that such
Stockholder is subject to backup withholding as a result of failure to report
all interest or dividends; or (iii) the Internal Revenue Service has notified
the Stockholder that the Stockholder is no longer subject to backup withholding.
The Stockholder must sign and date the Substitute Form W-9 where indicated,
certifying that the information on such form is correct.
WHAT NUMBER TO GIVE THE DEPOSITARY.
The Stockholder is required to give the Depositary the social security
number or employer identification number of the record owner of the Shares. 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.
<PAGE> 11
The Depository for the Offer is:
FIRSTAR BANK, NATIONAL ASSOCIATION
<TABLE>
<CAPTION>
By Mail: By Hand or Overnight Delivery:
<S> <C>
Corporate Trust Services Corporate Trust Services
P.O. Box 2077 1555 N. RiverCenter Drive
Milwaukee, WI 53201 Suite 301
Milwaukee, WI 53212
</TABLE>
Facsimile for Eligible Institutions:
(414) 905-5049
To Confirm Facsimile Transmission by Telephone:
(414) 905-5300
The Information Agent for the Offer is:
LOGO
17 State Street
10th Floor
New York, New York 10004
Banks and brokers call collect: (212) 440-9800
All others call toll free: (800) 223-2064
February 22, 2000.
<PAGE> 1
NOTICE OF GUARANTEED DELIVERY
OF
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
IMTEC INC.
PURSUANT TO THE OFFER TO PURCHASE
DATED FEBRUARY 22, 2000
AT
$12.00 NET PER SHARE
BY
IMTC ACQUISITION CORP.,
AN INDIRECT, WHOLLY OWNED SUBSIDIARY OF
BRADY CORPORATION
As set forth in Section 3 of the Offer to Purchase (as defined below), this
form, or one substantially the same as this form, must be used to accept the
Offer (as defined below) if the certificates representing shares of common
stock, par value $.01 per share (the "Shares"), of Imtec Inc., a Delaware
corporation (the "Company"), are not immediately available or time will not
permit all required documents to reach Firstar Bank, National Association (the
"Depositary") prior to the Expiration Date (as defined in the Offer to Purchase)
or the procedures for book-entry transfer cannot be completed on a timely basis.
This form may be delivered by hand or transmitted by facsimile transmission or
mailed to the Depositary and must include a guarantee by an Eligible Institution
(as defined in the Offer to Purchase). See Section 3 of the Offer to Purchase.
The Depositary for the Offer is:
FIRSTAR BANK, NATIONAL ASSOCIATION
<TABLE>
<CAPTION>
By Mail: By Hand or Overnight Delivery:
<S> <C>
Corporate Trust Services Corporate Trust Services
P.O. Box 2077 1555 N. RiverCenter Drive
Milwaukee, WI 53201 Suite 301
Milwaukee, WI 53212
</TABLE>
Facsimile for Eligible Institutions:
(414) 905-5049
To Confirm Facsimile Transmission By Telephone:
(414) 905-5300
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE, OR TRANSMISSION OF INSTRUCTIONS TO A FACSIMILE NUMBER OTHER
THAN AS LISTED ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY.
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 as described in the instructions to the
Letter of Transmittal, such signature guarantee must appear in the applicable
space provided in the signature box on the Letter of Transmittal.
<PAGE> 2
Ladies and Gentlemen:
The undersigned hereby tenders to IMTC Acquisition Corp., a Delaware
corporation ("Purchaser") and an indirect, wholly owned subsidiary of Brady
Corporation, a Wisconsin corporation, upon the terms and subject to the
conditions set forth in the Offer to Purchase, dated February 22, 2000 (the
"Offer to Purchase"), and the related Letter of Transmittal (which, as amended
or supplemented from time to time, together constitute the "Offer"), receipt of
which are hereby acknowledged, the number of Shares indicated below pursuant to
the guaranteed delivery procedure set forth in Section 3 of the Offer to
Purchase.
Number of Shares:
--------------------------------
Share Certificate Numbers (if available):
-----------------------------------------------------
-----------------------------------------------------
If Shares will be delivered by book-entry transfer:
DTC Account Number:
---------------------------
Date:
--------------------------------------- , 2000
Names(s) of Record Holders(s):
- -----------------------------------------------------
- -----------------------------------------------------
Please Type or Print
Address(es):
- ---------------------------------------
- -----------------------------------------------------
Zip Code
Telephone Number:
- -----------------------------------------------------
Area Code
Signature(s):
- --------------------------------------
- -----------------------------------------------------
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a participant in the Security Transfer Agents Medallion
Program, the New York Stock Exchange Medallion Signature Guarantee Program or
the Stock Exchange Medallion Program (each, an "Eligible Institution"), hereby
guarantees that either the certificates representing the Shares tendered
hereby in proper form for transfer or timely confirmation of a book-entry
transfer of such Shares into the Depositary's account at the Book-Entry
Transfer Facility (as defined in the Offer to Purchase and pursuant to
procedures set forth in Section 3 of the Offer to Purchase), together with a
properly completed and duly executed Letter of Transmittal (or facsimile
thereof) with any required signature guarantees (or, in the case of a
book-entry transfer, an Agent's Message (as defined in the Offer to Purchase))
and any other documents required by the Letter of Transmittal, will be
received by the Depositary at one of its addresses set forth above within
three (3) New York Stock Exchange Inc. trading days after the date of
execution hereof.
2
<PAGE> 3
The Eligible Institution that completes this form must communicate the
guarantee to the Depositary and must deliver the Letter of Transmittal,
certificates for Shares and/or any other required documents to the Depositary
within the time period shown above. Failure to do so could result in a financial
loss to such Eligible Institution.
Name of Firm:
- --------------------------------------------------------------------------------
Address:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Zip Code
Area Code and
Telephone Number:
- --------------------------------------------------------------------------------
AUTHORIZED SIGNATURE
Name:
- --------------------------------------------------------------------------------
Please Type or Print
Title:
- --------------------------------------------------------------------------------
Dated: __, 2000
NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE OF GUARANTEED
DELIVERY. CERTIFICATES FOR SHARES ARE TO BE DELIVERED WITH THE LETTER OF
TRANSMITTAL.
3
<PAGE> 1
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
IMTEC INC.
AT
$12.00 NET PER SHARE
BY
IMTC ACQUISITION CORP.,
A WHOLLY OWNED, INDIRECT SUBSIDIARY OF
BRADY CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., EASTERN TIME, ON
TUESDAY, MARCH 21, 2000, UNLESS THE OFFER IS EXTENDED.
February 22, 2000
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been engaged by IMTC Acquisition Corp., a Delaware corporation
("Purchaser") and a wholly owned, indirect subsidiary of Brady Corporation, a
Wisconsin corporation ("Parent"), to act as Information Agent in connection with
its offer to purchase all of the outstanding shares of common stock, par value
$.01 per share, of Imtec Inc., a Delaware corporation (the "Company"), at $12.00
per Share, net to the seller in cash, upon the terms and subject to the
conditions set forth in the Offer to Purchase, dated February 22, 2000 (the
"Offer to Purchase"), of Purchaser and in the related Letter of Transmittal
(which, as amended or supplemented from time to time, together constitute the
"Offer"). Please furnish copies of the enclosed materials to those of your
clients for whom you hold Shares registered in your name or in the name of your
nominee.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (I) THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE TIME OF EXPIRATION OF THE OFFER THAT
NUMBER OF SHARES THAT, TOGETHER WITH ANY SHARES HELD BY OR ON BEHALF OF PARENT,
REPRESENTS AT LEAST 75 PERCENT OF THE ISSUED AND OUTSTANDING SHARES ON A FULLY
DILUTED BASIS AND (II) ANY WAITING PERIOD APPLICABLE UNDER THE HART-SCOTT-RODINO
ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED, HAVING EXPIRED OR TERMINATED.
Enclosed herewith are the following documents:
1. Offer to Purchase, dated February 22, 2000;
2. Letter of Transmittal to be used by stockholders of the Company in
accepting the Offer;
3. Notice of Guaranteed Delivery;
4. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9;
5. Letter to stockholders of the Company from the Chairman of the
Company, accompanied by the Company's Solicitation/Recommendation Statement
on Schedule 14D-9; and
6. A printed form of a letter that may be sent to your clients for
whose account you hold Shares in your name or in the name of your nominee,
with space provided for obtaining such clients' instructions with regard to
the Offer.
<PAGE> 2
The Offer is being made pursuant to an Agreement and Plan of Merger (the
"Merger Agreement"), dated as of February 11, 2000, by and among the Company,
Parent and Purchaser, pursuant to which, after completion of the Offer,
Purchaser will be merged with and into the Company and the Company will be the
surviving corporation (the "Merger") and each issued and outstanding Share
(other than Shares owned by Parent, Purchaser or any subsidiary of Parent,
Purchaser or the Company or held in the treasury of the Company or held by
stockholders who properly exercise dissenters' rights under Delaware law, if
any) shall, by virtue of the Merger and without any action on the part of the
holder thereof, be converted into and represent the right to receive the price
per Share paid by Purchaser in the Offer, without interest.
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE MERGER
AGREEMENT, APPROVED THE OFFER AND THE MERGER, DETERMINED THAT THE OFFER AND THE
MERGER ARE IN THE BEST INTERESTS OF THE HOLDERS OF SHARES AND UNANIMOUSLY
RECOMMENDS THAT STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT
TO 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 be deemed to have accepted for payment, and will
pay for, all Shares validly tendered and not properly withdrawn by the
Expiration Date (as defined in the Offer to Purchase) as, if and when Purchaser
gives oral or written notice to the Depositary of the Purchaser's acceptance of
the tenders of such Shares for payment pursuant to the Offer. Payment for Shares
purchased pursuant to the Offer will be made only after timely receipt by the
Depositary of (i) certificates for (or a timely Book-Entry Confirmation (as
defined in the Offer to Purchase) with respect to) such Shares, (ii) a properly
completed and duly executed Letter of Transmittal (or facsimile thereof) or, in
the case of a book-entry transfer, an Agent's Message (as defined in the Offer
to Purchase) and (iii) any other documents required by the Letter of
Transmittal. Accordingly, tendering stockholders may be paid at different times
depending upon when certificates for Shares or Book-Entry Confirmations with
respect to Shares are actually received by the Depositary. UNDER NO
CIRCUMSTANCES WILL INTEREST BE PAID ON THE PURCHASE PRICE FOR SHARES, REGARDLESS
OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING PAYMENT PURSUANT TO THE
OFFER.
The Offer is not being made (nor will tenders be accepted from or on behalf
of) holders of Shares in any jurisdiction in which the making or acceptance of
the Offer would not be in compliance with the laws of such jurisdiction. 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 will be deemed to be made on
behalf of the Purchaser by one or more registered brokers or dealers that are
licensed under the laws of such jurisdiction.
In order to tender Shares pursuant to the Offer, a properly completed and
duly executed Letter of Transmittal (or facsimile thereof), with any required
signature guarantees, or an Agent's Message (in the case of any book-entry
transfer), and any other documents required by the Letter of Transmittal, should
be sent to the Depositary, and either certificates representing the tendered
Shares should be delivered or such Shares must be delivered to the Depositary
pursuant to the procedures for book-entry transfers, all in accordance with the
instructions set forth in the Letter of Transmittal and the Offer to Purchase.
Neither Parent nor Purchaser will pay any fees or commissions to any broker
or dealer or other person (other than the Information Agent and the Depositary
as described in the Offer to Purchase) in connection with the solicitation of
tenders of Shares pursuant to the Offer. You will be reimbursed upon request for
customary mailing and handling expenses incurred by you in forwarding the
enclosed offering materials to your clients.
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS
PROMPTLY AS POSSIBLE. THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,
EASTERN TIME, ON TUESDAY, MARCH 21, 2000, UNLESS THE OFFER IS EXTENDED.
2
<PAGE> 3
Any inquiries you may have with respect to the Offer may be addressed to
the undersigned at the address and telephone numbers set forth on the back cover
page of the Offer to Purchase. Additional copies of enclosed materials may be
obtained from the Information Agent and will be furnished at Purchaser's
expense.
Very truly yours,
GEORGESON SHAREHOLDER
COMMUNICATIONS INC.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL RENDER YOU OR
ANY PERSON THE AGENT OF PURCHASER, PARENT, THE COMPANY, ANY AFFILIATE OF THE
COMPANY, THE INFORMATION AGENT OR THE DEPOSITARY, OR AUTHORIZE YOU OR ANY OTHER
PERSON TO USE ANY DOCUMENT OR MAKE ANY REPRESENTATION ON BEHALF OF ANY OF THEM
WITH RESPECT TO THE OFFER NOT CONTAINED IN THE OFFER TO PURCHASE OR THE LETTER
OF TRANSMITTAL.
3
<PAGE> 1
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
IMTEC INC.
AT
$12.00 NET PER SHARE
BY
IMTC ACQUISITION CORP.,
A WHOLLY OWNED, INDIRECT SUBSIDIARY OF
BRADY CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M.,
EASTERN TIME, ON TUESDAY MARCH 21, 2000, UNLESS THE OFFER IS EXTENDED.
February 22, 2000
To the Holders of Common Stock of Imtec Inc.:
Enclosed for your information is an Offer to Purchase, dated February 22,
2000 ("Offer to Purchase"), and the related Letter of Transmittal (which, as
amended or supplemented from time to time, together constitute the "Offer"),
relating to the Offer by IMTC Acquisition Corp., a Delaware corporation
("Purchaser") and a wholly owned, indirect subsidiary of Brady Corporation, a
Wisconsin corporation ("Parent"), to purchase all of the outstanding shares of
common stock, par value $.01 per share, of Imtec Inc. (the "Company") (the
"Shares"), at $12.00 per Share, net to the seller in cash, upon the terms and
subject to the conditions set forth in the Offer. Also enclosed is a letter to
stockholders of the Company from the Chairman of the Company, accompanied by the
Company's Solicitation/Recommendation Statement on Schedule 14D-9.
WE ARE THE HOLDER OF RECORD OF SHARES HELD BY US FOR YOUR ACCOUNT. A TENDER
OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD AND PURSUANT TO
YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL ACCOMPANYING THIS LETTER IS
FURNISHED TO YOU FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER
SHARES HELD BY US FOR YOUR ACCOUNT.
We request instructions as to whether you wish to tender any or all of the
Shares held by us for your account, pursuant to the terms and conditions set
forth in the Offer.
Your attention is directed to the following:
1. The offer price is $12.00 per Share, net to the seller in cash,
without interest thereon, upon the terms and subject to the conditions of
the Offer.
2. The Offer is being made for all of the outstanding Shares.
3. The Offer is being made pursuant to an Agreement and Plan of Merger
(the "Merger Agreement"), dated as of February 11, 2000, by and among the
Company, Parent and Purchaser, pursuant to which, after completion of the
Offer, Purchaser will be merged with and into the Company and the Company
will be the surviving corporation (the "Merger"), and each issued and
outstanding Share (other than Shares owned by Parent, Purchaser or any
subsidiary of Parent, Purchaser or the Company or held in the treasury of
the Company or Shares which are held by stockholders who properly exercise
dissenters' rights under Delaware law, if any) shall, by virtue of the
Merger, and without any action on the part of the holder thereof, be
converted into and represent the right to receive the price per Share paid
by Purchaser in the Offer, without interest.
<PAGE> 2
4. THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE
MERGER AGREEMENT, APPROVED THE OFFER AND THE MERGER, DETERMINED THAT THE
OFFER AND THE MERGER ARE IN THE BEST INTERESTS OF THE HOLDERS OF SHARES AND
UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR
SHARES PURSUANT TO THE OFFER.
5. The Offer is conditioned upon, among other things, there being
validly tendered and not withdrawn prior to the Expiration Date (as defined
in the Offer to Purchase) that number of Shares which together with Shares
held by or on behalf of Parent represents at least 75 percent of the then
issued and outstanding Shares on a fully diluted basis (the "Minimum Tender
Condition"). Subject to the terms of the Merger Agreement, the Offer is
also subject to other terms and conditions, including receipt of certain
regulatory approvals, set forth in the Offer to Purchase. Any or all
conditions to the Offer may be waived by Purchaser.
6. The Offer and withdrawal rights will expire at 5:00 p.m., Eastern
time, on Tuesday, March 21, 2000, unless the Offer is extended.
7. Any stock transfer taxes applicable to the sale of Shares to
Purchaser pursuant to the Offer will be paid by Purchaser, except as
otherwise provided in Instruction 6 of the Letter of Transmittal.
If you wish to have us tender any or all of the Shares held by us for your
account, please so instruct us by completing, executing and returning to us the
instruction form set forth below. Please forward your instructions to us in
ample time to permit us to submit a tender on your behalf prior to the
expiration of the Offer. If you authorize the tender of your Shares, all such
Shares will be tendered unless otherwise specified on the instruction form set
forth below.
Payment for Shares accepted for payment pursuant to the Offer will be in
all cases made only after timely receipt by Firstar Bank, National Association
(the "Depositary"), of (a) certificates for (or a timely Book-Entry Confirmation
(as defined in the Offer to Purchase) with respect to) such Shares, (b) a Letter
of Transmittal, properly completed and duly executed, with any required
signature guarantees, or, in the case of a book-entry transfer effected pursuant
to the procedure set forth in Section 3 of the Offer to Purchase, an Agent's
Message (as defined in the Offer to Purchase) and (c) any other documents
required by the Letter of Transmittal. Accordingly, tendering stockholders may
be paid at different times depending upon when certificates for Shares or
Book-Entry Confirmations with respect to Shares are actually received by the
Depositary. UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE PURCHASE PRICE
FOR SHARES, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING
PAYMENT PURSUANT TO THE OFFER.
The Offer is not being made to (nor will tenders be accepted from, or on
behalf of) holders of Shares in any jurisdiction in which the making or
acceptance of the Offer would not be in compliance with the laws of such
jurisdiction. 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 will be
deemed made on behalf of Purchaser by the registered brokers or dealers that are
licensed under the laws of such jurisdiction. An envelope in which to return
your instructions to us is enclosed.
2
<PAGE> 3
INSTRUCTIONS WITH RESPECT TO THE
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
IMTEC INC.
AT
$12.00 NET PER SHARE
BY
IMTC ACQUISITION CORP.
A WHOLLY OWNED, INDIRECT SUBSIDIARY OF
BRADY CORPORATION
The undersigned acknowledge(s) receipt of your letter and the enclosed
Offer to Purchase, dated February 22, 2000, and the related Letter of
Transmittal, in connection with the offer by IMTC Acquisition Corp., a Delaware
corporation ("Purchaser") and a wholly owned, indirect subsidiary of Brady
Corporation, a Wisconsin corporation ("Parent"), to purchase for cash all of the
outstanding shares of common stock, par value $.01 per share (the "Shares"), of
Imtec Inc., a Delaware corporation (the "Company"), at $12.00 per Share, net to
the seller in cash, upon the terms and conditions set forth in the Offer.
This will instruct you to tender the number of Shares indicated below (or
if no number is indicated below, all Shares) that are held by you for the
account of the undersigned, upon the terms and subject to the conditions set
forth in the Offer and the related Letter of Transmittal.
Dated: , 2000
Number of Shares to be Tendered:
---------------------- SHARES*
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Signature(s)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Please Print Name(s)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Please Print Address(es)
- --------------------------------------------------------------------------------
Area Code and Telephone Number(s)
- --------------------------------------------------------------------------------
Tax Identification or
Social Security Number(s)
- -------------------------
* Unless otherwise indicated, it will be assumed that all your Shares are to be
tendered.
3
<PAGE> 1
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER--Social Security numbers have nine digits separated by two hyphens: i.e.
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen: i.e. 00-0000000. The table below will help determine the number to
give the payer.
- ------------------------------------------------------------
- ------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THIS TYPE OF ACCOUNT: GIVE THE
SOCIAL SECURITY
NUMBER OF--
- ----------------------------------------------------
<S> <C>
1. An individual's The individual
account
2. Two or more The actual owner of the
individuals (joint account or, if combined
account) funds, the first
individual on the
account(1)
3. Custodian account of The minor(2)
a minor (Uniform Gift
to Minors Act)
4. a. The usual The grantor-trustee(1)
revocable savings
trust (grantor is
also trustee)
b. So-called trust The actual owner(1)
account that is
not a legal or
valid trust under
state law
5. Sole proprietorship The owner(4)
account
</TABLE>
<TABLE>
- ----------------------------------------------------
<CAPTION>
FOR THIS TYPE OF ACCOUNT: GIVE THE
EMPLOYER
IDENTIFICATION
NUMBER OF--
<S> <C>
6. A valid trust, The legal entity(5)
estate, or pension
trust
7. Corporate account The corporation
8. Religious, The organization
charitable, or
educational
organization account
9. Partnership account The partnership
held in the name of
the business
10. Association, club, or The organization
other tax-exempt
organization
11. A broker or The broker or nominee
registered nominee
12. Account with the The public entity
Department of
Agriculture in the
name of a public
entity (such as a
State or local
government, school
district, or prison)
that receives
agricultural program
payments
</TABLE>
- ------------------------------------------------------------
- ------------------------------------------------------------
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show the name of the owner.
(5) List first and circle the name of the legal trust, estate, or pension trust.
Do not furnish the identifying number of the personal representative or
trustee unless the legal entity itself is not designated in the account
title.
NOTE: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
<PAGE> 2
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5 (Application for a Social Security Number Card) or Form
SS-4 (Application for Employer Identification Number) from your local office of
the Social Security Administration or the Internal Revenue Service and apply for
a number.
PAYEES AND PAYMENTS EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments include the
following:
- - An organization exempt from tax under section 501(a) of the Internal Revenue
Code of 1986, as amended (the "Code"), or an individual retirement plan.
- - The United States or any agency or instrumentality thereof.
- - A state, the District of Columbia, a possession of the United States, or any
subdivision or instrumentality thereof.
- - A foreign government, a political subdivision of a foreign government, or any
agency or instrumentality thereof.
- - An international organization or any agency, or instrumentality thereof.
Other payees that may be exempt from backup withholding include:
- - A corporation.
- - A financial institution.
- - A registered dealer in securities or commodities registered in the United
States or a possession of the United States.
- - A real estate investment trust.
- - A common trust fund operated by a bank under section 584(a) of the Code.
- - An exempt charitable remainder trust, or a non-exempt trust described in
section 4947(a)(1) or the Code.
- - An entity registered at all times under the Investment Company Act of 1940.
- - A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to
backup withholding include the following:
- - Payments to nonresident aliens subject to withholding under section 1441 of
the Code.
- - Payments to partnerships not engaged in a trade or business in the United
States and which have at least one non-resident partner.
- - Payments of patronage dividends where the amount received is not paid in
money.
- - Payments made by certain foreign organizations.
- - Payments made to a nominee.
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 of the Code).
- - Payments described in section 6049(b)(5) of the Code to non-resident aliens.
- - Payments on tax-free covenant bonds under section 1451 of the Code.
- - Payments made by certain foreign organizations.
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, AND
RETURN IT TO THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE
DIVIDENDS, ALSO SIGN AND DATE THE FORM. IF YOU ARE A NONRESIDENT ALIEN OR A
FOREIGN ENTITY NOT SUBJECT TO BACKUP WITHHOLDING, FILE WITH PAYER A COMPLETED
INTERNAL REVENUE FORM W-8 (CERTIFICATE OF FOREIGN STATUS).
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), 6045, and 6050A of the
Code.
PRIVACY ACT NOTICE.--Section 6109 of the Code requires most recipients of
dividend, interest, or other payments to give taxpayer identification numbers to
payers who must report the payments to the Internal Revenue Service. The
Internal Revenue Service uses the numbers for identification purposes. Payers
must be given the numbers whether or not recipients are required to file tax
returns. Beginning January 1, 1993, payers must generally withhold 31% of
taxable interest, dividend, and certain other payments to a payee who does not
furnish a taxpayer identification number to a payer. Certain penalties may also
apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you fail
to furnish your taxpayer identification number to a payer, you are subject to a
penalty of $50 for each such failure unless your failure is due to reasonable
cause and not to willful neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Falsifying certifications or
affirmations may subject you to criminal penalties including fines and/or
imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE
<PAGE> 1
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
BRADY CORPORATION,
IMTC ACQUISITION CORP.
AND
IMTEC INC.
DATED AS OF FEBRUARY 11, 2000
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
RECITALS.................................................... 1
ARTICLE I
DEFINITIONS............................................... 1
1.1 Acquisition and Acquisition Proposal.......... 1
1.2 Affiliate..................................... 1
1.3 Agreement..................................... 1
1.4 Buildings..................................... 1
1.5 CERCLA........................................ 1
1.6 Certificate of Merger......................... 1
1.7 Closing Date.................................. 1
1.8 Code.......................................... 1
1.9 Company....................................... 1
1.10 Company Certificates.......................... 1
1.11 Company Common Stock.......................... 2
1.12 Company SEC Reports........................... 2
1.13 Company Stockholders.......................... 2
1.14 Company Special Meeting....................... 2
1.15 Confidentiality Agreement..................... 2
1.16 Continuing Directors.......................... 2
1.17 Contracts..................................... 2
1.18 DGCL.......................................... 2
1.19 Disclosure Schedule........................... 2
1.20 Dissenting Shares............................. 2
1.21 Effective Time of Merger...................... 2
1.22 Employee Benefit Plans........................ 2
1.23 Environmental Claim, Environmental Hazardous
Materials, Environmental Laws, Environmental
Permits and Environmental Release............. 2
1.24 ERISA......................................... 2
1.25 Exchange Act.................................. 2
1.26 Exchange Agent................................ 2
1.27 Exchange Fund................................. 2
1.28 Existing Contracts............................ 2
1.29 Existing Liens................................ 3
1.30 Existing Litigation........................... 3
1.31 Existing Permits.............................. 3
1.32 Existing Stock Options........................ 3
1.33 Existing Plans................................ 3
1.34 HSR Act....................................... 3
1.35 Indebtedness.................................. 3
1.36 Indemnified Parties........................... 3
1.37 Insurance Policies............................ 3
1.38 Knowledge..................................... 3
1.39 Knowledge of the Company...................... 3
1.40 Law........................................... 3
1.41 Lien.......................................... 3
1.42 Material Adverse Effect....................... 3
1.43 Merger........................................ 3
1.44 Merger Consideration.......................... 3
1.45 Minimum Condition............................. 3
1.46 Newco......................................... 3
</TABLE>
i
<PAGE> 3
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
1.47 Offer......................................... 3
1.48 Offer Documents............................... 4
1.49 Option Consideration.......................... 4
1.50 Parent........................................ 4
1.51 Person........................................ 4
1.52 Product Liability Matters..................... 4
1.53 Proxy Statement............................... 4
1.54 Real Estate................................... 4
1.55 Representatives............................... 4
1.56 Schedule 14D-9................................ 4
1.57 SEC........................................... 4
1.58 Securities Act................................ 4
1.59 Shareholder Option Agreements................. 4
1.60 Special Event................................. 4
1.61 Stock Award................................... 4
1.62 Stock Option Plans............................ 4
1.63 Subsidiary.................................... 4
1.64 Superior Proposal............................. 4
1.65 Surviving Corporation......................... 4
1.66 Takeover Laws................................. 4
1.67 Termination Fee............................... 4
1.68 WBCL.......................................... 4
1.69 Year 2000 Compliant........................... 4
ARTICLE II
THE OFFER................................................. 5
2.1 The Offer...................................... 5
2.2 Company Actions................................ 6
ARTICLE III
THE MERGER................................................ 6
3.1 The Merger.................................... 6
3.2 Effect of the Merger.......................... 7
3.3 Effective Time of Merger...................... 7
3.4 Conversion of Company Common Stock............ 7
3.5 Newco Stock................................... 7
3.6 Exchange of Company Certificates.............. 7
3.7 Stock Transfer Books.......................... 8
3.8 Stockholder's Meeting......................... 9
3.9 Dissenting Shares............................. 9
3.10 Takeover Laws................................. 9
3.11 Stock Options................................. 9
ARTICLE IV
OTHER AGREEMENTS.......................................... 10
4.1 Access........................................ 10
4.2 Disclosure Schedule........................... 10
4.3 Duties Concerning Representations and
Covenants........................................... 11
4.4 Deliveries of Information; Consultation....... 11
4.5 Acquisition Proposals......................... 11
4.6 Legal Conditions to Merger.................... 13
4.7 Public Announcements.......................... 13
4.8 Indemnification of Company Directors and
Officers............................................ 13
4.9 Company Board................................. 14
</TABLE>
ii
<PAGE> 4
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE COMPANY............. 14
5.1 Organization; Business........................ 14
5.2 Capitalization................................ 14
5.3 Authorization; Enforceability................. 15
5.4 No Violation or Conflict...................... 15
5.5 Title to Assets............................... 15
5.6 Litigation.................................... 15
5.7 Company SEC Reports and Books and Records..... 15
5.8 Absence of Certain Changes.................... 16
5.9 Contingent and Undisclosed Liabilities........ 16
5.10 Existing Contracts............................ 16
5.11 Insurance Policies............................ 17
5.12 Compliance with Law; No Default............... 17
5.13 Brokers....................................... 18
5.14 Patents, Trademarks and Like Assets........... 18
5.15 Permits....................................... 18
5.16 Employee Benefit Plans........................ 18
5.17 Labor Matters................................. 19
5.18 Real Estate................................... 19
5.19 No Pending Acquisitions....................... 20
5.20 Taxes......................................... 20
5.21 Information Supplied.......................... 21
5.22 Takeover Statutes............................. 21
5.23 Environmental Protection...................... 21
5.24 Certain Transactions.......................... 23
5.25 Product Matters............................... 23
5.26 Year 2000..................................... 23
5.27 Required Vote of the Company Stockholders..... 23
5.28 Representations Complete...................... 23
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF PARENT AND NEWCO........ 23
6.1 Organization.................................. 23
6.2 Authorization; Enforceability................. 24
6.3 No Violation or Conflict...................... 24
6.4 Litigation.................................... 24
6.5 Financing..................................... 24
6.6 Brokers....................................... 24
6.7 Governmental Approvals........................ 24
6.8 Offer Documents; Proxy Statement.............. 24
6.9 Representations Complete...................... 24
ARTICLE VII
CONDUCT OF BUSINESS BY THE COMPANY PENDING THE MERGER..... 25
7.1 Carry on in Regular Course.................... 25
7.2 Use of Assets................................. 25
7.3 Contracts..................................... 25
7.4 Insurance Policies............................ 25
7.5 Employment Matters............................ 25
7.6 Contracts and Commitments..................... 25
7.7 Indebtedness.................................. 25
7.8 Preservation of Relationships................. 25
</TABLE>
iii
<PAGE> 5
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
7.9 Compliance with Laws.......................... 25
7.10 Taxes......................................... 25
7.11 Amendments.................................... 25
7.12 Dividends; Redemptions; Issuance of Stock..... 25
7.13 No Dispositions............................... 25
7.14 Dissolution; Reorganization................... 25
7.15 Litigation.................................... 25
ARTICLE VIII
CONDITIONS TO CONSUMMATION OF THE MERGER.................. 26
8.1 Injunction.................................... 26
8.2 Governmental Approvals........................ 26
8.3 The Offer..................................... 26
8.4 Approval of Company Stockholders; Certificate
of Merger........................................... 26
ARTICLE IX
TERMINATION; MISCELLANEOUS................................ 26
9.1 Termination................................... 26
9.2 Rights on Termination; Waiver................. 27
9.3 Survival of Representations, Warranties and
Covenants........................................... 27
9.4 Entire Agreement; Amendment................... 27
9.5 Expenses...................................... 27
9.6 Governing Law................................. 27
9.7 Assignment.................................... 27
9.8 Notices....................................... 27
9.9 Counterparts; Headings........................ 28
9.10 Interpretation................................ 28
9.11 Severability.................................. 28
9.12 Specific Performance.......................... 28
9.13 No Reliance................................... 28
SIGNATURES PAGE............................................. 29
ANNEX A..................................................... A-1
</TABLE>
iv
<PAGE> 6
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER is made as of the 11th day of February,
2000 by and among BRADY CORPORATION, a Wisconsin corporation ("Parent"), IMTC
ACQUISITION CORP., a Delaware corporation ("Newco"), and IMTEC INC., a Delaware
corporation (the "Company").
RECITALS
WHEREAS, the respective Boards of Directors of Parent, Newco and the
Company have each determined that it is advisable and in the best interests of
each such respective entity and their stockholders for Newco to commence a cash
tender offer to purchase all outstanding shares of Company Common Stock (as
defined below) at a price of $12.00 per share (the "Offer") and, following the
consummation of the Offer, to merge Newco with and into the Company (the
"Merger"); and
WHEREAS, the Board of Directors of the Company has unanimously (i) approved
the Offer and the Merger, (ii) determined that the Offer and the Merger are in
the best interests of the Company Stockholders, and (iii) approved and adopted
this Agreement and the transactions contemplated hereby.
NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements set forth herein, the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS
When used in this Agreement, the following terms shall have the meanings
specified:
1.1 "ACQUISITION" AND "ACQUISITION PROPOSAL" shall have the meanings
specified in Section 4.5(a) of this Agreement.
1.2 "AFFILIATE" shall have the meaning given to such term in Rule 12b-2
under the Exchange Act.
1.3 "AGREEMENT" shall mean this Agreement and Plan of Merger, together with
the Exhibits and the Disclosure Schedule attached hereto, as the same may be
amended from time to time in accordance with the terms hereof.
1.4 "BUILDINGS" shall mean all buildings, fixtures, structures and
improvements used by the Company and located on the Real Estate.
1.5 "CERCLA" shall mean the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, 42 U.S.C.A. sec. 9601, et
seq., and the rules, regulations and orders promulgated thereunder.
1.6 "CERTIFICATE OF MERGER" shall mean the appropriate Certificate of
Merger to be filed with the Delaware Secretary of State in connection with the
Merger.
1.7 "CLOSING DATE" shall mean:
(a) That date following consummation of the Offer which is the first
business day after satisfaction (or waiver) of all of the conditions set
forth in Article VIII; or
(b) Such other date as the parties may mutually agree to in writing.
1.8 "CODE" shall mean the Internal Revenue Code of 1986, as amended, and
the regulations promulgated thereunder, as the same may be in effect from time
to time.
1.9 "COMPANY" shall mean Imtec Inc., a Delaware corporation.
1.10 "COMPANY CERTIFICATES" shall have the meaning specified in Section
3.6(b)(i).
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1.11 "COMPANY COMMON STOCK" shall mean all of the issued and outstanding
shares of common stock, $.01 par value per share, of the Company.
1.12 "COMPANY SEC REPORTS" shall mean the Company's: (a) Annual Reports on
Form 10-K for the years ended June 30, 1996, 1997, 1998 and 1999 (including any
amendments thereto) and related Annual Reports to Stockholders; (b) Quarterly
Reports on Form 10-Q for the quarters ended September 30, 1996, December 31,
1996, March 31, 1997, September 30, 1997, December 31, 1997, March 31, 1998,
September 30, 1998, December 31, 1998, March 31, 1999 and September 30, 1999;
(c) Proxy Statements dated October 15, 1996, September 15, 1997 and 1998 and
September 24, 1999; (d) Current Reports on Form 8-K dated February 21, 1997 (as
amended) and August 26, 1997; (e) registration statements on Form S-8, filed on
September 6, 1995 and October 2, 1998; and (f) all documents filed by the
Company with the SEC after the date of this Agreement and prior to the Effective
Time of Merger.
1.13 "COMPANY STOCKHOLDERS" shall mean all Persons owning shares of Company
Common Stock on the relevant date.
1.14 "COMPANY SPECIAL MEETING" shall mean a special meeting of the Company
Stockholders for the purpose of considering the Merger, this Agreement and the
transactions contemplated hereby and for such other purposes as may be necessary
or desirable.
1.15 "CONFIDENTIALITY AGREEMENT" shall mean the non-disclosure agreement
between Parent and the Company dated as of November 2, 1999.
1.16 "CONTINUING DIRECTORS" shall have the meaning specified in Section
4.9(b) of this Agreement.
1.17 "CONTRACTS" shall mean all of the material contracts, agreements,
leases, relationships and commitments, written or oral, to which the Company is
a party or by which the Company is bound.
1.18 "DGCL" shall mean the Delaware General Corporation Law, as the same
may be in effect from time to time.
1.19 "DISCLOSURE SCHEDULE" shall mean the Disclosure Schedule, dated the
date of this Agreement, delivered by the Company to Parent contemporaneously
with the execution and delivery of this Agreement.
1.20 "DISSENTING SHARES" shall have the meaning specified in Section 3.9.
1.21 "EFFECTIVE TIME OF MERGER" shall have the meaning specified in Section
3.3 of this Agreement.
1.22 "EMPLOYEE BENEFIT PLANS" shall mean any pension plan, profit sharing
plan, bonus plan, incentive compensation plan, stock ownership plan, stock
purchase plan, stock option plan, stock appreciation plan, employee benefit or
welfare plan, employee benefit policy, retirement plan, deferred compensation
plan, fringe benefit program, insurance plan, severance plan, disability plan,
health care plan, sick leave plan, death benefit plan, defined contribution plan
or any other plan or program to provide retirement income, fringe benefits or
other benefits to former or current employees of the Company.
1.23 "ENVIRONMENTAL CLAIM," "ENVIRONMENTAL HAZARDOUS MATERIALS,"
"ENVIRONMENTAL LAWS," "ENVIRONMENTAL PERMITS" AND "ENVIRONMENTAL RELEASE" shall
have the meanings specified in Section 5.23 of this Agreement.
1.24 "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as the same may be in effect from time to time.
1.25 "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as the
same may be in effect from time to time.
1.26 "EXCHANGE AGENT" shall have the meaning specified in Section 3.6(a).
1.27 "EXCHANGE FUND" shall have the meaning specified in Section 3.6(a).
1.28 "EXISTING CONTRACTS" shall mean those Contracts which are listed and
briefly described on the Disclosure Schedule.
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1.29 "EXISTING LIENS" shall mean all Liens affecting any of the assets or
properties of the Company on the date of this Agreement, all of which are listed
and briefly described on the Disclosure Schedule.
1.30 "EXISTING LITIGATION" shall mean all pending or, to the Knowledge of
the Company, threatened suits, audit inquiries, charges, workers compensation
claims, product warranty claims, litigation, arbitrations, proceedings,
governmental investigations, labor grievances, citations and actions of any kind
against the Company, all of which are listed and briefly described on the
Disclosure Schedule.
1.31 "EXISTING PERMITS" shall mean all licenses, permits, approvals,
franchises, qualifications, certificates, permissions, agreements and other
orders and governmental or regulatory authorizations required for the conduct of
the business of the Company. All Existing Permits which are material to the
Company are listed and briefly described on the Disclosure Schedule.
1.32 "EXISTING STOCK OPTIONS" shall have the meaning specified in Section
3.11(a) of this Agreement.
1.33 "EXISTING PLANS" shall mean all Employee Benefit Plans of the Company,
all of which are listed and briefly described on the Disclosure Schedule.
1.34 "HSR ACT" shall mean the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as the same may be in effect from time to time.
1.35 "INDEBTEDNESS" shall mean all liabilities or obligations of the
Company, whether primary or secondary or absolute or contingent: (a) for
borrowed money; (b) evidenced by notes, bonds, debentures or similar
instruments; or (c) secured by Liens on any assets of the Company. All
Indebtedness is listed and briefly described on the Disclosure Schedule.
1.36 "INDEMNIFIED PARTIES" shall have the meaning specified in Section
4.8(b).
1.37 "INSURANCE POLICIES" shall mean all of the insurance policies
currently in effect and owned by the Company, all of which are listed and
briefly described on the Disclosure Schedule.
1.38 "KNOWLEDGE" An individual shall be deemed to have "Knowledge" of a
particular fact or other matter if such individual is actually aware of such
fact or if such individual should be aware of such fact after a reasonable
investigation concerning the existence of such fact or other matter.
1.39 "KNOWLEDGE OF THE COMPANY," "the Company's Knowledge" or similar terms
shall mean the Knowledge of Steven D. Anton, George S. Norfleet III, James
Searcy, William MacDougall and/or John Kiernan.
1.40 "LAW" shall mean any foreign, federal, state, local or other law,
rule, regulation or governmental requirement or restriction of any kind, and the
rules, regulations and orders promulgated thereunder by any regulatory agency,
court or other Person.
1.41 "LIEN" shall mean, with respect to any asset: (a) any mortgage,
pledge, lien, charge, claim, restriction, reservation, condition, easement,
covenant, lease, encroachment, title defect, imposition, security interest or
other encumbrance of any kind; and (b) the interest of a vendor or lessor under
any conditional sale agreement, financing lease or other title retention
agreement relating to such assets.
1.42 "MATERIAL ADVERSE EFFECT" shall mean a material adverse effect on the
condition, business, assets, results of operations or prospects of the entity to
which it refers, taken as a whole.
1.43 "MERGER" shall mean the merger of Newco with and into the Company
pursuant to this Agreement and the Certificate of Merger.
1.44 "MERGER CONSIDERATION" shall have the meaning specified in Section
2.1(a) of this Agreement.
1.45 "MINIMUM CONDITION" shall have the meaning specified in Section 2.1(a)
of this Agreement.
1.46 "NEWCO" shall mean IMTC Acquisition Corp., a Delaware corporation and
an indirect, wholly owned Subsidiary of Parent.
1.47 "OFFER" shall have the meaning specified in Section 2.1(a) of this
Agreement.
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1.48 "OFFER DOCUMENTS" shall have the meaning specified in Section 2.1(c)
of this Agreement.
1.49 "OPTION CONSIDERATION" shall have the meaning specified in Section
3.11(a) of this Agreement.
1.50 "PARENT" shall mean Brady Corporation, a Wisconsin corporation.
1.51 "PERSON" shall mean a natural person, corporation, trust, partnership,
limited liability company, association, unincorporated organization,
governmental entity, agency or branch or a department thereof, or any other
legal entity.
1.52 "PRODUCT LIABILITY MATTERS" shall mean any and all product recalls,
and liabilities or obligations or damages of any kind for death, disease, or
injury to Persons, businesses or property relating to the products designed,
produced, distributed, sold or shipped by the Company.
1.53 "PROXY STATEMENT" shall have the meaning specified in Section 5.21 of
this Agreement.
1.54 "REAL ESTATE" shall mean the parcels of real property owned or leased
by the Company, all of which are identified in the Disclosure Schedule.
1.55 "REPRESENTATIVES" shall have the meaning specified in Section 4.1(a)
of this Agreement.
1.56 "SCHEDULE 14D-9" shall have the meaning specified in Section 2.2(b) of
this Agreement.
1.57 "SEC" shall mean the Securities and Exchange Commission.
1.58 "SECURITIES ACT" shall mean the Securities Act of 1933, as the same
may be in effect from time to time.
1.59 "SHAREHOLDER OPTION AGREEMENTS" shall mean the agreement dated as of
December 9, 1999 between Parent and each director and all but one holder of
greater than five percent (5%) of Company Common Stock obligating each such
Person to tender all shares of Company Common Stock beneficially owned by such
Person, and any amendments thereto, and an agreement dated as of December 9,
1999 between Parent and a holder of greater than five percent (5%) of Company
Common Stock obligating such Person to tender a portion of its Company Common
Stock beneficially owned by such Person pursuant to the Offer, and any
amendments thereto.
1.60 "SPECIAL EVENT" shall have the meaning specified in Section
4.5(a)(iii) of this Agreement.
1.61 "STOCK AWARD" shall have the meaning specified in Section 3.11(b) of
this Agreement.
1.62 "STOCK OPTION PLANS" shall have the meaning specified in Section
3.11(a) of this Agreement.
1.63 "SUBSIDIARY" shall mean, when used with reference to an entity, any
other entity of which securities or other ownerships interests having ordinary
voting power to elect a majority of the board of directors or other persons
performing similar functions, or a majority of the outstanding voting securities
of which, are owned directly or indirectly by such entity.
1.64 "SUPERIOR PROPOSAL" shall have the meaning specified in Section 4.5(a)
of this Agreement.
1.65 "SURVIVING CORPORATION" shall have the meaning specified in Section
3.1 of this Agreement.
1.66 "TAKEOVER LAWS" shall have the meaning specified in Section 3.10 of
this Agreement.
1.67 "TERMINATION FEE" shall have the meaning specified in Section
4.5(a)(iv) of this Agreement.
1.68 "WBCL" shall mean the Wisconsin Business Corporation Law, as the same
may be in effect from time to time.
1.69 "YEAR 2000 COMPLIANT" shall have the meaning specified in Section 5.26
of this Agreement.
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ARTICLE II
THE OFFER
2.1 THE OFFER.
(a) Provided that this Agreement shall not have been terminated in
accordance with Section 9.1 hereof and none of the conditions set forth in
paragraphs (a) through (i) of Annex A hereto shall have occurred or be
existing, as promptly as reasonably practicable (but in any event within
five (5) business days from the initial public announcement of the
execution of this Agreement), Parent shall cause Newco to commence an offer
to purchase all outstanding shares of Company Common Stock, at a price of
$12.00 per share net to the seller in cash (the "Merger Consideration"),
which shall remain open for at least twenty (20) business days (the
"Offer") and, subject to the conditions of the Offer, shall use its
reasonable best efforts to consummate the Offer. Newco shall accept for
payment shares of Company Common Stock which have been validly tendered and
not withdrawn pursuant to the Offer at the earliest time following
expiration of the Offer as provided in Section 2.1(b) hereof. The
obligations of Newco to consummate the Offer, to accept for payment and to
pay for any shares of Company Common Stock tendered shall be subject only
to those conditions set forth in Annex A hereto, in addition to the
condition that there be validly tendered and not properly withdrawn prior
to the expiration of the Offer a number of shares of Company Common Stock
which constitutes at least seventy-five percent (75%) of the then
outstanding shares of Company Common Stock entitled to vote, measured on a
fully diluted basis (the "Minimum Condition").
(b) Parent and Newco expressly reserve the right to waive any
condition set forth in Annex A hereto (including the Minimum Condition)
without the consent of the Company, and to make any other changes in the
terms and conditions of the Offer; provided, however, that neither Parent
nor Newco will, without the prior written consent of the Board of Directors
of the Company, decrease the amount or change the form of the consideration
payable in the Offer, decrease the number of shares of Company Common Stock
sought pursuant to the Offer, impose additional conditions to the Offer or
amend any term of the Offer in any manner adverse to the Company
Stockholders. Assuming the prior satisfaction or waiver of the conditions
to the Offer, Parent and Newco covenant and agree to accept for payment and
pay for, in accordance with the terms of the Offer, shares of Company
Common Stock tendered pursuant to the Offer as soon as permitted to do so
under applicable Law. Notwithstanding the foregoing, but subject to the
provisions of Section 9.1(e) of this Agreement, Parent and Newco shall have
the right to (i) extend the Offer, if at the then scheduled expiration date
of the Offer any of the conditions to Newco's obligation to accept for
payment and pay for the shares of Company Common Stock shall not be
satisfied or waived, until such time as such conditions are satisfied or
waived, (ii) extend the Offer for any period required by any rule,
regulation, interpretation or position of the SEC, United States Department
of Justice or United States Federal Trade Commission or the staff of any
such Governmental Entities applicable to the Offer, and (iii) extend the
Offer for any reason on one or more occasions for an aggregate period of
not more than 30 business days (for all such extensions) beyond the latest
expiration date that would otherwise be permitted under clause (i) or (ii)
of this sentence.
(c) As soon as reasonably practicable on the date of commencement of
the Offer, Parent and Newco shall file with the SEC a Tender Offer
Statement on Schedule TO with respect to the Offer which will contain the
offer to purchase and form of the related letter of transmittal (together
with any supplements or amendments thereto, the "Offer Documents"). The
Offer Documents will comply in all material respects with the provisions of
applicable federal securities Laws. Each of Parent, Newco and the Company
agrees promptly to correct any information provided by it for use in the
Offer Documents if and to the extent that it shall have become false or
misleading in any material respect, and Parent and Newco each further agree
to take all steps necessary to cause the Offer Documents as so corrected to
be filed with the SEC and disseminated to the Company Stockholders, in each
case as and to the extent required by applicable federal securities Laws.
The Company and its counsel shall be given a reasonable opportunity to
review and comment on the Offer Documents and any amendments thereto prior
to the filing thereof with the SEC.
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2.2 COMPANY ACTIONS.
(a) The Company hereby approves of and consents to the Offer and
represents that the Board of Directors of the Company, at a meeting duly
called and held, has unanimously (i) determined that the Offer and the
Merger, taken together, are fair to and in the best interests of the
Company Stockholders, (ii) approved and adopted this Agreement and the
transactions contemplated hereby, including the Offer and the Merger, and
that such approval constitutes the requisite approval of the Offer, this
Agreement and the Merger for purposes of Section 203(a)(1) of the DGCL, and
(iii) resolved to recommend that the Company Stockholders accept the Offer,
tender their shares of Company Common Stock thereunder to Newco and approve
and adopt this Agreement and the Merger; provided that such recommendation
may be withdrawn, modified or amended if the Board of Directors reasonably
determines in good faith, based on the written advice of outside legal
counsel to the Company, that such action is necessary in order for the
Board of Directors of the Company to comply with its fiduciary duties under
applicable Law. The Company consents to the inclusion of such
recommendation and approval in the Offer Documents. The Company has been
advised of the execution of the Shareholder Option Agreements and that
prior to such execution the Company's Board of Directors unanimously
approved such agreements for purposes of Section 203(a) of the DGCL.
(b) The Company hereby agrees to file with the SEC as soon as
reasonably practicable on the date of commencement of the Offer a
Solicitation/Recommendation Statement on Schedule 14D-9 (together with any
amendments or supplements thereto, the "Schedule 14D-9") containing the
recommendations described in Section 2.2(a). The Schedule 14D-9 will comply
in all material respects with the provisions of applicable federal
securities Laws. The Company, Parent and Newco each agree promptly to
correct any information provided by it for use in the Schedule 14D-9 if and
to the extent that it shall have become false or misleading in any material
respect, and the Company further agrees to take all steps necessary to
cause the Schedule 14D-9 as so corrected to be filed with the SEC and
disseminated to the Company Stockholders, in each case as and to the extent
required by applicable federal securities Laws. Parent and its counsel
shall be given a reasonable opportunity to review and comment on the
Schedule 14D-9 and any amendments thereto prior to the filing thereof with
the SEC. The Company hereby consents to the inclusion in the Offer of the
recommendations described in Section 2.2(a).
(c) In connection with the Offer, the Company will promptly furnish
Parent and Newco with mailing labels, security position listings and any
available listing or computer file containing the names and addresses of
the record holders of Company Common Stock as of a recent date and will
furnish Parent and Newco with such information and assistance (including
without limitation updated lists of the Company Stockholders, mailing
labels and lists of securities positions) as Parent, Newco or their agents
may reasonably request in communicating the Offer to the Company
Stockholders. Subject to the requirements of applicable Law, and except for
such steps as are necessary to disseminate the documents constituting the
Offer and any other documents necessary to consummate the Merger, Parent
and Newco and each of their Affiliates, associates and advisers shall use
such information only in connection with the Offer and the Merger and, if
this Agreement is terminated, will keep such information confidential with
such care as is equivalent to the care exercised by such parties with
respect to their respective proprietary or confidential information, and
will deliver to the Company all such information (and copies thereof) then
in their possession.
ARTICLE III
THE MERGER
3.1 THE MERGER. Subject to the terms and conditions of this Agreement, as
of the Effective Time of Merger, Newco and the Company shall consummate the
Merger in which (a) Newco will be merged with and into the Company and the
separate corporate existence of Newco shall thereupon cease; (b) the Company
shall be the successor or surviving corporation in the Merger and shall continue
to be governed by the Laws of the State of Delaware; and (c) the separate
corporate existence of the Company with all its rights, privileges, immunities,
powers and franchises shall continue unaffected and unimpaired by the Merger.
The corporation
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surviving the Merger is sometimes hereinafter referred to as the "Surviving
Corporation." The Merger shall be pursuant to the provisions of, and shall be
with the effect provided in, the applicable provisions of the DGCL.
3.2 EFFECT OF THE MERGER.
(a) The Certificate of Incorporation of Newco, as in effect
immediately prior to the Effective Time of Merger, shall be the Certificate
of Incorporation of the Surviving Corporation until amended in accordance
with Law.
(b) The Bylaws of Newco, as in effect immediately prior to the
Effective Time of Merger, shall be the Bylaws of the Surviving Corporation
until amended in accordance with Law.
(c) The directors of Newco at the Effective Time of Merger shall, from
and after the Effective Time of Merger, be the initial directors of the
Surviving Corporation until their successors have been duly elected or
appointed and qualified or until their earlier death, resignation or
removal in accordance with the Surviving Corporation's Certificate of
Incorporation and Bylaws then in effect.
(d) The officers of Newco at the Effective Time of Merger shall, from
and after the Effective Time of Merger, be the initial officers of the
Surviving Corporation until their successors have been duly elected or
appointed and qualified or until their earlier death, resignation or
removal in accordance with the Surviving Corporation's Certificate of
Incorporation and Bylaws.
3.3 EFFECTIVE TIME OF MERGER. The parties hereto will cause the Certificate
of Merger to be executed and filed on the Closing Date as provided in the DGCL.
The Merger shall become effective on the date and time of the filing of the
Certificate of Merger with the Delaware Secretary of State, or such other date
as is agreed upon by the parties and specified in the Certificate of Merger. The
date and time upon which the Merger shall become effective is referred to in
this Agreement as the "Effective Time of Merger."
3.4 CONVERSION OF COMPANY COMMON STOCK.
(a) At the Effective Time of Merger, and without any action on the
part of the holders thereof:
(i) Each share of Company Common Stock issued and outstanding at
the Effective Time of Merger (other than shares owned by Parent, Newco
or any Affiliate thereof or held in the treasury of the Company or
Dissenting Shares), shall be converted into the right to receive the
Merger Consideration, payable to the holder thereof, without interest
thereon, less any required withholding of taxes, upon surrender of the
certificate formerly representing such share, and thereupon such share
of Company Common Stock shall be canceled and retired and cease to
exist.
(ii) Any shares of capital stock of the Company that are held by
the Company as treasury stock and any shares of Company Common Stock
owned by Parent, Newco or any Affiliate thereof at the Effective Time of
Merger shall be canceled and retired and cease to exist.
3.5 NEWCO STOCK. Each outstanding share of capital stock of Newco issued
and outstanding at the Effective Time of Merger shall, by virtue of the Merger
and without any action on the part of the holders thereof, be converted into one
validly issued, fully paid and nonassessable share of common stock of the
Surviving Corporation.
3.6 EXCHANGE OF COMPANY CERTIFICATES.
(a) EXCHANGE AGENT. As of the Effective Time of Merger, Parent shall
deposit, or shall cause to be deposited, with such bank or trust company as
may be designated by Parent (the "Exchange Agent") for the benefit of the
holders of shares of Company Common Stock, the funds necessary to make the
payments pursuant to Section 3.4 hereof (the "Exchange Fund"), and to make
the appropriate payments, if any, to holders of Dissenting Shares. The
Exchange Agent shall, pursuant to irrevocable instructions, make the
payments provided for in the preceding sentence out of the Exchange Fund.
The Exchange Agent shall invest portions of the Exchange Fund as the Parent
directs, provided that all such investments shall be in obligations of or
guaranteed by the United States of America, in commercial paper obligations
receiving the highest rating from either Moody's Investor's Service Inc. or
Standard & Poor's, or in
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certificates of deposit, bank repurchase agreements or banker's acceptances
of commercial banks with capital exceeding $100 million (or in a money
market mutual fund comprised of the foregoing). The Exchange Fund shall not
be used for any other purpose, except as provided in this Agreement.
(b) EXCHANGE PROCEDURES.
(i) As soon as reasonably practicable after the Effective Time of
Merger, the Exchange Agent shall mail to each holder of record of a
certificate or certificates which immediately prior to the Effective
Time of Merger represented outstanding shares of Company Common Stock
(the "Company Certificates"): (A) a letter of transmittal which shall
specify that delivery shall be effected, and risk of loss and title to
the Company Certificates shall pass, only upon delivery of the Company
Certificates to the Exchange Agent and which shall be in such form and
have such other provisions as Parent may reasonably specify; and (B)
instructions to effect the surrender of the Company Certificates for
payment therefor.
(ii) Upon surrender of a Company Certificate for cancellation to
the Exchange Agent together with such letter of transmittal, duly
executed, and with such other documents as the Exchange Agent may
reasonably require, the holder of such Company Certificate shall be
entitled to receive in exchange therefor cash in an amount equal to the
Merger Consideration multiplied by the number of shares of Company
Common Stock formerly represented by such Company Certificate, and such
Company Certificate shall forthwith be canceled. No interest will be
paid or accrued on the cash payable upon the surrender of the Company
Certificates. If payment is to be made to a Person other than the Person
in whose name the Company Certificate surrendered is registered, it
shall be a condition of payment that the Company Certificate so
surrendered shall be properly endorsed or otherwise in proper form for
transfer and that the Person requesting such payment shall pay any
transfer or other taxes required by reason of the payment to a Person
other than the registered holder of the Company Certificate surrendered
(or establish to the satisfaction of Parent that such tax has been paid
or is not applicable), and the Company Certificate so surrendered shall
forthwith be canceled.
(iii) Until surrendered as contemplated by this Section 3.6, each
Company Certificate shall be deemed at all times after the Effective
Time of Merger to represent only the right to receive the Merger
Consideration in cash multiplied by the number of shares of Company
Common Stock evidenced by the Company Certificate, without any interest
thereon.
(c) TERMINATION OF EXCHANGE FUND. Any portion of the Exchange Fund
which remains undistributed to the Company Stockholders as of a date which
is six (6) months after the Effective Time of Merger shall be delivered to
Parent, upon demand, and any Company Stockholders who have not theretofore
complied with this Article III shall thereafter look only to Parent for
payment of their claim for the Merger Consideration.
(d) NO LIABILITY. Neither the Exchange Agent nor any party to this
Agreement shall be liable to any Company Stockholder for any shares of
Company Common Stock or cash delivered to a public official pursuant to any
abandoned property, escheat or similar Law.
(e) WITHHOLDING RIGHTS. Parent shall be entitled to deduct and
withhold from the consideration otherwise payable pursuant to this
Agreement to any Company Stockholder such amounts as Parent is required to
deduct and withhold with respect to the making of such payment under the
Code, or any provision of state, local or foreign tax Law. To the extent
that amounts are so withheld by Parent, (i) such withheld amounts shall be
treated for all purposes of this Agreement as having been paid to the
Company Stockholder in respect of which such deduction and withholding is
made by Parent and (ii) Parent shall pay, when due, any such amounts so
withheld to the appropriate taxing authority.
3.7 STOCK TRANSFER BOOKS. At the Effective Time of Merger, the stock
transfer books of the Company shall be closed and there shall be no further
registration of transfers of shares of Company Common Stock thereafter on the
records of the Company. From and after the Effective Time of Merger, the holders
of Company Certificates representing shares outstanding immediately prior to the
Effective Time of Merger shall
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cease to have any rights with respect to the shares of Company Common Stock
represented thereby except as otherwise provided in this Agreement or by Law.
3.8 STOCKHOLDER'S MEETING. If approval by the Company Stockholders is
required by applicable Law in order to consummate the Merger, the Company,
acting through its Board of Directors, shall, in accordance with applicable Law:
(a) Duly call, give notice of, convene and hold the Company Special
Meeting as soon as reasonably practicable following the consummation of the
Offer for the purpose of considering and taking action on this Agreement;
(b) Include in the Proxy Statement the recommendation of the Board of
Directors that the Company Stockholders vote in favor of the approval and
adoption of this Agreement and the transactions contemplated hereby; and
(c) Use its reasonable best efforts to (i) obtain and furnish the
information required to be included by it in the Proxy Statement, and,
after consultation with Parent, respond promptly to any comments made by
the SEC with respect to the Proxy Statement and any preliminary version
thereof and cause the Proxy Statement to be mailed to the Company Stock
holders at the earliest practicable time following the consummation of the
Offer, and (ii) obtain the necessary approvals of the Merger and this
Agreement by the Company Stockholders. Parent agrees that, at the Company
Special Meeting, all of the shares of Company Common Stock acquired
pursuant to the Offer or otherwise by Parent, Newco or any other
majority-owned Subsidiary of Parent will be voted in favor of the Merger
and this Agreement.
(d) Notwithstanding the foregoing, if, following the completion of the
Offer, the Merger may be consummated under the DGCL without a vote of the
Company Stockholders by virtue of the fact that Newco shall have acquired
at least 90% of the then outstanding shares of Company Common Stock and if
requested by Parent, the parties hereto agree to take all necessary and
appropriate action to cause the Merger to become effective as soon as
reasonably practicable after the acquisition of shares of Company Common
Stock pursuant to the Offer without the holding of the Company Special
Meeting.
3.9 DISSENTING SHARES. Notwithstanding anything in this Agreement to the
contrary, in the event that appraisal rights are available in connection with
the Merger pursuant to the DGCL, shares of Company Common Stock which are issued
and outstanding immediately prior to the Effective Time of Merger and which are
held by Company Stockholders who did not vote in favor of the Merger and who
comply with all of the relevant provisions of Section 262 of the DGCL (the
"Dissenting Shares") shall not be converted into the right to receive the Merger
Consideration, unless and until such holders shall have failed to perfect or
shall have effectively withdrawn or lost their rights to appraisal under the
DGCL. If any such holder shall have failed to perfect or shall have effectively
withdrawn or lost such right, such holder's shares of Company Common Stock shall
thereupon be deemed to have been converted into the right to receive as of the
Effective Time of Merger the Merger Consideration without any interest thereon.
3.10 TAKEOVER LAWS. The Company also has taken and will continue to take
all necessary action to ensure that Section 203 of the DGCL and any other
provision of any "moratorium," "control share acquisition," "business
combination," "fair price," or other form of anti-takeover Laws (collectively,
"Takeover Laws") of any jurisdiction that may purport to be applicable to this
Agreement or the Shareholder Option Agreements are inapplicable to this
Agreement, the Offer, the Shareholder Option Agreements and the Merger. The
Company shall provide evidence satisfactory to Parent that it has taken all such
actions.
3.11 STOCK OPTIONS.
(a) Prior to the consummation of the Offer, the Company shall take all
actions necessary or desirable (including obtaining all required consents
from optionees) to provide for the cancellation, effective at the Effective
Time of Merger, of all of the outstanding stock options (the "Existing
Stock Options") heretofore granted under any stock option, employment or
similar plan or arrangement of the Company or any such similar plan or
agreement which benefits any person providing services to the Company (the
"Stock Option Plans"), without any payment therefor except as otherwise
provided in this
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Section 3.11. At the Effective Time of Merger (or at such earlier time as
Parent shall designate), each holder of any Existing Stock Option shall, in
settlement thereof, be entitled to receive from the Surviving Corporation,
an amount (subject to any applicable withholding tax) in cash equal to the
product of (i) the excess of the Merger Consideration over the per share
exercise or purchase price of such Existing Stock Option and (ii) the
number of Shares subject to such Existing Stock Option (such amount being
hereinafter referred to as the "Option Consideration"). Except as otherwise
agreed to by the parties, as of the Effective Time of Merger, the Stock
Option Plans shall terminate and any and all rights under any provisions in
any other plan, program or arrangement providing for the issuance or grant
of any other interest in respect of the capital stock of the Company shall
be canceled. Notwithstanding the foregoing, no holder of an Existing Stock
Option shall be entitled to any payment hereunder unless he or she delivers
to Newco a consent to the cancellation of such Existing Stock Option in a
form to be prescribed by Newco.
(b) Prior to the Effective Time of Merger, the Company shall take all
necessary and appropriate actions (including obtaining all applicable
consents) to provide that, upon the Effective Time of Merger, each then
outstanding restricted stock award in respect of shares of Company Common
Stock and any other stock based awards (collectively, the "Stock Awards")
which is subject to any vesting requirement and which was issued pursuant
to a Stock Option Plan or any other plan or arrangement shall, whether or
not then exercisable or vested, become 100% vested. At the Effective Time
of Merger, a holder of shares of Company Common Stock underlying such Stock
Award shall be entitled to receive the Merger Consideration (subject to any
applicable withholding tax), upon the surrender of the Company Certificate
representing such shares of Company Common Stock as provided in Section
3.6. Notwithstanding the foregoing, no holder of a Stock Award shall be
entitled to any payment hereunder unless he or she delivers to Newco a
consent to the cancellation of such Stock Award in a form to be prescribed
by Newco.
(c) From and after the date of this Agreement, the Company shall not
grant any options or other rights to acquire shares of Company Common
Stock.
ARTICLE IV
OTHER AGREEMENTS
4.1 ACCESS.
(a) Upon reasonable prior notice, the Company shall (i) afford to the
officers, employees, accountants, legal counsel and other representatives
of Parent ("Representatives") full access, during normal business hours, to
all of its properties, personnel, books, contracts, commitments and records
and (ii) cooperate with Parent or its Representatives for the purpose of
obtaining any consents of third parties or Governmental Entities necessary
or desired by Parent or Newco for the consummation of the Offer and the
Merger. Access granted to Parent or its Representatives shall also include
permitting Parent and its environmental consultants to conduct Phase I
environmental assessments at the Real Estate and Buildings and, if deemed
appropriate by Parent based on the advice of its environmental consultants,
Phase II environmental investigations and other follow-up work on the Real
Estate and Buildings. All costs and expenses of such environmental
assessments or investigations and other follow-up work shall be borne by
Parent. Parent shall reimburse the Company for, and indemnify the Company
from, any costs or expenses resulting from any damage to the Real Estate
occurring in the course of such environmental assessments, investigations
or follow-up work.
(b) The Company, Parent and Newco agree that the provisions of the
Confidentiality Agreement shall remain in full force and effect; provided
that, at the Effective Time of Merger, the Confidentiality Agreement shall
be deemed to have terminated without further action by the parties.
4.2 DISCLOSURE SCHEDULE.
(a) DISCLOSURE SCHEDULE. Contemporaneously with the execution and
delivery of this Agreement, the Company is delivering to Parent the
Disclosure Schedule. The Disclosure Schedule is deemed to
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constitute an integral part of this Agreement and to modify the
representations, warranties, covenants or agreements of the Company
contained in this Agreement to the extent that such representations,
warranties, covenants or agreements expressly refer to the Disclosure
Schedule.
(b) UPDATES. Prior to the Closing Date, the Company shall update the
Disclosure Schedule promptly by written notice to Parent to reflect any
matters which have occurred from and after the date of this Agreement
which, if existing on the date of this Agreement, would have been required
to be described in the Disclosure Schedule. If requested by Parent, the
Company shall meet and discuss with Parent any change in the Disclosure
Schedule made by the Company which is, in the reasonable judgment of
Parent, materially adverse to the Merger, Parent or the Company. No update
of the Disclosure Schedule shall have the effect of curing any prior breach
of a representation or warranty made by the Company pursuant to this
Agreement unless accepted or waived by Parent.
4.3 DUTIES CONCERNING REPRESENTATIONS AND COVENANTS. Each party to this
Agreement shall: (a) to the extent within its control, use its reasonable best
efforts to cause all of its representations and warranties contained in this
Agreement to be true and correct in all respects at the Effective Time of Merger
with the same force and effect as if such representations and warranties had
been made on and as of the Effective Time of Merger; (b) use its reasonable best
efforts to obtain any governmental or third party consents or approvals required
by this Agreement, to prevent any preliminary or permanent injunction or other
order by a court of competent jurisdiction or governmental entity relating to
the transactions contemplated by this Agreement and to cause all of the
conditions precedent set forth in Article VIII of this Agreement to be
satisfied; and (c) use its reasonable best efforts to take, or cause to be
taken, all action, and to do, or cause to be done, all other things necessary,
proper or advisable under applicable Laws and regulations to consummate and make
effective the transactions contemplated by this Agreement, including without
limitation, the Offer and the Merger. Each party shall promptly inform the other
parties after it becomes aware that any condition precedent set forth in Article
VIII hereof or any condition in Annex A hereto will not, or is not reasonably
likely to, be satisfied.
4.4 DELIVERIES OF INFORMATION; CONSULTATION.
(a) DELIVERIES. Prior to the Effective Time of Merger, the Company
shall furnish promptly to Parent: (i) a copy of each report, schedule and
other document filed by it or received by it pursuant to the requirements
of federal or state securities Laws or any other applicable Laws promptly
after such documents are available; (ii) the monthly financial statements
of the Company and financial statements by unit or business segment (as
prepared in accordance with its normal accounting procedures) promptly
after such financial statements are available; (iii) a summary of any
action taken by the Company's Board of Directors, or any committee thereof;
and (iv) all other information concerning the business, properties and
personnel of the Company as Parent may reasonably request.
(b) CONSULTATION. Prior to the Effective Time of Merger, the Company
shall advise Representatives of Parent on a regular and frequent basis with
respect to operational matters and the general status of ongoing business
operations of the Company.
(c) PERMITS. Prior to the Effective Time of Merger, the Company shall
use all reasonable efforts to maintain in effect all Existing Permits. The
Company shall notify Parent promptly in the event that it becomes aware of
any complaint or proceeding which could result in the termination or
non-renewal of any material Existing Permit.
4.5 ACQUISITION PROPOSALS.
(a) DEFINITIONS. As used in this Agreement, the following terms shall
have the meanings specified:
(i) "Acquisition" shall mean any or all of the following, other
than the Offer and the Merger: (A) a merger, share exchange,
consolidation, reorganization, combination or similar transaction
involving the Company; (B) a purchase, exchange or tender offer for 20%
or more of the outstanding shares of Company Common Stock; (C) a
purchase, lease or other acquisition of all or any significant portion
of the assets or any equity interest (or any option (other than Existing
Stock
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Options), warrant or security convertible into any equity interest), of
the Company; or (D) any other transaction the consummation of which
could reasonably be expected to impede, interfere with, prevent or delay
the Offer or the Merger.
(ii) "Acquisition Proposal" shall mean any inquiry, request for
information, expression of interest, indication of a desire to have
discussions, or the making of any proposal, by any Person concerning an
Acquisition.
(iii) "Special Event" shall mean any of the following to occur on
or prior to December 9, 2000; (A) a Person unrelated to Parent shall
have consummated, or shall have publicly announced or proposed and
subsequently consummated, a tender or exchange offer for shares of
Company Common Stock representing, on a fully diluted basis, 20% or more
of the outstanding shares of Company Common Stock; (B) a Person
unrelated to Parent shall have consummated an Acquisition or the Company
shall have entered into an agreement with respect to an Acquisition; (C)
the Company shall have terminated this Agreement as provided in Section
9.1(c) (i) of this Agreement or otherwise for the purpose of pursuing an
Acquisition Proposal; (D) Parent shall have terminated this Agreement as
provided in Section 9.1(b)(i) or 9.1(b)(ii) of this Agreement; (E) the
Board of Directors of the Company shall have withdrawn or materially
modified or changed its favorable recommendation of the Offer, the
Merger or this Agreement, or shall have approved or recommended any
Acquisition Proposal or Acquisition; (F) Parent and Newco shall have
terminated this Agreement pursuant to Section 9.1(b)(iii) (but only if
Parent and Newco terminated the Offer pursuant to paragraphs (b), (e),
(g) or (h) of Annex A); or (G) the Company shall have terminated this
Agreement pursuant to Section 9.1(c)(ii)(y) when the Offer is terminated
by Parent and Newco under the circumstances contemplated by Section
9.1(b)(iii) of this Agreement (but only if Parent and Newco terminated
the Offer pursuant to paragraphs (b), (e), (g) or (h) of Annex A).
(iv) "Termination Fee" shall mean $25,000.00
(v) "Superior Proposal" shall mean a written bona fide, unsolicited
Acquisition Proposal by any Person (other than Parent) which the Board
of Directors determines in good faith, and in the exercise of reasonable
judgment, to be more favorable to the Company and the Company
Stockholders than the Offer and the Merger from a financial point of
view, which proposal is capable of being consummated without undue delay
and has the requisite financing committed to it or, as determined in
good faith, and in the exercise of reasonable judgment, is reasonably
capable of being financed by such Person.
(b) ACQUISITION PROPOSALS. The Company shall not, and shall cause all
of its officers, directors, employees, agents, Affiliates or
Representatives (including, without limitation, any investment banker,
financial adviser, attorney or accountant retained or engaged by the
Company) to not, directly or indirectly: (i) initiate, solicit or encourage
any inquiries concerning an Acquisition or an Acquisition Proposal; (ii)
engage in any negotiations concerning, or provide any confidential
information or data to, or have any discussions with, any Person relating
to an Acquisition or an Acquisition Proposal; (iii) facilitate any effort
or attempt to make or implement an Acquisition Proposal; or (iv)
consummate, agree or commit to consummate any Acquisition or Acquisition
Proposal. The Company shall immediately cease or cause to be terminated any
existing activities, discussions or negotiations with any Person with
respect to any of the foregoing activities. Notwithstanding the foregoing,
the Board of Directors of the Company may furnish information about the
Company to the Person making a Superior Proposal pursuant to a
confidentiality agreement in customary form and participate in discussions
and negotiations regarding such Superior Proposal if the Board of Directors
of the Company determines in good faith, upon the written advice of outside
legal counsel, that the failure to take such action would violate its
fiduciary duties to the Company Stockholders under applicable Law. In
addition, the Company will be permitted to take and disclose to the Company
Stockholders a position contemplated by Rules 14d-9 and 14e-2(a) under the
Exchange Act with respect to an Acquisition Proposal by means of a tender
offer. The Company shall notify Parent orally and in writing of any
Acquisition Proposal, within 24 hours from
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the receipt thereof, specifying all of the material terms and conditions of
such Acquisition Proposal and identifying the Person making such
Acquisition Proposal, shall keep Parent informed of the status and all
material developments and information regarding the Acquisition Proposal,
and shall give Parent five (5) business days' prior notice and an
opportunity to negotiate with the Company before entering into, executing
or agreeing to any Acquisition or Acquisition Proposal.
(c) TERMINATION FEE. In order to induce Parent to enter into this
Agreement and to compensate Parent for the time and expenses incurred in
connection with this Agreement and the transactions contemplated by this
Agreement and the losses suffered by Parent from foregone opportunities,
upon the occurrence of a Special Event, the Company shall pay the
Termination Fee to Parent and shall reimburse Parent for all documented
out-of-pocket fees and expenses incurred by Parent and Newco in connection
with the preparation and negotiation of this Agreement and the consummation
of the transactions contemplated hereby. Such amount shall be paid in
immediately available funds within three (3) business days following the
occurrence of the Special Event. If the Company fails to pay the
Termination Fee and make such reimbursement when due, the unpaid portion of
the Termination Fee (including interest thereon) and such reimbursement
shall accrue interest at the lesser of the rate of fifteen percent (15%)
per annum or the maximum amount allowed by law until paid.
4.6 LEGAL CONDITIONS TO MERGER. Each of the Company and Parent will: (a)
take all reasonable actions necessary to comply promptly with all legal
requirements which may be imposed on it with respect to the Offer and the Merger
(including furnishing all information required in connection with approvals of
or filings with any governmental entity as described in Section 8.2 of this
Agreement); (b) promptly cooperate with and furnish information to each other in
connection with any such requirements imposed upon any of them in connection
with the Offer and the Merger; and (c) take all reasonable actions necessary to
obtain (and cooperate with each other in obtaining) any consent, authorization,
order or approval of, or any exemption by, any governmental entity or other
Person, required to be obtained or made by the Company and Parent in connection
with the Offer, the Merger or the taking of any action contemplated thereby or
by this Agreement.
4.7 PUBLIC ANNOUNCEMENTS. The Company and Parent will not, without the
prior written consent of the other party, develop or distribute any news release
and other public information disclosure with respect to this Agreement or any of
the transactions contemplated hereby, except that a party may make such
disclosure if in the written opinion of a party's outside legal counsel, such
disclosure is necessary to avoid committing a violation of Law, court order or
applicable stock exchange regulation. In such event, the disclosing party shall
use its reasonable efforts to give advance notice to the other party.
4.8 INDEMNIFICATION OF COMPANY DIRECTORS AND OFFICERS.
(a) The Certificate of Incorporation and Bylaws of the Surviving
Corporation shall contain provisions with respect to indemnification
substantially as set forth in the Certificate of Incorporation and Bylaws
of the Company on the date of this Agreement, which provisions shall not be
amended, repealed or otherwise modified for a period of three (3) years
after the Effective Time of Merger in any manner that would adversely
affect the rights thereunder of individuals who at any time prior to the
Effective Time of Merger were directors or officers of the Company in
respect of actions or omissions occurring at or prior to the Effective Time
of Merger, unless such modification is required by Law; provided, that in
the event any claim or claims are asserted or made within such three-year
period, all rights to indemnification in respect of any such claim or
claims shall continue until disposition of any and all such claims.
(b) Parent shall cause to be maintained in effect for the Indemnified
Parties (as defined below) for not less than three (3) years the current
policies of directors and officers liability insurance and fiduciary
liability insurance maintained by the Company with respect to matters
occurring at or prior to the Effective Time of Merger; provided, that
Parent may substitute therefor policies of substantially the same coverage
containing terms and conditions which are no less advantageous to the
Company's present or former directors or officers or other employees
covered by such insurance policies prior to the Effective Time of Merger
(the "Indemnified Parties"). Notwithstanding the foregoing, in no case
shall Parent or the Surviving Corporation be required to pay an annual
premium for such insurance greater than 125% of
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the last annual premium paid prior to the date hereof. Should payment of
the maximum amount of premium provided for in the previous sentence not
allow the purchase of an amount of such insurance equal to the amount
provided under the current policies, Parent shall purchase the maximum
amount of insurance available for 125% of the last annual premium.
4.9 COMPANY BOARD.
(a) Promptly upon the purchase by Newco pursuant to the Offer or
otherwise of such number of shares of Company Common Stock as represents at
least a majority of the outstanding shares thereof, and from time to time
thereafter, Newco shall be entitled to designate such number of directors,
rounded up to the next whole number, on the Board of Directors of the
Company as will give Newco representation on the Board of Directors of the
Company equal to the product of the number of directors on the Board of
Directors of the Company and the percentage that such number of shares of
Company Common Stock so purchased bears to the number of shares of Company
Common Stock outstanding, and the Company shall, upon request by Newco,
promptly increase the size of the Board of Directors of the Company or use
its best efforts to secure the resignations of such number of directors as
is necessary to provide Newco with such level of representation and shall
cause Newco designees to be so elected. The Company will also use its best
efforts to cause persons designated by Newco to constitute the same
percentage as is on the entire Board of Directors of the Company to be on
each committee of the Board of Directors of the Company. The Company's
obligations to appoint designees to its Board of Directors shall be subject
to Section 14(f) of the Exchange Act. At the request of Newco, the Company
shall take all actions necessary to effect any such election or appointment
of Newco's designees, including mailing to its stockholders the information
required by Section 14(f) of the Exchange Act and Rule 14f-1 promulgated
thereunder which, unless Parent otherwise elects, shall be so mailed
together with the Schedule 14D-9. Parent and Newco will promptly supply to
the Company all information with respect to themselves and their respective
officers, directors and Affiliates required by such Section and Rule.
(b) Following the election or appointment of Newco's designees
pursuant to Section 4.9(a) and prior to the Effective Time of Merger, and
so long as there shall be at least one Continuing Director (as defined
below), any amendment of this Agreement requiring action by the Board of
Directors of the Company, any extension of time for the performance of any
of the obligations or other acts of Parent or Newco under this Agreement
and any waiver of compliance with any of the agreements or conditions under
this Agreement for the benefit of the Company will require the concurrence
of a majority of the directors of the Company then in office who are
directors of the Company on the date hereof (the "Continuing Directors").
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the relevant section of the Disclosure Schedule, the
Company hereby represents and warrants to Parent and Newco that:
5.1 ORGANIZATION; BUSINESS. The Company is a corporation duly organized,
validly existing and in good standing under the Laws of the state of Delaware
and is qualified and in good standing as a foreign corporation in each
jurisdiction where the failure to qualify would have a Material Adverse Effect
on the Company. The Company has all requisite corporate power and authority to
own its properties and to carry on its business as it is now being conducted.
The Company has heretofore made available to Parent complete and correct copies
of its Certificate of Incorporation and Bylaws. The Company does not have and
has not ever had a Subsidiary.
5.2 CAPITALIZATION. The entire authorized capital stock of the Company
consists of 5,000,000 shares of common stock, $.01 par value per share, of which
1,635,313 shares are issued and outstanding. All of the issued and outstanding
shares of capital stock of the Company have been duly authorized and validly
issued and are fully paid and non-assessable. The Disclosure Schedule lists all
outstanding options and other rights to acquire shares of the Company's capital
stock, which lists include the holder's name, number of shares underlying the
options or other rights, the exercise price, grant date and applicable vesting
provisions. Except
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as set forth on the Disclosure Schedule, there are no outstanding or authorized
options, warrants, calls, rights (including preemptive rights), commitments or
any other agreements of any character to which the Company is a party, or to
which it may be bound, requiring it to issue, transfer, sell, purchase, redeem
or acquire any shares of capital stock or any securities or rights convertible
into, exchangeable for, or evidencing the right to subscribe for, any shares of
capital stock of the Company. There are no outstanding obligations of the
Company to repurchase, redeem or otherwise acquire any shares of capital stock
or any securities or rights convertible into, exchangeable for, or evidencing
the right to subscribe for, any shares of capital stock of the Company. There
are no voting trusts of other agreements or understandings to which the Company
is a party with respect to the voting of capital stock of the Company.
5.3 AUTHORIZATION; ENFORCEABILITY. The Company has all requisite corporate
power and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
by the Company and the consummation by the Company of the transactions
contemplated hereby have been duly authorized by unanimous vote of the Board of
Directors of the Company and no other corporate proceedings on the part of the
Company are necessary to authorize this Agreement or to consummate the
transactions contemplated hereby (other than, with respect to the Merger, if
required, the approval and adoption of this Agreement by the Company
Stockholders). The Board of Directors has unanimously determined that the Offer
and the Merger are fair to and in the best interests of the Company Stockholders
and has unanimously determined to recommend that the Company Stockholders
approve the Merger and this Agreement. This Agreement is, and the other
documents and instruments required by this Agreement to be executed and
delivered by the Company will be, when executed and delivered by the Company,
the valid and binding obligations of the Company, enforceable against the
Company in accordance with their respective terms, except as the enforcement
thereof may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar Laws generally affecting the rights of creditors and
subject to general equity principles.
5.4 NO VIOLATION OR CONFLICT. The execution, delivery and performance of
this Agreement by the Company do not and will not: (a) conflict with or violate
any Law or order, writ, injunction or decree applicable to the Company or any of
its assets; (b) conflict with or violate the Certificate of Incorporation or
Bylaws of the Company; or (c) result in a violation or breach of, or constitute
(with or without due notice or lapse of time or both) a default (or give rise to
any right of termination, cancellation or acceleration or Lien) under any
Contract. The execution, delivery and performance of this Agreement by the
Company do not and will not require any consent, approval, authorization or
permit of, or filing with or notification to, any governmental or regulatory
authority, except (i) in connection with the applicable requirements of the HSR
Act, (ii) pursuant to the applicable requirements of the Exchange Act, (iii) the
filing of the Certificate of Merger pursuant to the DGCL, (iv) as may be
required by any applicable state securities or "blue sky" Laws or state Takeover
Laws, (v) where the failure to obtain such consent, approval, authorization or
permit, or to make such filing or notification is not material and would not
prevent, materially delay or materially impair the ability of the Company to
consummate the transactions contemplated by this Agreement, or (vi) as set forth
in the Disclosure Schedule.
5.5 TITLE TO ASSETS. The Company owns good and valid title to the assets
and properties which it owns or purports to own, free and clear of any and all
Liens, except the Existing Liens.
5.6 LITIGATION. Except for the Existing Litigation: (a) there is no
litigation, arbitration, proceeding, governmental investigation, citation or
action of any kind pending or, to the Knowledge of the Company, threatened,
against or relating to the Company, and, to the Company's Knowledge, there is no
basis for any such action; and (b) there are no actions, suits or proceedings
pending or, to the Knowledge of the Company, threatened, against the Company by
any Person which question the legality, validity or propriety of the
transactions contemplated by this Agreement.
5.7 COMPANY SEC REPORTS AND BOOKS AND RECORDS.
(a) The Company SEC Reports: include all reports, registration
statements, definitive proxy statements, prospectuses and amendments
thereto filed or required to be filed by the Company with the
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SEC since June 30, 1996; did not or will not, as the case may be, contain
as of their respective dates any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading; and otherwise complied or will comply, as the
case may be, in all material respects with the then applicable requirements
of the Exchange Act and the Securities Act, as the case may be, and the
then applicable rules and regulations of the SEC thereunder.
(b) The audited financial statements and unaudited interim financial
statements of the Company included in the Company SEC Reports have been or
will be, as the case may be, prepared in accordance with generally accepted
accounting principles applied on a consistent basis (except as may be
indicated therein or in the notes thereto) and fairly present the financial
position of the Company as of the dates thereof and the results of its
operations and changes in financial position for the periods then ended,
subject, in the case of the unaudited interim financial statements, to
normal year-end and audit adjustments and any other adjustments described
therein.
5.8 ABSENCE OF CERTAIN CHANGES. Except as disclosed in the Company SEC
Reports and the Disclosure Schedule, since September 30, 1999:
(a) There has not been any change with respect to the Company which
has had or is reasonably likely to have a Material Adverse Effect;
(b) There has not been any damage, destruction or loss (whether or not
covered by insurance) to the properties or assets of the Company which has
had or is reasonably likely to have a Material Adverse Effect;
(c) There has not been any transaction or commitment by the Company
outside the ordinary course of business, except for the transactions
contemplated by this Agreement or as set forth in the Disclosure Schedule;
(d) The business of the Company has been carried on only in the
ordinary course and in the manner consistent with past practice;
(e) The Company has not incurred any material Liens or Indebtedness;
(f) There has not been any increase in the compensation (including
bonuses) payable or to become payable by the Company to any of its
officers, or any increase in the compensation payable to other employees or
agents of the Company other than in the ordinary course of business and in
such amounts and at such times as are consistent with the Company's past
practice or any adoption or amendment of any bonus, pension, retirement,
profit sharing or stock option plan, arrangement or agreement made to or
with any of such officers or employees;
(g) There has not been any declaration or payment or setting aside the
payment of any dividend or any distribution in respect of the capital stock
of the Company or any direct or indirect redemption, purchase or other
acquisition of any such stock by the Company;
(h) The Company has not made any change to its accounting practices or
methods, and has not made any tax elections; and
(i) There has not been any other transaction outside of the ordinary
course of business.
5.9 CONTINGENT AND UNDISCLOSED LIABILITIES. The Company has not guaranteed
or become a surety and it is not otherwise contingently liable for the
obligations of any other Person. The Company has no material liabilities or
obligations of any nature (whether accrued, absolute, contingent or otherwise)
except for those which: (a) are disclosed in the Company SEC Reports, the
Disclosure Schedule or this Agreement; or (b) arose in the ordinary course of
business since September 30, 1999.
5.10 EXISTING CONTRACTS. The Existing Contracts are the only Contracts
which constitute:
(a) A lease of, or agreement to purchase or sell, any capital assets,
Real Estate or Building, other than agreements in the ordinary course of
business;
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(b) Any collective bargaining or union labor contracts;
(c) Any Employee Benefit Plan; or any management, consulting,
employment, personal service, agency or other contractor contracts
providing for employment or rendition of services which: (i) create other
than an at will employment relationship or (ii) provide for any commission,
bonus, profit sharing, incentive, retirement, severance, termination,
consulting or additional compensation;
(d) Any agreements or notes evidencing any Indebtedness;
(e) Any agreement with a customer or supplier of the Company, other
than regular invoices, sales confirmations and purchase orders;
(f) An agreement for the storage, transportation, treatment or
disposal of any Environmental Hazardous Material;
(g) A power of attorney (revocable or irrevocable) given to any Person
by the Company that is in force;
(h) An agreement by the Company not to engage or compete in any
business or in any geographical area;
(i) An agreement restricting the right of the Company to use or
disclose any information in its possession;
(j) A partnership, joint venture or similar arrangement;
(k) A license, royalty agreement, distributor agreement,
manufacturer's or sales representative agreement or reseller agreement;
(l) A Contract with any officer, director, employee or Affiliate of
the Company; or
(m) Any other agreement which (i) involves an amount in excess of
$50,000 or (ii) is not in the ordinary course of business of the Company or
is not cancelable on 60 days or less notice to the other parties thereto.
True and complete copies of the Existing Contracts have been delivered to
Parent, and the Company has fully performed each material term, covenant and
condition of each Existing Contract which is to be performed by it at or before
the date hereof. Each of the Existing Contracts is in full force and effect and
constitutes a legal and binding obligation of the Company and, to the Knowledge
of the Company, constitutes the legal and binding obligation of the other
parties thereto.
5.11 INSURANCE POLICIES. All real and personal property owned or leased by
the Company has been and is being insured against in amounts adequate for the
assets insured, and the Company maintains liability insurance against, such
insurable risks and in such amounts as are set forth in the Insurance Policies.
The Insurance Policies constitute all insurance coverage owned by the Company
and are in full force and effect, and the Company has not received notice, and
has no Knowledge of any cancellation or threat of cancellation of such
insurance. All assets of the Company have been and are being used in all
material respects in a normal business-like manner. Except as described in the
Disclosure Schedule, no property damage, personal injury or liability claims are
pending or, to the Company's Knowledge, threatened, against the Company that are
not covered by insurance. Within the past three (3) years, no insurance company
has canceled any insurance (of any type) maintained by the Company. To the
Knowledge of the Company, the cost of any insurance currently maintained by the
Company will not increase upon renewal other than increases consistent with the
general upward trend in the cost of obtaining insurance.
5.12 COMPLIANCE WITH LAW; NO DEFAULT. The Company is not in conflict with,
in default with respect to or in violation of, (i) any Law applicable to the
Company or by which any property or asset of the Company is bound or affected or
(ii) any note, bond, mortgage, indenture, contract, agreement, lease, license,
permit, franchise or other instrument or obligation to which the Company is a
party or by which the Company, or any property or asset of the Company, is bound
or affected, in each case except for any such conflicts, defaults or
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violations that have not had and are not reasonably expected to have a Material
Adverse Effect or a material adverse effect on the ability of the parties to
consummate the Offer or the Merger.
5.13 BROKERS. The Company has not incurred any brokers', finders',
investment banking, advisory or any similar fee in connection with the
transactions contemplated by this Agreement.
5.14 PATENTS, TRADEMARKS AND LIKE ASSETS. All trademarks, trade names,
copyrights, service marks, domain names, Internet addresses, patents and
registrations and applications therefor owned by or used by the Company in its
business are listed and briefly described in the Disclosure Schedule. All of
such assets that have been registered have been properly registered, all pending
registrations and applications have been properly filed and all maintenance,
renewal and other fees relating to such registrations are current. No
proceedings have been instituted or are pending or, to the Knowledge of the
Company, threatened, which challenge the validity or the ownership of any of the
foregoing except as set forth in the Disclosure Schedule. The Company has no
Knowledge of the use or infringement of any such trademarks, trade names,
copyrights, service marks, domain names, Internet addresses, patents and
applications by any other Person except as set forth in the Disclosure Schedule.
The Company has not entered into any patent or trademark license, technology
transfer, non-disclosure or non-competition agreement relating to its business
except as set forth in the Disclosure Schedule. The Company owns (or possesses
adequate and enforceable licenses or other rights to use) all trademarks, trade
names, copyrights, patents, inventions, processes and other intellectual
property rights used in the conduct of its business. The Company does not
infringe on the intellectual property rights of others. The Company has taken
reasonable and necessary steps to protect its rights in all trademarks, trade
names, service marks, domain names, Internet addresses, copyrights, patents,
inventions and processes used in the conduct of its business and, to the
Knowledge of the Company, no such rights have been lost or are in jeopardy of
being lost through failure to act by the Company.
5.15 PERMITS. The Existing Permits listed on the Disclosure Schedule
constitute all material licenses, permits, approvals, franchises,
qualifications, permissions, agreements and other authorizations which the
Company currently has and needs for the conduct of its business. Each Existing
Permit is in full force and effect, the Company is in compliance with all
material obligations, restrictions or requirements thereof, and no facts or
circumstances exist which are reasonably likely to cause any of the material
Existing Permits to be terminated, suspended or further qualified or restricted.
5.16 EMPLOYEE BENEFIT PLANS.
(a) Except for the Existing Plans, the Company does not maintain, and
is not bound by, any Employee Benefit Plan. Each Existing Plan that is an
"employee benefit plan" as defined in ERISA is in compliance in all
material respects with ERISA. All of the Existing Plans which are intended
to meet the requirements of Section 401(a) of the Code have been determined
by the Internal Revenue Service to be "qualified" within the meaning of the
Code, and there are no facts which would adversely affect the qualified
status of any of the Existing Plans. Each Existing Plan has been
administered in accordance with its terms and is in material compliance
with all applicable Laws. Any past Employee Benefit Plan that has been
terminated was done so in compliance in all material respects with all
applicable Laws, and there is no basis for further liability or obligation
of the Company pursuant to any past Employee Benefit Plan. There is no
litigation, action or proceeding pending or, to the knowledge of the
Company, threatened or proposed, relating to any Employee Benefit Plan.
(b) There is no accumulated funding deficiency, within the meaning of
ERISA or the Code, in connection with the Existing Plans, and all material
contributions required to be made by the Company to any Existing Plan have
been made on or before their due dates and the Company has accrued the
amount of contributions to each Existing Plan to be made for its current
plan year. No reportable event, as defined in ERISA, has occurred in
connection with the Existing Plans. The Existing Plans have not, and the
trustees or administrators of the Existing Plans have not, engaged in any
prohibited transaction as defined in ERISA or the Code. All reports and
information relating to each Existing Plan required to be disclosed or
provided to participants have been timely disclosed or provided.
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(c) Except as set forth on the Disclosure Schedule, neither the
Company nor any Existing Plan provides or has any obligation to provide (or
contribute to the cost of) post-retirement (or post-termination of service)
welfare benefits with respect to current or former employees of the
Company, including without limitation post-retirement medical, dental, life
insurance, severance or any similar benefit, whether provided on an insured
or self-insured basis.
(d) The Company is not required to contribute to any multi-employer
plan, as defined in ERISA. The Company has not withdrawn from a
multi-employer plan where such withdrawal has resulted or would result in
any "withdrawal liability" within the meaning of ERISA that has not been
fully paid.
(e) Each Existing Plan that is an "employee welfare benefit plan" as
defined in ERISA may be amended or terminated at any time after the
Effective Time of Merger without liability to the Company.
(f) With respect to each Existing Plan, the Company has complied with
the applicable health care continuation and notice provisions of the
Consolidation Omnibus Budget Reconciliation Act of 1985 and the proposed
regulations thereunder, and the applicable requirements of the Family Leave
Act of 1993 and the regulations thereunder.
(g) The Offer, the Merger and the consummation of the transactions
contemplated by this Agreement will not entitle any current or former
employee of the Company to severance benefits or any other payment, except
as set forth in the Disclosure Schedule, or accelerate the time of payment
or vesting, or increase the amount of compensation due any such employee.
(h) Correct and complete copies of all Existing Plans, together with
recent summary plan descriptions, IRS determination letters, Forms 5500,
and actuarial reports (if applicable), material employee communications
regarding Existing Plans, all trust agreements, insurance contracts,
accounts or other documents which establish funding vehicles for any
Existing Plan and the latest financial statements thereof have been
delivered to Parent.
5.17 LABOR MATTERS.
(a) The Company is not and has never been a party to any collective
bargaining or other labor union contract or agreement. There is no pending
or, to the Company's Knowledge, threatened labor dispute, strike or work
stoppage against the Company and since July 1, 1994, except as disclosed in
the Disclosure Schedule, the Company has not experienced any labor dispute,
strike or work stoppage.
(b) There is no pending or, to the Company's Knowledge, threatened
charge or complaint against the Company by or before the National Labor
Relations Board or any representative thereof, or any comparable state
agency or authorities. There is no present or former employee of the
Company who has any claim against the Company (whether under Law, any
employment agreement or otherwise) on account of or for: (i) overtime pay,
other than overtime pay for the current payroll period; (ii) wages or
salaries, other than wages or salaries for the current payroll period; or
(iii) vacations, sick leave, time off or pay in lieu of vacation, sick
leave or time off, other than vacation, sick leave or time off (or pay in
lieu thereof) earned in the 12-month period immediately preceding the date
of this Agreement or incurred in the ordinary course of business and
appearing as a liability on the most recent financial statements included
in the Company SEC Reports.
(c) There are no pending and unresolved claims by any Person against
the Company arising out of any statute, ordinance or regulation relating to
discrimination to employees or employee practices or occupational or safety
and health standards.
(d) No union organizing activities are in process or, to the Knowledge
of the Company, contemplated and no petitions have been filed for union
organization or representation of employees. The Company has not committed
any unfair labor practices which have not been remedied.
5.18 REAL ESTATE. The Real Estate: (a) constitutes all real property and
improvements leased or owned by the Company; (b) except as set forth on the
Disclosure Schedule, is not subject to any sub-leases or tenancies of any kind
(other than the Company); (c) is not in the possession of any adverse
possessors;
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(d) has direct access to and from a public road or street; (e) is used in a
manner which is consistent with applicable Law; (f) is, and has been since the
date of possession thereof by the Company, in the peaceful possession of the
Company; and (g) is served by all water, sewer, electrical, telephone, drainage
and other utilities required for the normal operations of the Buildings and Real
Estate. The Company has previously delivered to Parent correct and complete
copies of all title insurance policies or commitments maintained by the Company
with respect to the Real Estate.
5.19 NO PENDING ACQUISITIONS. Except for this Agreement, the Company is not
a party to or bound by any agreement, undertaking or commitment with respect to
an Acquisition.
5.20 TAXES.
(a) The Company has timely and properly filed all federal, state,
local and foreign tax returns which were required to be filed and such
returns are true, complete and accurate in all material respects. The
Company has paid or made adequate provision, in reserves reflected in its
financial statements included in the Company SEC Reports in accordance with
generally accepted accounting principles, for the payment of all taxes
(including interest and penalties) and withholding amounts shown to be due
on such returns. No tax deficiencies have been proposed or assessed against
the Company, and, to the Company's Knowledge, there is no basis in fact for
the assessment of any tax or penalty tax against the Company. No issue has
been raised in any prior tax audit which, by application of the same or
similar principles, could reasonably be expected upon a future tax audit to
result in a proposed deficiency for any period.
(b) No tax return of the Company is under audit or examination by any
taxing authority, and no written or, to the Company's Knowledge, unwritten
notice of such an audit or examination has been received by the Company.
Each deficiency (if any) resulting from any audit or examination relating
to taxes by any taxing authority has been paid, except for deficiencies
being contested in good faith and which are described in the Disclosure
Schedule. The income tax returns of the Company have been closed by audit
by the Internal Revenue Service or by operation of the applicable statute
of limitations for all fiscal years through and including June 30, 1996,
and the state income, sales and use or gross proceeds tax returns of the
Company have been closed by audit or by operation of the applicable statute
of limitations for all fiscal years, except as described on the Disclosure
Schedule. The Company has not consented to any extension of the statute of
limitations with respect to any open tax returns. The Company has not made
any elections under Section 341(f) of the Code.
(c) There are no tax Liens upon any property or assets of the Company
except for Liens for current taxes not yet due and payable.
(d) Except as set forth on the Disclosure Schedule, the Company is not
a party to and is not bound by any tax sharing agreement, tax indemnity
obligation or similar agreement, arrangement or practice with respect to
taxes. All elections with respect to taxes affecting the Company as of the
date hereof are set forth on the Disclosure Schedule.
(e) The disallowance of a deduction under Section 162(m) of the Code
for employee remuneration will not apply to any amount paid or payable by
the Company under any Contract, company stock or option plan, Employee
Benefit Plan, program, arrangement or understanding currently in effect.
(f) Any amount or any entitlement that could be received (whether in
cash or property or the vesting of property) as a result of any transaction
contemplated by this Agreement by any employee, officer or director of the
Company who is a "disqualified individual" (as such term is defined in
proposed Treasury Regulation Section 1.280G-1) under any employment,
severance or termination agreement, other compensation arrangement or
Employee Benefit Plan currently in effect would not be characterized as an
"excess parachute payment" (as such term is defined in Section 280G(b)(1)
of the Code).
(g) The Company has delivered to Parent correct and complete copies of
all tax returns and reports of the Company filed for all periods not barred
by the applicable statute of limitations.
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5.21 INFORMATION SUPPLIED.
(a) None of the information supplied or to be supplied by or on behalf
of the Company or any Affiliate of the Company for inclusion in the Offer
Documents will, at the times such documents are filed with the SEC and are
mailed to the Company Stockholders, contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they are made, not misleading, or to correct any
statement made in any communication with respect to the Offer previously
filed with the SEC or disseminated to the Company Stockholders. The
Schedule 14D-9 will not, at the time the Schedule 14D-9 is filed with the
SEC and at all times prior to the purchase of Company Common Stock by Newco
pursuant to the Offer, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which
they are made, not misleading, except that no representation or warranty is
made by the Company with respect to information supplied in writing by
Parent, Newco or any Affiliate of Parent or Newco expressly for inclusion
therein. The Schedule 14D-9 will comply as to form in all material respects
with the provisions of the Exchange Act and the rules and regulations of
the SEC thereunder.
(b) The Proxy Statement, and any other schedule or document required
to be filed by the Company in connection with the Merger, will not, at the
time the Proxy Statement is first mailed and at the time of the Special
Meeting, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they are
made, not misleading, or to correct any statement made in any earlier
communications with respect to the solicitation of any proxy or approval
for the Merger in connection with which the Proxy Statement shall be
mailed, except that no representation or warranty is made by the Company
with respect to information supplied in writing by Parent, Newco or an
Affiliate of Parent or Newco expressly for inclusion therein. The Proxy
Statement will comply as to form in all material respects with the
provisions of the Exchange Act and the rules and regulations of the SEC
promulgated thereunder. The letter to the Company Stockholders, notice of
meeting, proxy statement and form of proxy, or the information statement,
as the case may be, that may be provided to the Company Stockholders in
connection with the Merger (including any amendments or supplements), and
any schedules required to be filed with the SEC in connection therewith, as
from time to time amended or supplemented, are collectively referred to as
the "Proxy Statement."
5.22 TAKEOVER STATUTES. The Board of Directors of the Company has taken all
actions required to render the provisions of Section 203 of the DGCL, and any
other provision of any Takeover Laws of any jurisdiction that may purport to be
applicable to this Agreement or the Shareholder Option Agreements, inapplicable
to this Agreement, the Offer, Shareholder Option Agreements and the Merger.
5.23 ENVIRONMENTAL PROTECTION.
(a) As used in this Section 5.23 of this Agreement:
(i) "Environmental Claim" shall mean any and all administrative,
regulatory or judicial actions, suits, demands, demand letters,
directives, claims, Liens, investigations, proceedings or notices of
noncompliance or violation (written or oral) by any Person alleging
potential liability (including, without limitation, potential liability
for enforcement, investigatory costs, cleanup costs, governmental
response costs, removal costs, remedial costs, natural resources
damages, property damages, personal injuries, or penalties) arising out
of, based on or resulting from: (A) the presence, or release into the
environment, of any Environmental Hazardous Materials at any location,
whether or not owned by the Company; or (B) circumstances forming the
basis of any violation or alleged violation, of any Environmental Law;
or (C) any and all claims by any Person seeking damages, contribution,
indemnification, cost, recovery, compensation or injunctive relief
resulting from the presence or Environmental Release of any
Environmental Hazardous Materials.
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(ii) "Environmental Hazardous Materials" shall mean: (A) any
petroleum or petroleum products, radioactive materials, asbestos in any
form that is or could become friable, urea formaldehyde foam insulation,
and transformers or other equipment that contain dielectric fluid
containing levels of polychlorinated biphenyls (PCBs) and radon gas; and
(B) any chemicals, materials or substances which are now defined as or
included in the definition of "hazardous substances," "hazardous
wastes," "hazardous materials," "extremely hazardous wastes,"
"restricted hazardous wastes," "toxic substances," "toxic pollutants,"
or words of similar import, under any Environmental Law; and (C) any
other chemical, material, substance or waste, exposure to which is now
prohibited, limited or regulated by any governmental authority.
(iii) "Environmental Laws" shall mean all Laws relating to
pollution or protection of human health or the environment (including,
without limitation, ambient air, surface water, ground water, land
surface or subsurface strata), including, without limitation, Laws and
regulations relating to Environmental Releases or threatened
Environmental Releases of Environmental Hazardous Materials, or
otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Environmental
Hazardous Materials.
(iv) "Environmental Release" shall mean any release, spill,
emission, leaking, injection, deposit, disposal, discharge, dispersal,
leaching or mitigation from or into the atmosphere, soil, surface water,
groundwater or property.
(b) Except as set forth in the Disclosure Schedule, the Company: (i)
is in compliance in all material respects with all applicable Environmental
Laws; and (ii) has not received any communication (written or oral), from a
governmental authority, that alleges that the Company is not in compliance
with applicable Environmental Laws.
(c) Except as set forth in the Disclosure Schedule, the Company has
obtained all material environmental, health and safety permits and
governmental authorizations (collectively, the "Environmental Permits")
necessary for its operations, and all such permits are in good standing and
the Company is in compliance in all material respects with all terms and
conditions of the Environmental Permits.
(d) Except as set forth in the Disclosure Schedule, there is no
Environmental Claim pending or, to the Knowledge of the Company, threatened
against the Company or against any Person whose liability for any
Environmental Claim the Company has or may have retained or assumed either
contractually or by operation of Law, or against any real or personal
property or operations which the Company owns, leases or manages and, to
the Knowledge of the Company, there is no basis for any Environmental
Claim.
(e) Except as set forth in the Disclosure Schedule, there have been no
Environmental Releases of any Environmental Hazardous Material by the
Company, by any Person on real property owned, used, leased or operated by
the Company or by a Person on real property owned, used, leased or operated
by such Person that constitutes an Environmental Release on the real
property owned, used, leased or operated by the Company in violation of any
Environmental Law.
(f) No real property at any time owned, operated, used or controlled
by the Company is currently listed on the National Priorities List or the
Comprehensive Environmental Response, Compensation and Liability
Information System, both promulgated under CERCLA, or on any comparable
state list, and the Company has not received any written notice from any
Person under or relating to CERCLA or any comparable state or local Law.
(g) To the Company's Knowledge, no off-site location at which the
Company has disposed or arranged for the disposal of any waste is listed on
the National Priorities List or on any comparable state list and the
Company has not received any written notice from any Person with respect to
any off-site location, of potential or actual liability or a written
request for information from any Person under or relating to CERCLA or any
comparable state or local Law.
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5.24 CERTAIN TRANSACTIONS. No director, officer, partner, employee,
Affiliate or associate of the Company (a) has borrowed any monies from or has
outstanding any indebtedness or other similar obligations to the Company, (b)
owns any direct or indirect interest of any kind (other than the ownership of
less than 5% of the stock of a publicly traded company) in, or is a director,
officer, employee, partner, Affiliate or associate of, or consultant or lender
to, or borrower from, or has the right to participate in the management,
operations or profits of, any Person or entity which is (i) a competitor,
supplier, customer, distributor, lessor, tenant, creditor or debtor of the
Company, (ii) engaged in a business related to the business of the Company or
(iii) participated in any transaction to which the Company is a party; or (c) is
otherwise a party to any contract, arrangement or understanding with the
Company.
5.25 PRODUCT MATTERS. All instances of Product Liability Matters that have
occurred and for which notice has been received by the Company within the past
three (3) years are listed on the Disclosure Schedule, including without
limitation any product recall, re-work or post-sale warning or similar action
conducted with respect to the Company's products.
5.26 YEAR 2000. All internal computer systems that are material to the
business, finances or operations of the Company are (a) able to receive, record,
store, process, calculate, manipulate and output dates from and after January 1,
2000, time periods that include January 1, 2000 and information that is
dependent on or relates to such dates or time periods, in the same manner and
with the same accuracy, functionality, data integrity and performance as when
dates or time periods prior to January 1, 2000 are involved and (b) able to
store and output date information in a manner that is unambiguous as to century
("Year 2000 Compliant"). To the knowledge of the Company and upon due inquiry,
the systems of the Company's material suppliers are Year 2000 Compliant.
5.27 REQUIRED VOTE OF THE COMPANY STOCKHOLDERS. Unless the Merger is
consummated in accordance with Section 253 of the DGCL as contemplated by
Section 3.8(d), the only vote of the Company Stockholders required to adopt the
plan of merger contained in this Agreement and approve the Merger is the
affirmative vote of the holders of not less than a majority of the outstanding
Company Common Stock. No other vote of the Company Stockholders is required by
Law, the Certificate of Incorporation or Bylaws of the Company as currently in
effect or otherwise to adopt the plan of merger contained in this Agreement and
approve the Merger. Newco will have full voting power with respect to any
Company Common Stock purchased pursuant to the Offer.
5.28 REPRESENTATIONS COMPLETE. None of the representations or warranties
made by the Company herein or in the Disclosure Schedule, in any certificate
furnished by the Company pursuant to this Agreement or in the Company SEC
Reports, when all such documents are read together in their entirety, contains
or will contain at the Effective Time of Merger any untrue statement of a
material fact, or omits or will omit at the Effective Time of Merger to state
any material fact necessary in order to make the statements contained herein or
therein, in light of the circumstances under which they are made, not
misleading.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF PARENT AND NEWCO
Parent and Newco hereby represent and warrant to the Company that:
6.1 ORGANIZATION.
(a) Parent is a corporation duly and validly organized and existing
under the Laws of the State of Wisconsin. Newco is a corporation duly and
validly organized and existing under the Laws of the State of Delaware, and
is a wholly owned Subsidiary of Parent recently formed for the purpose of
engaging in the transactions described in the Agreement and has no
operating history.
(b) Each of Parent and Newco has full corporate power and authority
and all material franchises, permits, licenses, approvals, authorizations,
registrations, certificates, grants and orders necessary to carry on its
business as it is now conducted and to own, lease and operate its assets
and properties.
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6.2 AUTHORIZATION; ENFORCEABILITY. The execution, delivery and performance
of this Agreement by Parent and Newco and all of the documents and instruments
required by this Agreement to be executed and delivered by Parent and Newco are
within the corporate power of Parent and Newco and have been duly authorized by
all necessary corporate action by Parent and Newco. This Agreement is, and the
other documents and instruments required by this Agreement to be executed and
delivered by Parent and Newco will be, when executed and delivered by Parent and
Newco, the valid and binding obligations of Parent and Newco, enforceable
against Parent and Newco in accordance with their respective terms, except as
the enforcement thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar Laws generally affecting the rights of
creditors and subject to general equity principles.
6.3 NO VIOLATION OR CONFLICT. The execution, delivery and performance of
this Agreement by Parent and Newco do not and will not conflict with or violate
any Law, the Articles of Incorporation or Bylaws of Parent, the Certificate of
Incorporation or Bylaws of Newco or any material contract or agreement to which
Parent or Newco is a party or by which either of them is bound, except for
violations which would not, individually or in the aggregate, have a Material
Adverse Effect on the ability of Parent or Newco to consummate the transactions
contemplated hereby.
6.4 LITIGATION. There are no actions, suits or proceedings against Parent
or Newco, or both, pending or, to the Knowledge of Parent or Newco or both,
threatened by any Person which question the validity, legality or propriety of
the transactions contemplated by this Agreement.
6.5 FINANCING. Parent and Newco have or will have at the time required
sufficient funds available to consummate the Offer and the Merger and the other
transactions contemplated hereby, including the payment of related fees and
expenses.
6.6 BROKERS. Neither Parent nor Newco has incurred any brokers', finders',
investment banking, advisory or any similar fee in connection with the
transactions contemplated by this Agreement.
6.7 GOVERNMENTAL APPROVALS. No permission, approval, determination, consent
or waiver by, or any declaration, filing or registration with, any governmental
or regulatory authority is required in connection with the execution, delivery
and performance of this Agreement by Parent and Newco except (i) in connection
with the applicable requirements of the HSR Act; (ii) pursuant to the applicable
requirements of the Exchange Act; (iii) the filing of the Certificate of Merger
pursuant to the DGCL, (iv) as may be required by any applicable state securities
or "blue sky" Laws or state Takeover Laws, (v) where the failure to obtain such
consent, approval, permission, or waiver, or to make such declaration, filing or
registration is not material and would not affect their respective abilities to
consummate the transactions contemplated by this Agreement.
6.8 OFFER DOCUMENTS; PROXY STATEMENT. The Offer Documents will comply in
all material respects with applicable federal securities Laws, except that no
representation is made by Parent or Newco with respect to information supplied
by the Company in writing for inclusion in the Offer Documents or any amendments
or supplements thereto. None of the information supplied by Parent, Newco or
their Affiliates in writing for inclusion in the Proxy Statement or any
amendments or supplements thereto will, at the respective times the Proxy
Statement or any amendments or supplements thereto are filed with the SEC, at
the time the Proxy Statement or any amendments or supplements thereto are mailed
to the Company Stockholders, or at the time of the Company Special Meeting or at
the Effective Time of Merger, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading.
6.9 REPRESENTATIONS COMPLETE. None of the representations or warranties
made by Parent herein, in any certificate furnished by Parent pursuant to this
Agreement or in the Offer Documents, when all such documents are read together
in their entirety, contains or will contain at the Effective Time of Merger any
untrue statement of a material fact, or omits or will omit at the Effective Time
of Merger to state any material fact necessary in order to make the statements
contained herein or therein, in light of the circumstances under which they are
made, not misleading.
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ARTICLE VII
CONDUCT OF BUSINESS BY THE COMPANY PENDING THE MERGER
From and after the date of this Agreement and until the Effective Time of
Merger, the Company shall:
7.1 CARRY ON IN REGULAR COURSE. Diligently carry on its business in the
regular course and substantially in the same manner as heretofore and shall not
make or institute any unusual or novel methods of purchase, sale, lease,
management, accounting or operation.
7.2 USE OF ASSETS. Use, operate, maintain and repair all of its assets and
properties consistent with its normal business practices.
7.3 CONTRACTS. Not modify or amend any Existing Contract in any material
respect and not do any act or omit to do any act, or permit any act or omission
to act, which will cause a breach or termination of any of the Contracts.
7.4 INSURANCE POLICIES. Maintain all of the Insurance Policies in full
force and effect.
7.5 EMPLOYMENT MATTERS. Not: (a) except as described in the Disclosure
Schedule, grant any increase in the rate of pay of any of its employees,
directors or officers; (b) institute or amend any Employee Benefit Plan; or (c)
enter into or modify any written employment, severance, bonus, benefit,
termination or related arrangement with any Person.
7.6 CONTRACTS AND COMMITMENTS. Not enter into any contract or commitment or
engage in any transaction not in the usual and ordinary course of business and
consistent with its normal business practices, and not, without Parent's consent
which consent shall not be unreasonably withheld, purchase, lease, sell or
dispose of any capital assets.
7.7 INDEBTEDNESS. Not create, incur or assume any Indebtedness, Lien,
except in the ordinary course of business, or permit the imposition of any Lien.
7.8 PRESERVATION OF RELATIONSHIPS. Use its reasonable best efforts to
preserve its business organization intact, to retain the services of its present
officers and key employees and to preserve the goodwill of suppliers, customers,
creditors and others having business relationships with the Company.
7.9 COMPLIANCE WITH LAWS. Comply in all material respects with all
applicable Laws.
7.10 TAXES. Timely and properly file all federal, state, local and foreign
tax returns which are required to be filed, and pay or make provision for the
payment of all taxes owed by it.
7.11 AMENDMENTS. Not amend its Certificate of Incorporation or Bylaws.
7.12 DIVIDENDS; REDEMPTIONS; ISSUANCE OF STOCK. Not: (a) issue any
additional shares of stock of any class (except for the issuance of shares upon
exercise of options outstanding as of the date of this Agreement) or grant any
warrants, options or rights to subscribe for or acquire any additional shares of
stock of any class; (b) declare or pay any dividend or make any capital or
surplus distributions of any nature (including special dividends); or (c)
directly or indirectly redeem, purchase or otherwise acquire, split, combine,
recapitalize or reclassify any of its capital stock or liquidate in whole or in
part.
7.13 NO DISPOSITIONS. Not sell, lease, license, encumber or otherwise
dispose of, or agree to sell, lease, license, encumber or otherwise dispose of,
any of its assets, except in the ordinary course of business consistent with
past practice.
7.14 DISSOLUTION; REORGANIZATION. Not adopt a plan of complete or partial
liquidation, dissolution, merger, consolidation, restructuring, recapitalization
or other reorganization of the Company.
7.15 LITIGATION. Not settle or compromise any material claims, litigation
or governmental or administrative proceedings.
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ARTICLE VIII
CONDITIONS TO CONSUMMATION OF THE MERGER
The respective obligations of each party to effect the Merger are subject
to the satisfaction or waiver, where permissible, at or prior to the Effective
Time of Merger of the following conditions:
8.1 INJUNCTION. There shall not be in effect any statute, rule, regulation,
executive order, decree, ruling or injunction or other order of a court or
governmental or regulatory agency of competent jurisdiction directing that the
transactions contemplated herein not be consummated; provided, however, that
prior to invoking this condition each party shall use its reasonable best
efforts to have any such decree, ruling, injunction or order vacated.
8.2 GOVERNMENTAL APPROVALS.
(a) All governmental consents, orders and approvals legally required
for the consummation of the Merger and the transactions contemplated hereby
shall have been obtained and be in effect at the Effective Time of Merger.
(b) All necessary requirements of the HSR Act shall have been complied
with and any "waiting periods" applicable to the Merger and to the
transactions described in this Agreement, including any secondary
acquisitions, which are imposed by the HSR Act shall have expired prior to
the Closing Date or shall have been terminated by the appropriate agency.
8.3 THE OFFER. Newco shall have purchased in accordance with the terms of
the Offer all shares of Company Common Stock validly tendered and not withdrawn
pursuant to the Offer.
8.4 APPROVAL OF COMPANY STOCKHOLDERS; CERTIFICATE OF MERGER. To the extent
required by applicable Law, this Agreement, the Merger and the transactions
contemplated by this Agreement shall have received the requisite approval and
authorization of the Company Stock holders; provided that Parent, Newco and
their Affiliates shall vote all of their shares of Company Common Stock in favor
of the Merger.
ARTICLE IX
TERMINATION; MISCELLANEOUS
9.1 TERMINATION. This Agreement may be terminated and the Offer and the
Merger may be abandoned at any time prior to the Effective Time of Merger as
follows:
(a) By mutual written agreement duly authorized by the Boards of
Directors of Parent, Newco and the Company;
(b) By Parent and Newco if (i) the Board of Directors of the Company
shall have withdrawn or materially modified or changed its favorable
recommendation of the Offer, the Merger or this Agreement, or shall have
approved or recommended any Acquisition Proposal or Acquisition; (ii) the
Company shall have breached Section 4.5(b) of this Agreement or shall have
resolved to effect any of the actions referred to in Section 4.5(b); or
(iii) Newco shall have otherwise terminated the Offer in accordance with
the terms of this Agreement, including Annex A, without purchasing shares
of Company Common Stock pursuant to the Offer;
(c) By the Company if (i) the Board of Directors of the Company shall
have determined in good faith, upon the written advice of outside legal
counsel, that its fiduciary duties require the termination of this
Agreement in order to pursue a Superior Proposal; or (ii) Newco shall have
(x) failed to commence the Offer within five business days following the
date of this Agreement or (y) terminated the Offer without purchasing
shares of Company Common Stock pursuant to the Offer;
(d) By either Parent (including Newco) or the Company if the other
party shall have breached in any material respect any of its
representations, warranties, covenants or other agreements contained in
this Agreement (other than a breach by the Company of Section 4.5(b)
hereof, in which case Parent
26
<PAGE> 32
shall have the right to terminate this Agreement as provided in Section
9.1(b)(ii) above), which breach is incapable of being cured or shall not
have been cured within 30 days after the giving of written notice to the
breaching party; or
(e) By either Parent (including Newco) or the Company (i) if Newco
shall not have purchased shares of Company Common Stock pursuant to the
Offer on or before June 30, 2000 (provided, however, that the right to
terminate this Agreement under this Section 9.1(e) shall not be available
to any party whose action or failure to act has been the cause of or
resulted in such failure to purchase); or (ii) if any court of competent
jurisdiction or any other governmental body or regulatory authority shall
have issued an order, decree or ruling or taken any other action
permanently restraining, enjoining or otherwise prohibiting the Offer or
the Merger and such order, decree, ruling or other action shall have become
final and non-appealable.
9.2 RIGHTS ON TERMINATION; WAIVER. If this Agreement is terminated pursuant
to Section 9.1 of this Agreement, all further obligations of the parties under
or pursuant to this Agreement shall terminate without further liability of any
party to the others, provided that: (a) the obligations of Parent and Newco
contained in Sections 4.1(b), 4.7, 9.2 and 9.5 of this Agreement shall survive
any such termination; (b) the obligations of the Company contained in Sections
4.1(b), 4.5(c), 4.7, 9.2 and 9.5 of this Agreement shall survive any such
termination; and (c) each party to this Agreement shall retain any and all
remedies which it may have for breach of contract provided by Law.
9.3 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS. All
representations and warranties of the parties contained in this Agreement or
made pursuant to this Agreement shall terminate and be of no further force and
effect beyond the Effective Time of Merger. This Section 9.3 shall not limit any
covenant or agreement of the parties hereto which by its terms contemplates
performance after the Effective Time of Merger or the purchase of shares of
Company Common Stock by Newco pursuant to the Offer.
9.4 ENTIRE AGREEMENT; AMENDMENT. This Agreement and the documents referred
to in this Agreement and required to be delivered pursuant to this Agreement
constitute the entire agreement among the parties pertaining to the subject
matter of this Agreement, and supersede all prior and contemporaneous
agreements, understandings, negotiations and discussions of the parties, whether
oral or written, and there are no warranties, representations or other
agreements between the parties in connection with the subject matter of this
Agreement, except as specifically set forth in this Agreement. This Agreement
may be amended by the parties at any time prior to the Effective Time of Merger,
but no amendment, supplement, modification, waiver or termination of this
Agreement shall be binding unless executed in writing by the parties to be bound
thereby. No waiver of any of the provisions of this Agreement shall be deemed or
shall constitute a waiver of any other provision of this Agreement, whether or
not similar, nor shall such waiver constitute a continuing waiver unless
otherwise expressly provided.
9.5 EXPENSES. Except as provided in Section 4.5(c) hereof, all costs and
expenses incurred in connection with this Agreement and the transactions
contemplated by this Agreement shall be paid by the party incurring such
expenses, whether or not the Offer and the Merger are consummated.
9.6 GOVERNING LAW. This Agreement shall be construed and interpreted
according to the Laws of the State of Delaware without regard to applicable
conflicts of law.
9.7 ASSIGNMENT. Prior to the Effective Time of Merger, this Agreement shall
not be assigned by any party without the prior written consent of the other
parties, provided that Parent or Newco may assign any of their respective rights
and obligations to any direct or indirect subsidiary of Parent, but no such
assignment shall relieve Parent or Newco, as the case may be, of its obligations
hereunder.
9.8 NOTICES. All communications or notices required or permitted by this
Agreement shall be in writing and shall be deemed to have been given at the
earlier of the date when actually delivered to an officer of a party by personal
delivery or telephonic facsimile transmission or when deposited in the United
States mail,
27
<PAGE> 33
certified or registered mail, postage prepaid, return receipt requested, and
addressed as follows, unless and until any of such parties notifies the others
in accordance with this Section of a change of address:
<TABLE>
<S> <C>
If to Parent or Newco: Brady Corporation or IMTC Acquisition
Corp. Attn: Gary L. Johnson
6555 W. Good Hope Road
Milwaukee, WI 53223
Fax No.: 414-438-6801
with a copy to: Quarles & Brady LLP
Attention: Conrad G. Goodkind
411 East Wisconsin Avenue
Milwaukee, WI 53202
Fax No.: 414-271-3552
If to the Company: Imtec Inc.
Attention: Ralph Crump
One Imtec Lane
Bellows Falls, VT 05101
Fax No.: 802-463-4334
with a copy to: Cooperman Levitt Winikoff Lester &
Newman, P.C.
Attention: Ira I. Roxland
800 Third Avenue
New York, New York 10022-7601
Fax No.: 212-755-2839
</TABLE>
9.9 COUNTERPARTS; HEADINGS. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but such counterparts
shall together constitute but one and the same Agreement. The Table of Contents
and Article and Section headings in this Agreement are inserted for convenience
of reference only and shall not constitute a part hereof.
9.10 INTERPRETATION. Unless the context requires otherwise, all words used
in this Agreement in the singular number shall extend to and include the plural,
all words in the plural number shall extend to and include the singular, and all
words in any gender shall extend to and include all genders.
9.11 SEVERABILITY. If any provision, clause, or part of this Agreement, or
the application thereof under certain circumstances, is held invalid, the
remainder of this Agreement, or the application of such provision, clause or
part under other circumstances, shall not be affected thereby unless such
invalidity materially impairs the ability of the parties to consummate the
transactions contemplated by this Agreement.
9.12 SPECIFIC PERFORMANCE. The parties agree that the assets and business
of the Company as a going concern constitute unique property. There is no
adequate remedy at Law for the damage which any party might sustain for failure
of the other parties to consummate the Offer and the Merger and the transactions
contemplated by this Agreement, and accordingly, each party shall be entitled,
at its option, to the remedy of specific performance to enforce the Offer and
the Merger pursuant to this Agreement.
9.13 NO RELIANCE. Except for the parties to this Agreement and any
permitted assignees, no Person is entitled to rely on any of the
representations, warranties and agreements of the parties contained in this
Agreement, and the parties assume no liability to any Person because of any
reliance on the representations, warranties and agreements of the parties
contained in this Agreement.
28
<PAGE> 34
IN WITNESS WHEREOF, the parties have caused this Agreement and Plan of
Merger to be duly executed as of the date first above written.
BRADY CORPORATION
By: /s/ KATHERINE M. HUDSON
------------------------------------
Title: President and CEO
IMTC ACQUISITION CORP.
By: /s/ KATHERINE M. HUDSON
------------------------------------
Title: President
IMTEC INC.
By: /s/ RALPH E. CRUMP
------------------------------------
Title: Chairman
29
<PAGE> 35
ANNEX A
Capitalized terms used in this Annex A and not otherwise defined herein
have the meanings assigned to them in the Agreement to which it is attached.
CERTAIN CONDITIONS OF THE OFFER. Notwithstanding any other provision of the
Offer or the Agreement and provided that Newco shall not be obligated to accept
for payment any shares of Company Common Stock until (i) expiration of all
applicable waiting periods under the HSR Act and (ii) satisfaction of the
Minimum Condition, Newco shall not be required to accept for payment or, subject
to any applicable rules and regulations of the SEC, including Rule 14e-1(c)
under the Exchange Act (relating to Newco's obligation to pay for or return
tendered shares after the termination or withdrawal of the Offer), pay for, or
may delay the acceptance for payment of or payment for, any shares of Company
Common Stock tendered pursuant to the Offer, or may, subject to the terms of the
Agreement, terminate or amend the Offer if at any time on or after the date of
the Agreement, and at or before the time of payment for any of such shares, any
of the following conditions exist:
(a) There shall have occurred and be continuing as of the then
scheduled expiration date of the Offer (i) any general suspension of, or
limitation on prices for, trading in securities on the New York Stock
Exchange or the Nasdaq National Market, (ii) a declaration of a banking
moratorium or any suspension of payments in respect of banks in the United
States, (iii) a commencement or escalation of a war, armed hostilities or
other international or national calamity directly involving the United
States, (iv) any material limitation (whether or not mandatory) by any
governmental or regulatory authority, agency or commission, domestic or
foreign ("Governmental Entity"), on the extension of credit by banks or
other lending institutions in the United States, (v) or in the case of any
of the foregoing existing at the time of the commencement of the Offer, a
material acceleration or worsening thereof;
(b) The Company shall have breached or failed to perform any of its
obligations, covenants or agreements under the Agreement or any
representation or warranty of the Company as set forth in the Agreement
(disregarding all qualifications and exceptions contained therein relating
to knowledge, materiality or Material Adverse Effect) shall not have been
true and correct as of the date of the Agreement and as of the then
scheduled expiration date of the Offer as though made on and as of the then
scheduled expiration date of the Offer, provided that all such breaches,
failures to perform and untrue representations or warranties, taken in the
aggregate, shall have or shall be reasonably likely to have a Material
Adverse Effect;
(c) Any court or Governmental Entity shall have enacted, issued,
promulgated, enforced or entered any statute, rule, regulation, executive
order, decree, injunction or other order which is in effect and which (i)
restricts (other than restrictions which in the aggregate do not have a
Material Adverse Effect on Parent, Newco or the Company or which do not
materially restrict the ability of Parent and Newco to consummate the Offer
and the Merger as originally contemplated by Parent and Newco), prevents,
prohibits or makes materially more costly the consummation of the Offer or
the Merger, (ii) makes the acceptance for payment of, or payment for or
purchase of some or all of Company Common Stock pursuant to the Offer
illegal, (iii) results in a significant delay in or restricts the ability
of Newco to accept for payment, pay for or purchase some or all of Company
Common Stock pursuant to the Offer or to effect the Merger, (iv) renders
Newco unable to accept for payment or pay for or purchase some or all of
Company Common Stock pursuant to the Offer, (v) prohibits or limits (other
than limits which in the aggregate do not have a Material Adverse Effect on
Parent, Newco or the Company or which do not materially limit the ability
of Parent to own and operate all of the business and assets of Parent and
the Company after the consummation of the transactions contemplated by the
Offer and the Agreement) the ownership or operation by the Company, Parent
or any of their Subsidiaries of all or any material portion of the business
or assets of the Company, or as a result of the Offer or Merger compels the
Company, Parent or any of their Subsidiaries to dispose of or hold separate
all or any material portion of their respective business or assets, (vi)
imposes limitations on the ability of Parent or any Subsidiary of Parent to
hold, transfer or dispose of or exercise effectively full rights of
ownership of any shares of Company Common Stock, including, without
limitation, the right to vote any shares of Company Common Stock
A-1
<PAGE> 36
acquired by Newco pursuant to the Offer or otherwise on all matters
properly presented to the Company Stockholders including, without
limitation, the approval and adoption of the Agreement and the transactions
contemplated thereby, (vii) requires divestiture by Parent or any Affiliate
of Parent of any shares of Company Common Stock, or (viii) otherwise
materially adversely affects the financial condition, business or results
of operations of Parent, Newco or the Company or otherwise makes
consummation of the Offer or the Merger unduly burdensome;
(d) There shall have been threatened, instituted or pending any
action, proceeding or counterclaim by or before any Governmental Entity,
challenging the making of the Offer or the acquisition by Newco of Company
Common Stock pursuant to the Offer or the consummation of the Merger, or
seeking to obtain any material damages, or seeking to, directly or
indirectly, result in any of the consequences referred to in clauses (i)
through (viii) of paragraph (c) above;
(e) Any person or "group" (as such term is used in Section 13(d)(3) of
the Exchange Act) other than Parent or Newco or any of their Affiliates
shall have become the beneficial owner (as that term is used in Rule 13d-3
under the Exchange Act) of more than 25% of the outstanding Company Common
Stock;
(f) All consents, registrations, approvals, permits, authorizations,
notices, reports or other filings required to be obtained or made by the
Company, Parent or Newco in connection with the execution and delivery of
the Agreement, the Offer and the consummation of the transactions
contemplated by this Agreement shall not have been made or obtained as of
the then scheduled expiration date of the Offer (other than the failure to
receive any consent, registration, approval, permit or authorization or to
make any notice, report or other filing that, in the aggregate, is not
reasonably likely to have a Material Adverse Effect on Parent, Newco or the
Company, or would not prevent the consummation of the Offer or the Merger);
(g) There shall have occurred any one or more changes or developments
in the financial condition, properties, business or results of operations
of the Company that, individually or in the aggregate, has had or is
reasonably likely to have a Material Adverse Effect;
(h) The Board of Directors of the Company (or any committee thereof)
shall have withdrawn or amended, or modified in a manner adverse to Parent
and Newco its recommendation of the Offer or the Merger, or shall have
endorsed, approved or recommended any other Acquisition Proposal, or the
Company shall have entered into any agreement with respect to an
Acquisition, or the Board of Directors of the Company (or any committee
thereof) shall have resolved to take any of the foregoing actions; or
(i) The Agreement shall have been terminated by the Company, or by
Parent or Newco, in accordance with its terms or Parent or Newco shall have
reached an agreement or understanding in writing with the Company providing
for termination or amendment of the Offer or delay in payment for the
shares of Company Common Stock;
which, in the reasonable judgment of Parent and Newco, in any such case, and
regardless of the circumstances (excluding any direct action or inaction by
Parent or Newco which to Parent's and Newco's knowledge is reasonably likely to
cause any of the above conditions to exist) giving rise to any such conditions,
make it inadvisable to proceed with the Offer and/or with such acceptance for
payment of or payment for shares of Company Common Stock.
The foregoing conditions are for the sole benefit of Parent and Newco and
may be asserted by Parent or Newco regardless of the circumstances (excluding
any direct action or inaction by Parent or Newco which to Parent's and Newco's
knowledge is reasonably likely to cause any of the above conditions to exist)
giving rise to such condition or may be waived by Parent or Newco, in whole or
in part at any time and from time to time in its sole discretion. The failure by
Parent or Newco at any time to exercise any of the foregoing rights shall not be
deemed a waiver of any such right, the waiver of any such right with respect to
particular facts and circumstances shall not be deemed a waiver with respect to
any other facts and circumstances and each such right shall be deemed an ongoing
right that may be asserted at any time and from time to time.
A-2
<PAGE> 1
[BRADY LOGO]
[BRADY CORPORATION LETTERHEAD]
CONFIDENTIAL
November 9, 1999
Mr. Steve Anton
President & CEO
IMTBC, Inc.
One Imtec Lane
Bellows Falls, VT 05101-0809
Dear Mr. Anton:
In connection with our mutual review of a possible acquisition (a "Transaction")
of IMTEC, Inc. ("IMTEC") by Brady Corporation or a subsidiary thereof ("Brady")
both IMTEC and Brady will provide each other with certain information. As a
condition to such information being furnished to each party and its directors,
officers, employees, agents or advisors (including, without limitation,
attorneys, accountants, consultants, bankers and financial advisors)
(collectively, "Representatives"), each party agrees to treat any nonpublic
information concerning the other party (whether prepared by the disclosing
party, its advisors or otherwise and irrespective of the form of
communication) which is furnished hereunder to a party or to its Representative
now or in the future by or on behalf of the disclosing party (herein
collectively referred to as the "Evaluation Material") in accordance with the
provisions of this letter agreement, and to take or abstain from taking certain
other actions hereinafter set forth.
(1) EVALUATION MATERIAL. The term "Evaluation Material" shall be deemed
to include all notes analyses, compilations, studies, interpretations or other
documents prepared by each party or its Representatives which contain, reflect
or are based upon, in whole or in part, the information furnished to such party
or its Representatives pursuant hereto which is not available to the general
public. The term "Evaluation Material" does not include information which (i)
is or becomes generally available to the public (other than as a result of a
breach of this Agreement by the receiving party or its Representatives), (ii)
was within the receiving party's possession prior to its being furnished to
the receiving party by or on behalf of the disclosing party (provided that the
source of such information was not bound by a confidentiality agreement with or
other contractual, legal or fiduciary obligation of confidentiality to the
disclosing party), (iii) is or becomes available to the receiving party on a
nonconfidential basis from a source other than the disclosing party or any of
its Representatives (provided that such source was not known by the receiving
party to be bound by a confidentiality agreement with or other contractual,
legal or fiduciary obligation of confidentiality to the disclosing party or any
other party with respect to such information), (iv) is disclosed by the
disclosing party to a third party without a duty of confidentiality, (v) is
independently developed by the recipient without use of Evaluation Material,
(vi) is disclosed under operation of law, or (vii) is disclosed by the
recipient or its Representatives with the disclosure's prior written approval.
<PAGE> 2
November 9, 1999 Brady Corporation
IMTEC, Inc. Page 2 of 4
(2) PURPOSE OF DISCLOSURE OF EVALUATION MATERIAL. It is understood and
agreed to by each party that any exchange of information under this agreement
shall be solely for the purpose of evaluating a Transaction between the parties
and not to affect in any way, each party's relative competitive position to
each party or to other entities. It is further agreed, that the information to
be disclosed to each other shall only be that information which is reasonably
necessary to a Transaction and that information which is not reasonably
necessary for such purposes shall not be disclosed or exchanged. In addition,
competitively sensitive information such as information concerning product
development or marketing plans, product prices or pricing plans, cost data,
customers or similar information which has been determined to be reasonably
necessary to a Transaction, shall be limited only to those senior executives
and Representatives who are involved in evaluating or negotiating a Transaction
or approving the value of a Transaction.
(3) USE OF EVALUATION MATERIAL. Each party hereby agrees that it and its
Representatives shall use the other's Evaluation Material solely for the purpose
of evaluating a possible Transaction between the parties, and that the
disclosing party's Evaluation Material will be kept confidential and each party
and its Representatives will not disclose or use for purposes other than the
evaluation of a Transaction any of the other's Evaluation Material in any manner
whatsoever; provided, however, that (i) the receiving party may make any
disclosure of such information which the disclosing party gives its prior
written consent; (ii) any of such information may be disclosed to the receiving
party's Representatives who need to know such information for the sole purpose
of evaluating a possible Transaction between the parties, who are provided with
a copy of this letter agreement and who are directed by the receiving party to
treat such information confidentially; or any evaluation material which is
disclosed in accordance with section (1) above.
(4) NON DISCLOSURE. In addition, each party agrees that, without the prior
written consent of the other party, its Representatives will not disclose to any
other person the fact that any Evaluation material has been made available
hereunder, that discussions or negotiations are taking place concerning a
Transaction involving the parties or any of the terms, conditions or other facts
with respect thereto (including the status thereof) provided, that a party may
make such disclosure if in the written opinion of a party's outside
counsel, such disclosure is necessary to avoid committing a violation of law,
court order or applicable stock exchange regulation. In such event, the
disclosing party shall use its reasonable efforts to give advance notice to the
other party.
(5) TERMINATION OF DISCUSSIONS. If either party decides that it does not
wish to proceed with a Transaction with the other party, the party so deciding
will promptly inform the other party of that decision. In that case, or at any
time upon the request of either disclosing party for any reason, each receiving
party will promptly destroy or return all written Evaluation Material (and all
copies thereof and extracts therefrom) furnished to the receiving party or its
Representatives by or on behalf of the disclosing party pursuant hereto. In the
event of such a decision or request, all other Evaluation Material prepared by
the requesting party shall be destroyed and no copy thereof shall be retained,
and in no event shall either party be obligated to disclose or provide the
Evaluation Material prepared by it or its Representatives to the other party.
Notwithstanding the destruction of the Evaluation Material, each party and its
Representatives will continue to be bound by its obligations of confidentiality
and other obligations hereunder.
<PAGE> 3
November 9, 1999 Brady Corporation
IMTEC,Inc. Page 3 of 4
(6) NO REPRESENTATION OF ACCURACY. Each party understands and
acknowledges that neither party nor any of its Representatives makes any
representation or warranty, express or implied, as to the accuracy or
completeness of the Evaluation Material made available by it or to it. Each
party agrees that neither party nor any of its Representatives shall have any
liability to the other party or to any of its Representatives relating to or
resulting from the use of or reliance upon such other party's Evaluation
Material or any errors therein or omissions therefrom. Only those
representations or warranties which are made in a final definitive agreement
regarding the Transaction, when, as and if executed, and subject to such
limitations and restrictions as may be specified therein, will have any legal
effect.
(7) DEFINITIVE AGREEMENTS. Each party understands and agrees that no
contract or agreement providing for any Transaction involving the parties shall
be deemed to exist between the parties unless and until a final definitive
agreement has been executed and delivered. Each party also agrees that unless
and until a final definitive agreement regarding a Transaction between the
parties has been executed and delivered, neither party will be under any legal
obligation of any kind whatsoever with respect to such a Transaction by virtue
of this letter agreement except for the matters specifically agreed to herein.
For purposes of this paragraph, the term "definitive agreement" does not
include an executed letter of intent or any other preliminary written
agreement. Both parties further acknowledge and agree that each party reserves
the right, in its sole discretion, to provide or not provide Evaluation
Material to the receiving party under this Agreement, to reject any and all
proposals made by the other party or any of its Representatives with regard to
a Transaction between the parties, and to terminate discussions and
negotiations at any time.
(8) WAIVER. It is understood and agreed that no failure or delay by
either party in exercising any right, power or privilege hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise thereof
preclude any other or future exercise thereof or the exercise of any other
right, power or privilege hereunder.
(9) NON-SOLICITATION. Beginning on the date of this letter and
continuing for a period of twelve (12) months after the date of a notice of
termination under Section (5) above, each party and its subsidiaries will not
(and each party and its subsidiaries will not assist or encourage others to),
and any of its affiliates, having had access to Evaluation Material as defined
above, will not (and each of its affiliates will not assist or encourage others
to), directly or indirectly, in any manner whatsoever, request, influence, or
induce any employee to leave his or her employment with the other party,
provided that advertisements in trace journals, newspapers or discussions with
individuals that have left his or her employ or who initiate such discussions
with the other party shall not be in violation of this provision.
(10) MISCELLANEOUS. Each party agrees to be responsible for any
willful and material breach of this agreement by any of its Representatives. In
case any provision of this agreement shall be invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining provisions of the
agreement shall not in any way be affected or impaired thereby.
(11) EQUITABLE RELIEF. It is further understood and agreed that
money damages may not be a sufficient remedy for any willful and material
breach of this letter agreement by either party or any of its
<PAGE> 4
November 9, 1999 Brady Corporation
IMTEC, Inc. Page 4 of 4
Representatives and that the nonbreaching party may be entitled to equitable
relief. Any such relief shall be in addition to all other remedies available
at law or equity.
(12) STANDSTILL. The obligations of both IMTEC and Brady under this letter
agreement shall begin on the date of this letter and cease entirely twelve (12)
months from the date of a notice of termination under Section (5).
(13) GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of Vermont that are pertinent and applicable to such
agreements.
Please confirm your agreement with the foregoing by signing and returning one
copy of this letter to the undersigned, whereupon this letter agreement shall
become a binding agreement between IMTEC and Brady.
Very truly yours,
Brady Corporation
/s/ Gary L. Johnson
Gary L. Johnson
Vice President - Corporate Development
Accepted and Agreed as of the date first written above:
IMTEC, Inc.
/s/ Steve Anton
- ---------------------------------------
Name
President/CEO
- ---------------------------------------
Title
11-2-99
- ---------------------------------------
Date
