<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
SCHEDULE 14D-1
Tender Offer Statement
Pursuant to Section 14(d)(1)
of the Securities Exchange Act of 1934
SIGMA CIRCUITS, INC.
(Name of Subject Company)
------------------------------
TYCO INTERNATIONAL LTD.
T10 ACQUISITION CORP.
(Bidders)
------------------------------
COMMON STOCK, PAR VALUE $.001 PER SHARE
(Title of class of securities)
------------------------------
82655910
(CUSIP number of class of securities)
------------------------------
MARK H. SWARTZ, EXECUTIVE VICE PRESIDENT
C/O TYCO INTERNATIONAL (US) INC.
ONE TYCO PARK
EXETER, NEW HAMPSHIRE 03833
(603) 778-9700
(Name, address and telephone number of person authorized to
receive notices and communications on behalf of bidders)
------------------------------
WITH A COPY TO:
JOSHUA M. BERMAN, ESQ.
KRAMER, LEVIN, NAFTALIS & FRANKEL
919 THIRD AVENUE
NEW YORK, NEW YORK 10022
TELEPHONE: (212) 715-9100
------------------------
CALCULATION OF FILING FEE
<TABLE>
<CAPTION>
TRANSACTION VALUATION* AMOUNT OF FILING FEE**
<S> <C>
$67,074,305 $13,415
</TABLE>
* For purposes of calculating fee only. Assumes purchase of 6,388,029 shares
of Common Stock, par value $.001 per share, of Sigma Circuits, Inc. at
$10.50 per share, representing 4,252,985 shares outstanding and 2,135,044
shares reserved for issuance pursuant to outstanding options, a warrant and
a convertible note.
** 1/50th of 1% of Transaction Valuation.
/ / Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the form
or schedule and the date of its filing.
<TABLE>
<S> <C> <C> <C>
Amount previously paid: Not applicable Filing party: Not applicable.
Form or registration no.: Not applicable. Date filed: Not applicable.
</TABLE>
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Exhibit Index is located on Page 9
<PAGE>
14D-1
Page 2 of 9 Pages
- --------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS:
TYCO INTERNATIONAL LTD.
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) / /
(b) / /
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCES OF FUNDS
AF
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(e) OR 2(f) / /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
BERMUDA
- --------------------------------------------------------------------------------
7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
458,146 SEE ITEM 6 AND ITEM 7
- --------------------------------------------------------------------------------
8 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES
- --------------------------------------------------------------------------------
SEE ITEM 6 AND ITEM 7
- --------------------------------------------------------------------------------
9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
10.8% SEE ITEM 6 AND ITEM 7
- --------------------------------------------------------------------------------
10 TYPE OF REPORTING PERSON
CO
- --------------------------------------------------------------------------------
2
<PAGE>
14D-1
Page 3 of 9 Pages
- --------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS:
T10 ACQUISITION CORP.
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) / /
(b) / /
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCES OF FUNDS
AF
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(e) OR 2(f) / /
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
- --------------------------------------------------------------------------------
7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
458,146 SEE ITEM 6 AND ITEM 7
- --------------------------------------------------------------------------------
8 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES
- --------------------------------------------------------------------------------
SEE ITEM 6 AND ITEM 7
- --------------------------------------------------------------------------------
9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
10.8% SEE ITEM 6 AND ITEM 7
- --------------------------------------------------------------------------------
10 TYPE OF REPORTING PERSON
CO
- --------------------------------------------------------------------------------
3
<PAGE>
This Statement relates to the offer by T10 Acquisition Corp., a Delaware
corporation (the "Purchaser") and an indirect wholly-owned subsidiary of Tyco
International Ltd., a Bermuda company ("Tyco"), to purchase all outstanding
shares (the "Shares") of common stock, par value $.001 per share (the "Common
Stock"), of Sigma Circuits, Inc., a Delaware corporation (the "Company"), upon
the terms and subject to the conditions set forth in the Offer to Purchase,
dated June 5, 1998, annexed hereto as Exhibit (a)(1) (the "Offer to Purchase"),
and in the related Letter of Transmittal (which, together with any amendments or
supplements thereto, constitute the "Offer"), at a purchase price of $10.50 per
Share, net to each tendering stockholder in cash. The item numbers below and
responses thereto are in accordance with the requirements of Schedule 14D-1.
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is Sigma Circuits, Inc., a Delaware
corporation. The address of the Company's principal executive offices is 393
Mathew Street, Santa Clara, California 95050.
(b) The securities to which this statement relates are the Common Stock. The
information set forth in the 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 2. IDENTITY AND BACKGROUND.
(a)-(g) This Statement is being filed by the Purchaser and Tyco
(collectively, the "Reporting Persons"). The Purchaser is an indirect
wholly-owned subsidiary of Tyco.
The information set forth in Section 9 ("Certain Information Concerning Tyco
and the Purchaser") and in Annex I and II of the Offer to Purchase is
incorporated herein by reference.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
(a)-(b) The information set forth in the Introduction, Section 9 ("Certain
Information Concerning Tyco and the Purchaser"), Section 11 ("Contacts with the
Company; Background of the Offer") and Section 13 ("The Merger Agreement;
Stockholder Agreement") of the Offer to Purchase is incorporated herein by
reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a) The information set forth in Section 10 ("Source and Amount of Funds")
of the Offer to Purchase is incorporated herein by reference.
(b)-(c) Not applicable.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSAL OF THE BIDDER.
(a)-(g) The information set forth in the Introduction and Sections 7
("Effects of the Offer on the Market for Shares; Stock Quotations; Registration
Under the Exchange Act") and 12 ("Purpose of the Offer; Short Form Merger; Plans
for the Company; Dissenters' Rights; Going Private Transactions") of the Offer
to Purchase is incorporated herein by reference.
4
<PAGE>
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
The information set forth in Sections 9 ("Certain Information Concerning
Tyco and the Purchaser") and 13 ("The Merger Agreement; Stockholder Agreement")
of the Offer to Purchase is incorporated herein by reference.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS
WITH RESPECT TO THE SUBJECT COMPANY'S SECURITIES.
The information set forth in the Introduction and Sections 9 ("Certain
Information Concerning Tyco and the Purchaser"), 11 ("Contacts with the Company;
Background of the Offer"), 12 ("Purpose of the Offer; Short Form Merger; Plans
for the Company; Dissenters' Rights; Going Private Transactions") and 13 ("The
Merger Agreement; Stockholder Agreement") of the Offer to Purchase is
incorporated herein by reference.
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in Sections 17 ("Fees and Expenses") and 18
("Miscellaneous") of the Offer to Purchase is incorporated herein by reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
The information set forth in Section 9 ("Certain Information Concerning Tyco
and the Purchaser") of the Offer to Purchase is incorporated herein by
reference. The incorporation by reference herein of such financial information
does not constitute an admission that such information is material to a decision
by a stockholder of the Company whether to sell, tender or hold the Shares being
sought in the Offer.
ITEM 10. ADDITIONAL INFORMATION.
(a) The information set forth in Section 11 ("Contacts with the Company;
Background of the Offer") and Section 13 ("The Merger Agreement; Stockholder
Agreement") of the Offer to Purchase is incorporated herein by reference.
(b)-(c) The information set forth in Section 16 ("Certain Legal Matters") of
the Offer to Purchase is incorporated herein by reference.
(d) The information set forth in Sections 7 ("Effects of the Offer on the
Market for Shares; Stock Quotations; Registration Under the Exchange Act") and
16 ("Certain Legal Matters") of the Offer to Purchase is incorporated herein by
reference.
(e) None
(f) The information set forth in the Offer to Purchase and the related
Letter of Transmittal, to the extent not otherwise set forth herein, is
incorporated herein by reference.
ITEM 11. MATERIALS TO BE FILED AS EXHIBITS.
(a)(1) Offer to Purchase, dated June 5, 1998.
(a)(2) Letter of Transmittal.
(a)(3) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and
Nominees.
(a)(4) Letter to Clients for use by Brokers, Dealers, Commercial Banks,
Trust Companies and Nominees.
5
<PAGE>
(a)(5) Notice of Guaranteed Delivery.
(a)(6) Text of Joint Press Release issued June 2, 1998.
(a)(7) Form of Summary Advertisement, dated June 5, 1998.
(a)(8) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(b) Not applicable.
(c)(1) Confidentiality Agreement between Tyco and the Company, dated March
26, 1998.
(c)(2) Agreement and Plan of Merger, dated as of June 1,1998, among the
Purchaser, Tyco and the Company.
(c)(3) Stockholder Agreement, dated as of June 1, 1998, among Tyco, the
Purchaser and the individuals listed on the signature pages thereto.
(d)-(f) Not applicable.
6
<PAGE>
SIGNATURE
After due inquiry and to the best of the undersigned's knowledge and belief,
the undersigned certifies that the information set forth in this statement is
true, complete and correct.
<TABLE>
<S> <C> <C>
TYCO INTERNATIONAL LTD.
By: /s/ MARK H. SWARTZ
-----------------------------------------
Name: Mark H. Swartz
Title: Executive Vice President
and Chief Financial Officer
</TABLE>
Dated: June 5, 1998
7
<PAGE>
SIGNATURE
After due inquiry and to the best of the undersigned's knowledge and belief,
the undersigned certifies that the information set forth in this statement is
true, complete and correct.
T10 ACQUISITION CORP.
By: /s/ MARK H. SWARTZ
-----------------------------------------
Name: Mark H. Swartz
Title: Vice President
Dated: June 5, 1998
8
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT SEQUENTIALLY
NO. DESCRIPTION NUMBERED PAGE
- --------- ---------------------------------------------------------------------------------------- -------------------
<C> <S> <C>
(a)(1) Offer to Purchase, dated June 5, 1998...................................................
(a)(2) Letter of Transmittal...................................................................
(a)(3) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Nominees..............
(a)(4) Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust Companies and
Nominees................................................................................
(a)(5) Notice of Guaranteed Delivery...........................................................
(a)(6) Text of Joint Press Release issued June 2, 1998.........................................
(a)(7) Form of Summary Advertisement, dated June 5, 1998.......................................
(a)(8) Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9...
(c)(1) Confidentiality Agreement between Tyco and the Company, dated March 26, 1998............
(c)(2) Agreement and Plan of Merger, dated as of June 1, 1998, among the Purchaser, Tyco and
the Company.............................................................................
(c)(3) Stockholder Agreement, dated as of June 1, 1998, among Tyco, the Purchaser and the
individuals listed on the signature pages thereto.......................................
</TABLE>
9
<PAGE>
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
SIGMA CIRCUITS, INC.
AT
$10.50 NET PER SHARE
BY
T10 ACQUISITION CORP.,
AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF
TYCO INTERNATIONAL LTD.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON THURSDAY, JULY 2, 1998, UNLESS THE OFFER IS EXTENDED.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER A NUMBER OF
SHARES (AS HEREINAFTER DEFINED) REPRESENTING AT LEAST A MAJORITY OF THE TOTAL
NUMBER OF OUTSTANDING SHARES OF SIGMA CIRCUITS, INC. (THE "COMPANY") ON A FULLY
DILUTED BASIS AS OF THE DATE THE SHARES ARE ACCEPTED FOR PAYMENT PURSUANT TO THE
OFFER. CERTAIN EXECUTIVE OFFICERS AND DIRECTORS OF THE COMPANY, WHO OWN 458,146
ISSUED AND OUTSTANDING SHARES, CONSTITUTING APPROXIMATELY 7.2% OF THE SHARES ON
A FULLY DILUTED BASIS (APPROXIMATELY 21.9% OF THE SHARES ON A FULLY DILUTED
BASIS INCLUDING 942,219 SHARES ISSUABLE TO THEM UPON THE EXERCISE OF OPTIONS AND
OTHER RIGHTS TO ACQUIRE SHARES), HAVE AGREED TO TENDER THEIR SHARES IN THE
OFFER.
THE BOARD OF DIRECTORS OF THE COMPANY HAS DETERMINED THAT THE OFFER AND THE
MERGER ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE COMPANY AND ITS
STOCKHOLDERS, HAS APPROVED THE MERGER AGREEMENT (AS HEREINAFTER DEFINED), THE
OFFER AND THE MERGER, AND RECOMMENDS THAT THE COMPANY'S STOCKHOLDERS ACCEPT THE
OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER.
------------------------
IMPORTANT
ANY STOCKHOLDER DESIRING TO TENDER ALL OR ANY PORTION OF SUCH STOCKHOLDER'S
SHARES SHOULD EITHER (1) COMPLETE AND SIGN THE LETTER OF TRANSMITTAL (OR A
FACSIMILE THEREOF) IN ACCORDANCE WITH THE INSTRUCTIONS IN THE LETTER OF
TRANSMITTAL, MAIL OR DELIVER IT AND ANY OTHER REQUIRED DOCUMENTS TO THE
DEPOSITARY AND EITHER DELIVER THE CERTIFICATE(S) FOR SUCH TENDERED SHARES TO THE
DEPOSITARY ALONG WITH THE LETTER OF TRANSMITTAL OR TENDER SUCH SHARES PURSUANT
TO THE PROCEDURES FOR BOOK-ENTRY TRANSFER SET FORTH IN SECTION 2 OF THIS OFFER
TO PURCHASE, OR (2) REQUEST SUCH STOCKHOLDER'S BROKER, DEALER, COMMERCIAL BANK,
TRUST COMPANY OR OTHER NOMINEE TO EFFECT THE TRANSACTION FOR THE STOCKHOLDER.
STOCKHOLDERS HAVING SHARES REGISTERED IN THE NAME OF A BROKER, DEALER,
COMMERCIAL BANK, TRUST COMPANY OR OTHER NOMINEE MUST CONTACT SUCH BROKER,
DEALER, COMMERCIAL BANK, TRUST COMPANY OR OTHER NOMINEE IF THEY DESIRE TO TENDER
SUCH SHARES.
A STOCKHOLDER WHO DESIRES TO TENDER SHARES AND WHOSE CERTIFICATE(S) FOR
SHARES ARE NOT IMMEDIATELY AVAILABLE, OR WHO CANNOT COMPLY WITH THE PROCEDURES
FOR BOOK-ENTRY TRANSFER ON A TIMELY BASIS, MAY TENDER SUCH SHARES BY FOLLOWING
THE PROCEDURES FOR GUARANTEED DELIVERY SET FORTH IN SECTION 2 OF THIS OFFER TO
PURCHASE.
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. REQUESTS FOR ADDITIONAL COPIES OF THIS OFFER TO PURCHASE, THE
LETTER OF TRANSMITTAL AND THE NOTICE OF GUARANTEED DELIVERY MAY BE DIRECTED TO
THE INFORMATION AGENT OR TO BROKERS, DEALERS, COMMERCIAL BANKS OR TRUST
COMPANIES.
------------------------
THE INFORMATION AGENT FOR THE OFFER IS:
[LOGO]
June 5, 1998
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
-----
<C> <S> <C>
Introduction.................................................................................................... 1
The Tender Offer................................................................................................ 3
1. Terms of the Offer; Extension of Tender Period; Termination; Amendments.............................. 3
2. Procedure for Tendering Shares....................................................................... 4
3. Withdrawal Rights.................................................................................... 7
4. Acceptance for Payment and Payment of Offer Price.................................................... 8
5. Certain Federal Income Tax Consequences.............................................................. 9
6. Price Range of Shares; Dividends..................................................................... 9
7. Effects of the Offer on the Market for Shares; Stock Quotations; Registration Under the Exchange
Act................................................................................................ 10
8. Certain Information Concerning the Company........................................................... 11
9. Certain Information Concerning Tyco and the Purchaser................................................ 13
10. Source and Amount of Funds........................................................................... 15
11. Contacts with the Company; Background of the Offer................................................... 15
12. Purpose of the Offer; Short Form Merger; Plans for the Company; Dissenters' Rights; Going Private
Transactions....................................................................................... 16
13. The Merger Agreement; Stockholder Agreement.......................................................... 18
14. Dividends and Distributions.......................................................................... 26
15. Certain Conditions of the Offer...................................................................... 27
16. Certain Legal Matters................................................................................ 29
17. Fees and Expenses.................................................................................... 31
18. Miscellaneous........................................................................................ 31
Annex I Certain Information Concerning the Directors and Executive Officers of Tyco International Ltd..........
32
Annex II Certain Information Concerning the Directors and Executive Officers of the Purchaser..................
35
</TABLE>
<PAGE>
TO THE HOLDERS OF COMMON STOCK OF
SIGMA CIRCUITS, INC.
INTRODUCTION
T10 Acquisition Corp., a Delaware corporation (the "Purchaser") and an
indirect wholly-owned subsidiary of Tyco International Ltd., a Bermuda company
("Tyco"), hereby offers to purchase all outstanding shares of common stock, par
value $.001 per share (the "Shares"), of Sigma Circuits, Inc., a Delaware
corporation (the "Company"), at $10.50 per Share, net to the seller in cash,
upon the terms and subject to the conditions set forth in this Offer to Purchase
and in the related Letter of Transmittal (which together constitute the
"Offer").
Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, subject to Instruction 6 of the Letter of Transmittal, stock
transfer taxes on the purchase of Shares by the Purchaser pursuant to the Offer.
However, any tendering stockholder or other payee who fails to complete and sign
the Substitute Form W-9 that is included in the Letter of Transmittal may be
subject to a required backup federal income tax withholding of 31% of the gross
proceeds payable to such stockholder or other payee pursuant to the Offer. See
Section 2. The Purchaser will pay all charges and expenses of Morrow & Co.,
Inc., as Information Agent (the "Information Agent"), and ChaseMellon
Shareholder Services, L.L.C., as Depositary (the "Depositary"), incurred in
connection with the Offer. See Section 17.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER A NUMBER OF
SHARES REPRESENTING AT LEAST A MAJORITY OF THE TOTAL NUMBER OF OUTSTANDING
SHARES OF THE COMPANY ON A FULLY DILUTED BASIS AS OF THE DATE THE SHARES ARE
ACCEPTED FOR PAYMENT PURSUANT TO THE OFFER. CERTAIN EXECUTIVE OFFICERS AND
DIRECTORS OF THE COMPANY, WHO OWN 458,146 ISSUED AND OUTSTANDING SHARES,
CONSTITUTING APPROXIMATELY 7.2% OF THE SHARES ON A FULLY DILUTED BASIS
(APPROXIMATELY 21.9% OF THE SHARES ON A FULLY DILUTED BASIS INCLUDING 942,219
SHARES ISSUABLE TO THEM UPON THE EXERCISE OF OPTIONS AND OTHER RIGHTS TO ACQUIRE
SHARES) HAVE AGREED TO TENDER THEIR SHARES IN THE OFFER. THE OFFER IS ALSO
SUBJECT TO CERTAIN OTHER TERMS AND CONDITIONS SET FORTH IN SECTION 15.
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of June 1, 1998 (the "Merger Agreement"), among Tyco, the Purchaser and the
Company. The Merger Agreement provides, among other things, that upon the terms
and subject to the conditions therein, as soon as practicable after the
consummation of the Offer, the Purchaser will be merged with and into the
Company (the "Merger"), with the Company being the corporation surviving the
Merger (the "Surviving Corporation"). At the effective time of the Merger (the
"Effective Time"), each outstanding Share (other than Shares with respect to
which appraisal rights are properly exercised under the Delaware General
Corporation Law (the "DGCL") ("Dissenting Shares")) not held in the treasury of
the Company or owned by any subsidiary of the Company, Tyco, the Purchaser or
any other subsidiary of Tyco, will be converted into and represent the right to
receive $10.50 in cash or any higher price that may be paid per Share in the
Offer (the "Per Share Amount"), without interest. See Section 13.
THE BOARD OF DIRECTORS OF THE COMPANY HAS DETERMINED THAT THE OFFER AND THE
MERGER ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE COMPANY AND ITS
STOCKHOLDERS, HAS APPROVED THE MERGER AGREEMENT, THE OFFER AND THE MERGER, AND
RECOMMENDS THAT THE COMPANY'S STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR
SHARES PURSUANT TO THE OFFER.
J.C. Bradford & Co., L.L.C. the Company's financial advisor ("J.C.
Bradford"), has delivered to the Company's Board of Directors its written
opinion that the consideration to be received by the stockholders of the Company
pursuant to the Offer and the Merger is fair to such stockholders from a
financial point of view. A copy of such opinion is contained in the Company's
Solicitation/Recommendation Statement on Schedule 14D-9 which is being
distributed to the Company's stockholders herewith.
1
<PAGE>
The Merger Agreement provides that, promptly upon the purchase of Shares
pursuant to the Offer, Tyco will 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 Tyco, subject to compliance with Section 14(f) of the
Exchange Act, representation on the Board of Directors equal to the product of
(a) the total number of directors on the Board of Directors and (b) the
percentage that the number of Shares purchased by the Purchaser bears to the
number of Shares outstanding, and the Company shall, upon request by Tyco,
promptly increase the size of the Board of Directors and/or exercise its
reasonable best efforts to secure the resignations of such number of directors
as is necessary to enable Tyco's designees to be elected to the Board of
Directors and shall cause Tyco's designees to be so elected. See Section 13.
The Company has informed the Purchaser that as of May 23, 1998, there were
4,252,985 Shares outstanding and 2,135,044 Shares reserved for issuance pursuant
to outstanding options, a warrant and a convertible note. Based on such number
of outstanding Shares, options, the warrant and the convertible note, if the
Purchaser acquires at least 3,194,015 Shares as a result of the Offer, it will
own a majority of the outstanding Shares on a fully diluted basis. In such event
the Purchaser would have sufficient voting power to approve the Merger without
the affirmative vote of any other stockholder. Certain executive officers and
directors of the Company, who own 458,146 issued and outstanding Shares,
constituting approximately 7.2% of the Shares on a fully diluted basis
(approximately 21.9% of the Shares on a fully diluted basis including 942,219
Shares issuable to them upon the exercise of options and other rights to acquire
Shares), have agreed to tender their Shares in the Offer. If the Purchaser
acquires 90% or more of the outstanding Shares in the Offer, the Purchaser would
be able to effect the Merger pursuant to the short form merger provisions of the
DGCL, without the action of any other stockholder of the Company.
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.
2
<PAGE>
THE TENDER OFFER
1. TERMS OF THE OFFER; EXTENSION OF TENDER PERIOD; TERMINATION;
AMENDMENTS. Upon the terms and subject to the conditions of the Offer
(including, if the Offer is extended or amended, the terms and conditions of any
such extension or amendment), the Purchaser will accept for payment and pay for
all Shares which are validly tendered on or prior to the Expiration Date (as
hereinafter defined) and not theretofore withdrawn as permitted by Section 3.
The term "Expiration Date" means 12:00 Midnight, New York City time, on
Thursday, July 2, 1998, unless and until the Purchaser (subject to the terms and
conditions of the Merger Agreement) shall have extended the period of time for
which the Offer is open, in which event the term "Expiration Date" shall mean
the latest time and date at which the Offer, as so extended by the Purchaser,
shall expire.
The Offer is conditioned upon, among other things, the satisfaction of the
Minimum Condition (as defined in Section 15). Subject to the provisions of the
Merger Agreement, the Purchaser reserves the right (but shall not be obligated)
to waive or reduce the Minimum Condition or to waive any or all of the other
conditions of the Offer. If, by 12:00 Midnight, New York City time, on Thursday,
July 2, 1998, or any subsequent Expiration Date, any or all of such conditions
have not been satisfied or waived, subject to the provisions of the Merger
Agreement, the Purchaser may elect to (i) terminate the Offer and return all
tendered Shares to tendering stockholders, (ii) waive all of the unsatisfied
conditions and, subject to any required extension, purchase all Shares validly
tendered by the Expiration Date and not withdrawn, (iii) extend the Offer and,
subject to the right of stockholders to withdraw Shares until the Expiration
Date, retain the Shares that have been tendered until the expiration of the
Offer as extended or (iv) delay acceptance for payment of, or payment for, the
Shares, subject to complying with applicable law, until the satisfaction or
waiver of the conditions of the Offer. The Purchaser acknowledges that its
reservation of the right to delay payment for Shares that 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 the Purchaser to pay the
consideration offered or return the Shares tendered promptly after the
termination or withdrawal of the Offer. See Section 15. Under the terms of the
Merger Agreement, the Purchaser may not, without the prior written consent of
the Company, (i) impose conditions to the Offer in addition to the Offer
Conditions, (ii) modify or amend the Offer Conditions or any other term of the
Offer in a manner adverse to the holders of Shares, (iii) waive or amend the
Minimum Condition, (iv) reduce the number of Shares subject to the Offer, (v)
reduce the Per Share Amount, (vi) except as provided in the following sentence,
extend the Offer, if all of the Offer Conditions are satisfied or waived, or
(vii) change the form of consideration payable in the Offer. Notwithstanding the
foregoing, the Purchaser may, without the consent of the Company, extend the
Offer at any time, and from time to time, (i) if at the then scheduled
expiration date of the Offer any of the conditions to the Purchaser's obligation
to accept for payment and pay for Shares shall not have been satisfied or
waived, until such time as such conditions are satisfied or waived; (ii) for any
period required by any rule, regulation, interpretation or position of the
Securities and Exchange Commission (the "Commission") or its staff applicable to
the Offer; or (iii) if all Offer Conditions are satisfied or waived but the
number of Shares tendered is less than 90% of the then outstanding number of
Shares, for an aggregate period of not more than 10 business days (for all such
extensions) beyond the latest expiration date that would be permitted under
clause (i) or (ii) of this sentence.
Subject to the applicable regulations of the Commission and the provisions
of the Merger Agreement, the Purchaser also expressly reserves the right, in its
sole discretion, at any time or from time to time, to (i) delay acceptance for
payment of or, regardless of whether such Shares were theretofore accepted for
payment, payment for any Shares, (ii) terminate the Offer (whether or not any
Shares have theretofore been accepted for payment) if any of the conditions
referred to in Section 15 have not been satisfied or upon the occurrence of any
of the events specified in Section 15 and (iii) waive any condition or otherwise
amend the Offer in any respect, in each case by giving oral or written notice of
such delay, termination, waiver or amendment to the Depositary and by making a
public announcement thereof. If the Purchaser
3
<PAGE>
accepts for payment any Shares 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 clause (i) above, will promptly pay for all Shares
so accepted for payment. The Purchaser acknowledges that its reservation of the
right to delay payment for Shares that it has accepted for payment is limited by
Rule 14e-l(c) under the Exchange Act, which requires the Purchaser to pay the
consideration offered or return the Shares tendered promptly after the
termination or withdrawal of the Offer. See Section 15.
The rights reserved by the Purchaser in the preceding paragraph are in
addition to the Purchaser's rights pursuant to Section 15. 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., New York City time, on the next
business day after the previously scheduled Expiration Date, in accordance with
the public announcement requirements of Rule 14e-1(d) under the Exchange Act.
Subject to applicable law (including Rules 14d-4(c) and 14d-6(d) under the
Exchange Act, which require that any material change in the information
published, sent or given to stockholders in connection with the Offer be
promptly disseminated to stockholders in a manner reasonably designed to inform
stockholders of such change), and without limiting the manner in which the
Purchaser may choose to make any public announcement, the Purchaser shall have
no obligation to publish, advertise or otherwise communicate any such public
announcement other than by making a release to the Dow Jones News Service.
If the Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer, or if it waives a material condition of the
Offer (including the Minimum Condition), the Purchaser will disseminate
additional tender offer materials (including by public announcement as set forth
above) and extend the Offer to the extent required by Rules 14d-4(c), 14d-6(d)
and 14e-1 under the Exchange Act. The minimum period during which an offer must
remain open following material changes in the terms of the Offer, other than a
change in price, percentage of securities sought or inclusion of or change to a
dealer's soliciting fee, will depend upon the facts and circumstances, including
the materiality, of the changes. In the Commission's view, an offer should
remain open for a minimum of five business days from the date the material
change is first published, sent or given to stockholders, and, if material
changes are made with respect to information that approaches the significance of
price and share levels, a minimum of ten business days may be required to allow
for adequate dissemination and investor response. With respect to a change in
price or, subject to certain limitations, a change in the percentage of
securities sought or inclusion of or change to a dealer's soliciting fee, a
minimum ten business day period from the date of such change is generally
required to allow for adequate dissemination to stockholders. Accordingly, if,
prior to the Expiration Date, the Purchaser decreases the number of Shares being
sought or increases or decreases the consideration offered pursuant to the
Offer, and if the Offer is scheduled to expire at any time earlier than the
period ending on the tenth business day from the date that notice of such
increase or decrease is first published, sent or given to holders of Shares, the
Offer will be extended at least until the expiration of such ten business day
period. For purposes of the Offer, a "business day" means any day other than a
Saturday, Sunday or a federal holiday and consists of the time period from 12:01
a.m. through 12:00 midnight, New York City time.
In connection with the Offer, the Company has provided or will provide the
Purchaser with the names and addresses of all record holders of Shares and
security position listings of Shares held in stock depositories. This Offer to
Purchase, the related Letter of Transmittal and other relevant materials will be
mailed to registered holders of Shares and will be furnished to brokers,
dealers, commercial banks, trust companies and similar persons whose names, or
the names of whose nominees, appear on the stockholder list or, if applicable,
who are listed as participants in a clearing agency's security position listing,
for subsequent transmittal to beneficial owners of Shares.
2. PROCEDURE FOR TENDERING SHARES. Except as set forth below, in order for
Shares to be validly tendered pursuant to the Offer, the Letter of Transmittal
(or a facsimile thereof), properly completed and duly executed, together with
any required signature guarantees, or an Agent's Message (as hereinafter
4
<PAGE>
defined) in connection with a book-entry transfer of Shares, and any other
documents required by the Letter of Transmittal, must be received by the
Depositary at one of its addresses set forth on the back cover of this Offer to
Purchase on or prior to the Expiration Date, and either (i) certificates
representing tendered Shares must be received by the Depositary, or such Shares
must be tendered pursuant to the procedure for book-entry transfer set forth
below (and confirmation of receipt of such delivery must be received by the
Depositary), in each case on or prior to the Expiration Date, or (ii) the
guaranteed delivery procedures set forth below must be complied with. No
alternative, conditional or contingent tenders will be accepted.
SIGNATURE GUARANTEES. No signature guarantee is required on the Letter of
Transmittal (i) if such Letter of Transmittal is signed by the registered holder
of the Shares tendered therewith, unless such holder has completed either the
box entitled "Special Delivery Instructions" or the box entitled "Special
Payment Instructions" in the Letter of Transmittal, or (ii) if Shares are
tendered for the account of a firm that is a member in good standing of the
Security Transfer Agent's Medallion Program, the New York Stock Exchange
Medallion Signature Program or the Stock Exchange Medallion Program (each being
hereinafter referred to as an "Eligible Institution"). See Instruction 1 of the
Letter of Transmittal.
If a certificate representing Shares is registered in the name of a person
other than the signer of the Letter of Transmittal (or a facsimile thereof), or
if payment is to be made, or Shares not accepted for payment or not tendered are
to be returned to a person other than the registered holder, the certificate
must be endorsed or accompanied by an appropriate stock power, in either case
signed exactly as the name(s) of the registered holder(s) appears on the
certificate, with the signature(s) on the certificate or stock power guaranteed
by an Eligible Institution. If the Letter of Transmittal or stock powers are
signed or any certificate is endorsed 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, unless waived by the Purchaser, proper evidence satisfactory to the
Purchaser of their authority so to act must be submitted. See Instruction 5 of
the Letter of Transmittal.
BOOK-ENTRY TRANSFER. The Depositary will establish accounts with respect to
the Shares at The Depository Trust Company (the "Book-Entry Transfer Facility")
for purposes of the Offer within two business days after the date of this Offer
to Purchase, and any financial institution that is a participant in the
Book-Entry Transfer Facility's system may make book-entry delivery of the 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
procedure for such transfer. However, although delivery of Shares may be
effected through book-entry transfer at the Book-Entry Transfer Facility, a
properly completed and duly executed Letter of Transmittal (or facsimile
thereof), with any required signature guarantees, or an Agent's Message and any
other required documents, must, in any case, be transmitted to and received by
the Depositary at one of its addresses set forth on the back cover of this Offer
to Purchase prior to the Expiration Date, or the guaranteed delivery procedures
described below must be complied with. The term "Agent's Message" means a
message transmitted through electronic means by the Book-Entry Transfer Facility
to, and received by, the Depositary and forming a part of a book-entry
confirmation, which states that the Book-Entry Transfer Facility has received an
express acknowledgment from the participant in the Book-Entry Transfer Facility
tendering the Shares that such participant has received, and agrees to be bound
by, the terms of the Letter of Transmittal. 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.
GUARANTEED DELIVERY. If a stockholder desires to tender Shares pursuant to
the Offer and such stockholder's certificates representing Shares are not
immediately available (or the procedures for book-entry transfer cannot be
completed on a timely basis) or time will not permit all required documents to
reach the Depositary prior to the Expiration Date, such Shares may nevertheless
be tendered, provided that all of the following conditions are satisfied:
(a) such tender is made by or through an Eligible Institution;
5
<PAGE>
(b) the Depositary receives, prior to the Expiration Date, a properly
completed and duly executed Notice of Guaranteed Delivery, substantially in
the form provided by the Purchaser; and
(c) the certificates representing all tendered Shares in proper form for
transfer (or confirmation of a book-entry transfer of such Shares into the
Depositary's account at the Book-Entry Transfer Facility), together with a
properly completed and duly executed Letter of Transmittal (or facsimile
thereof) with any required signature guarantees (or, in connection with a
book-entry transfer, an Agent's Message) and any other documents required by
the Letter of Transmittal are received by the Depositary within three
trading days after the date of such Notice of Guaranteed Delivery. A
"trading day" is any day on which the National Market of The Nasdaq Stock
Market ("The Nasdaq National Market") is open for business.
The Notice of Guaranteed Delivery may be delivered by hand, or may be
transmitted by telegram, telex, 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.
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 representing such Shares (or timely confirmation of a book-entry
transfer of such Shares into the Depositary's account at the Book-Entry Transfer
Facility), (ii) properly completed and duly executed Letter(s) of Transmittal
(or facsimile(s) thereof), together with any required signature guarantees (or,
in connection with a book-entry transfer, an Agent's Message) and (iii) any
other documents required by the Letter of Transmittal. Accordingly, tendering
stockholders may be paid at different times depending upon when certificates
representing Shares or confirmations of book-entry transfers of such Shares are
actually received by the Depositary.
The method of delivery of all documents, including certificates for Shares,
is at the option and risk of the tendering stockholder, and the delivery will be
deemed made only when actually received by the Depositary. If delivery is by
mail, registered mail with return receipt requested, properly insured, is
recommended. In all cases, sufficient time should be allowed to ensure timely
delivery.
DETERMINATION OF VALIDITY. All questions as to the form of documents and
the validity, eligibility (including time of receipt) and acceptance for payment
of any tendered Shares will be determined by the Purchaser in its sole
discretion, and its determination shall be final and binding on all parties. The
Purchaser reserves the absolute right to reject any or all tenders of any Shares
that it determines are not in appropriate 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 of the
conditions of the Offer or any defect or irregularity in any tender with respect
to any particular Shares or any particular stockholder, and the Purchaser's
interpretation of the terms and conditions of the Offer (including the Letter of
Transmittal and the Instructions thereto) will be final and binding on all
parties. No tender of Shares will be deemed to have been validly made until all
defects or irregularities relating thereto have been expressly waived or cured
to the satisfaction of the Purchaser. None of the Purchaser, Tyco, the
Depositary, the Information Agent or any other person will be under any duty to
give notification of any defects or irregularities in tenders, nor shall any of
them incur any liability for failure to give any such notification.
OTHER REQUIREMENTS. By executing the Letter of Transmittal, a tendering
stockholder irrevocably appoints designees of the Purchaser as such
stockholder's proxies, in the manner set forth in the Letter of Transmittal,
each with full power of substitution, to the full extent of such stockholder's
rights with respect to the Shares tendered by such stockholder and accepted for
payment by the Purchaser (and any and all other Shares or other securities or
rights issued or issuable in respect of such Shares on or after June 5, 1998),
effective if, when and to the extent that the Purchaser accepts such Shares for
payment pursuant to the Offer. Upon such acceptance for payment, all prior
proxies given by such stockholder with respect to such Shares or other
securities accepted for payment will, without further action, be revoked, and no
subsequent proxies may be given by such stockholder nor any subsequent written
consents executed (and,
6
<PAGE>
if given or executed, will not be deemed effective). Such designees of the
Purchaser will, with respect to such Shares and other securities or rights
issuable in respect thereof, be empowered to exercise all voting and other
rights of such stockholder as they, in their sole discretion, may deem proper in
respect of any annual, special or adjourned meeting of the Company's
stockholders, action 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 acceptance for
payment of such Shares the Purchaser must be able to exercise full voting rights
with respect to such Shares.
The Purchaser's acceptance for payment of Shares tendered pursuant to any of
the procedures described above will constitute a binding agreement between the
tendering stockholder and the Purchaser upon the terms and subject to the
conditions of the Offer.
To prevent backup withholding of federal income tax on payments made to
stockholders with respect to Shares purchased pursuant to the Offer, each
stockholder must provide the Depositary with his correct taxpayer identification
number ("TIN") and certify that he is not subject to backup withholding of
federal income tax by completing the Substitute Form W-9 included in the Letter
of Transmittal. Foreign holders must submit a completed Form W-8 to avoid backup
withholding. This form may be obtained from the Depositary. See Instructions 10
and 11 of the Letter of Transmittal.
3. WITHDRAWAL RIGHTS. Tenders of Shares made pursuant to the Offer will be
irrevocable, except that Shares tendered may be withdrawn at any time prior to
the Expiration Date, and, unless theretofore accepted for payment by the
Purchaser as provided herein, may also be withdrawn on or after August 5, 1998.
For a withdrawal of Shares tendered to be effective, a written, telegraphic,
telex or facsimile transmission notice of withdrawal must be timely received by
the Depositary at one of its addresses set forth on the back cover of this Offer
to Purchase. Any notice of withdrawal must specify the name of the person who
tendered the Shares to be withdrawn, the number of Shares to be withdrawn and
the name(s) in which the certificate(s) representing such Shares are registered,
if different from that of the person who tendered such Shares. If certificates
for Shares to be withdrawn have been delivered or otherwise identified to the
Depositary, the name of the registered holder and the serial numbers shown on
the particular certificates evidencing such Shares to be withdrawn must also be
furnished to the Depositary prior to the physical release of the Shares to be
withdrawn. The signature(s) on the notice of withdrawal must be guaranteed by an
Eligible Institution (except in the case of Shares tendered by an Eligible
Institution). If Shares have been tendered pursuant to the procedures for
book-entry transfer set forth in Section 2, any notice of withdrawal must
specify the name and number of the account at the Book-Entry Transfer Facility
to be credited with such withdrawn Shares and must otherwise comply with the
Book-Entry Transfer Facility's procedures.
If the Purchaser extends the Offer, is delayed in its acceptance for payment
of any Shares tendered, or is unable to accept for payment or pay for Shares
tendered pursuant to the Offer, for any reason whatsoever, then, without
prejudice to the Purchaser's rights set forth herein, the Depositary may,
nevertheless, on behalf of the Purchaser, retain tendered Shares, and such
Shares may not be withdrawn except to the extent that the tendering stockholder
is entitled to and duly exercises withdrawal rights as described in this Section
and as otherwise required by Rule 14e-1(c) under the Exchange Act. Any such
delay will be accompanied by an extension of the Offer to the extent required by
law.
Withdrawals of tenders of Shares may not be rescinded, and Shares properly
withdrawn will thereafter be deemed not validly tendered for purposes of the
Offer. However, withdrawn Shares may be retendered by again following the
procedures described in Section 2 at any time prior to the Expiration Date.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by the Purchaser, in its sole
discretion, and its determination will be final and binding on all parties. None
of the Purchaser, Tyco, the Depositary, the Information Agent or any other
person will be
7
<PAGE>
under any duty to give notification of any defects or irregularities in any
notice of withdrawal, nor shall any of them incur any liability for failure to
give any such notification.
4. ACCEPTANCE FOR PAYMENT AND PAYMENT OF OFFER PRICE. Upon the terms and
subject to the conditions of the Offer (including, if the Offer is extended or
amended, the terms and conditions of any extension or amendment), the Purchaser
will accept for payment and will pay for all Shares validly tendered prior to
the Expiration Date (and not properly withdrawn in accordance with Section 3
above) as soon as practicable after the latest to occur of (a) the expiration or
termination of the waiting period applicable to the acquisition of the Shares
pursuant to the Offer under the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended (the "HSR Act"), (b) the Expiration Date, and (c) subject to
compliance with Rule 14e-1(c) under the Exchange Act, the satisfaction or waiver
of the conditions of the Offer set forth in Section 15. Any determination
concerning the satisfaction of such terms and conditions shall be within the
sole discretion of the Purchaser, and such determination shall be final and
binding on all tendering stockholders. See Section 15.
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. If the Purchaser desires to delay payment for Shares accepted
for payment pursuant to the Offer, and such delay would otherwise be in
contravention of Rule 14e-1(c) of the Exchange Act, the Purchaser will formally
extend the Offer. See Section 15. In all cases, payment for Shares accepted for
payment pursuant to the Offer will be made only after timely receipt by the
Depositary of (i) certificates representing such Shares (or a timely
confirmation of a book-entry transfer of such Shares into the Depositary's
account at the Book-Entry Transfer Facility, as described in Section 2), (ii) a
properly completed and duly executed Letter of Transmittal (or facsimile
thereof) with any required signature guarantees (or, in connection with a
book-entry transfer, an Agent's Message), and (iii) any other documents required
by the Letter of Transmittal.
For purposes of the Offer, the Purchaser will be deemed to have accepted for
payment, and thereby purchased, tendered Shares when, as and if the Purchaser
gives oral or written notice to the Depositary, as agent for the tendering
stockholders, of the Purchaser's acceptance for payment of such Shares. Payment
for Shares so accepted for payment will be made by the deposit of the purchase
price therefor with the Depositary, which will act as agent for the tendering
stockholders for the purpose of receiving such payment from the Purchaser and
transmitting such payment to tendering stockholders. If, for any reason
whatsoever, acceptance for payment of any Shares tendered pursuant to the Offer
is delayed, or the Purchaser is unable to accept for payment Shares tendered
pursuant to the Offer, then, without prejudice to the Purchaser's rights under
Section 1, the Depositary may, nevertheless, on behalf of the Purchaser, retain
tendered Shares, and such Shares may not be withdrawn, except to the extent that
the tendering stockholders are entitled to withdrawal rights as described in
Section 3 and as otherwise required by Rule 14e-1(c) under the Exchange Act.
Under no circumstances will interest be paid on the purchase price by reason of
any delay in making such payments.
If any tendered Shares are not accepted for payment and paid for,
certificates representing such Shares will be returned (or, in the case of
Shares delivered by book-entry transfer with the Book-Entry Transfer Facility as
permitted by Section 2, such Shares will be credited to an account maintained
with the Book-Entry Transfer Facility) without expense to the tendering
stockholder as promptly as practicable following the expiration or termination
of the Offer.
If, prior to the Expiration Date, the Purchaser increases the consideration
to be paid for Shares pursuant to the Offer, the Purchaser will pay such
increased consideration for all Shares accepted for payment pursuant to the
Offer, whether or not such Shares have been tendered or accepted for payment
prior to such increase in the consideration.
The Purchaser reserves the right to transfer or assign in whole or in part
to one or more affiliates of the Purchaser or Tyco 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
8
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in no way prejudice the rights of tendering stockholders to receive payment for
Shares validly tendered and accepted for payment pursuant to the Offer.
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES. The receipt of cash for Shares
pursuant to the Offer (or in the Merger) will be a taxable transaction for
federal income tax purposes (and may also be a taxable transaction under
applicable state, local or other tax laws). In general, a stockholder will
recognize gain or loss for such purposes equal to the difference between such
stockholder's adjusted tax basis for the Shares such stockholder sells in such
transaction and the amount of cash received therefor. Gain or loss must be
determined separately for each block of Shares (i.e., Shares acquired at the
same cost in a single transaction) sold pursuant to the Offer or converted to
cash in the Merger. Such gain or loss will be capital gain or loss if the Shares
are a capital asset in the hands of the stockholder and will be long term
capital gain or loss if the Shares were held for more than one year on the date
of sale (in the case of the Offer) or the effective time of the Merger (in the
case of the Merger). The receipt of cash for Shares pursuant to the exercise of
dissenters' rights, if any, will generally be taxed in the same manner as
described above. An individual stockholder's long-term capital gain will be
taxed at the lowest applicable rate (generally 20%) if such stockholder held the
Shares for more than eighteen months on the date of sale or the Effective Time
of the Merger, whichever is the relevant date.
Payments in connection with the Offer or the Merger may be subject to
"backup withholding" at a rate of 31%. Backup withholding generally applies if
the stockholder (a) fails to furnish such stockholder's social security number
or TIN, (b) furnishes an incorrect TIN, or (c) under certain circumstances,
fails to provide a certified statement, signed under penalties of perjury, that
the TIN provided is such stockholder's correct number and that such stockholder
is not subject to backup withholding. Backup withholding is not an additional
tax but merely an advance payment, which may be refunded to the extent it
results in an overpayment of tax. Certain persons generally are entitled to
exemption from backup withholding, including corporations and financial
institutions. Certain penalties apply for failure to furnish correct information
and for failure to include reportable payments in income. Each stockholder
should consult with his own tax advisor as to such stockholder's qualification
for exemption from backup withholding and the procedure for obtaining such
exemption. Tendering stockholders may be able to prevent backup withholding by
completing the Substitute Form W-9 included in the Letter of Transmittal.
The foregoing discussion may not be applicable to a stockholder who acquired
Shares pursuant to the exercise of employee stock options or otherwise as
compensation, or to a stockholder who is not a citizen or resident of the United
States, or who is not otherwise a U.S. person for U.S. federal income tax
purposes, or who is otherwise subject to special tax treatment under the
Internal Revenue Code. In addition, the foregoing discussion does not address
the tax treatment of holders of options or warrants to acquire Shares or of
debentures convertible into Shares.
The federal income tax discussion set forth above is included for general
information only and is based upon present law. Stockholders are urged to
consult their tax advisors with respect to the specific tax consequences of the
Offer and the Merger to them, including the application and effect of the
alternative minimum tax, and state, local or foreign income and other tax laws.
6. PRICE RANGE OF SHARES; DIVIDENDS. Since June 3, 1994, the Shares have
traded on The Nasdaq National Market under the symbol "SIGA." The following
table sets forth, for the periods indicated, the high and low per Share sales
prices on The Nasdaq National Market as reported by published financial sources
(adjusted to reflect a two-for-one stock split effected as a 100% stock dividend
in February 1996).
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The Company has not declared or paid any cash dividends with respect to the
Shares for the periods indicated.
<TABLE>
<CAPTION>
HIGH LOW
--------- ---------
<S> <C> <C>
FISCAL YEAR ENDED JUNE 29, 1996:
First Quarter................................................................................... $ 7.00 $ 2.94
Second Quarter.................................................................................. 10.13 5.13
Third Quarter................................................................................... 14.38 9.25
Fourth Quarter.................................................................................. 11.88 5.88
FISCAL YEAR ENDED JUNE 30, 1997:
First Quarter................................................................................... $ 7.06 $ 4.63
Second Quarter.................................................................................. 7.38 4.75
Third Quarter................................................................................... 6.75 4.81
Fourth Quarter.................................................................................. 4.88 2.38
FISCAL YEAR ENDING JUNE 27, 1998:
First Quarter................................................................................... $ 7.38 $ 4.88
Second Quarter.................................................................................. 9.88 6.63
Third Quarter................................................................................... 10.75 7.00
Fourth Quarter (through June 4, 1998)........................................................... 10.38 7.50
</TABLE>
On June 1, 1998, the last trading day prior to the public announcement of
the terms of the Offer and the Merger, the closing per Share sales price on The
Nasdaq National Market was $9.25. On June 4, 1998, the last trading day prior to
commencement of the Offer, the closing per Share sales price on The Nasdaq
National Market was $10.3125. Stockholders are urged to obtain a current market
quotation for the Shares.
7. EFFECTS OF THE OFFER ON THE MARKET FOR SHARES; STOCK QUOTATIONS;
REGISTRATION UNDER THE EXCHANGE ACT. The purchase of Shares pursuant to the
Offer will reduce the number of holders of Shares and the number of Shares that
might otherwise trade publicly. Consequently, depending upon the number of
Shares purchased and the number of remaining holders of Shares, the purchase of
Shares pursuant to the Offer may adversely affect the liquidity and market value
of the remaining Shares held by the public. The Purchaser cannot predict whether
the reduction in the number of Shares that might otherwise trade publicly would
have an adverse or beneficial effect on the market price for, or marketability
of, the Shares or whether it would cause future market prices to be greater or
less than the Offer price.
The Shares are currently listed and traded on The Nasdaq National Market,
which constitutes the principal trading market for the Shares. Depending upon
the aggregate market value and the number of Shares not purchased pursuant to
the Offer, the Shares may no longer meet the quantitative maintenance criteria
of the National Association of Securities Dealers, Inc. (the "NASD") for
continued inclusion on The Nasdaq National Market and may cease to be authorized
for quotation on such market. Issuers on the Nasdaq National Market are required
to have (i) (A) at least 750,000 publicly held shares, (B) at least 400 holders
of round lots, (C) a market value of publicly held shares of at least $5
million, (D) a minimum bid price per share of $1, and (E) net tangible assets of
at least $4 million or (ii) (A) at least 1.1 million publicly held shares, (B)
at least 400 holders of round lots, (C) a market value of publicly held shares
of at least $15 million, (D) a market capitalization of at least $50 million or
total assets and total revenue of at least $50 million (each for the most
recently completed fiscal year or two of the last three most recently completed
fiscal years), (E) a minimum bid price per share of $5, and (F) at least four
registered and active market makers for the Shares. Shares held directly or
indirectly by directors, officers or beneficial owners of more than 10% of the
Shares outstanding are not considered as being publicly held for this purpose.
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<PAGE>
If, as a result of the purchase of Shares pursuant to the Offer or
otherwise, the Shares no longer meet the requirements of the NASD for continued
inclusion in The Nasdaq National Market or in any other tier of The Nasdaq Stock
Market, and the Shares are no longer included in The Nasdaq National Market or
in any other tier of The Nasdaq Stock Market, the market for Shares could be
adversely affected.
In the event that the Shares no longer meet the requirements of the NASD for
continued inclusion in any tier of The Nasdaq Stock Market, it is possible that
Shares would continue to trade in the over-the-counter market and that price
quotations would be reported by other sources. The extent of the public market
for the Shares and the availability of such quotations would, however, depend
upon the number of holders of Shares remaining at such time, the interest in
maintaining a market in Shares on the part of securities firms, the possible
termination of registration of the Shares under the Exchange Act, as described
below, and other factors.
The Shares are currently registered under the Exchange Act. Such
registration may be terminated upon application of the Company to the Commission
if such Shares are not listed on a national securities exchange and there are
fewer than 300 holders of record of the Shares. The termination of the
registration of the Shares under the Exchange Act would substantially reduce the
information required to be furnished by the Company to its stockholders and to
the Commission, and would make certain of the 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 stockholders'
meetings and the related requirement of an annual report to stockholders, and
the requirements of Rule 13e-3 with respect to going private transactions, no
longer applicable with respect to the Shares or to the Company. Furthermore, if
registration of the Shares under the Exchange Act were terminated, the ability
of "affiliates" of the Company and persons holding "restricted securities" of
the Company to dispose of such securities pursuant to Rule 144 promulgated under
the Securities Act of 1933, as amended, may be impaired or, with respect to
certain persons, eliminated. According to the Company, as of June 3, 1998, there
were 118 holders of record of the Shares.
The Shares are currently "margin securities" under the regulations of the
Board of Governors of the Federal Reserve System (the "Federal Reserve Board"),
which has the effect, among other things, of allowing brokers to extend credit
on such Shares as collateral. Depending on factors similar to those described
above regarding listing and market quotations, it is possible the Shares would
no longer constitute "margin securities" for purposes of the Federal Reserve
Board's margin regulations and therefore could no longer be used as collateral
for loans made by brokers. If registration of the Shares under the Exchange Act
were terminated, the Shares would no longer be "margin securities."
8. CERTAIN INFORMATION CONCERNING THE COMPANY. Except as otherwise set
forth herein, the information concerning the Company contained in this Offer to
Purchase, including financial information, has been furnished by the Company or
has been taken from or based upon publicly available documents and records on
file with the Commission and other public sources. Although neither the
Purchaser nor Tyco has any knowledge that would indicate that the statements
contained herein based on such information are untrue, neither the Purchaser nor
Tyco takes any responsibility for the accuracy or completeness of the
information concerning the Company furnished by the Company or contained in such
documents and records or for any failure by the Company to disclose events or
information which may have occurred or may affect the significance or accuracy
of any such information but which are unknown to the Purchaser or Tyco.
The Company was incorporated in the State of California in April 1986 under
the name Sigma Circuits Holding Company for the purpose of acquiring its
predecessor company. The Company reincorporated in December 1987 under the laws
of the State of Delaware. The Company's principal executive offices are located
at 393 Mathew Street, Santa Clara, California 95050 and its telephone number is
(408) 727-9169. The following description of the Company's business has been
taken from the Company's Annual Report on Form 10-K for the fiscal year ended
June 30, 1997 filed with the Commission on September 25, 1997 (File No.
0-24170).
11
<PAGE>
"The Company is a leading time-sensitive manufacturer of specialized
electronic interconnect products, including multilayer rigid printed circuit
boards ("PCBs"), backplane assemblies and subassemblies and flexible
circuits. The Company's quick-turn manufacturing capabilities are designed
to meet the time-to-market and time-to-volume requirements of electronic
original equipment manufacturers ("OEMs") and contract manufacturers whose
markets and products are characterized by high growth rates and short
product development cycles."
Set forth below is a summary of certain consolidated financial information
with respect to the Company and its consolidated subsidiaries, excerpted or
derived from the information contained in the Company's Annual Report on Form
10-K for the fiscal year ended June 30, 1997 and its Quarterly Report on Form
10-Q for the quarter ended March 28, 1998. More comprehensive financial
information is included in such reports and other documents filed by the Company
with the Commission. The financial information summary set forth below is
qualified in its entirety by reference to such reports and other documents filed
with the Commission and all of the financial information and related notes
contained therein. Such reports and other documents may be inspected and copies
may be obtained from the offices of the Commission in the manner set forth
below.
SELECTED FINANCIAL DATA OF THE COMPANY
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
NINE MONTHS ENDED FISCAL YEAR ENDED JUNE
MARCH 31, 30,
--------------------- ----------------------
1998 1997 1997 1996(1)
---------- --------- ---------- ----------
<S> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Total revenues.................................................. $ 72,424 $ 59,143 $ 79,980 $ 87,705
Operating income (loss)......................................... 5,961 (553) 524 487
Income (loss) before provision for income taxes................. 4,716 (2,084) (1,466) (1,638)
Net income (loss)............................................... 2,879 (1,645) (1,232) (1,076)
Net income (loss) per share..................................... 0.69 (0.41) (0.30) (0.28)
BALANCE SHEET DATA:
Working capital................................................. $ 8,411 $ 10,035 $ 2,764
Total assets.................................................... 42,984 42,647 46,960
Long-term liabilities........................................... 15,044 20,200 15,699
Stockholders' equity............................................ 15,534 12,304 12,918
</TABLE>
- ------------------------
(1) Includes the operations of Citation Circuits, Inc., Citation Enterprises,
Inc. and Citron Inc., acquired on September 30, 1995.
OTHER INFORMATION. The Shares are registered under the Exchange Act.
Accordingly, the Company is subject to the informational filing requirements of
the Exchange Act and, in accordance therewith, is obligated to file periodic
reports, proxy statements and other information with the Commission relating to
its business, financial condition and other matters. Information, as of
particular dates, concerning the Company's directors and officers, their
remuneration, stock options granted to them, the principal holders of the
Company's securities and any material interest of such persons in transactions
with the Company is required to be disclosed in such proxy statements and
distributed to the Company's stockholders and filed with the Commission. Such
reports, proxy statements and other information should be available for
inspection at the public reference facilities at the Commission's principal
office at 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549, and
at the regional offices of the Commission located at 7 World Trade Center, Suite
1300, New York, New York 10048 and 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. The Commission maintains a site on the World Wide Web, and the
reports, proxy statements and other information filed by the Company with the
Commission may be accessed electronically on the Web at http://www.sec.gov.
Copies of such material may also be obtained by mail, upon
12
<PAGE>
payment of the Commission's customary fees, from the Commission's principal
office at 450 Fifth Street, N.W., Washington, D.C. 20549.
9. CERTAIN INFORMATION CONCERNING TYCO AND THE PURCHASER. The Purchaser is
a newly formed Delaware corporation and an indirect wholly-owned subsidiary of
Tyco. To date, the Purchaser has not conducted any business other than incident
to its formation, the execution and delivery of the Merger Agreement and the
commencement of the Offer.
Until immediately prior to the time that the Purchaser purchases Shares
pursuant to the Offer, it is not anticipated that Purchaser will have any
significant assets or liabilities or engage in activities other than those
incident to its formation and capitalization and the transactions contemplated
by the Offer and the Merger. Since the Purchaser is newly formed and has minimal
assets and capitalization, no meaningful financial information is available. The
address of the principal office of the Purchaser is One Tyco Park, Exeter, New
Hampshire 03833.
Tyco is a diversified manufacturing and service company that, through its
subsidiaries, operates in four segments: (i) the manufacture and distribution of
disposable medical supplies and other specialty products, and the conduct of
vehicle auctions and related services; (ii) the design, manufacture,
installation and service of fire detection and suppression systems, and the
installation, monitoring and maintenance of electronic security systems; (iii)
the design, manufacture and distribution of flow control products; and (iv) the
design, manufacture and distribution of electrical and electronic components,
and the design, manufacture, installation and service of undersea cable
communication systems.
On July 2, 1997, Tyco International Ltd., a Massachusetts corporation
("Former Tyco"), merged with a subsidiary of Tyco, and Tyco continued as the
surviving public corporation. In connection with the merger, Tyco changed its
name from ADT Limited ("ADT") to Tyco International Ltd.
Tyco is a Bermuda company. Its registered offices are located at The Gibbons
Building, 10 Queen Street, Hamilton HM11 Bermuda, and its telephone number is
(441) 292-8674. The executive offices of Tyco International (US) Inc., Tyco's
principal United States subsidiary, are located at One Tyco Park, Exeter, New
Hampshire 03833, and its telephone number is (603) 778-9700.
The following table was derived from Tyco's Transition Report on Form 10-K
(the "Tyco 1997 Form 10-K") for the period ended September 30, 1997 ("Fiscal
1997") and its Quarterly Report on Form 10-Q for the quarter ended March 31,
1998, and sets forth selected consolidated financial information of Tyco for the
six month periods ended March 31, 1998 and March 31, 1997, the nine month fiscal
year ended September 30, 1997 and the two years in the period ended December 31,
1996. The selected consolidated financial data reflects the combined results of
operations and financial position of Tyco, Former Tyco and Keystone
International, Inc. ("Keystone"), which was acquired in 1997, restated for all
periods presented pursuant to the pooling of interests method of accounting. The
selected consolidated financial data prior to January 1, 1997, does not reflect
the results of operations and financial position of INBRAND Corporation
("INBRAND"), which was acquired in 1997 and accounted for under the pooling of
interests method of accounting, due to immateriality. The information presented
for the six months ended March 31, 1998 and 1997 are unaudited and, in the
opinion of management, include all adjustments, consisting of normal recurring
adjustments necessary for a fair presentation of such data. The results for the
six months ended March 31, 1998 are not necessarily indicative of the results to
be expected for the fiscal year ending September 30, 1998. The combination of
Tyco and Former Tyco and the transactions pursuant to which Tyco acquired
Keystone and INBRAND are collectively referred to as the "Mergers." More
comprehensive financial information is included in the Tyco 1997 Form 10-K and
other documents filed by Tyco with the Commission, and the following summary is
qualified in its entirety by reference to such report and such other documents
and of the financial information (including any related notes) contained
therein. Such report and other documents should be available for inspection and
copies thereof should be obtainable in the manner set forth in Section 8. Such
report and other documents should also be available for inspection at the
offices of the New York Stock Exchange, 20 Broad Street, New York, New York
10005, where the common shares of Tyco are listed for trading.
13
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA OF TYCO INTERNATIONAL LTD.
(DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
SIX MONTHS NINE MONTHS
ENDED ENDED YEAR ENDED
MARCH 31, SEPTEMBER 30, DECEMBER 31,
---------------------- ------------- ----------------------
1998 1997 1997(1) 1996(5) 1995(5)
---------- ---------- ------------- ---------- ----------
(DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENTS OF OPERATIONS DATA:
Net Sales...................................... $ 5,539.5 $ 4,564.9 $ 7,588.2 $ 8,103.7 $ 6,915.6
Operating income (loss) (2)(3)(4).............. 847.6 294.4 (476.5) (18.8) 649.6
Income (loss) from continuing operations....... 517.0 215.4 (776.8) (296.7) 267.5
Income (loss) per share from continuing
operations (6):
Basic...................................... .94 .44 (1.50) (.62) .58
Diluted.................................... .91 .43 (1.50) (.62) .57
CONSOLIDATED BALANCE SHEET DATA:
Total Assets................................... $ 13,338.5 $ 10,447.0 $ 8,471.3 $ 7,357.8
Long-term debt................................. 3,144.4 2,480.6 1,878.4 1,760.7
Convertible redeemable preference shares....... -- -- -- 4.9
Shareholders' equity........................... 5,402.8 3,429.4 3,288.6 3,342.7
</TABLE>
- ------------------------
(1) In September 1997, Tyco changed its fiscal year end from December 31 to
September 30. Accordingly, the nine month transition period ended September
30, 1997 is presented.
(2) Operating loss in Fiscal 1997 results include charges related to merger,
restructuring and other non-recurring costs of $917.8 million and impairment
of long-lived assets of $148.4 million primarily related to the Mergers and
the integration of ADT, Former Tyco, Keystone and INBRAND. See Notes 11 and
15 to the Consolidated Financial Statements contained in the Tyco 1997 Form
10-K. Fiscal 1997 also includes a charge of $361.0 million for the write-off
of purchased in-process research and development related to the acquisition
of AT&T's submarine systems business.
(3) Operating loss in 1996 includes non-recurring charges of $744.7 million
related to the adoption of Statement of Financial Accounting Standards No.
121 "Accounting for the Impairment of Long-Lived Assets to be Disposed Of,"
$237.3 million related principally to the restructuring of ADT's electronic
security services business in the United States and United Kingdom and $8.8
million of fees and expenses related to ADT's 1996 merger with Automated
Security (Holdings) plc. See Notes 11 and 15 to the Consolidated Financial
Statements contained in the Tyco 1997 Form 10-K.
(4) Operating income in 1995 included a loss of $65.8 million on the disposal of
Tyco's European auto auction business and a gain of $31.4 million from the
disposal of the Tyco's European electronic article surveillance business.
See Note 3 to the Consolidated Financial Statements contained in the Tyco
1997 Form 10-K. Operating income also includes non-recurring charges of
$97.1 million for restructuring charges at ADT and at Keystone and for the
fees and expenses related to Former Tyco's 1994 merger with Kendall
International, Inc., as well as a charge of $8.2 million relating to the
divestiture of certain assets by Keystone. See Notes 11 and 15 to the
Consolidated Financial Statements contained in the Tyco 1997 Form 10-K.
(5) Prior to the Mergers, ADT and Keystone had a calendar year end and Former
Tyco had a June 30 fiscal year end. The historical results have been
combined using a calendar year end for ADT, Keystone and Former Tyco for the
year ended December 31, 1996. For 1995, the results of operations and
financial position reflect the combination of ADT and Keystone with a
calendar year end and Former Tyco with a June 30 fiscal year end. Net sales
and net income for Former Tyco for the period
14
<PAGE>
July 1, 1995 through December 31, 1995 (which results are not included in
the historical combined results) were $2.46 billion and $136.4 million,
respectively.
(6) Per share amounts for all periods presented have been restated to give
effect to the Mergers, including a reverse stock split in the ratio of
0.48133:1 on July 2, 1997 in connection with the merger of Tyco and Former
Tyco, and a two-for-one stock split distributed on October 22, 1997 effected
in the form of a stock dividend.
The name, citizenship, business address, present principal occupation or
employment and five year employment history of each of the directors and
executive officers of Tyco and the Purchaser are set forth in Annex I and Annex
II hereto, respectively.
Except as set forth in this Offer to Purchase, none of Tyco, the Purchaser
or, to the best of their knowledge, any of the persons listed in Annex I or
Annex II hereto, (a) has any contract, arrangement, understanding or
relationship with any other person with respect to any securities of the
Company, including, but not limited to, any contract, arrangement, understanding
or relationship concerning the transfer or 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, (b)
has engaged in contacts, negotiations or transactions with the Company or its
affiliates concerning a merger, consolidation, acquisition, tender offer or
other acquisition of securities, election of directors or a sale or other
transfer of a material amount of assets or (c) has had any other transaction
with the Company or any of its executive officers, directors or affiliates that
would require disclosure under the rules and regulations of the Commission
applicable to the Offer.
10. SOURCE AND AMOUNT OF FUNDS. The total amount of funds required by Tyco
and the Purchaser to purchase all Shares that may be tendered pursuant to the
Offer and in the Merger, and to pay related fees and expenses, is estimated to
be approximately $68.5 million.
The Purchaser will obtain all such funds from Tyco or its affiliates. Tyco
has sufficient financial resources to satisfy its and the Purchaser's
obligations under the Offer and the Merger Agreement. This Offer is not
conditioned upon any financing arrangements.
11. CONTACTS WITH THE COMPANY; BACKGROUND OF THE OFFER.
In late March 1998, management of Tyco's Printed Circuit Group contacted the
Company to solicit its interest in a possible acquisition of the Company by
Tyco. On March 26, 1998, Tyco and the Company executed a confidentiality
agreement regarding the furnishing of non-public information concerning the
Company to Tyco. At the beginning of April 1998, representatives of Tyco visited
the Company's facilities and met with senior management to preliminarily review
the Company's operations. Several days later, Tyco conducted a preliminary
review of the Company's environmental compliance.
On April 24, 1998, representatives of Tyco met with the Company and J.C.
Bradford, the Company's financial advisor, and presented a non-binding offer to
acquire the Company in an all cash transaction at a price of $12.50 per Share,
subject to the negotiation of definitive documentation, regulatory approvals and
the approval of the transaction by the Tyco Board. The offer was also subject to
satisfactory conclusion of Tyco's due diligence investigation of the Company's
operations, facilities and management. The Company responded with a counter
offer to Tyco on the afternoon of April 24, 1998, and, on April 27, 1998, Tyco
offered an increased price of $12.75 per Share, subject to the conditions of its
offer of April 24, 1998.
On May 5, 1998, the Company granted to Tyco the exclusive right through May
28, 1998 to negotiate for the acquisition of the Company. From May 11 through
May 14, 1998, representatives of Tyco met with the Company's management and
conducted a diligence review of the Company. This review included discussion of
the Company's results of operations for April and the forecast for the balance
of the Company's fourth quarter, both of which were below the Company's
projections previously furnished to Tyco.
15
<PAGE>
At a meeting of the Board of Directors of Tyco held on May 18, 1998, Tyco
management made a presentation concerning the acquisition of the Company based
on the results of the completed due diligence investigation. The Board approved
the acquisition and authorized management to complete the transaction on terms
that in management's view were consistent with the results of due diligence.
Based upon the results of Tyco's due diligence efforts and its review of the
Company's recent operating results and revised forecasts, on May 20, 1998, Tyco
called the Company and J.C. Bradford and proposed to acquire the Company for
$10.50 per Share in a cash tender offer followed by a merger at the same cash
price.
On May 22, 1998, the Board of Directors of the Company met to consider the
Tyco offer. J.C. Bradford delivered its preliminary oral opinion to the
Company's Board that, as of such date, the consideration proposed to be paid to
the stockholders of the Company pursuant to the Tyco offer was fair to the
stockholders from a financial point of view. Thereafter, the Company's Board of
Directors authorized the Company's officers and legal counsel to enter into
negotiations concerning a definitive merger agreement.
Representatives of Tyco and the Company and their respective counsel
conducted negotiations concerning the Merger Agreement during the week of May
26, 1998 and concluded such negotiations on June 1, 1998.
On May 29, 1998, the Company's Board of Directors met to consider the Tyco
offer and discuss the changes made to Merger Agreement from the draft previously
discussed by the Board. J.C. Bradford reconfirmed its oral opinion to the
Company's Board (subsequently confirmed in writing) that as of such date, the
consideration proposed to be paid to the stockholders of the Company pursuant to
the Tyco offer was fair to the stockholders from a financial point of view.
Thereafter, the Company's Board of Directors, unanimously approved the Offer and
the Merger, determined to recommend the Offer and the Merger to the Company's
stockholders and authorized the officers of the Company to finalize and execute
definitive documentation for the transaction. A representative of the Company
then contacted Tyco to inform it of the Board's determination.
The Merger Agreement and the Stockholder Agreement were executed by the
respective parties on June 1, 1998. A joint press release announcing the
execution of the Merger Agreement was released by the parties prior to the
opening of the U.S. financial markets on June 2, 1998.
12. PURPOSE OF THE OFFER; SHORT FORM MERGER; PLANS FOR THE COMPANY;
DISSENTERS' RIGHTS; GOING PRIVATE TRANSACTIONS.
PURPOSE OF THE OFFER. The purpose of the Offer is for the Purchaser to
acquire control of, and a majority equity interest in, the Company. The purpose
of the Merger is to acquire all outstanding Shares not tendered and purchased
pursuant to the Offer. The acquisition of the entire equity interest in the
Company has been structured as a cash tender offer followed by a cash merger in
order to provide a prompt and orderly transfer of ownership of the Company from
the public stockholders to Tyco and to provide stockholders with cash for all of
their Shares.
Under the DGCL and the Company's Certificate of Incorporation, the approval
of the Board of Directors of the Company and the affirmative vote of a majority
of the holders of outstanding Shares are required to approve and adopt the
Merger Agreement and the Merger. The Board of Directors of the Company has
approved the Offer, the Merger and the Merger Agreement and the transactions
contemplated thereby, and, unless the Merger is consummated pursuant to the
short-form merger provisions under the DGCL described below, the only remaining
required corporate action of the Company is the approval and adoption of the
Merger Agreement and the Merger by the affirmative vote of the holders of a
majority of the outstanding Shares. If the Minimum Condition is satisfied, the
Purchaser will have sufficient voting power to cause the approval and adoption
of the Merger Agreement and the Merger without the affirmative vote of any other
stockholder. Certain executive officers and directors of the Company, who own
458,146 issued and outstanding Shares, constituting approximately 7.2% of the
Shares
16
<PAGE>
on a fully diluted basis (approximately 21.9% of the Shares on a fully diluted
basis including 942,219 Shares issuable to them upon the exercise of options and
other rights to acquire Shares), have agreed to tender their Shares in the
Offer.
The Merger Agreement provides that, if approval of the Merger by the
stockholders of the Company is required by law, the Company will, as soon as
possible following payment for Shares in the Offer, duly call and hold a meeting
of stockholders for the purpose of obtaining stockholder approval of the Merger,
and the Company, through its Board of Directors, will recommend to stockholders
that such approval be given.
SHORT FORM MERGER. Under the DGCL, if the Purchaser acquires at least 90%
of the outstanding Shares, the Purchaser will be able to approve the Merger
without a vote of the Company's other stockholders. The Merger Agreement
provides that if the Purchaser, or any other direct or indirect subsidiary of
Tyco, acquires at least 90% of the outstanding Shares, Tyco, the Purchaser and
the Company will take all necessary and appropriate action to cause the Merger
to become effective as soon as practicable after the expiration of the Offer
without a meeting of stockholders of the Company, in accordance with Section 253
of the DGCL. In the event that all of the conditions to the Purchaser's
obligation to purchase Shares in the Offer are satisfied or waived and the
number of Shares tendered is less than 90% of the outstanding Shares, the
Purchaser may, subject to the limitations set forth in the Merger Agreement,
extend the Offer for an aggregate period of not more than 10 business days (for
all such extensions) without the consent of the Company. See Section 1. If the
Purchaser does not acquire at least 90% of the outstanding Shares, a
significantly longer period of time may be required to effect the Merger,
because a vote of the Company's stockholders would be required under the DGCL.
PLANS FOR THE COMPANY. Except as otherwise set forth in this Offer to
Purchase, it is expected that, initially following the Merger, the business and
operations of the Company will be continued by the Surviving Corporation
substantially as they are currently being conducted. The directors of the
Purchaser will be the initial directors of the Surviving Corporation, and the
officers of the Company and such other persons as are designated by Tyco will be
the initial officers of the Surviving Corporation. Upon completion of the Offer,
Tyco intends to conduct a detailed review of the Company and its assets,
corporate structure, capitalization, operations, policies, management and
personnel. After such review, Tyco will determine what actions or changes, if
any, would be desirable in light of the circumstances which then exist, and
reserves the right to effect such actions or changes.
Except as described in this Offer to Purchase, neither Tyco nor the
Purchaser has any present plans or proposals that would relate to or result in
(i) any extraordinary corporate transaction, such as a merger, reorganization or
liquidation, involving the Company or any of its subsidiaries, (ii) a sale or
transfer of a material amount of assets of the Company or any of its
subsidiaries, (iii) any change in the Company's Board of Directors or
management, (iv) any material change in the Company's capitalization or dividend
policy, (v) any other material change in the Company's corporate structure or
business, (vi) a class of securities of the Company being delisted from a
national securities exchange or ceasing to be authorized to be quoted in an
inter-dealer quotation system of a registered national securities association,
or (vii) a class of equity securities of the Company becoming eligible for
termination of registration pursuant to Section 12(g) of the Exchange Act.
DISSENTERS' RIGHTS. No dissenters' rights are available in connection with
the Offer. However, if the Merger is consummated, stockholders of the Company
may have certain rights under the DGCL to dissent, and demand appraisal of, and
to obtain payment for the fair value of their Shares. Such rights, if the
statutory procedures were complied with, could lead to a judicial determination
of the fair value of the Shares (excluding any element of value arising from the
accomplishment or expectation of the Merger) to be required to be paid in cash
to such dissenting holders for their Shares. In addition, such dissenting
stockholders would be entitled to receive payment of a fair rate of interest
from the date of consummation of the Merger on the amount determined to be the
fair value of their Shares. In determining the fair value of the Shares, a
Delaware court would be required to take into account all relevant factors.
Accordingly,
17
<PAGE>
such determination could be based upon considerations other than, or in addition
to, the market value of the Shares, including, among other things, asset value
and earning capacity. In Weinberger v. UOP, Inc., the Delaware Supreme Court
stated, among other things, that "proof of value by any techniques or methods
which are generally considered acceptable in the financial community and
otherwise admissible in court" should be considered in an appraisal proceeding.
Therefore, the value so determined in any appraisal proceeding could be
different from the price being paid in the Offer.
GOING PRIVATE TRANSACTIONS. The Merger would have to comply with any
applicable Federal law operative at the time. 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 the
Merger or another business combination following the purchase of Shares pursuant
to the Offer in which the Purchaser or Tyco seeks to acquire the remaining
Shares not held by it. The Purchaser believes, however, that Rule 13e-3 will not
be applicable to the Merger. If applicable, Rule 13e-3 requires, among other
things, that certain financial information concerning the Company and certain
information relating to the fairness of such transaction and the consideration
offered to minority stockholders in such transaction be filed with the
Commission and disclosed to stockholders prior to the consummation of such
transaction.
13. THE MERGER AGREEMENT; STOCKHOLDER AGREEMENT.
THE MERGER AGREEMENT
The following summary of certain provisions of the Merger Agreement, a copy
of which is filed as an exhibit to the Schedule 14D-1 referred to in Section 18,
is qualified in its entirety by reference to the text of the Merger Agreement.
Capitalized terms used in the following summary and not otherwise defined in
this Offer to Purchase shall have the meanings set forth in the Merger
Agreement.
THE OFFER. The Merger Agreement provides that the Purchaser will commence
the Offer and that, upon the terms and subject to the prior satisfaction or
waiver of the conditions of the Offer, the Purchaser will purchase all Shares
validly tendered pursuant to the Offer. The Merger Agreement provides that,
without the prior written consent of the Company, the Purchaser will not (i)
impose conditions to the Offer in addition to the Offer Conditions, (ii) modify
or amend the Offer Conditions or any other term of the Offer in a manner adverse
to the holders of Shares, (iii) waive or amend the Minimum Condition, (iv)
reduce the number of Shares subject to the Offer, (v) reduce the Per Share
Amount, (vi) except as provided in the following sentences, extend the Offer, if
all of the Offer Conditions are satisfied or waived, or (vii) change the form of
consideration payable in the Offer. The Merger Agreement provides that the
Purchaser may extend the Offer at any time, and from time to time, without the
consent of the Company (i) if at the then scheduled expiration date of the Offer
any of the conditions to the Purchaser's obligation to accept for payment and
pay for Shares shall not have been satisfied or waived, until such time as such
conditions are satisfied or waived; (ii) for any period required by any rule,
regulation, interpretation or position of the Commission or its staff applicable
to the Offer; or (ii), if all Offer Conditions are satisfied or waived but the
number of Shares tendered is less than 90% of the then outstanding number of
Shares, for an aggregate period of not more than 10 business days (for all such
extensions) beyond the latest expiration date that would be permitted under
clause (i) or (ii) of this sentence. See Section 15.
THE MERGER. The Merger Agreement provides that, upon the terms and subject
to the conditions of the Merger Agreement, and in accordance with the DGCL, the
Purchaser shall be merged with and into the Company. Following the Merger, the
separate corporate existence of the Purchaser will cease and the Company will
continue as the Surviving Corporation and will succeed to and assume all the
rights and obligations of the Purchaser in accordance with the DGCL. Unless
otherwise determined by Tyco prior to the Effective Time, the Certificate of
Incorporation and Bylaws of the Purchaser, as in effect immediately prior to the
Effective Time, will be the Certificate of Incorporation and Bylaws of the
Surviving Corporation until thereafter changed or amended as provided therein or
by applicable law.
18
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CONVERSION OF SHARES. At the Effective Time, each Share issued and
outstanding immediately prior thereto (other than Shares held by the Company as
treasury Shares, Shares owned by Tyco, the Purchaser or any wholly owned
subsidiary of Tyco and Dissenting Shares) will be converted into the right to
receive from Tyco the Merger Consideration upon the surrender of the certificate
formerly representing such Share. Each Share so converted will no longer be
outstanding and will automatically be cancelled and retired.
STOCK OPTIONS, WARRANTS AND NOTES. Each option outstanding at the Effective
Time to purchase Shares (a "Stock Option") granted under the Company's (i)
Amended and Restated 1997 Stock Option Plan, (ii) 1994 Non-employee Director's
Stock Option Plan, and (iii) any other option plan or agreement (collectively,
the "Company Option Plans") shall be converted into the right to receive, upon
the exercise of such Stock Option in accordance with the terms thereof,
including the provisions providing for full vesting of all unvested shares in
the event that such options are not assumed following a Change in Control (as
defined in the Company Option Plans), an amount of cash equal to the Merger
Consideration multiplied by such number of shares of Common Stock underlying
such option.
The warrant of the Company expiring June 10, 1999 to purchase 200,000 Shares
at a price of $3.30 per share (the "Warrant") shall be exercisable, from and
after the Effective Time and in accordance with the terms thereof, for an amount
of cash equal to the Merger Consideration multiplied by 200,000.
The $1.8 million 10.0% convertible subordinated note due 2001 of the Company
(the "Note") shall be convertible, from and after the Effective Time and
pursuant to the terms thereof, for an amount of cash equal to the Merger
Consideration multiplied by such number of Shares as the Note was convertible
into prior to the Effective Time assuming that the Note was fully convertible at
that time.
DISSENTING SHARES. The Merger Agreement provides that, if required by the
DGCL, Dissenting Shares will not be exchangeable for the right to receive the
Merger Consideration, and holders of such Dissenting Shares will be entitled to
receive payment of the appraised value of such Dissenting Shares in accordance
with the provisions of Section 262 of the DGCL unless and until such holders
fail to perfect or effectively withdraw or lose their rights to appraisal and
payment under the DGCL. If, after the Effective Time, any holder fails to
perfect or effectively withdraws or loses such right, such Dissenting Shares
will thereupon be treated as if they had been converted into and have become
exchangeable for, at the Effective Time, the right to receive the Merger
Consideration, without any interest thereon. See Section 12 "--Dissenters'
Rights."
SHORT-FORM MERGER. The Merger Agreement provides that in the event that the
Purchaser, or any other direct or indirect subsidiary of Tyco, acquires at least
90% of the outstanding Shares, Tyco, the Purchaser and the Company will take all
necessary and appropriate action to cause the Merger to become effective as soon
as practicable after the expiration of the Offer without a meeting of
stockholders of the Company, in accordance with Section 253 of the DGCL.
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REPRESENTATIONS AND WARRANTIES. Pursuant to the Merger Agreement, the
Company, has made customary representations and warranties to Tyco and the
Purchaser relating to the Company including, among other things, organization
and qualification, Certificate of Incorporation and Bylaws, capitalization,
authority relative to the Merger Agreement, contracts, the absence of conflicts,
required filings and consents, premises, compliance with law, filings with the
Commission, financial statements, absence of certain changes or events,
undisclosed liabilities, litigation, employee benefit matters, labor matters,
limitation on business conduct, title to property, real property, taxes,
environmental matter, intellectual property, insurance, accounts receivable,
customers, interested party transactions, the absence of certain payments, the
applicability of the Delaware takeover statute, the opinion of J.C. Bradford,
brokers and full disclosure.
Tyco and the Purchaser have also made customary representations and
warranties to the Company relating to Tyco and the Purchaser, including, without
limitation, organization and qualification, authority relative to the Merger
Agreement, the absence of conflicts, required filings and consent, brokers, the
activities of Purchaser, the availability of sufficient funds to consummate the
Offer and the Merger and full disclosure.
COVENANTS RELATING TO THE CONDUCT OF BUSINESS. Pursuant to the Merger
Agreement, the Company has agreed that, except as otherwise expressly
contemplated by the Merger Agreement or consented to in advance by Tyco (which
consent is in writing or subsequently confirmed in writing), which consent shall
not be unreasonably withheld, it will in all material respects, carry on its
business in, and not enter into any material transaction other than in
accordance with, the regular and ordinary course and, to the extent consistent
therewith, use its reasonable best efforts to preserve intact its current
business organization, keep available the services of its current officers and
employees and preserve their relationships with customers, suppliers and others
having business dealings with it.
The Company has agreed that except as expressly contemplated by the Merger
Agreement it will not, without the prior consent of Tyco (which consent is in
writing or subsequently confirmed in writing), which consent shall not be
unreasonably withheld: (a) (i) declare, set aside or pay any dividends on, or
make any other actual, constructive or deemed distributions in respect of, any
of its capital stock, or otherwise make any payments to stockholders of the
Company in their capacity as such, (ii) split, combine or reclassify any of its
capital stock or issue or authorize the issuance of any other securities in
respect of, in lieu of or in substitution for shares of its capital stock or
(iii) purchase, redeem or otherwise acquire any shares of capital stock of the
Company or any other securities thereof or any rights, warrants or options to
acquire any such shares or other securities; (b) issue, deliver, sell, pledge,
dispose of or otherwise encumber any shares of its capital stock, any other
voting securities or equity equivalent or any securities convertible into, or
any rights, warrants or options to acquire, any such shares, voting securities
or convertible securities or equity equivalent (other than the issuance of
Shares during the period from the date of the Merger Agreement through the
Effective Time upon the exercise of options or warrants or other rights to
purchase Shares outstanding on the date of the Merger Agreement in accordance
with their current terms); (c) amend or change its Certificate of Incorporation
or Bylaws; (d) acquire or agree to acquire by merging or consolidating with, or
by purchasing a substantial portion of the assets of or equity in, or by any
other manner, any business or any corporation, partnership, association or other
business organization or division thereof or otherwise acquire or agree to
acquire any assets, in each case that are material, individually or in the
aggregate, to the Company (e) sell, lease or otherwise dispose of, or agree to
sell, lease or otherwise dispose of, any of its assets that are material,
individually or in the aggregate, to the Company; (f) make any commitment or
enter into any contract or agreement except (i) in the ordinary course of
business consistent with past practice or (ii) for capital expenditures to be
made in fiscal 1998 as identified in a capital expenditure budget previously
delivered to Tyco; (g) incur any indebtedness for borrowed money or guarantee
any such indebtedness or issue or sell any debt securities or guarantee any debt
securities of others, except in the ordinary course of business consistent with
past practice under financing arrangements in existence on the date of the
Merger Agreement, or make any loans, advances or
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capital contributions to, or investments in, any other person, other than in the
ordinary course of business consistent with past practice; (h) except as may be
required as a result of a change in law or pursuant to generally accepted
accounting principles, change any of the accounting principles or practices used
by the Company; (i) make any tax election or settle or compromise any material
income tax liability; (j) pay, discharge or satisfy any claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise), other than the payment, discharge or satisfaction in the ordinary
course of business and consistent with past practice of liabilities reflected or
reserved against in, or contemplated by, the financial statements (or the notes
thereto) of the Company or incurred in the ordinary course of business
consistent with past practice; (k) increase in any manner the compensation or
fringe benefits of any directors, officers or other key employees of the Company
or pay any pension or retirement allowance not required by an existing plan or
agreement to any such employees, or become a party to, amend or commit itself to
any pension, retirement, profit-sharing or welfare benefit plan or agreement or
employment agreement with or for the benefit of any employee, other than
increases in the compensation of employees who are not officers or directors of
the Company made in the ordinary course of business consistent with past
practice, or (except pursuant to the terms of preexisting plans or agreements)
accelerate the vesting of any compensation or benefit; (l) except in connection
with the exercise of its fiduciary duties by the Board of Directors of the
Company, waive, amend or allow to lapse any term or condition of any
confidentiality or "standstill" agreement to which the Company or any subsidiary
is a party; or (m) take, or agree to take, any of the foregoing actions or any
action which would make any of the representations or warranties of the Company
contained in the Merger Agreement untrue or incorrect at or prior to the
Effective Time of the Merger.
COMPANY STOCKHOLDER APPROVAL. Pursuant to the Merger Agreement, the Company
will, if required by applicable law, call a meeting of its stockholders (the
"Stockholder Meeting") as soon as practicable following the purchase of Shares
pursuant to the Offer for the purpose of voting upon the Merger. The Company
will recommend to its stockholders the approval of the Merger through its Board
of Directors and will use its reasonable best efforts to obtain stockholder
approval of the Merger. In addition, if required by applicable law, the Company
has agreed to prepare and file with the Commission, as soon as practicable
following the expiration of the Offer, a proxy statement to be sent to the
stockholders of the Company in connection with the Stockholders Meeting, or, if
applicable, an information statement, satisfying all requirement under the
Exchange Act.
ACQUISITION PROPOSALS. The Company has agreed in the Merger Agreement, from
the date of the Merger Agreement and prior to the Effective Time, (a) the
Company will not, and the Company will direct and use its reasonable best
efforts to cause its officers, directors, employees and authorized agents and
representatives (including any investment banker, attorney or accountant
retained by it) not to, initiate, solicit or encourage, directly or indirectly,
any inquiries or the making or implementation of any proposal or offer
(including any proposal or offer to its stockholders) with respect to a merger,
acquisition, consolidation or similar transaction involving, or any purchase of,
any equity securities (except pursuant to the exercise of outstanding opinions,
warrants or other rights) or all or any significant portion of the assets of,
the Company (any such proposal or offer being referred to as an "Acquisition
Proposal") or engage in any negotiations concerning, or provide any confidential
information or data to, or have any discussions with, any person or entity
relating to an Acquisition Proposal, or otherwise facilitate any effort or
attempt to make or implement an Acquisition Proposal; (b) that it will
immediately cease and cause to be terminated any existing activities,
discussions or negotiations with any person or entity conducted previously with
respect to any of the foregoing and will take the necessary steps to inform the
person or entity referred to above of the obligations undertaken pursuant to
this provision; and (c) that it will notify Tyco immediately if any such
inquiries or proposals are received by, any such information is requested from,
or any such negotiations or discussions are sought to be initiated or continued
with, the Company (but the Company shall not be required to disclose the
identity of the other party or the terms of its proposals); provided, however,
that the foregoing provisions will not prohibit the Board of Directors of the
Company from (i) furnishing information to, or entering into discussions or
negotiations with, any person or entity
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that makes an unsolicited bona fide proposal in writing to engage in an
Acquisition Proposal transaction which the Board of Directors of the Company in
good faith determines represents a financially superior transaction for the
stockholders of the Company as compared to the Offer and the Merger if, and only
to the extent that, (A) the Board of Directors determines, after consultation
with outside counsel of national reputation (which may be the Company's
regularly engaged counsel) in corporate and securities matters as the Company
shall select ("Company Counsel"), that failure to take such action would be
inconsistent with the compliance by the Board of Directors with its fiduciary
duties to stockholders imposed by law, (B) prior to or concurrently with
furnishing such information to, or entering into discussions or negotiations
with, such a person or entity, the Company provides written notice to Tyco to
the effect that it is furnishing information to, or entering into discussions or
negotiations with, such a person or entity, and (C) the Company keeps Tyco
informed of the status (excluding, however, the identity of such person or
entity) of any such discussions or negotiations; and (ii) to the extent
applicable, complying with Rule 14e-2 promulgated under the Exchange Act with
regard to an Acquisition Proposal. Nothing contained in the foregoing provisions
will (x) permit the Company to terminate the Merger Agreement (except as
provided below under "Termination"), (y) permit the Company to enter into any
agreement with respect to an Acquisition Proposal during the term of the Merger
Agreement, or (z) affect any other obligation of any party under the Merger
Agreement.
ANNUAL MEETING. The Company has agreed pursuant to the Merger Agreement
that it will defer and/ or postpone the holding of its 1998 annual meeting of
stockholders indefinitely pending the consummation of the Merger, unless the
Company is otherwise required to hold such meeting by an order from a court of
competent jurisdiction.
STOCK PLANS AND WARRANTS. The Company has agreed pursuant to the Merger
Agreement that, prior to the Effective Time, it will take all such actions as
shall be necessary to effect the provisions of the Merger Agreement relating to
the Company Option Plans, the Warrant and the Note. The Company has also agreed
to take such action as is necessary to cause the ending date of the then current
offering period under the Company's 1994 Employee Stock Purchase Plan to be
prior to the Effective Time and to terminate such plan as of the Effective Time.
The Company also agreed to give written notice of the Merger to the holder of
the Warrant at least 20 days prior to the Effective Time or by such other time
required pursuant to the terms thereof.
REASONABLE BEST EFFORTS. Upon the terms and subject to the conditions set
forth in the Merger Agreement, each of the parties thereto has agreed to use its
reasonable best efforts to take, or cause to be taken, all actions (including
entering into transactions), and to do, or cause to be done, and to assist and
cooperate with the other parties in doing, all things necessary, proper or
advisable to consummate and make effective, in the most expeditious manner
practicable, the Merger, and the other transactions contemplated by the Merger
Agreement, including (a) making its respective filings (including under the HSR
Act) and thereafter making any other required submission with respect to the
Offer and the Merger, (b) obtaining all additional necessary actions or
non-actions, waivers, consents and approvals from any applicable Governmental
Entity and making all necessary registrations and filings (including filings
with Governmental Entities) and taking all reasonable steps as may be necessary
to obtain an approval or waiver from any Governmental Entity, (c) obtaining all
necessary consents, approvals or waivers from third parties, (d) defending any
lawsuits or other legal proceedings, whether judicial or administrative,
challenging the Merger Agreement or the consummation of the transactions
contemplated thereby, including seeking to have any stay or temporary
restraining order entered by any court or other Governmental Entity vacated or
reversed, and (e) executing and delivering any additional instruments necessary
to consummate the transactions contemplated by the Merger Agreement. Neither
Tyco, Purchaser nor the Company, however, will be required to take any action
pursuant to clauses (b), (c), (d) or (e) above that would in any event have a
Material Adverse Effect, in the case of the Company, or any similar effect on
Tyco and/or its subsidiaries. In addition, neither Tyco, Purchaser nor any of
their affiliates will be required to enter into any transaction or take any
other action that would require a waiver of, or that is inconsistent with
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satisfaction of, the conditions of the Offer set forth in clauses (a)(iii), (iv)
or (v) of Section 15 -- "Certain Conditions of the Offer."
PUBLIC ANNOUNCEMENTS. The Merger Agreement provides that Tyco, the
Purchaser and the Company will consult with each other before issuing any press
release or otherwise making any public statements with respect to the
transactions contemplated by the Merger Agreement, and shall not issue any such
press release or make any such public statement prior to such consultation,
except as may be required by applicable law or by obligations pursuant to any
listing agreement with any national securities exchange.
INDEMNIFICATION AND INSURANCE. The Merger Agreement provides that, from and
after the Effective Time, the Surviving Corporation will indemnify and hold
harmless all past and present officers and directors (the "Indemnified Parties")
of the Company and of its subsidiaries to the full extent such persons may be
indemnified by the Company pursuant to Delaware law, the Company's Certificate
of Incorporation and Bylaws as in effect from time to time for acts and
omissions occurring at or prior to the Effective Time and has agreed to advance
reasonable litigation expenses incurred by such persons in connection with
defending any action arising out of such acts or omissions, provided that such
persons provide the requisite affirmations and undertaking, as set forth in
Section 145(e) of the DGCL. Tyco has agreed to provide, or cause the Surviving
Corporation to provide, for a period of not less than six years after the
Effective Time, the Company's current directors and officers an insurance and
indemnification policy that provides coverage for events occurring at or prior
to the Effective Time (the "D&O Insurance") that is no less favorable than the
Company's existing policy or, if substantially equivalent insurance coverage is
unavailable, the best available coverage; PROVIDED, HOWEVER, that Tyco and the
Surviving Corporation will not be required to pay an annual premium for the D&O
Insurance in excess of 200% of the annual premium currently paid by the Company
for such insurance, but in such case will purchase as much coverage as possible
for such amount. Tyco has agreed to absolutely and unconditionally guarantee the
performance of the Surviving Corporation under these provisions.
BOARD REPRESENTATION. The Merger Agreement provides that, promptly upon the
purchase of Shares pursuant to the Offer, Tyco will 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 Tyco, subject to compliance with Section
14(f) of the Exchange Act, representation on the Board of Directors equal to the
product of (a) the total number of directors on the Board of Directors and (b)
the percentage that the number of Shares purchased by the Purchaser bears to the
number of Shares outstanding. The Company has agreed that, upon request by Tyco,
it will promptly increase the size of the Board of Directors and/or exercise its
reasonable best efforts to secure the resignations of such number of directors
as is necessary to enable Tyco's designees to be elected to the Board of
Directors and will cause Tyco's designees to be so elected. The Company has
agreed to take, at its expense, all actions required by Section 14(f) of the
Exchange Act and Rule 14f-1 promulgated thereunder to effect any such election
and shall include in the Schedule 14D-9 or otherwise timely mail to its
stockholders the information required to be disclosed pursuant thereto. Tyco
will supply to the Company in writing and be solely responsible for any
information with respect to itself and its nominees, officers, directors and
affiliates required by Section 14(f) and Rule 14f-1.
Pursuant to the Merger Agreement, following the election of designees of the
Purchaser, prior to the Effective Time, any amendment of the Merger Agreement or
the Certificate of Incorporation or Bylaws of the Company, any termination of
the Merger Agreement by the Company, any extension by the Company of the time
for the performance of any of the obligations or other acts of Tyco or the
Purchaser or waiver of any of the Company's rights or obligations under the
Merger Agreement will require the concurrence of a majority of the directors of
the Company then in office who were directors as of the date of the Merger
Agreement or persons designated by such directors and neither were designated by
Tyco nor are employees of the Company ("Continuing Directors"). Prior to the
Effective Time, the Company and Tyco will use all reasonable efforts to ensure
that the Company's Board of Directors at all times includes at least three
Continuing Directors.
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If the Purchaser acquires at least a majority of the Shares, it will have
sufficient voting power to approve the Merger, even if no other stockholder
votes in favor of the Merger.
CONDITIONS PRECEDENT TO MERGER. The respective obligations of Tyco, the
Purchaser and the Company to effect the Merger are subject to the fulfillment at
or prior to the Effective Time of the following conditions: (a) if required by
applicable law, the Merger Agreement shall have been approved by the requisite
vote of the stockholders of the Company; and (b) no court or other Governmental
Entity shall have enacted, issued, promulgated, enforced or entered any law,
rule, regulation, executive order, decree or injunction which prohibits or has
the effect of prohibiting the consummation of the Merger; PROVIDED, HOWEVER, the
Company, Tyco and the Purchaser have agreed that, prior to invoking this
provision, they shall use their reasonable best efforts (subject to the other
terms and conditions of the Merger Agreement) to have any such order, decree or
injunction vacated.
TERMINATION. The Merger Agreement may be terminated at any time prior to
the Effective Time, whether before or after any approval by the stockholders of
the Company:
A. by mutual written consent of Tyco and the Company;
B. by the Company if: (i) the Offer has not been timely commenced
(except as a result of actions or omissions by the Company); or (ii) there
is an Acquisition Proposal which the Board of Directors of the Company in
good faith determines represents a financially superior transaction for the
stockholders of the Company as compared to the Offer and the Merger, and the
Board of Directors of the Company determines, after consultation with
Company Counsel, that failure to terminate the Merger Agreement would be
inconsistent with the compliance by the Board of Directors with its
fiduciary duties to stockholders imposed by law; PROVIDED, HOWEVER, that
such right to terminate the Merger Agreement shall not be available (1) if
the Company has breached in any material respect its obligations concerning
Acquisition Proposals or (2) if, prior to or concurrently with any purported
termination pursuant to this clause, the Company shall not have paid the
fees and expenses contemplated under the provisions set forth below under
"Fees and Expenses"; or (iii) any representation or warranty of Tyco or the
Purchaser shall not have been true and correct in all material respects as
if made at such later date; or (iv) Tyco or the Purchaser fails to comply in
any material respect with any of its material obligations or covenants
contained in the Merger Agreement, including the obligation of the Purchaser
to purchase Shares pursuant to the Offer;
C. by Tyco if (i) the Board of Directors of the Company shall have
failed to recommend, or shall have withdrawn, modified or amended in any
material respect its approval or recommendations of the Offer or the Merger
or shall have resolved to do any of the foregoing; or (ii) any
representation or warranty of the Company shall not have been true and
correct (1) in all material respects when made or (2) other than where the
failure to be true and correct would not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect, shall
have ceased at any later date to be true and correct in all material
respects as if made at such later date, except that the right to terminate
the Merger Agreement pursuant to this clause shall not be available to Tyco
if the Purchaser or any affiliate of the Purchaser shall acquire Shares
pursuant to the Offer; or (iii) the Company shall have failed to comply in
any material respect with any of its material obligations or covenants
contained in the Merger Agreement, except that the right to terminate the
Merger Agreement pursuant to this clause shall not be available to Tyco if
the Purchaser or any affiliate of the Purchaser shall acquire Shares
pursuant to the Offer; or
D. by either Tyco or the Company if: (i) either (x) as the result of the
failure of the Minimum Condition or any of the other Offer Conditions, the
Offer shall have terminated or expired in accordance with its terms without
Purchaser having purchased any Shares, or (y) the Offer shall not have been
consummated on or before October 31, 1998; PROVIDED, HOWEVER, that the right
to terminate this Agreement pursuant to this clause shall not be available
to any party whose failure to fulfill any of its obligations under this
Agreement results in the failure of any such condition; or (ii) any court of
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competent jurisdiction or any governmental, administrative or regulatory
authority, agency or body shall have issued an order, decree or ruling or
taken any other action permanently enjoining, restraining or otherwise
prohibiting the transactions contemplated by the Merger Agreement and such
order, decree, ruling or other action shall have become final and
nonappealable.
FEES AND EXPENSES. Except as described in the following sentences, whether
or not the Merger is consummated, all costs and expenses incurred in connection
with the Merger Agreement and the transactions contemplated thereby shall be
paid by the party incurring such costs and expenses. The Company has agreed in
the Merger Agreement that, if the Merger Agreement is terminated pursuant to:
(i) clause D(i) set forth above under "Termination" and at the time of such
termination (1)(x) the Offer has remained open for a minimum of 20 business
days, (y) the Minimum Condition has not been satisfied and (z) an Acquisition
Proposal existed during such 20 day period, or (2) at the time of such
termination any person, entity or group (as defined in Section 13(d)(3) of the
Exchange Act) (other than Tyco or any of its affiliates) shall have become the
beneficial owner of more than 20% of the outstanding Shares and such person,
entity or group (or any affiliate of such person, entity or group) thereafter
(x) shall make an Acquisition Proposal at a price per share of at least $10.50,
and, in the case of a consensual transaction with the Company, shall
substantially have negotiated the terms thereof, at any time on or prior to the
date which is six months after such termination of the Merger Agreement, and (y)
shall consummate such Acquisition Proposal at any time on or prior to the date
which is one year after termination of Merger Agreement, in the case of a
consensual transaction, or six months after termination of the Merger Agreement,
in the case of a non-consensual transaction, in each case with a value per share
of Common Stock of at least $10.50 (with appropriate adjustments for
reclassification of capital stock, stock dividends, stock splits, reverse stock
splits and similar events); (ii) clause B(ii) set forth above under
"Termination"; (iii) clause C(i) set forth above under "Termination"; or (iv)
clause C(iii) set forth above under "Termination", the Company will pay to Tyco
(such payment, with respect to clause (iv) above only, to be Tyco's sole and
exclusive remedy), the sum of (a) $2.0 million, plus (b) the amount of all
documented out-of-pocket costs and expenses incurred by Tyco, the Purchaser or
their affiliates in connection with the Merger Agreement or the transactions
contemplated thereby in an aggregate amount not to exceed $150,000. Such payment
will be made as promptly as practicable but in no event later than five business
days following termination of the Merger Agreement pursuant to the immediately
preceding sentence, or, in the case of clause (v) of the immediately preceding
sentence, upon consummation of such Acquisition Proposal and will be made by
wire transfer of immediately available funds to an account designated by Tyco.
The Company has further agreed that if the Merger Agreement is terminated
pursuant to clause C(ii)(1) set forth above under "Termination," the Company
will pay to Tyco the amount of all documented out-of-pocket costs and expenses
incurred by Tyco, the Purchaser or their affiliates in an aggregate amount not
to exceed $150,000 in connection with the Merger Agreement or the transactions
contemplated thereby.
STOCKHOLDER AGREEMENT
As an inducement to Tyco and the Purchaser entering into the Merger
Agreement with the Company, certain executive officers and directors of the
Company (the "Stockholders"), who beneficially own 458,146 issued and
outstanding Shares, constituting approximately 7.2% of the Shares on a fully
diluted basis (approximately 21.9% of the Shares on a fully diluted basis
including 942,219 Shares issuable to them upon the exercise of options and other
rights to acquire Shares) and other rights to acquire Shares, have entered into
a Stockholder Agreement (the "Stockholder Agreement") with Tyco and the
Purchaser, pursuant to which they have agreed to tender their Shares in the
Offer.
The following summary of certain provisions of the Stockholder Agreement, a
copy of which is filed as an exhibit to the Schedule 14D-1, is qualified in its
entirety by reference to the text of the Stockholder Agreement.
AGREEMENT TO TENDER. Each of the Stockholders has agreed to tender its
Shares, whether held now or acquired any time prior to the expiration or
termination of the Offer, in the Offer and not to withdraw any
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Shares so tendered unless the Offer (i) is withdrawn in accordance with the
terms of the Merger Agreement or (ii) expires without such Shareholder's Shares
being purchased and the conditions set forth in Section 15 have not been
satisfied or waived by Tyco or the Purchaser. In connection therewith, the
Company has agreed with, and covenanted to, Tyco that the Company will not
register the transfer of any certificate or agreement representing any
Stockholder's Shares, unless such transfer is made to Tyco or the Purchaser or
otherwise in compliance with the Stockholder Agreement.
GRANT OF IRREVOCABLE PROXY. Each of the Stockholders has irrevocably
granted to, and appointed, Tyco and individuals designated by Tyco as such
Stockholder's proxy and attorney-in-fact, to vote such Stockholders' Shares, or
grant a consent or approval in respect of such Shares, at any meeting of
stockholders of the Company or at any adjournment thereof or in any other
circumstances upon which such Stockholders' vote, consent or other approval is
sought, against (i) any merger agreement or merger (other than the Merger
Agreement and the Merger), consolidation, combination, sale of substantial
assets, reorganization, joint venture, recapitalization, dissolution,
liquidation or winding up of or by the Company and (ii) any amendment of the
Company's Certificate of Incorporation or Bylaws or other proposal or
transaction (including any consent solicitation to remove or elect any directors
of the Company) involving the Company or any of its subsidiaries, which
amendment or other proposal or transaction would in any manner impede,
frustrate, prevent or nullify, or result in a breach of any covenant,
representation or warranty or any other obligation or agreement of the Company
under or with respect to, the Offer, the Merger, the Merger Agreement or any of
the other transactions contemplated by the Merger Agreement.
REPRESENTATIONS, WARRANTIES, COVENANTS AND OTHER AGREEMENTS. The
Stockholders have made certain representations and warranties in the Stockholder
Agreement, including with respect to (i) ownership of his Shares, (ii) the
absence of liens, claims, security interests, proxies, voting trusts or
agreements, understandings or arrangements or any other encumbrances on or in
respect of his Shares, and (iii) an acknowledgement of Tyco's reliance upon such
Stockholders' execution of the Stockholder Agreement in entering into, and
causing the Purchaser to enter into, the Merger Agreement. In addition, each of
the Stockholders has agreed not to (i) transfer, or consent to any transfer of,
any or all of such Stockholder's Shares or any interest therein (except as
contemplated by the Stockholder Agreement and except for certain charitable
contributions), (ii) enter into any contract, option or other agreement or
understanding with respect to any transfer of any or all of such Shares or any
interest therein, (iii) grant any proxy, power-of-attorney or other
authorization or consent in or with respect to such Shares, (iv) deposit such
Shares into a voting trust or enter into a voting agreement or arrangement with
respect to such Shares or (v) take any other action that would in any way
restrict, limit or interfere with the performance of his obligations under the
Stockholder Agreement or the transactions contemplated thereby. The Stockholders
have also agreed not to, directly or indirectly, (i) solicit, initiate or
encourage the submission of any Acquisition Proposal or (ii) participate in any
discussions or negotiations regarding, or furnish to any person any information
with respect to, or take any other action to facilitate any inquiries or the
making of any proposal that constitutes, or may reasonably be expected to lead
to, any Acquisition Proposal, provided that the foregoing restrictions shall not
be applicable in any case to the extent that, pursuant to the Merger Agreement,
such restrictions would not be applicable to the Company.
TERMINATION. The Stockholder Agreement, and all rights and obligations
thereunder and the proxy provided therein, shall terminate upon the earlier of
(i) the date upon which the Merger Agreement is terminated in accordance with
its terms, (ii) with respect to each Stockholder, the date that Tyco or the
Purchaser shall have purchased and paid for the Shares of such Stockholder
pursuant to the terms of the Stockholder Agreement, or (iii) the date of the
termination or expiration of the Offer.
14. DIVIDENDS AND DISTRIBUTIONS. The Merger Agreement provides that the
Company will not (x) declare, set aside or pay any dividends on, or make any
other actual, constructive or deemed distributions in respect of, any of its
capital stock, or otherwise make any payments to stockholders of the Company in
their capacity as such, (y) split, combine or reclassify any of its capital
stock or issue or authorize the
26
<PAGE>
issuance of any other securities in respect of, in lieu of or in substitution
for shares of its capital stock or (z) purchase, redeem or otherwise acquire any
shares of capital stock of the Company or any other securities thereof or any
rights, warrants or options to acquire any such shares or other securities.
If on or after the date of the Merger Agreement and notwithstanding the
provisions thereof, the Company should (i) split, combine or otherwise change
the Shares or its capitalization, (ii) acquire presently outstanding Shares or
otherwise cause a reduction in the number of outstanding Shares or (iii) issue
or sell any shares of any class or any securities convertible into any such
shares, or any rights, warrants or options to acquire any such shares or
convertible securities (other than Shares issued pursuant to, and in accordance
with the terms in effect on the date of the Merger Agreement of, stock options,
warrants or convertible debentures issued prior to such date), then, without
prejudice to the Purchaser's rights under the Merger Agreement, the Purchaser
(subject to the Merger Agreement), in its sole discretion, may make such
adjustments in the Offer price and other terms of the Offer as it deems
appropriate to reflect such action.
If, on or after the date of the Merger Agreement and notwithstanding the
provisions thereof, the Company should declare or pay any cash, non-cash or
stock dividend or other distribution on, or issue any rights with respect to,
the Shares, payable or distributable to stockholders of record on a date prior
to the transfer to the name of the Purchaser or its nominees or transferees on
the Company's stock transfer records of the Shares purchased pursuant to the
Offer, then, without prejudice to the Purchaser's rights under the Merger
Agreement, (i) the price per Share payable by the Purchaser pursuant to the
Offer may, subject to the provisions of the Merger Agreement, in the sole
discretion of the Purchaser, be reduced by the amount of any such cash dividend
or distribution and (ii) any non-cash dividend, distribution or right to be
received by the tendering stockholders will (a) be received and held by the
tendering stockholders for the account of the Purchaser and will be required to
be promptly remitted and transferred by each tendering stockholder to the
Depositary for the account of the Purchaser, accompanied by appropriate
documentation of transfer or (b) at the direction of the Purchaser, be exercised
for the benefit of the Purchaser, in which case the proceeds of such exercise
will promptly be remitted to the Purchaser. Pending such remittance, the
Purchaser will be entitled, subject to applicable law, to all rights and
privileges as owner of any such non-cash dividend, distribution or right or such
proceeds and may withhold the entire purchase price or deduct from the purchase
price the amount or value thereof, as determined by the Purchaser in its sole
discretion.
15. CERTAIN CONDITIONS OF THE OFFER. Notwithstanding any other term of the
Offer or the Merger Agreement, the Purchaser shall not be required to accept for
payment or pay for, subject to any applicable rules and regulations of the
Commission, including Rule 14e-1(c) of the Exchange Act, any Shares not
theretofore accepted for payment or paid for and may terminate or amend the
Offer as to such Shares, unless (i) there shall have been validly tendered and
not withdrawn prior to the expiration of the Offer that number of Shares which
would represent at least a majority of the outstanding Shares on a fully diluted
basis (the "Minimum Condition"), and (ii) any waiting period under the HSR Act
applicable to the purchase of Shares pursuant to the Offer shall have expired or
been terminated; PROVIDED, HOWEVER, that Tyco and Purchaser shall extend the
expiration date of the Offer from time to time until July 31, 1998 if, when and
as necessary to satisfy any request for additional information by the Antitrust
Division of the United States Department of Justice (the "Antitrust Division")
or the Federal Trade Commission (the "FTC") pursuant to the HSR Act.
Furthermore, notwithstanding any other term of the Offer of the Merger
Agreement, the Purchaser shall not be required to accept for payment or, subject
as aforesaid, to pay for any Shares not theretofore accepted for payment or paid
for, and may terminate or amend the Offer, if at any time on or after the date
of the Merger Agreement and before the acceptance of such Shares for payment or
the payment therefor, any of the following conditions exist or shall occur and
remain in effect:
(a) there shall have been instituted, pending or threatened any action
or proceeding by any court or other Governmental Entity, which (i) seeks to
challenge the acquisition by Tyco or the Purchaser
27
<PAGE>
(or any of its affiliates) of Shares pursuant to the Offer, restrain,
prohibit or delay the making or consummation of the Offer or the Merger, or
obtain damages in connection therewith in an amount which would reasonably
be expected to have a Material Adverse Effect, (ii) seeks to make the
purchase of or payment for some or all of the Shares pursuant to the Offer
or the Merger illegal, (iii) seeks to impose limitations on the ability of
Tyco (or any of its affiliates) effectively to acquire or hold, or to
require Tyco or the Company or any of their respective affiliates or
subsidiaries to dispose of or hold separate, any portion of the assets or
the business of Tyco and its affiliates or any material portion of the
assets or the business of the Company, (iv) seeks to impose material
limitations on the ability of Tyco (or its affiliates) to exercise full
rights of ownership of the Shares purchased by it, including, without
limitation, the right to vote the Shares purchased by it on all matters
properly presented to the stockholders of the Company, or (v) seeks to
restrict any future business activity by Tyco (or any of its affiliates) in
the United States electronic interconnect industry, including, without
limitation, requiring the prior consent of any person or entity (including
any Governmental Entity) to future transactions by Tyco (or any of its
affiliates); or
(b) there shall have been promulgated, enacted, entered, enforced or
deemed applicable to the Offer of the Merger, by any statute, rule,
regulation, judgment, decree, order or injunction, that is reasonably likely
to directly or indirectly result in any of the consequences referred to
clauses (i) through (v) of subsection (a) above; or
(c) the Merger Agreement shall have been terminated in accordance with
its terms; or
(d) any of the representations and warranties made by the Company in the
Merger Agreement (1) shall not have been true and correct in all material
respects when made, or (2) other than where the failure to be true and
correct will not reasonably be expected, individually or in the aggregate,
to have a Material Adverse Effect, shall thereafter have ceased to be true
and correct in all material respects as if made as of such later date (other
than representations and warranties made as of a specified date), or the
Company shall not in all material respects have performed in a timely manner
each obligation and agreement and complied in a timely manner with each
covenant to be performed and complied with by it under the Merger Agreement;
or
(e) the Company's Board of Directors shall have modified or amended its
recommendation of the Offer in any manner adverse to Tyco or shall have
withdrawn its recommendation of the Offer, or shall have recommended
acceptance of any Acquisition Proposals or shall have resolved to do any of
the foregoing; or
(f) (i) any corporation, entity or "group" (as defined in Section
13(d)(3) of the Exchange Act) (a "person"), other than Tyco and the
Purchaser, shall have acquired beneficial ownership of more than 20% of the
outstanding Shares, or shall have been granted any options or rights,
conditional or otherwise, to acquire a total of more than 20% of the
outstanding Shares; (ii) any new group shall have been formed which
beneficially owns more than 20% of the outstanding Shares; or (iii) any
person (other than Tyco or one or more of its affiliates) shall have entered
into an agreement in principle or definitive agreement with the Company with
respect to a tender or exchange offer for any Shares or a merger,
consolidation or other business combination with or involving the Company;
or
(g) there shall have occurred (i) any general suspension of, or
limitation on prices for, trading in securities on the New York Stock
Exchange, the American Stock Exchange or The Nasdaq Stock Market, (ii) a
declaration of a banking moratorium or any suspension of payments in respect
of banks in the United States (whether or not mandatory), (iii) a
commencement or escalation of a war, armed hostility or other international
or national calamity directly involving the United States, (iv) any material
limitation (whether or not mandatory) by any Governmental Equity on, or any
other event that is reasonably likely materially and adversely to affect the
extension of credit by banks or other lending institutions in the United
States, (v) any decline in either the Dow Jones Industrial Average or the
Standard and Poor's 500 Index by an amount in excess of 15% measured from
the close of
28
<PAGE>
business on the date of the Merger Agreement, or (vi) in the case of any of
the foregoing existing at the time of the commencement of the Offer, a
material acceleration or worsening thereof; or
(h) any change, development, effect or circumstance shall have occurred
or be threatened that would reasonably be expected to have a Material
Adverse Effect; or
(i) the Company shall commence a case under any chapter of Title XI of
the United States Code or any similar law or regulation; or a petition under
any chapter of Title XI of the United States Code or any similar law or
regulation is filed against the Company which is not dismissed within 10
business days.
The foregoing conditions are for the sole benefit of Tyco and the Purchaser
and may be asserted by Tyco or the Purchaser regardless of the circumstances
giving rise to any such condition and may be waived by Tyco or the Purchaser, in
whole or in part, at any time and from time to time, in the sole discretion of
Tyco. The failure by Tyco or the Purchaser at any time to exercise any of the
foregoing rights will not be deemed a waiver of any right, the waiver of such
right with respect to any particular facts or circumstances will not be deemed a
waiver with respect to any other facts or circumstances, and each right will be
deemed an ongoing right which may be asserted at any time and from time to time.
Notwithstanding anything to the contrary contained in this Section 15 or any
other provision of the Offer to Purchase, the Purchaser shall pay for or return
tendered Shares promptly after expiration, termination or withdrawal of the
Offer, and the occurrence or continuation of any of the circumstances referred
to in the conditions described in this Section 15 following such expiration,
termination or withdrawal shall not affect the obligation of the Purchaser
promptly to pay for or return all Shares duly tendered and not theretofore
withdrawn in accordance with the terms of the Offer.
16. CERTAIN LEGAL MATTERS.
GENERAL. Except as described in this Section 16, based on a review of
publicly available filings by the Company with the Commission and other publicly
available information concerning the Company, neither Tyco nor the Purchaser is
aware of any license or regulatory permit that appears to be material to the
business of the Company and that might be adversely affected by the Purchaser's
acquisition of Shares pursuant to the Offer, or of any approval or other action
by any governmental, administrative or regulatory agency or authority, domestic
or foreign, that 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 presently contemplated that such approval or action would be
sought, except as described below under "State Takeover Laws." While the
Purchaser does not currently intend to delay acceptance for payment of Shares
tendered pursuant to the Offer pending the outcome of any such matter, there can
be no assurance that any such approval or other action, if required, would be
obtained without substantial conditions or that adverse consequences would not
result to the Company's business or that certain parts of the Company's business
would not have to be disposed of in the event that such approvals were not
obtained or such other actions were not taken or in order to obtain any such
approval or other action. If certain types of adverse action are taken with
respect to the matters discussed below, the Purchaser may decline to accept for
payment or pay for any Shares tendered. See Section 15.
STATE TAKEOVER LAWS. The Company and conducts business in a number of
states throughout the United States, some of which have adopted laws and
regulations applicable to offers to acquire shares of corporations that are
incorporated or have substantial assets, stockholders and/or a principal place
of business in such states. In Edgar v. MITE Corp., the Supreme Court of the
United States held that the Illinois Business Takeover Statute, which involved
state securities laws that made the takeover of certain corporations more
difficult, imposed a substantial burden on interstate commerce and was therefore
unconstitutional. In CTS Corp. v. Dynamics Corp. of America, however, the
Supreme Court of the United States held that a state may, as a matter of
corporate law and, in particular, those laws concerning
29
<PAGE>
corporate governance, constitutionally disqualify a potential acquiror from
voting on the affairs of a target corporation without prior approval of the
remaining stockholders, provided that such laws were applicable only under
certain conditions, in particular, that the corporation has a substantial number
of stockholders in and is incorporated under the laws of such state.
The Company is incorporated under the laws of the State of Delaware. In
general, Section 203 of the DGCL ("Section 203") prevents an "interested
stockholder" (including a person who owns or has the right to acquire 15% or
more of the corporation's outstanding voting stock) from engaging in a "business
combination" (defined to include mergers and certain other actions) with a
Delaware corporation for a period of three years following the date such person
became an interested stockholder. The Board of Directors of the Company has
taken all appropriate action so that neither Tyco nor the Purchaser is an
"interested stockholder" pursuant to Section 203.
Neither Tyco nor the Purchaser has determined whether any other state
takeover laws and regulations will by their terms apply to the Offer, and,
except as set forth above, neither Tyco nor the Purchaser has presently sought
to comply with any state takeover statute or regulation. Tyco and the Purchaser
reserve the right to challenge the applicability or validity of any state law or
regulation purporting to apply to the Offer or the Merger, and neither anything
in this Offer nor any action taken in connection herewith is intended as a
waiver of such right. In the event it is asserted that one or more state
takeover statutes is applicable to the Offer or the Merger and an appropriate
court does not determine that such statute is inapplicable or invalid as applied
to the Offer or the Merger, Tyco or the Purchaser might be required to file
certain information with, or to receive approval from, the relevant state
authorities, and the Purchaser might be unable to accept for payment or pay for
Shares tendered pursuant to the Offer, or be delayed in consummating the Offer.
ANTITRUST. Under the HSR Act and the rules that have been promulgated
thereunder by the FTC, certain acquisition transactions may not be consummated
unless certain information has been furnished to the Antitrust Division and the
FTC and certain waiting period requirements have been satisfied. The acquisition
of Shares by the Purchaser pursuant to the Offer is subject to such
requirements. See Section 15.
Under the provisions of the HSR Act applicable to the purchase of Shares
pursuant to the Offer, purchases may not be consummated until the expiration of
a 15-calendar day waiting period after the filing of certain required
information and documentary material with the Antitrust Division and the FTC
with respect to the Offer (unless earlier terminated pursuant to a request
therefor, which Tyco will make). If, within such 15-day waiting period, either
the Antitrust Division or the FTC requests additional information or documentary
material relevant to the Offer from Tyco, the waiting period will be extended
for an additional period of 10 calendar days following the date of substantial
compliance with such request. Only one extension of the waiting period pursuant
to a request for additional information is authorized by the rules promulgated
under the HSR Act. Thereafter, such waiting period may be extended only by court
order or by agreement of Tyco. A request for additional information issued to
the Company cannot extend the waiting period. Tyco expects to file, or cause to
be filed, a Notification and Report Form with respect to the Offer under the HSR
Act on June 5, 1998, and, in such event, the required waiting period with
respect to the Offer will expire at 11:59 p.m., New York City time, on June 20,
1998, unless Tyco receives a request for additional information or documentary
material or the Antitrust Division or the FTC terminates the waiting period
prior thereto.
The Antitrust Division and the FTC frequently scrutinize the legality under
the antitrust laws of transactions such as the proposed purchase of Shares by
the Purchaser pursuant to the Offer. At any time before or after such purchase,
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 transaction or seeking divestiture of the Shares so
acquired or divestiture of substantial assets of Tyco or its subsidiaries.
Litigation seeking similar relief could also be brought by private persons and
the state attorneys general.
30
<PAGE>
Based upon an examination of publicly available information relating to the
businesses in which Tyco and the Company are engaged, Tyco and the Purchaser do
not believe that consummation of the Offer will result in violation of any
applicable antitrust laws. However, there can be no assurance that a challenge
to the Offer on antitrust grounds will not be made, or, if such a challenge is
made, what the result would be. See Section 15 for certain conditions to the
Offer, including conditions with respect to certain judicial or governmental
actions.
17. FEES AND EXPENSES. The Purchaser has retained Morrow & Co., Inc. to act
as the Information Agent and ChaseMellon Shareholder Services, L.L.C. to act as
the Depositary in connection with the Offer. The Information Agent may contact
holders of Shares by mail, telephone, telex, telecopy and personal interview and
may request brokers, dealers and other nominee stockholders to forward the Offer
materials to beneficial owners. The Information Agent and the Depositary will
receive reasonable and customary compensation for services relating to the Offer
and will be reimbursed for certain out-of-pocket expenses. The Purchaser and
Tyco have also agreed to indemnify the Information Agent and the Depositary
against certain liabilities and expenses in connection with the Offer, including
certain liabilities under the federal securities laws.
Neither Tyco nor the Purchaser will pay any fees or commissions to any
broker or dealer or any other person (other than to the Information Agent) for
soliciting tenders of Shares pursuant to the Offer. Brokers, dealers, commercial
banks and trust companies will, upon request, be reimbursed by the Purchaser for
customary mailing and handling expenses incurred by them in forwarding offering
materials to their customers.
18. MISCELLANEOUS. The Offer is being made to all holders of Shares. The
Purchaser is not aware of any jurisdiction where the making of the Offer is
prohibited by administrative or judicial action pursuant to any valid state
statute. If the Purchaser becomes aware of any valid state statute prohibiting
the making of the Offer or the acceptance of Shares pursuant thereto, the
Purchaser will make a good faith effort to comply with any such state statute or
seek to have such statute declared inapplicable to the Offer. If, after such
good faith effort, the Purchaser cannot comply with any such state statute, the
Offer will not be made to (nor will tenders be accepted from or on behalf of)
the holders of Shares in such state. In any jurisdiction where the securities,
blue sky or other laws require the Offer to be made by a licensed broker or
dealer, the Offer will be deemed to 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 make any
representation on behalf of Tyco, the Purchaser or the Company not contained in
this Offer to Purchase or in the related Letter of Transmittal and, if given or
made, such information or representation must not be relied upon as having been
authorized.
Tyco and the Purchaser have filed with the Commission a Tender Offer
Statement on Schedule 14D-1, together with all exhibits thereto, pursuant to
Rule 14d-3 of the General Rules and Regulations under the Exchange Act,
furnishing certain additional information with respect to the Offer. Such Tender
Offer Statement and any amendments thereto, including exhibits, may be inspected
and copies may be obtained from the offices of the Commission in the manner set
forth in Section 8 (except that they will not be available at the regional
offices of the Commission).
T10 ACQUISITION CORP.
June 5, 1998
31
<PAGE>
ANNEX I
CERTAIN INFORMATION CONCERNING THE DIRECTORS
AND EXECUTIVE OFFICERS OF TYCO INTERNATIONAL LTD.
The following table sets forth the name, current business address, present
principal occupation or employment, and material occupations, positions, offices
or employment for the past five years of each director of Tyco, each executive
officer of Tyco and the executive officers of certain of Tyco's subsidiaries.
Unless otherwise indicated, positions held shown in the following table are
positions with Tyco. Except as set forth below, each such person is a citizen of
the United States of America. None of the listed persons, during the past five
years, has been convicted in a criminal proceeding (excluding traffic violations
or similar misdemeanors) or was a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction as a result of which such person
was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting activities subject to, federal or state securities
laws or finding any violation of such laws.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL
OCCUPATION OR EMPLOYMENT
NAME AND POSITION HELD CURRENT BUSINESS ADDRESS AND FIVE-YEAR EMPLOYMENT HISTORY
- ------------------------------------ ---------------------------- ---------------------------------------------
<S> <C> <C>
L. Dennis Kozlowski,................ One Tyco Park Mr. Kozlowski has been Chairman of the Board
Chairman of the Board, Exeter, NH 03833 of Directors, Chief Executive Officer and
President and Chief Executive President of Tyco since July 1997. He has
Officer been Chairman of the Board of Directors of
Former Tyco since 1993 and has been Chief
Executive Officer of Former Tyco since 1992
and President of Former Tyco since 1989.
Michael A. Ashcroft,................ P.O. Box 1598 Mr. Ashcroft has been non-executive Chairman
Director Belize City, Belize of BHI Corporation since 1987. He was
Chairman of the Board of Directors and Chief
Executive Officer of ADT Limited (now Tyco
International Ltd.) from 1984 to 1997. Mr.
Ashcroft is a citizen of Belize.
Joshua M. Berman,................... 919 Third Avenue Mr. Berman has been counsel to the law firm
Director and Vice President New York, NY 10022 of Kramer, Levin, Naftalis & Frankel since
1985.
Richard S. Bodman,.................. 2 Wisconsin Circle Mr. Bodman has been Managing General Partner
Director Suite 610 of AT&T Ventures LLC since 1996. Previously,
Chevy Chase, MD 20815 since 1990, he was Senior Vice President,
Corporate Strategy and Development, of AT&T
Corporation.
John F. Fort, III................... 2003 Milford Street Mr. Fort was Chairman of the Board and Chief
Director Houston, TX 77098 Executive Officer of Former Tyco from 1982 to
1992.
Stephen W. Foss,.................... 380 Lafayette Road Mr. Foss has been President of Foss Man-
Director Hampton, NH 03842 ufacturing Company, Inc. a manufacturer of
non-woven fabrics, since 1969.
</TABLE>
32
<PAGE>
<TABLE>
<CAPTION>
PRESENT PRINCIPAL
OCCUPATION OR EMPLOYMENT
NAME AND POSITION HELD CURRENT BUSINESS ADDRESS AND FIVE-YEAR EMPLOYMENT HISTORY
- ------------------------------------ ---------------------------- ---------------------------------------------
<S> <C> <C>
Richard A. Gilleland,............... 2829 Townsgate Road Mr. Gilleland was President and Chief
Director Suite 101 Executive Officer of Amsco International,
West Lake Village, CA 91361 Inc., a manufacturer of infection control
products, from 1995 to 1996 and Senior Vice
President of Former Tyco from 1994 to 1995.
From 1990 to 1995, he was President and Chief
Executive Officer of Kendall International,
Inc., a manufacturer of medical products,
which was acquired by Former Tyco in 1994.
Philip M. Hampton,.................. 399 Park Avenue Mr. Hampton was Chairman of Metzler
Director 32nd Floor Corporation, an investment bank, from 1989 to
New York, NY 10022 1997.
James S. Pasman, Jr.,............... 29 The Trillium Mr. Pasman was President and Chief Operating
Director Pittsburgh, PA 15238 Officer of National Intergroup, Inc., an
industrial holding company, from 1989 to 1991
and was Chairman and Chief Executive Officer
of Kaiser Aluminum and Chemical Corp. from
1987 to 1989.
W. Peter Slusser,................... One Citicorp Center Mr. Slusser has been the President of Slusser
Director Suite 5100 Associates, Inc., a private investment
153 East 53rd Street banking firm, since 1988.
New York, NY 10022
Frank E. Walsh, Jr.,................ 330 South Street Mr. Walsh has been Chairman of the Sandyhill
Director Morristown, NJ Foundation, a charitable foundation, since
07962-1975 1996. Previously, from 1989 to 1996, he was
Chairman of Wesray Capital Corporation.
Jerry R. Boggess,................... Three Tyco Park Exeter, NH Mr. Boggess has been Vice President of Former
Vice President of Tyco (US) 03833 Tyco since 1996 and President of the Grinnell
Fire Protection Division of Former Tyco's
Grinnell Corporation subsidiary ("Grinnell")
since 1993. Previously, from 1989, he was
Executive Vice President of Grinnell.
David P. Brownell,.................. One Tyco Park Mr. Brownell has been Senior Vice President
Senior Vice President Exeter, NH 03833 of Tyco since July 1997. He has been Senior
Vice President of Former Tyco since 1993.
Previously, he served as Executive Vice
President of the Flow Control Division of
Grinnell from 1991 to 1993.
</TABLE>
33
<PAGE>
<TABLE>
<CAPTION>
PRESENT PRINCIPAL
OCCUPATION OR EMPLOYMENT
NAME AND POSITION HELD CURRENT BUSINESS ADDRESS AND FIVE-YEAR EMPLOYMENT HISTORY
- ------------------------------------ ---------------------------- ---------------------------------------------
<S> <C> <C>
Robert P. Mead,..................... Three Tyco Park Mr. Mead has been Vice President of Former
Vice President of Tyco (US) Exeter, NH 03833 Tyco and President of Grinnell's Flow Control
Division since 1993. From 1992 to 1993, he
was Executive Vice President of Former Tyco's
Allied Tube and Conduit Corp. subsidiary. He
served as Managing Director of Former Tyco's
Asia-Pacific operations from 1991 to 1992.
Richard J. Meelia,.................. 15 Hampshire Street Mr. Meelia has been Vice President of Former
Vice President of Tyco (US) Mansfield, MA 02048 Tyco since 1996 and President of The Kendall
Company (a Former Tyco subsidiary) since
1995. From 1991 to 1995, he was Group
President of Kendall Healthcare.
Mark H. Swartz,..................... One Tyco Park Mr. Swartz has been Executive Vice President
Executive Vice President and Exeter, NH 03833 and Chief Financial Officer of Tyco since
Chief Financial Officer July 1997. He has been Vice President and
Chief Financial Officer of Former Tyco since
1995. From 1993 to 1995, he was Former Tyco's
Director of Mergers and Acquisitions, and
previously since 1991 was associated with
Former Tyco in other capacities.
</TABLE>
34
<PAGE>
ANNEX II
CERTAIN INFORMATION CONCERNING THE DIRECTORS
AND EXECUTIVE OFFICERS OF THE PURCHASER
The following table sets forth the name, current business address, present
principal occupation or employment, and material occupations, positions, offices
or employment for the past five years of each director and executive officer of
the Purchaser. Each such person is a citizen of the United States of America.
None of the listed persons, during the past five years, has been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors) or
was a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction as a result of which such person was or is subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
activities subject to, federal or state securities laws or finding any violation
of such laws.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL
CURRENT BUSINESS OCCUPATION OR EMPLOYMENT
NAME AND POSITION HELD ADDRESS AND FIVE-YEAR EMPLOYMENT HISTORY
- -------------------------------------------- ---------------------- --------------------------------------------
<S> <C> <C>
L. Dennis Kozlowski,........................ One Tyco Park *
President Exeter, NH 03833
Mark H. Swartz,............................. One Tyco Park *
Director and Vice President Exeter, NH 03833
M. Brian Moroze,............................ One Tyco Park Mr. Moroze has been General Counsel of
Director, Vice President and Secretary Exeter, NH 03833 Former Tyco since 1994 and served as
Associate General Counsel from 1986 to 1994.
Irving Gutin................................ One Tyco Park Mr. Gutin has been Senior Vice President of
Director and Vice President Exeter, NH 03833 Former Tyco for more than the past five
years.
</TABLE>
- ------------------------
* Please see the information set forth in Annex I.
35
<PAGE>
Manually signed facsimile copies of the Letter of Transmittal will be
accepted. Letters of Transmittal and certificates for Shares should be sent or
delivered by each stockholder of the Company or his broker, dealer, commercial
bank or trust company to the Depositary at one of its addresses set forth below:
THE DEPOSITARY FOR THE OFFER IS:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
<TABLE>
<S> <C> <C>
BY MAIL: BY HAND OR BY FACSIMILE:
ChaseMellon BY OVERNIGHT COURIER: (201) 329-8936
Shareholder Services, L.L.C. ChaseMellon (For Eligible Institutions
P.O. Box 3301 Shareholder Services, L.L.C. Only)
South Hackensack, NJ 07606 120 Broadway, 13th Floor
New York, NY 10271 Confirm by Telephone:
(201) 296-4209
</TABLE>
Any questions or requests for assistance may be directed to the Information
Agent at its address and telephone numbers set forth below. Requests for
additional copies of this Offer to Purchase and the Letter of Transmittal may be
directed to the Information Agent or the Depositary. Stockholders may also
contact their brokers, dealers, commercial banks or trust companies for
assistance concerning the Offer.
THE INFORMATION AGENT FOR THE OFFER IS:
[LOGO]
909 Third Avenue
New York, New York 10022
(212) 754-8000
Toll-Free (800) 566-9061
Banks and Brokerage Firms
Call (800) 662-5200
<PAGE>
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
OF
SIGMA CIRCUITS, INC.
PURSUANT TO THE OFFER TO PURCHASE DATED JUNE 5, 1998
OF
T10 ACQUISITION CORP.,
AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF
TYCO INTERNATIONAL LTD.
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON THURSDAY, JULY 2, 1998, UNLESS THE OFFER IS EXTENDED
- --------------------------------------------------------------------------------
THE DEPOSITARY FOR THE OFFER IS:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
<TABLE>
<S> <C> <C>
BY HAND OR
BY MAIL: BY OVERNIGHT COURIER: BY FACSIMILE:
ChaseMellon ChaseMellon (201) 329-8936
Shareholder Services, L.L.C. Shareholder Services, L.L.C. (For Eligible Institutions Only)
P.O. Box 3301 120 Broadway, 13th Floor CONFIRM BY TELEPHONE:
South Hackensack, NJ 07606 New York, NY 10271 (201) 296-4860
</TABLE>
------------------------
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE DOES
NOT CONSTITUTE A VALID DELIVERY. YOU MUST SIGN THIS LETTER OF TRANSMITTAL IN THE
APPROPRIATE SPACE THEREFOR PROVIDED BELOW AND COMPLETE THE SUBSTITUTE FORM W-9
SET FORTH BELOW.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be completed by stockholders either if
certificates representing Shares (as defined below) are to be forwarded herewith
or, unless an Agent's Message (as defined in Instruction 2) is utilized, if
delivery is to be made by book-entry transfer to the account maintained by the
Depositary at The Depository Trust Company (the "Book-Entry Transfer Facility")
pursuant to the procedures set forth in Section 2 of the Offer to Purchase.
Stockholders whose certificates are not immediately available, or who cannot
deliver their certificates or confirmation of the book-entry transfer of their
Shares into the Depositary's account at the Book-Entry Transfer Facility ("Book-
Entry Confirmation") and all other documents required hereby to the Depositary
on or prior to the Expiration Date (as defined in Section 1 of the Offer to
Purchase), must tender their Shares according to the guaranteed delivery
procedures set forth in Section 2 of the Offer to Purchase. See Instruction 2.
DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE
DELIVERY TO THE DEPOSITARY.
/ / CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
MADE TO THE ACCOUNT MAINTAINED BY THE DEPOSITARY AT THE BOOK-ENTRY TRANSFER
FACILITY AND COMPLETE THE FOLLOWING:
Name of Tendering Institution: _____________________________________________
Account Number: ____________________________________________________________
Transaction Code Number: ___________________________________________________
<PAGE>
/ / CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING:
Name(s) of Registered Holder(s): ___________________________________________
Date of Execution of Notice of Guaranteed Delivery: ________________________
Name of Institution that Guaranteed Delivery: ______________________________
If Delivered by Book-Entry Transfer: _______________________________________
Name of Tendering Institution: _____________________________________________
Account Number: ____________________________________________________________
Transaction Code Number: ___________________________________________________
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------
DESCRIPTION OF SHARES TENDERED
----------------------------------------------------------------------------------------------------
CERTIFICATES TENDERED
(ATTACH ADDITIONAL LISTS IF NECESSARY)
- ------------------------------------------------------------------------------------------------------
TOTAL NUMBER
OF
SHARES
REPRESENTED NUMBER OF
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) CERTIFICATE BY SHARES
(PLEASE FILL IN, IF BLANK) NUMBER(S)* CERTIFICATE(S) TENDERED**
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
----------------------------------------------
Total Shares
- ----------------------------------------------------------------------------------------------------
</TABLE>
* Need not be completed by stockholders tendering by book-entry transfer.
** Unless otherwise indicated, it will be assumed that all Shares represented
by any certificates delivered to the Depositary are being tendered hereby.
See Instruction 4.
The names and addresses of the registered holders should be printed, if not
already printed above, exactly as they appear on the certificates representing
Shares tendered hereby. The certificates and number of Shares that the
undersigned wishes to tender should be indicated in the appropriate boxes.
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to T10 Acquisition Corp., a Delaware
corporation (the "Purchaser") and an indirect wholly-owned subsidiary of Tyco
International Ltd., a Bermuda company ("Tyco"), the above-described shares of
common stock, par value $.001 per share (the "Shares"), of Sigma Circuits, Inc.,
a Delaware corporation (the "Company"), pursuant to the Purchaser's offer to
purchase all of the outstanding Shares at a price of $10.50 per Share, net to
the tendering stockholder in cash, upon the terms and subject to the conditions
set forth in the Offer to Purchase, dated June 5, 1998 (the "Offer to
Purchase"), receipt of which is hereby acknowledged, and in this Letter of
Transmittal (which together constitute the "Offer"). The Purchaser reserves the
right to transfer or assign, in whole or from time to time in part, to Tyco or
to one or more affiliates of Tyco, the right to purchase Shares tendered
pursuant to the Offer.
Subject to, and effective upon, acceptance for payment of and payment for
the Shares tendered herewith in accordance with the terms and subject to the
conditions of the Offer, the undersigned hereby sells, assigns, and transfers
to, or upon the order of, the Purchaser all right, title and interest in and to
all of the Shares that are being tendered hereby (and any and all other Shares
or other securities or rights issued or issuable in respect thereof on or after
June 5, 1998) and irrevocably appoints the Depositary the true and lawful agent
and attorney-in-fact of the undersigned with respect to such Shares (and any
such other Shares or securities or rights), with full power of substitution
(such power of attorney being deemed to be an irrevocable power coupled with an
interest), to (a) deliver certificates representing such Shares (and any such
other Shares or securities or rights), or transfer ownership of such Shares (and
any such other Shares or securities or rights) on the account books maintained
by the Book-Entry Transfer Facility, together in either such case with all
accompanying evidences of transfer and authenticity, to or upon the order of the
Purchaser upon receipt by the Depositary, as the undersigned's agent, of the
purchase price (adjusted, if appropriate, as provided in the Offer to Purchase),
(b) present such Shares (and any such other Shares or securities or rights) for
registration and transfer on the books of the Company, and (c) receive all
benefits and otherwise exercise all rights of beneficial ownership of such
Shares (and any such other Shares or securities or rights), all in accordance
with the terms of the Offer.
The undersigned hereby irrevocably appoints Jeffrey D. Mattfolk and M. Brian
Moroze and each of them or any other designee of the Purchaser, the attorneys
and proxies of the undersigned, each with full power of substitution, to vote in
such manner as each such attorney and proxy or his substitute shall, in his sole
discretion, deem proper, and otherwise act (including pursuant to written
consent) with respect to all the Shares tendered hereby which have been accepted
for payment by the Purchaser prior to the time of such vote or action (and any
and all other Shares or securities or rights issued or issuable in respect
thereof on or after June 5, 1998), which the undersigned is entitled to vote at
any meeting of stockholders (whether annual or special and whether or not an
adjourned meeting) of the Company, or consent in lieu of any such meeting, or
otherwise. This proxy and power of attorney is coupled with an interest in the
Shares tendered hereby and is irrevocable and is granted in consideration of,
and is effective upon, the acceptance for payment of such Shares (and any such
other Shares or securities or rights) by the Purchaser in accordance with the
terms of the Offer. Such acceptance for payment shall revoke all prior proxies
granted by the undersigned at any time with respect to such Shares (and any such
other Shares or securities or rights) and no subsequent proxies will be given
(and if given will be deemed not to be effective) with respect thereto by the
undersigned. The undersigned acknowledges that in order for Shares to be deemed
validly tendered, immediately upon the acceptance for payment of such Shares,
the Purchaser or the Purchaser's designee must be able to exercise full voting
and other rights of a record and beneficial holder with respect to such Shares.
<PAGE>
The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender, sell, assign and transfer the Shares tendered
hereby (and any and all other Shares or securities or rights issued or issuable
in respect thereof on or after June 5, 1998), and that, when the same are
accepted for payment by the Purchaser, the Purchaser will acquire good 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, upon request, will execute and deliver any additional documents
deemed by the Depositary or the Purchaser to be necessary or desirable to
complete the sale, assignment and transfer of the Shares tendered hereby (and
any such other Shares or securities or rights).
No authority herein conferred or agreed to be conferred in this Letter of
Transmittal shall be affected by, and all such authority shall survive, the
death or incapacity of the undersigned, and any obligation of the undersigned
hereunder shall be binding upon the successors, assigns, heirs, executors,
administrators and legal representatives of the undersigned. Except as stated in
the Offer to Purchase, this tender is irrevocable.
The undersigned understands that tenders of Shares pursuant to any one of
the procedures described in Section 2 of the Offer to Purchase and in the
instructions hereto will constitute a binding agreement between the undersigned
and the Purchaser upon the terms and subject to the conditions of the Offer.
The undersigned recognizes that, under certain circumstances set forth in
the Offer to Purchase, the Purchaser may not be required to accept for payment
any of the Shares tendered hereby.
Unless otherwise indicated herein under "Special Payment Instructions,"
please issue the check for the purchase price and/or return any certificates
representing Shares not tendered or accepted for payment in the name(s) of the
registered holder(s) appearing under "Description of Shares Tendered."
Similarly, unless otherwise indicated under "Special Delivery Instructions,"
please mail the check for the purchase price and/or return any certificates
representing Shares not tendered or accepted for payment (and accompanying
documents, as appropriate) to the registered holder(s) appearing under
"Description of Shares Tendered" at the address shown below such registered
holder(s) name(s). In the event that either or both the Special Delivery
Instructions and the Special Payment Instructions are completed, please issue
the check for the purchase price and/or return any certificates representing
Shares not tendered or accepted for payment in the name(s) of, and deliver such
check and/or return such certificates to, the person or persons so indicated.
Stockholders tendering Shares by book entry transfer may request that any Shares
not accepted for payment be returned by crediting such account maintained at the
Book-Entry Transfer Facility as such stockholder may designate by making an
appropriate entry under "Special Payment Instructions." The undersigned
recognizes that the Purchaser has no obligation pursuant to the Special Payment
Instructions to transfer any Shares from the name of the registered holder(s)
thereof if the Purchaser does not accept for payment any of the Shares so
tendered hereby.
<PAGE>
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if certificates representing Shares not tendered or not
purchased and/or the check for the purchase price of Shares purchased are to be
issued in the name of someone other than the undersigned, or if Shares tendered
by book-entry transfer which are not purchased are to be returned by credit to
an account maintained at the Book-Entry Transfer Facility other than that
account designated above.
Issue: / / Check / / Certificate(s) to:
Name: __________________________________________________________________________
(Please Print)
Address: _______________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Include Zip Code)
_______________________________________________________________________________
(Tax Identification or Social Security No.)
Credit unpurchased Shares tendered by book-entry transfer to the Book-Entry
Transfer Facility account set forth below.
_______________________________________________________________________________
(Account Number)
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if certificates representing Shares not tendered or not
purchased and/or the check for the purchase price of Shares purchased are to be
sent to someone other than the undersigned, or to the undersigned at an address
other than that shown under "Description of Shares Tendered."
Issue: / / Check / / Certificate(s) to:
Name: __________________________________________________________________________
(Please Print)
Address: _______________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Include Zip Code)
<PAGE>
SIGN HERE
(Please Complete Substitute Form W-9 on Reverse Side)
Signature(s) of Holder(s) of Shares __________________________________
______________________________________________________________________
______________________________________________________________________
Dated: ____________________________________ , 1998
(Must be signed by registered holder(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 holder(s) by certificates
and documents transmitted herewith. If signature is by trustees,
executors, administrators, guardians, attorneys-in-fact, agents,
officers of corporations or others acting in a fiduciary or
representative capacity, please set forth the full title and see
Instruction 5.)
Name(s) ______________________________________________________________
______________________________________________________________________
(Please Print)
Capacity (full title) ________________________________________________
Address ______________________________________________________________
______________________________________________________________________
(Including Zip Code)
(Area Code and Telephone No.) ________________________________________
(Tax Identification or Social Security No.) __________________________
<PAGE>
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 5)
FOR USE BY FINANCIAL INSTITUTIONS ONLY
PLACE MEDALLION GUARANTEE IN SPACE BELOW.
Authorized Signature(s) ______________________________________________________
Name _________________________________________________________________________
(Please Print)
Title ________________________________________________________________________
Name of Firm _________________________________________________________________
Address ______________________________________________________________________
(Include Zip Code)
Area Code and Telephone Number _______________________________________________
Dated: ______________________________________________________________________,
1998
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. No signature guarantee on this Letter of
Transmittal is required (i) if this Letter of Transmittal is signed by the
registered holder(s) of the Shares (which term, for purposes of this document,
shall include any participant in the Book-Entry Transfer Facility whose name
appears on a security position listing as the owner of Shares) tendered
herewith, unless such holder has completed either the box entitled "Special
Delivery Instructions" or the box entitled "Special Payment Instructions" on
this Letter of Transmittal, or (ii) if such Shares are tendered for the account
of a firm that is a member in good standing of the Security Transfer Agent's
Medallion Program, the New York Stock Exchange Medallion Signature Program or
the Stock Exchange Medallion Program (each being hereinafter referred to as an
"Eligible Institution"). In all other cases, all signatures on this Letter of
Transmittal must be guaranteed by an Eligible Institution. See Instruction 5.
2. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES. This Letter of
Transmittal is to be completed by stockholders either if certificates
representing Shares are to be forwarded herewith to the Depositary or, unless an
Agent's Message (as defined below) is utilized, if tenders of Shares are to be
made pursuant to the procedures for delivery by book-entry transfer set forth in
Section 2 of the Offer to Purchase. Certificates representing all physically
tendered Shares, or any book-entry confirmation of Shares, as the case may be,
together with a properly completed and duly executed Letter of Transmittal (or
facsimile thereof), with any required signature guarantees, or, in connection
with a book-entry transfer, an Agent's Message, 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 Purchase). If a stockholder's certificate(s)
representing Shares are not immediately available (or the procedure for the
book-entry transfer cannot be completed on a timely basis) or time will not
permit all required documents to reach the Depositary on or prior to the
Expiration Date, such stockholder's Shares may nevertheless be tendered if the
procedures for guaranteed delivery set forth in Section 2 of the Offer to
Purchase are followed. Pursuant to such procedure, (i) such tender must be made
by or through an Eligible Institution, (ii) a properly completed and duly
executed Notice of Guaranteed Delivery, substantially in the form provided by
the Purchaser, must be received by the Depositary on or prior to the Expiration
Date, and (iii) the certificates representing all tendered Shares, in proper
form for transfer, or Book-Entry Confirmation of Shares, as the case may be, in
each case together with a properly completed and duly executed Letter of
Transmittal (or facsimile thereof), with any required signature guarantees (or,
in connection with a book-entry transfer, an Agent's Message) and any other
documents required by this Letter of Transmittal, must be received by the
Depositary within three Nasdaq National Market trading days after the date of
execution of such Notice of Guaranteed Delivery, all as provided in Section 2 of
the Offer to Purchase. The term "Agent's Message" means a message transmitted
through electronic means by the Book-Entry Transfer Facility to, and received
by, the Depositary and forming a part of a book-entry confirmation, which states
that the Book-Entry Transfer Facility has received an express acknowledgment
from the participant in the Book-Entry Transfer Facility tendering the Shares
that such participant has received, and agrees to be bound by, this Letter of
Transmittal.
THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, THE CERTIFICATE(S)
REPRESENTING SHARES AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH
THE BOOK-ENTRY TRANSFER FACILITY, IS AT THE OPTION AND SOLE RISK OF THE
TENDERING STOCKHOLDER. THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY
RECEIVED BY THE DEPOSITARY. IF SUCH DELIVERY IS BY MAIL, REGISTERED MAIL WITH
RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES,
SUFFICIENT TIME SHOULD BE ALLOWED TO INSURE TIMELY DELIVERY.
NO ALTERNATIVE, CONDITIONAL OR CONTINGENT TENDERS WILL BE ACCEPTED, AND NO
FRACTIONAL SHARES WILL BE PURCHASED. ALL TENDERING STOCKHOLDERS, BY EXECUTION OF
THIS LETTER OF TRANSMITTAL (OR FACSIMILE THEREOF), WAIVE ANY RIGHT TO RECEIVE
ANY NOTICE OF THE ACCEPTANCE OF THEIR SHARES FOR PAYMENT.
3. INADEQUATE SPACE. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares should be listed on a separate
signed schedule attached hereto.
4. PARTIAL TENDERS (NOT APPLICABLE TO STOCKHOLDERS WHO TENDER SHARES BY
BOOK-ENTRY TRANSFER). If fewer than all the Shares represented by any
certificate submitted are to be tendered, fill in the number of Shares that are
to be tendered in the box entitled "Number of Shares Tendered." In such case,
new certificate(s) representing the remainder of the Shares that were
represented by the old certificate(s) will be sent to the registered holder(s),
unless otherwise provided in the appropriate box on this Letter of Transmittal,
as soon as practicable after the Expiration Date. All Shares represented by
certificate(s) delivered to the Depositary will be deemed to have been tendered
unless otherwise indicated.
<PAGE>
5. SIGNATURES ON LETTER OF TRANSMITTAL, STOCK POWERS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signature(s) must correspond exactly with the name(s) as
written on the face(s) of the certificate(s) without alteration, enlargement or
any change whatsoever. If any of the Shares tendered hereby are owned of record
by two or more joint owners, all such owners must sign this Letter of
Transmittal. If any tendered Shares are registered in different names on several
certificates, it will be necessary to complete, sign and submit as many separate
Letters of Transmittal as there are different registrations of certificates.
IF THIS LETTER OF TRANSMITTAL IS SIGNED BY THE REGISTERED HOLDER(S) OF THE
SHARES LISTED AND TENDERED HEREBY, NO ENDORSEMENTS OF CERTIFICATES OR SEPARATE
STOCK POWERS ARE REQUIRED, UNLESS PAYMENT OR CERTIFICATES FOR SHARES NOT
TENDERED OR ACCEPTED FOR PAYMENT ARE TO BE ISSUED TO A PERSON OTHER THAN THE
REGISTERED HOLDER(S). SIGNATURES ON SUCH CERTIFICATES OR STOCK POWERS MUST BE
GUARANTEED BY AN ELIGIBLE INSTITUTION.
IF THIS LETTER OF TRANSMITTAL OR ANY CERTIFICATES OR STOCK POWERS ARE SIGNED
BY A TRUSTEE, EXECUTOR, ADMINISTRATOR, GUARDIAN, ATTORNEY-IN-FACT, OFFICER OF A
CORPORATION OR OTHER PERSON ACTING IN A FIDUCIARY OR REPRESENTATIVE CAPACITY,
SUCH PERSON SHOULD SO INDICATE WHEN SIGNING, AND PROPER EVIDENCE SATISFACTORY TO
THE PURCHASER OF SUCH PERSON'S AUTHORITY SO TO ACT MUST BE SUBMITTED.
IF THIS LETTER OF TRANSMITTAL IS SIGNED BY A PERSON OTHER THAN THE
REGISTERED HOLDER(S) OF THE SHARES TENDERED HEREBY, THE CERTIFICATES MUST BE
ENDORSED OR ACCOMPANIED BY APPROPRIATE STOCK POWERS, IN EITHER CASE SIGNED
EXACTLY AS THE NAME(S) OF THE REGISTERED HOLDER(S) APPEAR ON THE CERTIFICATES.
SIGNATURES ON SUCH CERTIFICATES OR STOCK POWERS MUST BE GUARANTEED BY AN
ELIGIBLE INSTITUTION, UNLESS THE SIGNATURE IS THAT OF AN ELIGIBLE INSTITUTION.
6. STOCK TRANSFER TAXES. Except as set forth in this Instruction 6, the
Purchaser will pay or cause to be paid any stock transfer taxes with respect to
the transfer and sale of purchased Shares to it or its order pursuant to the
Offer. If, however, payment of the purchase price is to be made to, or if
certificates representing Shares not tendered or accepted for payment are to be
registered in the name of, any person other than the registered holder, or if
tendered certificates are registered in the name of any person other than the
person(s) signing this Letter of Transmittal, the amount of any stock transfer
taxes (whether imposed on the registered holder or such other person) payable on
account of the transfer to such person will be deducted from the purchase price,
unless satisfactory evidence of the payment of such taxes or exemption therefrom
is submitted.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check and/or
certificates representing Shares not tendered or accepted for payment are to be
issued in the name of a person other than the signer of this Letter of
Transmittal or if a check is to be sent and/or such certificates are to be
returned to someone other than the signer of this Letter of Transmittal or to an
address other than that shown above, the appropriate boxes on this Letter of
Transmittal should be completed. Stockholders tendering Shares by book-entry
transfer may request that Shares not accepted for payment be credited to such
account maintained at the Book-Entry Transfer Facility as such stockholder may
designate hereon. If no such instructions are given, such Shares not accepted
for payment will be returned by crediting the account at the Book-Entry Transfer
Facility designated above.
8. LOST, DESTROYED OR STOLEN CERTIFICATES. If any certificate(s)
representing Shares has been lost, destroyed or stolen, the stockholder should
promptly notify the Depositary. The stockholder will then be instructed as to
the steps that must be taken in order to replace the certificate(s). This Letter
of Transmittal and related documents cannot be processed until the procedures
for replacing lost or destroyed certificates have been followed.
9. WAIVER OF CONDITIONS. The conditions of the Offer may be waived by the
Purchaser, in whole or in part, at any time and from time to time in the
Purchaser's sole discretion, in the case of any Shares tendered hereby.
10. SUBSTITUTE FORM W-9. The 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, which is provided below, and to certify whether the
stockholder is subject to backup withholding of Federal income tax. If a
tendering stockholder is subject to backup withholding, the stockholder must
cross out item (2) of the Certification box of the Substitute Form W-9. Failure
to provide the information on the Substitute Form W-9 may subject the tendering
stockholder to 31% Federal income tax withholding on the payment of the purchase
price. If the tendering stockholder has not been issued a TIN and has applied
for a number or intends to apply for a number in the near future, the
stockholder should write "Applied For" in the space provided for the TIN in Part
I, and sign and date the Substitute Form W-9. If "Applied For" is written in
Part I and the Depositary is not provided with a TIN within 60 days, the
Depositary will withhold 31% on all payments of the purchase price until a TIN
is provided to the Depositary.
<PAGE>
11. FOREIGN HOLDERS. Foreign holders must submit a completed IRS Form W-8
to avoid backup withholding. IRS Form W-8 may be obtained by contacting the
Depositary at one of the addresses on the face of this Letter of Transmittal.
12. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Requests for assistance
may be directed to the Information Agent at the address set forth below.
Additional copies of the Offer to Purchase, this Letter of Transmittal, the
Notice of Guaranteed Delivery and the Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 may be obtained from the
Information Agent at the address set forth below or from your broker, dealer,
commercial bank or trust company.
IMPORTANT: This Letter of Transmittal (or a facsimile thereof), together
with certificates representing Shares or confirmation of book-entry transfer and
all other required documents, or the Notice of Guaranteed Delivery, must be
received by the Depositary on or prior to the Expiration Date.
IMPORTANT TAX INFORMATION
Under federal income tax law, a stockholder whose tendered Shares are
accepted for payment is required to provide the Depositary (as payer) with such
stockholder's correct TIN on Substitute Form W-9 below. If such stockholder is
an individual, the TIN is such person's social security number. The TIN of a
resident alien who does not have and is not eligible to obtain a social security
number is such person's IRS individual taxpayer identification number. If a
tendering stockholder is subject to backup withholding, the stockholder must
cross out item (2) of the Certification box on the Substitute Form W-9. If the
Depositary is not provided with the correct TIN, the stockholder may be subject
to a $50 penalty imposed by the Internal Revenue Service ("IRS"). In addition,
payments that are made to such stockholder with respect to Shares purchased
pursuant to the Offer may be subject to backup withholding.
CERTAIN STOCKHOLDERS (INCLUDING, AMONG OTHERS, ALL CORPORATIONS AND CERTAIN
FOREIGN INDIVIDUALS) ARE NOT SUBJECT TO BACKUP WITHHOLDING. IN ORDER FOR A
FOREIGN INDIVIDUAL TO QUALIFY AS AN EXEMPT RECIPIENT, THAT STOCKHOLDER MUST
SUBMIT TO THE DEPOSITARY A PROPERLY COMPLETED IRS FORM W-8, SIGNED UNDER
PENALTIES OF PERJURY, ATTESTING TO THAT INDIVIDUAL'S EXEMPT STATUS. SUCH FORMS
MAY BE OBTAINED FROM THE DEPOSITARY. EXEMPT STOCKHOLDERS, OTHER THAN FOREIGN
INDIVIDUALS, SHOULD FURNISH THEIR TIN, WRITE "EXEMPT" ON THE FACE OF THE
SUBSTITUTE FORM W-9 BELOW, AND SIGN, DATE AND RETURN THE SUBSTITUTE FORM W-9 TO
THE DEPOSITARY. SEE THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL INSTRUCTIONS.
IF BACKUP WITHHOLDING APPLIES, THE DEPOSITARY IS REQUIRED TO WITHHOLD 31% OF
ANY PAYMENTS MADE TO THE STOCKHOLDER. BACKUP WITHHOLDING IS NOT AN ADDITIONAL
TAX. RATHER, THE TAX LIABILITY OF PERSONS SUBJECT TO BACKUP WITHHOLDING WILL BE
REDUCED BY THE AMOUNT OF TAX WITHHELD. IF WITHHOLDING RESULTS IN AN OVERPAYMENT
OF TAXES, A REFUND MAY BE OBTAINED FROM THE IRS.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments that are made to a stockholder
with respect to Shares purchased pursuant to the Offer, the stockholder is
required to notify the Depositary of such stockholder's correct TIN by
completing the Substitute Form W-9 below certifying that the TIN provided on
such form is correct (or that such stockholder is awaiting a TIN) and that (i)
such holder is exempt from backup withholding, (ii) such holder has not been
notified by the IRS that such holder is subject to backup withholding as a
result of a failure to report all interest or dividends, or (iii) the IRS has
notified such holder that such holder is no longer subject to backup withholding
(see Part 2 of Substitute Form W-9).
WHAT NUMBER TO GIVE THE DEPOSITARY
The stockholder is required to give the Depositary the social security
number, individual taxpayer identification 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 guidelines on which number to report. If the tendering stockholder
has not been issued a TIN and has applied for a number or intends to apply for a
number in the near future, such stockholder should write "Applied For" in the
space provided for in the TIN in Part 1, and sign and date the Substitute Form
W-9. If "Applied For" is written in Part 1 and the Depositary is not provided
with a TIN within 60 days, the Depositary will withhold 31% on all payments of
the purchase price until a TIN is provided to the Depositary.
<PAGE>
PAYER'S NAME: CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
<TABLE>
<S> <C> <C>
SUBSTITUTE PART 1--PLEASE PROVIDE YOUR TIN IN THE BOX SOCIAL SECURITY NUMBER
FORM W-9 AT RIGHT AND CERTIFY BY SIGNING AND DATING OR Employer identification number
BELOW -----------------------------
(If awaiting TIN write "Applied
For")
</TABLE>
<TABLE>
<S> <C> <C>
PART 2--For Payees exempt from backup withholding,
see the enclosed Taxpayer Identification Number
(TIN) Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 and
complete as instructed therein.
CERTIFICATION--UNDER THE PENALTIES OF PERJURY, I CERTIFY THAT:
DEPARTMENT OF THE TREASURY
(1) The number shown on this form is my correct Taxpayer Identification
INTERNAL REVENUE SERVICE Number (or a Taxpayer Identification Number has not been issued to me and
either (a) I have mailed or delivered an application to receive a
Taxpayer Identification Number to the appropriate Internal Revenue
Service ("IRS") or Social Security Administration office or (b) I intend
to mail or deliver an application in the near future. I understand that
if I do not provide a Taxpayer Identification Number within sixty (60)
days, 31% of all reportable payments made to me thereafter will be
withheld until I provide a number); and
PAYER'S REQUEST FOR TAXPAYER
IDENTIFICATION NUMBER (TIN)AND (2) I am not subject to backup withholding because (a) I am exempt from
CERTIFICATION backup withholding, (b) I have not been notified by 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.
</TABLE>
<TABLE>
<S> <C>
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 and dividends on your
tax return. If after being notified by the IRS that you were subject to backup withholding, you received another
notification from the IRS that you are no longer subject to backup withholding, do not cross out item (2). (Also
see instructions in the enclosed Guidelines for Certification of Taxpayer Identification Number on Substitute
Form W-9).
NAME:
(PLEASE PRINT)
ADDRESS:
(PLEASE PRINT)
SIGNATURE --------------------------------------------- DATE ------------, 1998
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER.
PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL
INFORMATION.
THE INFORMATION AGENT FOR THE OFFER IS:
[LOGO]
909 Third Avenue
20th Floor
New York, New York 10022
(212) 754-8000
Toll Free (800) 566-9061
Banks and Brokerage Firms please call:
(800) 662-5200
<PAGE>
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
SIGMA CIRCUITS, INC.
AT
$10.50 NET PER SHARE
BY
T10 ACQUISITION CORP.,
AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF
TYCO INTERNATIONAL LTD.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON THURSDAY, JULY 2, 1998, UNLESS THE OFFER IS EXTENDED.
June 5, 1998
To Brokers, Dealers, Commercial Banks,
Trust Companies And Other Nominees:
We have been appointed by T10 Acquisition Corp. (the "Purchaser"), a
Delaware corporation and an indirect wholly-owned subsidiary of Tyco
International Ltd. ("Tyco"), a Bermuda company, to act as Information Agent in
connection with the Purchaser's offer to purchase all of the outstanding shares
of common stock, par value $.001 per share (the "Shares"), of Sigma Circuits,
Inc., a Delaware corporation (the "Company"), at a price of $10.50 per Share,
net to the seller in cash, upon the terms and subject to the conditions set
forth in the Offer to Purchase, dated June 5, 1998 (the "Offer to Purchase"),
and the related Letter of Transmittal (which together constitute the "Offer"),
copies of which are enclosed herewith. The Offer is being made in connection
with the Agreement and Plan of Merger, dated as of June 1, 1998, among Tyco, the
Purchaser and the Company.
Please furnish copies of the enclosed materials to those of your clients for
whose accounts you hold Shares registered in your name or in the name of your
nominee.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER A NUMBER OF
SHARES REPRESENTING AT LEAST A MAJORITY OF THE TOTAL NUMBER OF OUTSTANDING
SHARES OF THE COMPANY ON A FULLY DILUTED BASIS AS OF THE DATE THE SHARES ARE
ACCEPTED FOR PAYMENT PURSUANT TO THE OFFER. CERTAIN EXECUTIVE OFFICERS AND
DIRECTORS OF THE COMPANY, WHO OWN 458,146 ISSUED AND OUTSTANDING SHARES,
CONSTITUTING APPROXIMATELY 7.2% OF THE SHARES ON A FULLY DILUTED BASIS
(APPROXIMATELY 21.9% OF THE SHARES ON A FULLY DILUTED BASIS INCLUDING 942,219
SHARES ISSUABLE TO THEM UPON THE EXERCISE OF OPTIONS AND OTHER RIGHTS TO ACQUIRE
SHARES), HAVE AGREED TO TENDER THEIR SHARES IN THE OFFER.
<PAGE>
For your information and for forwarding to your clients, we are enclosing
the following documents:
1. The Offer to Purchase.
2. The Letter of Transmittal to be used by stockholders of the Company
in accepting the Offer. Facsimile copies of the Letter of Transmittal (with
manual signatures) may be used to tender Shares.
3. A letter to stockholders of the Company from B. Kevin Kelly,
President, Chief Executive Officer and Director of the Company, together
with a Solicitation/Recommendation Statement on Schedule 14D-9 filed by the
Company with the Securities and Exchange Commission and mailed to the
stockholders of the Company.
4. A printed form of letter which 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.
5. The Notice of Guaranteed Delivery to be used to accept the Offer if
certificates representing Shares are not immediately available or if time
will not permit all required documents to reach the Depositary prior to the
Expiration Date (as defined in Section 1 of the Offer to Purchase) or if the
procedures for book-entry transfer cannot be completed on a timely basis.
6. Guidelines of the Internal Revenue Service for Certification of
Taxpayer Identification Number on Substitute Form W-9.
7. A return envelope addressed to ChaseMellon Shareholder Services,
L.L.C., as Depositary.
Your attention is directed to the following:
1. The tender price is $10.50 per Share, net to the seller in cash.
2. THE BOARD OF DIRECTORS OF THE COMPANY HAS DETERMINED THAT THE OFFER
AND THE MERGER (AS DEFINED IN THE OFFER TO PURCHASE) ARE FAIR TO, AND IN THE
BEST INTERESTS OF, THE COMPANY AND ITS STOCKHOLDERS, HAS APPROVED THE MERGER
AGREEMENT, THE OFFER AND THE MERGER, AND RECOMMENDS THAT THE COMPANY'S
STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER.
3. The Offer and withdrawal rights will expire at 12:00 Midnight, New
York City time, on Thursday, July 2, 1998, unless the Offer is extended.
4. The Offer is being made for all of the outstanding Shares. The Offer
is conditioned upon, among other things, there being validly tendered and
not withdrawn prior to the expiration of the Offer a number of Shares
representing at least a majority of the total number of outstanding Shares
of the Company on a fully diluted basis as of the date the Shares are
accepted for payment pursuant to the Offer. Certain executive officers and
directors of the Company, who own 458,146 issued and outstanding Shares,
constituting approximately 7.2% of the Shares on a fully diluted basis
(approximately 21.9% of the Shares on a fully diluted basis including
942,219 Shares issuable to them upon the exercise of options and other
rights to acquire Shares), have agreed to tender their Shares in the Offer.
5. Stockholders who tender Shares will not be obligated to pay
brokerage fees, commissions or, except as set forth in Instruction 6 of the
Letter of Transmittal, transfer taxes on the purchase of Shares by the
Purchaser 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), the Purchaser will accept for payment and pay for all Shares which
are validly tendered on or prior to the Expiration Date and not theretofore
withdrawn pursuant to the Offer to Purchase. In all cases, payment for Shares
accepted for payment pursuant to the Offer will be made only after timely
receipt by the Depositary of (i) certificates representing such Shares (or a
timely confirmation of a book-entry transfer of such Shares into the
2
<PAGE>
Depositary's account at The Depository Trust Company, pursuant to the procedures
described in Section 2 of the Offer to Purchase), (ii) a properly completed and
duly executed Letter of Transmittal (or facsimile thereof) with any required
signature guarantees (or, in connection with a book-entry transfer, an Agent's
Message (as defined in Section 2 of the Offer to Purchase)), and (iii) all other
documents required by the Letter of Transmittal.
If holders of Shares wish to tender, but it is impracticable for them to
forward their certificates or other required documents prior to the expiration
of the Offer, a tender may be effected by following the guaranteed delivery
procedures specified under Section 2, "Procedure for Tendering Shares," in the
Offer to Purchase.
The Purchaser will not pay any fees or commissions to any broker or dealer
or to any other person (other than the Information Agent) in connection with the
solicitation of tenders of Shares pursuant to the Offer. The Purchaser will,
however, upon request, reimburse you for customary mailing and handling expenses
incurred by you in forwarding the enclosed materials to your clients. The
Purchaser will pay or cause to be paid any transfer taxes payable on the
transfer of Shares to it, except as otherwise provided in Instruction 6 of the
enclosed Letter of Transmittal.
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS
PROMPTLY AS POSSIBLE. PLEASE NOTE THAT THE OFFER AND WITHDRAWAL RIGHTS WILL
EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON THURSDAY, JULY 2, 1998, UNLESS
THE OFFER IS EXTENDED.
Any inquiries you may have with respect to the Offer should be directed to,
and additional copies of the enclosed materials may be obtained by contacting,
the undersigned at (800) 566-9061 or (212) 754-8000 (call collect). Banks and
brokerage firms please call (800) 662-5200.
Very truly yours,
[LOGO]
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
OR ANY PERSON AS AN AGENT OF THE PURCHASER, TYCO, THE DEPOSITARY OR THE
INFORMATION AGENT, OR ANY AFFILIATE OF ANY OF THE FOREGOING, OR AUTHORIZE YOU OR
ANY OTHER PERSON TO GIVE ANY INFORMATION OR USE ANY DOCUMENT OR MAKE ANY
STATEMENTS ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE
DOCUMENTS ENCLOSED AND THE STATEMENTS CONTAINED THEREIN.
3
<PAGE>
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
SIGMA CIRCUITS, INC.
AT
$10.50 NET PER SHARE
BY
T10 ACQUISITION CORP.,
AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF
TYCO INTERNATIONAL LTD.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON THURSDAY, JULY 2, 1998, UNLESS THE OFFER IS EXTENDED.
To Our Clients:
Enclosed for your consideration is an Offer to Purchase, dated June 5, 1998
(the "Offer to Purchase"), and the related Letter of Transmittal (which together
constitute the "Offer") relating to the offer by T10 Acquisition Corp., a
Delaware corporation (the "Purchaser") and an indirect wholly-owned subsidiary
of Tyco International Ltd., a Bermuda company ("Tyco"), to purchase all of the
outstanding shares of common stock, par value $.001 per share (the "Shares"), of
Sigma Circuits, Inc., a Delaware corporation (the "Company"), at a price of
$10.50 per Share, net to the seller in cash, upon the terms and subject to the
conditions set forth in the Offer. The Offer is being made in connection with
the Agreement and Plan of Merger, dated as of June 1, 1998, among Tyco, the
Purchaser and the Company.
WE ARE THE HOLDER OF RECORD OF SHARES FOR YOUR ACCOUNT. A TENDER OF SUCH
SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD AND PURSUANT TO YOUR
INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR YOUR INFORMATION
ONLY AND CANNOT BE USED BY YOU TO TENDER SHARES HELD BY US FOR YOUR ACCOUNT.
We request instructions as to whether you wish to have us tender on your
behalf any or all of the Shares held by us for your account, pursuant to the
terms and conditions set forth in the Offer.
Your attention is directed to the following:
1. The tender price is $10.50 per Share, net to you in cash.
2. THE BOARD OF DIRECTORS OF THE COMPANY HAS DETERMINED THAT THE OFFER
AND THE MERGER (AS DEFINED IN THE OFFER TO PURCHASE) ARE FAIR TO, AND IN THE
BEST INTERESTS OF, THE COMPANY AND ITS STOCKHOLDERS, HAS APPROVED THE MERGER
AGREEMENT, THE OFFER AND THE MERGER, AND RECOMMENDS THAT THE COMPANY'S
STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER.
3. The Offer and withdrawal rights will expire at 12:00 Midnight, New
York City time, on Thursday, July 2, 1998, unless the Offer is extended.
<PAGE>
4. The Offer is being made for all of the outstanding Shares. The Offer
is conditioned upon, among other things, there being validly tendered and
not withdrawn prior to the expiration of the Offer a number of Shares
representing at least a majority of the total number of outstanding Shares
of the Company on a fully diluted basis as of the date the Shares are
accepted for payment pursuant to the Offer. Certain executive officers and
directors of the Company, who own 458,146 issued and outstanding Shares,
constituting approximately 7.2% of the Shares on a fully diluted basis
(approximately 21.9% of the Shares on a fully diluted basis including
942,219 Shares issuable to them upon the exercise of options and other
rights to acquire Shares), have agreed to tender their Shares in the Offer.
5. Stockholders who tender Shares will not be obligated to pay
brokerage fees, commissions or, except as set forth in Instruction 6 of the
Letter of Transmittal, transfer taxes on the purchase of Shares by Purchaser
pursuant to the Offer.
If you wish to have us tender any or all of your Shares, please complete,
sign and return the instruction form set forth below. An envelope to return your
instructions to us is enclosed. If you authorize the tender of your Shares, all
such Shares will be tendered unless otherwise specified on the instruction form
set forth below. PLEASE FORWARD YOUR INSTRUCTIONS TO US AS SOON AS POSSIBLE TO
ALLOW US AMPLE TIME TO TENDER YOUR SHARES ON YOUR BEHALF PRIOR TO THE EXPIRATION
OF THE OFFER.
The Offer is made solely by the Offer to Purchase and the related Letter of
Transmittal and any supplements and amendments thereto. The Purchaser is not
aware of any state where the making of the Offer is prohibited by administrative
or judicial action pursuant to any valid state statute. If the Purchaser becomes
aware of any valid state statute prohibiting the making of the Offer or the
acceptance of Shares pursuant thereto, the Purchaser will make a good faith
effort to comply with any such state statute or seek to have such statute
declared inapplicable to the Offer. If, after such good faith effort, the
Purchaser cannot comply with any such state statute, the Offer will not be made
to (nor will tenders be accepted from or on behalf of) the holders of Shares in
such state. In any jurisdiction where the securities, blue sky or other laws
require the Offer to be made by a licensed broker or dealer, the Offer will be
deemed to be made on behalf of the Purchaser by one or more registered brokers
or dealers licensed under the laws of such jurisdiction.
INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE
FOR CASH ALL OUTSTANDING SHARES OF COMMON STOCK
OF
SIGMA CIRCUITS, INC.
The undersigned acknowledge(s) receipt of your letter and the enclosed Offer
to Purchase, dated June 5, 1998, and the related Letter of Transmittal (which
together constitute the "Offer") relating to the offer by T10 Acquisition Corp.
(the "Purchaser"), a Delaware corporation and an indirect wholly-owned
subsidiary of Tyco International Ltd., a Bermuda company, to purchase all of the
outstanding shares of common stock, par value $.001 per share (the "Shares"), of
Sigma Circuits, Inc., a Delaware corporation, at a price of $10.50 per Share,
net to the seller in cash.
2
<PAGE>
This will instruct you to tender to the Purchaser the number of Shares
indicated below (or if no number is indicated below, all Shares) held by you for
the account of the undersigned, upon the terms and subject to the conditions set
forth in the Offer.
<TABLE>
<S> <C>
Number of Shares to be Tendered:*
Shares SIGN HERE
Signature(s)
Account Number:
Please print name(s) and address(es) here
Area Code and Telephone Number(s)
Dated , 1998
Tax Identification or Social Security Number
</TABLE>
- ------------------------
* Unless otherwise indicated, it will be assumed that all of your Shares held
by us for your account are to be tendered.
3
<PAGE>
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK
OF
SIGMA CIRCUITS, INC.
TO
T10 ACQUISITION CORP.,
AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF
TYCO INTERNATIONAL LTD.
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
This form, or one substantially equivalent hereto, must be used to accept
the Offer (as defined below) if certificates representing shares of common
stock, par value $.001 per share (the "Shares"), of Sigma Circuits, Inc., a
Delaware corporation, are not immediately available (or if the procedure for
book-entry transfer cannot be completed on a timely basis), or if time will not
permit all required documents to reach the Depositary prior to the Expiration
Date (as defined in Section 1 of the Offer to Purchase). Such form may be
delivered by hand or transmitted by facsimile transmission or mail to the
Depositary. See Section 2 of the Offer to Purchase.
THE DEPOSITARY FOR THE OFFER IS:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
<TABLE>
<CAPTION>
BY HAND OR
BY MAIL: BY OVERNIGHT COURIER: BY FACSIMILE:
<S> <C> <C>
ChaseMellon ChaseMellon (201) 329-8936
Shareholder Services, L.L.C. Shareholder Services, L.L.C. (For Eligible Institutions
P.O. Box 3301 120 Broadway, 13th Floor Only)
South Hackensack, NJ 07606 New York, NY 10271 CONFIRM BY TELEPHONE:
(201) 296-4860
</TABLE>
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION OTHER
THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
This form is not to be used to guarantee signatures. If a signature on a
Letter of Transmittal is required to be guaranteed by an "Eligible Institution"
under the instructions thereto, such signature guarantee must appear in the
applicable space provided in the signature box on the Letter of Transmittal.
The Eligible Institution that completes this form must communicate the
guarantee to the Depositary and must deliver the Letter of Transmittal or an
Agent's Message (as defined in Section 2 of the Offer to Purchase) and
certificates representing the Shares to the Depositary within the time period
specified herein. Failure to do so could result in a financial loss to the
Eligible Institution.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to T10 Acquisition Corp., a Delaware
corporation and an indirect wholly-owned subsidiary of Tyco International Ltd.,
a Bermuda company, upon the terms and subject to the conditions set forth in the
Offer to Purchase dated June 5, 1998, (the "Offer to Purchase") and the related
Letter of Transmittal (which together constitute the "Offer"), receipt of which
is hereby acknowledged, the number of Shares specified below pursuant to the
guaranteed delivery procedures set forth in Section 2 of the Offer to Purchase.
Number of Shares _______________________________________________________________
Certificate No(s). (if available)
________________________________________________________________________________
/ / CHECK BOX IF SHARES WILL BE TENDERED BY BOOK-ENTRY TRANSFER.
Name of Tendering Institution:
________________________________________________________________________________
Account Number _________________________________________________________________
Dated ____________________________________________________________________, 1998
Name(s) of Record Holder(s)
________________________________________________________________________________
(Please type or Print)
Address(es)
________________________________________________________________________________
________________________________________________________________________________
(Zip Code)
Area Code and Tel. No(s).
________________________________________________________________________________
Signature(s)
________________________________________________________________________________
________________________________________________________________________________
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a member in good standing of the Security Transfer Agent's
Medallion Program, the New York Stock Exchange Medallion Signature Program or
the Stock Exchange Medallion Program (each, an "Eligible Institution"), (a)
represents that the above named person(s) own(s) the Shares tendered hereby
within the meaning of Rule 14e-4 promulgated under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), (b) represents that such tender of
Shares complies with Rule 14e-4 under the Exchange Act, and (c) guarantees
delivery to the Depositary, at one of its addresses set forth above, of
certificates representing the Shares tendered hereby in proper form for
transfer, or confirmation of book-entry transfer of such Shares into the
Depositary's accounts at The Depository Trust Company, in each case with
delivery of a properly completed and duly executed Letter of Transmittal (or
facsimile thereof) with any required signature guarantees, or an Agent's Message
in the case of a book-entry transfer, and any other required documents, within
three Nasdaq National Market trading days after the date hereof.
<TABLE>
<S> <C>
(Name of Firm) (Authorized signature)
(Address) (Title)
(Zip code) (Please Type or Print)
Date , 1998
(Area Code and Tel. No.)
</TABLE>
NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE OF GUARANTEED
DELIVERY. CERTIFICATES REPRESENTING SHARES SHOULD BE SENT
WITH YOUR LETTER OF TRANSMITTAL.
2
<PAGE>
Tyco International To Acquire Sigma Circuits
HAMILTON, Bermuda and SANTA CLARA, Calif., June 2/PRNewswire/--Tyco
Internation Ltd. (NYSE: TYC, LSE: TYI, BSX: TYC) (Tyco), a diversified
manufacturing and service company, and Sigma Circuits, Inc. (Nasdaq: SIGA)
(Sigma), a leading manufacturer of electronic interconnect products, announced
today that they have entered into a definitive Merger Agreement purusant to
which Tyco will purchase all of the outstanding common shares of Sigma.
Under the Agreement, a subsidiary of Tyco will shrotly commence a tender
offer to purchase all of Sigma's approximately 5.5 million shares of common
stock and common stock equivalents for $10.50 per share in cash. The offer is
conditioned on the tender of a majority of the outstanding shares of common
stock on a fully diluted basis, regulatory approvals, and certain other
conditions.
Sigma, with estimated fiscal 1998 revenues of approximately $94 million, is
headquartered in Santa Clara, California. They have four manufacturing
facilities in California, three in Santa Clara, and one in Stockton. Sigma is a
leading quick-turn manufacturer of specialized electronic interconnect products,
including multilayer rigid printed circuit boards, backplane assemblies and
subassemblies and flexible circuits. It will become part of the Tyco Printed
Circuit Group, headquartered in Stafford, CT, one of the country's largest
independent circuit board manufacturers.
"The Tyco Printed Circuit Group's significant organic growth over the
last three years has created a need for additional capacity. Sigma is an
excellent fit with the Tyco Printed Circuit Group as it provides us with the
capacity to expand our business organically. Sigma gives us west coast
locations to produce complex multilayer circuit boards, backplanes and
flexible cirucits which readily complement the product lines and customer
base of our printed cirucit operations," said L. Dennis Kozlowski, Tyco's
Chairman and Chief Executive Officer. Mr. Kozlowski also noted that the
acquisition will provide an immediate positve contribution to Tyco's earnings.
B. Kevin Kelly, President and Chief Executive Officer of Sigma stated,
"This transaction provides superior value to our shareholders. We are a
natural complement to the Tyco Printed Circuit Group, providing strategically
located manufacturing capacity through which the Tyco Printed Circuit Group
can continue its high rate of growth."
Tyco International Ltd., a diversified manufacturing and service company,
is the world's largest manufacturer and installer of fire protection systems,
the largest provider of electronic security services, and has strong
leadership positions in disposable medical products, packaging materials,
flow control products, electrical and electronic components and undersea
telecommunications systems. The company operates in more than 80 countries
around the world and has expected annual revenues in excess of $13 billion.
FORWARD LOOKING INFORMATION
Certain statements in this release are "forward looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995. All forward
looking statements involve risks and uncertainties. In particular, any
statements contained herein regarding the consummation and benefits of future
acquisitions, as well as expectations with respect to future sales, operating
efficiencies and product expansion, are subject to known and unknown risks,
uncertainties and contingencies, many of which are beyond the control of the
Company, which may cause actual results, performance or achievements to differ
materially from anticipated results, performance or achievements. Factors that
might affect such forward looking statements include, among other things,
overall economic and business conditions, the demand for the Company's goods and
services, competitive factors in the industries in which the Company competes,
changes in government regulation and the timing, impact and other
1 of 2
<PAGE>
uncertainties of future acquisitions.
SOURCE Tyco International Ltd.
Company News On Call: http://www.prnewswire.com or fax 800-758-5804, ext 897850
CONTACT: J. Brad McGee, Senior Vice President of Tyco International (US) Inc.,
603-778-9700 or B. Kevin Kelly, President and Chief Executive Officer of Sigma
Circuits, Inc., 408-727-9169.
2 of 2
<PAGE>
This announcement is neither an offer to purchase nor a solicitation of an
offer to sell Shares. The Offer is made solely by the Offer to Purchase, dated
June 5, 1998, and the related Letter of Transmittal and is not being made to
(nor will tenders be accepted from or on behalf of) holders of Shares in any
jurisdiction in which the making of the Offer or the acceptance thereof would
not be in compliance with the laws of such jurisdiction. In any jurisdiction the
securities laws of which require the Offer to be made by a licensed broker or
dealer, the Offer shall be deemed made on behalf of the Purchaser by one or more
registered brokers or dealers licensed under the laws of such jurisdiction.
NOTICE OF OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
SIGMA CIRCUITS, INC.
AT
$10.50 NET PER SHARE
BY
T10 ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY OF
TYCO INTERNATIONAL LTD.
T10 Acquisition Corp., a Delaware corporation (the "Purchaser") and an
indirect wholly owned subsidiary of Tyco International Ltd., a Bermuda company
("Tyco"), is offering to purchase all outstanding shares of common stock, par
value $.001 per share (the "Shares"), of Sigma Circuits, Inc., a Delaware
corporation (the "Company"), at $10.50 per Share, net to the seller in cash (the
"Offer Price"), upon the terms and subject to the conditions set forth in the
Offer to Purchase, dated June 5, 1998, and in the related Letter of Transmittal
(which together constitute the "Offer").
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON THURSDAY, JULY 2, 1998, UNLESS EXTENDED.
The Offer is conditioned upon, among other things, there being validly
tendered and not withdrawn prior to the expiration of the Offer at least that
number of Shares which would constitute a majority of the outstanding Shares on
a fully diluted basis (the "Minimum Condition"). Certain execuitve officers and
directors of the Company, which beneficially own 458,146 issued and outstanding
Shares (and options and other rights to purchase 942,219 Shares), constituting
7.2% of the Shares on a fully diluted basis (and 21.9% of the Shares on a fully
diluted basis assuming the exercise of the aforesaid options and other rights),
have agreed to tender their Shares in the Offer.
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of June 1, 1998 (the "Merger Agreement"), among Tyco, the Purchaser and the
Company pursuant to which, following the consummation of the Offer and the
satisfaction or waiver of certain conditions, the Purchaser will be merged with
and into the Company (the "Merger"). At the effective time of the Merger, each
outstanding Share (other than Shares held in the Company's treasury, or owned by
Tyco, the Purchaser or any other wholly owned subsidiary of Tyco or held by
stockholders, if any, who are entitled to and who properly exercise dissenters'
rights under Delaware law) will be converted into the right to receive the Offer
Price, without interest.
The Board of Directors of the Company has determined that the Offer and the
Merger are fair to, and in the best interests of, the Company and its
stockholders, has approved the Merger Agreement, the Offer and the Merger, and
recommends that the Company's stockholders accept the Offer and tender their
Shares pursuant to the Offer.
<PAGE>
For purposes of the Offer, the Purchaser will be deemed to have accepted for
payment, and thereby purchased, Shares properly tendered to the Purchaser and
not withdrawn as, if and when the Purchaser gives oral or written notice to
ChaseMellon Shareholder Services, L.L.C. (the "Depositary") of the Purchaser's
acceptance for payment of such Shares. Upon the terms and subject to the
conditions of the Offer, payment for Shares purchased pursuant to the Offer will
be made by deposit of the purchase price therefor with the Depositary, which
will act as agent for tendering stockholders for the purpose of receiving
payment from the Purchaser and transmitting payment to tendering stockholders.
In all cases, payment for Shares purchased pursuant to the Offer will be made
only after timely receipt by the Depositary of (a) certificates for such Shares
or timely confirmation of book-entry transfer of such Shares into the
Depositary's account at a Book-Entry Transfer Facility (as defined in the Offer
to Purchase) pursuant to the procedures set forth in Section 2 of the Offer to
Purchase, (b) a properly completed and duly executed Letter of Transmittal (or
facsimile thereof) with any required signature guarantees and (c) any other
documents required by the Letter of Transmittal. Under no circumstances will
interest be paid by the Purchaser on the purchase price of the Shares,
regardless of any extension of the Offer or any delay in making such payment.
The term "Expiration Date" means 12:00 Midnight, New York City time, on
Thursday, July 2, 1998, unless and until the Purchaser, in its sole discretion
(but subject to the terms of the Merger Agreement), shall have extended the
period of time during which the Offer is open, in which event the term
"Expiration Date" shall mean the latest time and date at which the Offer, as so
extended by the Purchaser, shall expire. The Purchaser expressly reserves the
right, in its sole discretion (but subject to the terms of the Merger
Agreement), at any time or from time to time, and regardless of whether or not
any of the events set forth in Section 15 of the Offer to Purchase shall have
occurred or shall have been determined by the Purchaser to have occurred, to
extend the period of time during which the Offer is open and thereby delay
acceptance for payment of, and the payment for, any Shares, by giving oral or
written notice of such extension to the Depositary. The Purchaser shall not have
any obligation to pay interest on the purchase price for tendered Shares in the
event the Purchaser exercises its right to extend the period of time during
which the Offer is open. There can be no assurance that the Purchaser will
exercise its right to extend the Offer. Any such extension will be followed by a
public announcement thereof no later than 9:00 A.M., New York City time, on the
next business day after the previously scheduled Expiration Date. During any
such extension, all Shares previously tendered and not withdrawn will remain
subject to the Offer, subject to the right of a tendering stockholder to
withdraw such stockholder's Shares.
Except as otherwise provided below, tenders of Shares are irrevocable.
Shares tendered pursuant to the Offer may be withdrawn at any time prior to
12:00 Midnight, New York City time, on Thursday, July 2, 1998 (or, if the
Purchaser shall have extended the period of time during which the Offer is open,
the latest time and date at which the Offer, as so extended by the Purchaser,
shall expire) and, unless theretofore accepted for payment and paid for by the
Purchaser pursuant to the Offer, may also be withdrawn at any time on or after
August 5, 1998. For a withdrawal to be effective, a written, telegraphic or
facsimile transmission notice of withdrawal must be timely received by the
Depositary at one of its addresses set forth on the back cover of the Offer to
Purchase and must specify the name of the person having tendered the Shares to
be withdrawn, the number of Shares to be withdrawn and the name of the
registered holder of the Shares to be withdrawn, if different from the name of
the person who tendered the Shares. If certificates for Shares have been
delivered or otherwise identified to the Depositary, then, prior to the physical
release of such certificates, the serial numbers shown on such certificates must
be submitted to the Depositary and, unless such Shares have been tendered by an
Eligible Institution (as defined in Section 2 of the Offer to Purchase), the
signatures on the notice of withdrawal must be guaranteed by an Eligible
Institution. If Shares have been delivered pursuant to the procedures for
book-entry transfer as set forth in Section 2 of the Offer to Purchase, any
notice of withdrawal must also specify the name and number of the account at the
appropriate Book-Entry Transfer Facility to be credited with the withdrawn
Shares and otherwise comply with such Book-Entry Transfer Facility's procedures.
Withdrawals of tenders of Shares may not be rescinded, and any Shares properly
withdrawn will thereafter be deemed not validly tendered
2
<PAGE>
for purposes of the Offer. However, withdrawn Shares may be retendered by again
following one of the procedures described in Section 2 of the Offer to Purchase
at any time prior to the Expiration Date.
The Offer to Purchase and the related Letter of Transmittal and other
relevant materials will be mailed to record holders of Shares and furnished to
brokers, dealers, banks, trust companies and similar persons whose names, or the
names of whose nominees, appear on the stockholder lists or, if applicable, who
are listed as participants in a clearing agency's security position listing, for
subsequent transmittal to beneficial owners of Shares.
The information required to be disclosed by Rule 14d-6(e)(1)(vii) under the
Securities Exchange Act of 1934, as amended, is contained in the Offer to
Purchase and is incorporated herein by reference.
The 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.
Requests for copies of the Offer to Purchase and the Letter of Transmittal
may be directed to the Information Agent as set forth below, and copies will be
furnished promptly at the Purchaser's expense.
The Information Agent for the Offer is:
[LOGO]
909 Third Avenue
New York, New York 10022
(212) 754-8000
Toll Free (800) 566-9061
Banks and Brokerage Firms Please Call:
(800) 662-5200
June 5, 1998
3
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER.--Social Security numbers have nine digits separated by two hyphens: i.e.,
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen: i.e., 00-0000000. The table below will help determine the number to
give the payer.
- --------------------------------------------
<TABLE>
<CAPTION>
GIVE THE NAME AND
SOCIAL SECURITY
FOR THIS TYPE OF ACCOUNT: NUMBER OF --
<C> <S> <C>
- -------------------------------------------------------
1. Individual The individual
2. Two or more individuals The actual owner of the
(joint account) account or, if combined
funds, the first
individual on the
account(1)
3. Custodian account of a The minor(2)
minor (Uniform Gift to
Minors Act)
4. a. The usual revocable The grantor-trustee(1)
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(3)
</TABLE>
- --------------------------------------------
<TABLE>
<CAPTION>
GIVE THE NAME AND
EMPLOYER
IDENTIFICATION
FOR THIS TYPE OF ACCOUNT: NUMBER OF --
<C> <S> <C>
-------------------------------------------------------
6. A valid trust, estate, The legal entity(4)
or pension trust
7. Corporate The corporation
8. Association, club, The organization
religious, charitable,
educational or other
tax-exempt organization
9. Partnership The partnership
10. A broker or registered The broker or nominee
nominee
11. Account with the The public entity
Department of Agricul-
ture in the name of a
public entity (such as a
state or local govern-
ment, school district,
or prison) that receives
agricultural program
payments
</TABLE>
_______________________________________ _______________________________________
(1) List first and circle the name of the person whose number you furnish. If
only one person on a joint account has a social security number, that
person's number must be furnished.
(2) Circle the minor's name and furnish the minor's social security number.
(3) You must show your individual name, but you may also enter your business or
"doing business as" name. You may use either your social security number or
employer identification number (if you have one).
(4) 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>
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, or Form
SS-4, Application for an Employer Identification Number, at the local office of
the Social Security Administration or the Internal Revenue Service and apply for
a number. United States resident aliens who cannot obtain a social security
number must apply for an ITIN (Individual Taxpayer Identification Number) on
Form W-7.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on payments of interest,
dividends and with respect to broker transactions include the following:
- A corporation.
- A financial institution.
- An organization exempt from tax under section 501(a), 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 political subdivision or instrumentality thereof.
- A foreign government, or any a political subdivision, agency or
instrumentality thereof.
- An international organization or any agency or instrumentality thereof.
- A dealer in securities or commodities required to register in the United
States, the District of Columbia, or a possession of the United States.
- A real estate investment trust.
- A common trust fund operated by a bank under section 584(a).
- An exempt charitable remainder trust, or a non-exempt trust described in
section 4947.
- An entity registered at all times under the Investment Company Act of
1940.
- A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
- Payments to nonresident aliens subject to withholding under section 1441.
- Payments to partnerships not engaged in a trade or business in the United
States and which have at least one nonresident alien partner.
- Payments of patronage dividends not paid in money.
- Payments made by certain foreign organizations.
- Payments made to a middleman known in the investment community as a
nominee or who is listed in the most recent publication of the American
Society of Corporate Secretaries, Inc., Nominee List.
Payments of interest not generally subject to backup withholding include the
following:
- Payments of interest on obligations issued by individuals. Note: You may
be subject to backup withholding if this interest is $600 or more and is
paid in the course of the payer's trade or business and you have not
provided your correct taxpayer identification number to the payer.
- Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
- Payments described in section 6049(b)(5) to nonresident aliens.
- Payments on tax-free covenant bonds under section 1451.
- Payments made by certain foreign organizations.
- Payments made to a middleman known in the investment community as a
nominee or who is listed in the most recent publication of the American
Society of Corporate Secretaries, Inc., Nominee List.
Exempt payees described above should file Form W-9 to avoid possible erroneous
backup withholding.
FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER IDENTIFICATION NUMBER,
WRITE "EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT TO THE PAYER. IF THE
PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS, ALSO SIGN AND DATE THE
FORM.
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.--Willfully falsifying
certifications or affirmations may subject you to criminal penalties including
fines and/or imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE
<PAGE>
Exhibit 99(c)(1)
March 26, 1998
Kevin Kelly, CEO
Sigma Circuits, Inc.
393 Mathew Street
Santa Clara, CA 95050
Dear Kevin:
In connection with our possible interest in a transaction involving the
acquisition of Sigma Circuits, Inc. (the "Company"), you are furnishing us or
our representatives with certain information which is either non-public,
confidential or proprietary in nature. All information furnished to us or our
representatives by the Company or any of its employees, representatives, agents
or advisors (including attorneys, accountants and financial advisors) shall be
considered confidential and proprietary and, together with analyses,
compilations, forecasts, studies or other documents prepared by us, our agents,
advisors (including attorneys, accountants and financial advisors),
representatives or employees which contain such information, is hereinafter
referred to as the "Information". In consideration of the Company furnishing us
with the information, we agree that:
1. The Information will be kept confidential and shall not, without the prior
written consent of the Company, be disclosed by us, or by our agents,
representatives, advisors or employees, in any manner whatsoever, in whole or in
part, and shall not be used by us, our agents, representatives, advisors or
employees, other than to determine whether we wish to enter into, or other than
in connection with, the transaction described above. Moreover, we agree to
reveal the Information only to our agents, representatives, advisors and
employees who need to know the Information for the purpose of evaluating, or
otherwise in connection with, the transaction described above who shall agree to
act in accordance with the terms and conditions of this Agreement.
2. Without the prior written consent of the Company, except pursuant to
paragraph 5 hereof, we and our agents, representatives, advisors and employees
will not disclose to any person the fact that the Information has been made
available, that discussions or negotiations are taking place or have taken place
concerning a possible transaction involving the acquisition of the Company by us
or any of the terms, conditions, or other facts with respect to any such
possible transaction, including the status thereof.
3. All copies of the Information, except for that portion of the Information
which consists of analyses, compilations, forecasts, studies or other documents
prepared by us, our agents, representatives, advisors or employees, will be
returned to the Company promptly upon its request.
<PAGE>
Mr. Kevin Kelly
March 26, 1998
Page 2
4. The term Information shall not include such portions of the Information which
(i) are or become generally available to the public other than as a result of a
disclosure by us, our agents, representatives, advisors or employees; or (ii)
become available to us or to our agents, representatives, advisors or employees
on a non- confidential basis from a source which was not then prohibited from
disclosing such Information to us by a legal, contractual or fiduciary
obligation to the Company; or (iii) was in our possession, or in the possession
of our agents, representatives, advisors or employees, or otherwise available to
us, or our agents, representatives, advisors or employees, on a non-confidential
basis prior to its disclosure to us or one or more of our agents,
representatives, advisors or employees; or (iv) was independently developed by
us without access to or the benefit of the Information.
5. In the event that we or anyone to whom we transmit the Information pursuant
to this Agreement are requested or become legally compelled to disclose any of
the Information (whether by oral questions, interrogatories, requests for
Information or documents, subpoena, Civil Investigative Demand or similar
process or otherwise), we will provide the Company with prompt prior written
notice, so that the Company may seek a protective order or other appropriate
remedy and/or waive compliance with the provisions of this Agreement. In the
event that such protective order or other remedy is not obtained, the Company
agrees that such disclosure may be made without liability hereunder. We will
furnish only that portion of the Information which we are, in the opinion of our
counsel or the counsel of our representative, legally required to disclose and
will use our best efforts to obtain reliable assurance that confidential
treatment will be accorded the Information.
6. Standstill Provisions. During the three-year period commencing on the date of
this Agreement (the "Standstill Period"), neither we nor any entity controlled
by us will, in any manner, directly or indirectly:
(a) make , effect, initiate, cause or participate in (i) any acquisition of
beneficial ownership of any securities of the Company or any of its
subsidiaries, (ii) any acquisition of any assets of the Company or any of its
subsidiaries, (iii) any tender offer, exchange offer, merger, business
combination, recapitalization, restructuring, liquidation, dissolution or other
extraordinary transaction involving the Company or any of its securities, assets
or subsidiaries, or (iv) any "solicitation" of "proxies" (as those terms are
used in the proxy rules of the Securities and Exchange Commission) with respect
to any securities of the Company;
(b) form, join or participate in a "group" (as defined in the Securities
Exchange Act of 1934 and the rules promulgated thereunder) with respect to the
beneficial ownership of any securities of the Company;
<PAGE>
Mr. Kevin Kelly
March 26, 1998
Page 3
(c) act, alone or in concert with others, to seek to control or influence
the management, board of directors or policies of the Company;
(d) take any action that might require the Company to make a public
announcement regarding any of the types of matters set forth in clause "(a)" of
this section 6;
(e) agree or offer to take, or encourage or propose (publicly or otherwise)
the taking of, any action referred to in clause "(a)", "(b)", "(c)", or "(d)" of
this section 6;
(f) assist, induce or encourage any other person to take any action of the
type referred to in clause "(a)", "(b)", "(c)", "(d)" or "(e)" of this section
6;
(g) enter into any discussions, negotiations, arrangement or agreement with
any other person relating to any of the foregoing; or
(h) request or propose that the Company or any of the Company's
representatives amend, waive or consider the amendment or waiver of any
provision set forth in this section 6.
The expiration of the Standstill Period will not terminate or otherwise
affect any of the other provisions of this Agreement
Notwithstanding the foregoing, if an unaffiliated third party seeks to
acquire or assist, advises or encourages any other persons in seeking to
acquire, directly or indirectly, control of the Company or any of the Company's
securities, businesses or assets during the three-year period from the date of
this letter, then we will be permitted hereunder to take any such actions.
7. The confidentiality obligations created by this Agreement shall terminate
three years from the date hereof.
8. Any provision of this Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof or affecting the validity or enforceability of such provisions
in any other jurisdiction.
<PAGE>
Mr. Kevin Kelly
March 26, 1998
Page 4
9. This Agreement shall be governed by and construed in accordance with the laws
of the Commonwealth of Massachusetts without regard to principles of conflicts
of law.
Very truly yours,
TYCO INTERNATIONAL (US) INC.
By: /s/ Jeffrey D. Mattfolk
-------------------------------------------
Title: Vice President--Mergers and Acquisitions
----------------------------------------
<PAGE>
------------------------------
AGREEMENT AND PLAN OF MERGER
AMONG
TYCO INTERNATIONAL LTD.,
T10 ACQUISITION CORP.
AND
SIGMA CIRCUITS, INC.
DATED AS OF JUNE 1, 1998
------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE I THE OFFER
Section 1.1 The Offer.................................................... 1
Section 1.2 Company Actions.............................................. 3
ARTICLE II THE MERGER
Section 2.1 The Merger....................................................4
Section 2.2 Effective Time................................................4
Section 2.3 Effects of the Merger.........................................4
Section 2.4 Certificate of Incorporation and Bylaws; Directors
and Officers..................................................4
Section 2.5 Conversion of Securities......................................5
Section 2.6 Payment of Certificates.......................................6
Section 2.7 Dissenting Shares.............................................7
Section 2.8 Merger Without Meeting of Stockholders........................7
Section 2.9 No Further Ownership Rights in Common Stock...................7
Section 2.10 Closing of Company Transfer Books............................8
ARTICLE III REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB
Section 3.1 Organization and Qualification...............................8
Section 3.2 Authority Relative to this Agreement.........................8
Section 3.3 No Conflict; Required Filings and Consents...................8
Section 3.4 Brokers......................................................9
Section 3.5 Ownership of Sub; No Prior Activities........................9
Section 3.6 Financing....................................................9
Section 3.7 Full Disclosure.............................................10
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Section 4.1 Organization and Qualification; Subsidiaries................10
Section 4.2 Certificate of Incorporation and Bylaws.....................10
Section 4.3 Capitalization..............................................10
Section 4.4 Authority Relative to this Agreement........................11
Section 4.5 Contracts; No Conflict; Required Filings and Consents.......11
Section 4.6 Compliance; Permits.........................................12
Section 4.7 SEC Filings; Financial Statements...........................13
Section 4.8 Absence of Certain Changes or Events........................13
Section 4.9 No Undisclosed Liabilities..................................13
Section 4.10 Absence of Litigation.......................................14
Section 4.11 Employee Benefit Plans; Employment Agreements...............14
Section 4.12 Labor Matters...............................................17
Section 4.13 Limitation on Business Conduct..............................17
Section 4.14 Title to Property...........................................17
Section 4.15 Real Property; Leased Premises..............................18
Section 4.16 Taxes.......................................................18
i
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Section 4.17 Environmental Matters.......................................20
Section 4.18 Intellectual Property.......................................21
Section 4.19 Insurance...................................................22
Section 4.20 Accounts Receivable.........................................22
Section 4.21 Customers...................................................22
Section 4.22 Interested Party Transactions...............................22
Section 4.23 Absence of Certain Payments.................................22
Section 4.24 Takeover Statute............................................23
Section 4.25 Opinion of Financial Advisor................................23
Section 4.26 Brokers.....................................................23
Section 4.27 Full Disclosure.............................................23
ARTICLE V COVENANTS RELATING TO CONDUCT OF BUSINESS
Section 5.1 Conduct of Business by the Company Pending the Merger....... 23
Section 5.2 Acquisition Proposals........................................25
Section 5.3 Annual Meeting of Stockholders...............................26
Section 5.4 Conduct of Business of Sub Pending the Merger................26
ARTICLE VI ADDITIONAL AGREEMENTS
Section 6.1 Company Stockholder Approval; Proxy Statement................27
Section 6.2 Access to Information; Confidentiality.......................28
Section 6.3 Fees and Expenses............................................28
Section 6.4 Stock Plans and Warrants.....................................29
Section 6.5 Reasonable Best Efforts......................................29
Section 6.6 Public Announcements.........................................30
Section 6.7 Indemnification; Directors and Officers Insurance............30
Section 6.8 Board Representation.........................................31
Section 6.9 Notification of Certain Matters..............................31
ARTICLE VII CONDITIONS PRECEDENT
Section 7.1 Conditions to Each Party's Obligation to Effect the
Merger.......................................................32
ARTICLE VIII TERMINATION, AMENDMENT AND WAIVER
Section 8.1 Termination..................................................32
Section 8.2 Effect of Termination........................................34
Section 8.3 Amendment....................................................34
Section 8.4 Waiver.......................................................34
ARTICLE IX GENERAL PROVISIONS
Section 9.1 Non-Survival of Representations and Warranties...............34
Section 9.2 Notices......................................................35
Section 9.3 Interpretation...............................................36
Section 9.4 Counterparts.................................................36
Section 9.5 Entire Agreement; No Third-Party Beneficiaries...............36
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Section 9.6 Governing Law................................................36
Section 9.7 Assignment...................................................36
Section 9.8 Severability.................................................36
Section 9.9 Enforcement of this Agreement; Attorneys Fees................36
Section 9.10 Material Adverse Effect......................................37
EXHIBIT A Conditions of the Offer
</TABLE>
iii
<PAGE>
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of June 1, 1998 (this "Agreement"),
among Tyco International Ltd., a Bermuda company ("Parent"), T10 Acquisition
Corp., a Delaware corporation ("Sub") and an indirect, wholly owned subsidiary
of Parent, and Sigma Circuits, Inc., a Delaware corporation (the "Company").
W I T N E S S E T H:
WHEREAS, the respective Boards of Directors of Parent, Sub and the Company
each have approved the acquisition of the Company by Parent pursuant to a tender
offer (the "Offer") by Sub for all of the outstanding shares of Common Stock,
par value $.001 per share ("Common Stock"), of the Company at a price of $10.50
per share (the "Per Share Amount"), net to the seller in cash, without interest,
followed by a merger (the "Merger") of Sub with and into the Company, all upon
the terms and subject to the conditions set forth herein;
WHEREAS, the Board of Directors of the Company has adopted resolutions
approving the Offer and the Merger and recommending that the Company's
stockholders accept the Offer; and
WHEREAS, pursuant to the Merger, each issued and outstanding share of Common
Stock not owned directly or indirectly by Parent or the Company, except shares
of Common Stock held by holders who comply with the provisions of Delaware law
regarding the right of stockholders to dissent from the Merger and require
appraisal of their shares of Common Stock, will be converted into the right to
receive the per share consideration paid pursuant to the Offer.
NOW, THEREFORE, in consideration of the premises and the representations,
warranties, covenants and agreements herein contained, Parent, Sub and the
Company hereby agree as follows:
ARTICLE I
THE OFFER
Section 1.1 The Offer. (a) Subject to the provisions of this Agreement,
within five business days after the first public announcement of this Agreement,
Sub shall, and Parent shall cause Sub to, commence, within the meaning of Rule
14d-2 under the Securities Exchange Act of 1934, as amended (including the rules
and regulations promulgated thereunder, the "Exchange Act"), the Offer. The
obligation of Sub to, and of Parent to cause Sub to, commence the Offer and
accept for payment, and pay for, any shares of Common Stock tendered pursuant to
the Offer shall be subject to the conditions set forth in Exhibit A (the "Offer
Conditions"). The Offer shall initially expire twenty (20) business days after
the date of its commencement, unless this Agreement is terminated in accordance
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with Article VIII, in which case the Offer (whether or not previously extended
in accordance with the terms hereof) shall expire on such date of termination.
Without the prior written consent of the Company, Sub shall not (i) impose
conditions to the Offer in addition to the Offer Conditions, (ii) modify or
amend the Offer Conditions or any other term of the Offer in a manner adverse to
the holders of shares of Common Stock, (iii) waive or amend the Minimum
Condition (as defined in Exhibit A), (iv) reduce the number of shares of Common
Stock subject to the Offer, (v) reduce the Per Share Amount, (vi) except as
provided in the following sentence, extend the Offer, if all of the Offer
Conditions are satisfied or waived, or (vii) change the form of consideration
payable in the Offer. Notwithstanding the foregoing, Sub may, without the
consent of the Company, extend the Offer at any time, and from time to time, (i)
if at the then scheduled expiration date of the Offer any of the conditions to
Sub's obligation to accept for payment and pay for shares of Common Stock shall
not have been satisfied or waived, until such time as such conditions are
satisfied or waived; (ii) for any period required by any rule, regulation,
interpretation or position of the Securities and Exchange Commission (the "SEC")
or its staff applicable to the Offer; or (iii) if all Offer Conditions are
satisfied or waived but the number of shares of Common Stock tendered is less
than 90% of the then outstanding number of shares of Common Stock, for an
aggregate period of not more than 10 business days (for all such extensions)
beyond the latest expiration date that would be permitted under clause (i) or
(ii) of this sentence. So long as this Agreement is in effect and the Offer
Conditions have not been satisfied or waived, Sub shall, and Parent shall cause
Sub to, cause the Offer not to expire. Subject to the terms and conditions of
the Offer (but subject to the right of termination in accordance with Article
VIII), Sub shall, and Parent shall cause Sub to, pay for all shares of Common
Stock validly tendered and not withdrawn pursuant to the Offer as soon as
practicable after the expiration of the Offer.
(b) On the date of commencement of the Offer, Parent and Sub shall
file with the SEC a Tender Offer Statement on Schedule 14D-1 with respect
to the Offer, which shall contain an offer to purchase and a related
letter of transmittal (such Schedule 14D-1 and the documents therein
pursuant to which the Offer will be made, together with any supplements
or amendments thereto, the "Offer Documents"). The Company and its
counsel shall be given an opportunity to review and comment upon the
Offer Documents prior to the filing thereof with the SEC. The Offer
Documents shall comply as to form in all material respects with the
requirements of the Exchange Act, and, on the date filed with the SEC and
on the date first published, sent or given to the Company's stockholders,
the Offer Documents shall not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, except that no
representation is made by Parent or Sub with respect to information
supplied by the Company in writing for inclusion in the Offer Documents.
Each of Parent, Sub and the Company agrees promptly to correct any
information provided by it for use in the Offer Documents if and to the
extent that such information shall have become false or misleading in any
material respect, and each of Parent and Sub further agrees to take all
steps necessary to cause the Offer Documents as so corrected to be filed
with the SEC and to be disseminated to holders of shares of Common Stock,
in each case as and to the extent required by applicable federal
securities laws. Parent and Sub agree to provide the Company
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and its counsel in writing with any comments Parent, Sub or their counsel
may receive from the SEC or its staff with respect to the Offer Documents
promptly upon receipt of such comments.
Section 1.2 Company Actions. (a) The Company hereby approves of and consents
to the Offer and represents that the Board of Directors of the Company at a
meeting duly called and held has duly adopted resolutions (i) approving this
Agreement, the Offer and the Merger, (ii) determining that the terms of the
Offer and Merger are fair to, and in the best interests of, the Company and its
stockholders, and (iii) recommending that the Company's stockholders accept the
Offer and tender their shares of Common Stock and approve the Merger and this
Agreement. The Company hereby consents to the inclusion in the Offer Documents
of such recommendation of the Board of Directors of the Company. The Company
represents that its Board of Directors has received the written opinion (the
"Fairness Opinion") of J.C. Bradford & Co. (the "Financial Advisor") that the
proposed consideration to be received by the holders of shares of Common Stock
pursuant to the Offer and the Merger is fair to such holders from a financial
point of view. The Company has been authorized by the Financial Advisor to
permit, subject to the prior review and consent by the Financial Advisor (such
consent not to be unreasonably withheld), the inclusion of the Fairness Opinion
(or a reference thereto) in the Offer Documents, the Schedule 14D-9 (as
hereinafter defined) and the Proxy Statement (as hereinafter defined).
Notwithstanding the foregoing, the Company may withdraw, modify or amend its
recommendation (and the Financial Advisor may withdraw, modify or amend its
Fairness Opinion) in accordance with the provisions of Section 5.2 of this
Agreement.
(b) On the date the Offer Documents are filed with the SEC, the
Company shall file with the SEC a Solicitation/Recommendation Statement
on Schedule 14D-9 with respect to the Offer (such Schedule 14D-9, as
amended from time to time, including the exhibits thereto, the "Schedule
14D-9") containing the recommendations described in paragraph (a) of
Section 1.2 above (subject to the provisions of Section 5.2 of this
Agreement) and shall mail the Schedule 14D-9 to the stockholders of the
Company as required by Rule 14D-9 promulgated under the Exchange Act.
Parent and its counsel shall be given an opportunity to review and
comment upon the Schedule 14D-9 prior to the filing thereof with the SEC.
The Schedule 14D-9 shall comply as to form in all material respects with
the requirements of the Exchange Act and, on the date filed with the SEC
and on the date first published, sent or given to the Company's
stockholders, shall not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, except that no
representation is made by the Company with respect to information
supplied by Parent or Sub in writing for inclusion in the Schedule 14D-9.
Each of the Company, Parent and Sub agrees promptly to correct any
information provided by it for use in the Schedule 14D-9 if and to the
extent that such information shall have become false or misleading in any
material respect, and the Company further agrees to take all steps
necessary to cause the Schedule 14D-9 as so corrected to be filed with
the SEC and disseminated to the holders of shares of Common Stock, in
each case as and to the extent required by applicable federal securities
laws. The Company agrees to provide Parent and Sub and their counsel in
writing with any comments the Company or its
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counsel may receive from the SEC or its staff with respect to the
Schedule 14D-9 promptly after the receipt of such comments.
(c) In connection with the Offer, the Company shall cause its
transfer agent to promptly furnish Sub with a list, as of a recent date,
of the holders of Common Stock and mailing labels containing the names
and addresses of the record holders of Common Stock and of those persons
becoming record holders subsequent to such date, together with copies of
all lists of stockholders, security position listings (including shares
of Common Stock held by depositories) and computer files and all other
information in the Company's possession or control regarding the
beneficial owners of Common Stock, and shall furnish to Sub such
information and assistance (including updated lists of stockholders,
security position listings and computer files) as Sub may reasonably
request in communicating the Offer to the Company's stockholders.
ARTICLE II
THE MERGER
Section 2.1 The Merger. Upon the terms and subject to the conditions hereof,
and in accordance with the General Corporation Law of the State of Delaware, as
amended (the "DGCL"), Sub shall be merged with and into the Company at the
Effective Time (as hereinafter defined). Following the Merger, the separate
corporate existence of Sub shall cease and the Company shall continue as the
surviving corporation (the "Surviving Corporation") and shall succeed to and
assume all the rights and obligations of Sub in accordance with the DGCL.
Section 2.2 Effective Time. The Merger shall become effective when the
Certificate of Merger or, if applicable, the Certificate of Ownership and Merger
(each, the "Certificate of Merger"), executed in accordance with the relevant
provisions of the DGCL, are accepted for record by the Secretary of State of the
State of Delaware. When used in this Agreement, the term "Effective Time" shall
mean the later of the date and time at which the Certificate of Merger is
accepted for record or such later time established by the Certificate of Merger.
The filing of the Certificate of Merger shall be made as soon as reasonably
practicable (but not later than the third business day) after the satisfaction
or waiver of the conditions to the Merger set forth herein.
Section 2.3 Effects of the Merger. The Merger shall have the effects set
forth in the DGCL.
Section 2.4 Certificate of Incorporation and Bylaws; Directors and Officers.
Unless otherwise determined by Parent prior to the Effective Time, the
Certificate of Incorporation and Bylaws of Sub, as in effect immediately prior
to the Effective Time, shall be the Certificate of Incorporation of the
Surviving Corporation until thereafter changed or amended as provided therein or
by applicable law.
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(a) The directors of Sub at the Effective Time shall, from and after
the Effective Time, be the 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.
(b) The officers of the Company at the Effective Time and such other
persons as designated by Parent shall, from and after the Effective Time, be
the 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.
Section 2.5 Conversion of Securities. As of the Effective Time, by virtue of
the Merger and without any action on the part of any stockholder of the Company:
(a) All shares of Common Stock that are held in the treasury of the
Company or by any wholly owned subsidiary of the Company and any shares of
Common Stock owned by Parent, Sub or any other wholly owned subsidiary of
Parent shall be canceled and no consideration shall be delivered in exchange
therefor.
(b) Each share of Common Stock issued and outstanding immediately prior
to the Effective Time (other than shares to be canceled in accordance with
Section 2.5(a) and other than Dissenting Shares (as defined in Section 2.7))
shall be converted into the right to receive from Parent in cash, without
interest, the Per Share Amount (the "Merger Consideration"). All such shares
of Common Stock, when so converted, shall no longer be outstanding and shall
automatically be canceled and retired and each holder of a certificate or
certificates (the "Certificates") representing any such shares shall cease
to have any rights with respect thereto, except the right to receive the
Merger Consideration for such shares upon surrender of such Certificates.
(c) Each issued and outstanding share of the capital stock of Sub shall
be converted into and become one fully paid and nonassessable share of
Common Stock of the Surviving Corporation.
(d) Each option outstanding at the Effective Time to purchase shares of
Common Stock (a "Stock Option") granted under the Company's (i) Amended and
Restated 1997 Stock Option Plan, (ii) 1994 Non-employee Director's Stock
Option Plan, and (iii) any other option plan or agreement including stock
options granted outside the Company's stock option plans (collectively, the
"Company Option Plans") shall be converted into the right to receive, upon
the exercise of such Stock Option in accordance with the terms thereof
(including the provisions providing for full vesting of all unvested shares
in the event that such options are not assumed following a Change-in-Control
(as defined in the Company Option Plans)), an amount of cash equal to the
Merger Consideration multiplied by such number of shares of Common Stock
underlying such option.
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(e) The warrant expiring June 10, 1999 to purchase 200,000 shares of
Common Stock at a price of $3.30 per share (the "Warrant"), shall be
exercisable, from and after the Effective Time and in accordance with the
terms thereof, for an amount of cash equal to the Merger Consideration
multiplied by 200,000.
(f) The Company's $1.8 million 10.0% convertible subordinated note due
2001 (the "Note"), convertible into a maximum of 400,000 shares of Common
Stock, shall be convertible, from and after the Effective Time and in
accordance with the terms thereof, for an amount of cash equal to the Merger
Consideration multiplied by such number of shares of Common Stock as such
note was convertible into prior to the Effective Time assuming that the Note
was fully convertible at that time.
Section 2.6 Payment of Certificates. (a) Paying Agent. Prior to the
Effective Time, Parent shall appoint ChaseMellon Shareholder Services LLC or
such other commercial bank or trust company designated by Parent and reasonably
acceptable to the Company to act as paying agent hereunder (the "Paying Agent")
for the payment of the Merger Consideration upon surrender of Certificates. All
of the fees and expenses of the Paying Agent shall be borne by Parent.
(b) Surviving Corporation to Provide Funds. Parent shall take all steps
necessary to enable and cause the Surviving Corporation to provide the
Paying Agent with cash in amounts necessary to pay for all of the shares of
Common Stock pursuant to Section 2.5 (determined as though there are no
Dissenting Shares (as hereinafter defined)), when and as such amounts are
needed by the Paying Agent.
(c) Payment Procedures. As soon as practicable after the Effective
Time, the Paying Agent shall mail to each holder of record of a Certificate,
other than Parent, the Company and any wholly owned subsidiary of Parent or
the Company, (i) a letter of transmittal (which shall specify that delivery
shall be effected, and risk of loss and title to the Certificates shall
pass, only upon actual delivery of the Certificates to the Paying Agent and
shall be in a form and have such other provisions as Parent may reasonably
specify) and (ii) instructions for the use thereof in effecting the
surrender of the Certificates in exchange for the Merger Consideration. Upon
surrender of a Certificate for cancellation to the Paying Agent or to such
other agent or agents as may be appointed by the Surviving Corporation,
together with such letter of transmittal, duly executed and completed in
accordance with the instructions thereto, and such other documents as may
reasonably be required by the Paying Agent, the holder of such Certificate
shall be entitled to receive in exchange therefor the amount of cash into
which the shares of Common Stock theretofore represented by such Certificate
shall have been converted pursuant to Section 2.5, and the Certificates so
surrendered shall forthwith be canceled. No interest will be paid or will
accrue on the cash payable upon the surrender of any Certificate. If payment
is to be made to a person other than the person in whose name the
Certificate so surrendered is registered, it shall be a condition of payment
that such Certificate 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 transfer of such
Certificate or establish to the satisfaction of
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the Surviving Corporation that such tax has been paid or is not applicable.
Until surrendered as contemplated by this Section 2.6, each Certificate
(other than Certificates representing Dissenting Shares and Certificates
representing any shares of Common Stock owned by Parent or any wholly owned
subsidiary of Parent or held in the treasury of the Company or by any wholly
owned subsidiary of the Company) shall be deemed at any time after the
Effective Time to represent only the right to receive upon such surrender
the amount of cash, without interest, into which the shares of Common Stock
theretofore represented by such Certificate shall have been converted
pursuant to Section 2.5. Notwithstanding the foregoing, none of the Paying
Agent, the Surviving Corporation or any party hereto shall be liable to a
former stockholder of the Company for any cash or interest delivered to a
public official pursuant to applicable abandoned property, escheat or
similar laws. In the event any Certificate shall have been lost, stolen or
destroyed, Parent may, in its discretion and as a condition precedent to the
payment of the Merger Consideration in respect of the shares represented by
such Certificate, require the owner of such lost, stolen or destroyed
Certificate to deliver a bond in such sum as it may reasonably direct as
indemnity against any claim that may be made against Parent or the Paying
Agent.
Section 2.7 Dissenting Shares. Notwithstanding any provision of this
Agreement to the contrary, if required by the DGCL (but only to the extent
required thereby), shares of Common Stock which are issued and outstanding
immediately prior to the Effective Time and which are held by holders of such
shares of Common Stock who have properly exercised appraisal rights with respect
thereto in accordance with Section 262 of the DGCL (the "Dissenting Shares")
will not be exchangeable for the right to receive the Merger Consideration, and
holders of such shares of Common Stock will be entitled to receive payment of
the appraised value of such shares of Common Stock in accordance with the
provisions of such Section 262 unless and until such holders fail to perfect or
effectively withdraw or lose their rights to appraisal and payment under the
DGCL. If, after the Effective Time, any such holder fails to perfect or
effectively withdraws or loses such right, such shares of Common Stock will
thereupon be treated as if they had been converted into and have become
exchangeable for, at the Effective Time, the right to receive the Merger
Consideration, without any interest thereon. The Company will give Parent prompt
notice of any demands received by the Company for appraisals of shares of Common
Stock, and Parent shall have the right to participate in all negotiations and
proceedings with respect to any such demands. Neither the Company nor the
Surviving Corporation shall, except with the prior written consent of Parent,
make any payment with respect to any demands for appraisal or offer to settle or
settle any such demands.
Section 2.8 Merger Without Meeting of Stockholders. Notwithstanding the
foregoing in this Article II, in the event that Sub, or any other direct or
indirect subsidiary of Parent, shall acquire at least 90 percent of the
outstanding shares of Common Stock, the parties hereto agree to take all
necessary and appropriate action to cause the Merger to become effective as soon
as practicable after the expiration of the Offer without a meeting of
stockholders of the Company, in accordance with Section 253 of the DGCL.
Section 2.9 No Further Ownership Rights in Common Stock. From and after the
Effective Time, the holders of shares of Common Stock which were outstanding
immediately
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prior to the Effective Time shall cease to have any rights with respect to such
shares of Common Stock except as otherwise provided in this Agreement or by
applicable law. All cash paid upon the surrender of Certificates in accordance
with the terms hereof shall be deemed to have been issued in full satisfaction
of all rights pertaining to the shares of Common Stock.
Section 2.10 Closing of Company Transfer Books. At the Effective Time, the
stock transfer books of the Company shall be closed and no transfer of shares of
Common Stock shall thereafter be made. If, after the Effective Time,
Certificates are presented to the Surviving Corporation, they shall be canceled
and exchanged as provided in this Article II.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB
Parent and Sub hereby represent and warrant to the Company as follows:
Section 3.1 Organization and Qualification. Each of Parent and Sub is a
corporation duly organized and validly existing under the laws of the
jurisdiction of its incorporation and has the requisite corporate power and
authority necessary to own, lease and operate the properties it purports to own,
operate or lease and to carry on its business as it is now being conducted,
except as would not reasonably be expected to prevent or delay consummation of
the Merger, or otherwise materially and adversely affect the ability of Parent
or Sub to perform their respective obligations under this Agreement.
Section 3.2 Authority Relative to this Agreement. Each of Parent and Sub has
all necessary corporate power and authority to execute and deliver this
Agreement and to perform its obligations hereunder and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
by Parent and Sub and the consummation by Parent and Sub of the transactions
contemplated hereby have been duly and validly authorized by all necessary
corporate action on the part of Parent and Sub, and no other corporate
proceedings on the part of Parent or Sub are necessary to authorize this
Agreement or to consummate the transactions contemplated hereby. The Board of
Directors of Parent has determined that it is advisable and in the best interest
of Parent's stockholders for Parent to enter into this Agreement and to
consummate, upon the terms and subject to the conditions of this Agreement, the
transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by Parent and Sub and, assuming the due authorization,
execution and delivery by the Company, constitutes a legal, valid and binding
obligation of Parent and Sub.
Section 3.3 No Conflict; Required Filings and Consents. The execution and
delivery of this Agreement by Parent and Sub do not, and the performance of this
Agreement by Parent and Sub will not, (i) conflict with or violate Parent's
Memorandum of Association or Sub's Certificate of Incorporation or the Bylaws of
Parent or Sub, (ii) conflict with or violate any law, rule, regulation, order,
judgment or decree applicable to Parent or any of its subsidiaries or by which
its or their respective properties are bound or affected, or (iii) result
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in any breach of or constitute a default (or an event which with notice or lapse
of time or both would become a default) under, or impair Parent's or any of its
subsidiaries' rights or alter the rights or obligations of any third party
under, or give to others any rights of termination, amendment, acceleration or
cancellation of, or result in the creation of a lien or encumbrance on any of
the properties or assets of Parent or any of its subsidiaries pursuant to, any
note, bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which Parent or any of its
subsidiaries is a party or by which Parent or any of its subsidiaries or its or
any of their respective properties are bound or affected, except in any such
case for any such conflicts, violations, breaches, defaults or other occurrences
that would not reasonably be expected to prevent or delay consummation of the
Merger, or otherwise materially and adversely affect the ability of Parent or
Sub to perform their respective obligations under this Agreement.
(b) The execution and delivery of this Agreement by Parent and Sub does
not, and the performance of this Agreement by Parent and Sub will not,
require any consent, approval, authorization or permit of, or filing with or
notification to, any governmental or regulatory authority, domestic or
foreign, except (i) for applicable requirements, if any, of the Exchange
Act, the pre-merger notification requirements of the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, and the rules and
regulations thereunder (the "HSR Act"), and the filing and recordation of
appropriate merger or other documents as required by the DGCL, and (ii)
where the failure to obtain such consents, approvals, authorizations or
permits, or to make such filings or notifications, would not reasonably be
expected to prevent or delay consummation of the Merger, or otherwise
materially and adversely affect the ability of Parent or Sub to perform
their respective obligations under this Agreement.
Section 3.4 Brokers. No broker, finder or investment banker is entitled to
any brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of Parent or Sub.
Section 3.5 Ownership of Sub; No Prior Activities. (a) Sub is an indirect,
wholly-owned subsidiary of Parent and was formed solely for the purpose of
engaging in the transactions contemplated by this Agreement.
(b) As of the date hereof and the Effective Time, except for
obligations or liabilities incurred in connection with its incorporation or
organization and the transactions contemplated by this Agreement and except
for this Agreement and any other agreements or arrangements contemplated by
this Agreement, Sub has not and will not have incurred, directly or
indirectly, through any subsidiary or affiliate, any obligations or
liabilities or engaged in any business activities of any type or kind
whatsoever or entered into any agreements or arrangements with any person.
Section 3.6 Financing. Parent or Sub have sufficient funds available to
enable Sub to purchase all outstanding shares, on a fully diluted basis, of
Common Stock and to pay all fees and expenses related to the transactions
contemplated by this Agreement.
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Section 3.7 Full Disclosure. No statement contained in any certificate or
schedule furnished or to be furnished by Parent or Sub to the Company in, or
pursuant to the provisions of, this Agreement contains or shall contain any
untrue statement of a material fact or omits or will omit to state any material
fact necessary, in the light of the circumstances under which it was made, in
order to make the statements herein or therein not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Parent and Sub as follows:
Section 4.1 Organization and Qualification; Subsidiaries. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has the requisite corporate power and authority
necessary to own, lease and operate the properties it purports to own, operate
or lease and to carry on its business as it is now being conducted, except where
the failure to be so organized, existing and in good standing or to have such
power and authority would not reasonably be expected to have a Material Adverse
Effect (as defined in Section 9.10 of this Agreement). The Company is duly
qualified or licensed as a foreign corporation to do business, and is in good
standing, in each jurisdiction where the character of its properties owned,
leased or operated by it or the nature of its activities makes such
qualification or licensing necessary, except for such failures to be so duly
qualified or licensed and in good standing that would not reasonably be expected
to have a Material Adverse Effect. The Company does not have any subsidiaries.
Except as set forth in Section 4.1 of the written disclosure schedule previously
delivered by the Company to Parent (the "Disclosure Schedule") or the SEC
Reports (as defined below), the Company does not directly or indirectly own any
equity or similar interest in, or any interest convertible into or exchangeable
or exercisable for any equity or similar interest in, any corporation,
partnership, joint venture or other business association or entity, with respect
to which interest the Company has invested or is required to invest $100,000 or
more, excluding securities in any publicly traded company held for investment by
the Company and comprising less than five percent of the outstanding stock of
such company.
Section 4.2 Certificate of Incorporation and Bylaws. The Company has
heretofore furnished to Parent a complete and correct copy of its Certificate of
Incorporation and Bylaws as most recently restated and subsequently amended to
date. Such Certificate of Incorporation and Bylaws are in full force and effect.
The Company is not in violation of any of the provisions of its Certificate of
Incorporation or Bylaws.
Section 4.3 Capitalization. The authorized capital stock of the Company
consists of 20,000,000 shares of Common Stock and 5,000,000 shares of Preferred
Stock, par value $.001 per share (the "Preferred Stock"). As of May 23, 1998,
4,252,985 shares of Common Stock were issued and outstanding, all of which are
validly issued, fully paid and nonassessable, and no shares were held in
treasury, (ii) no shares of Preferred Stock were outstanding or held in
treasury, (iii) 1,535,044 shares of Common Stock were reserved for
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future issuance pursuant to outstanding stock options granted under the
Company's Option Plans, (iv) 191,283 shares of Common Stock were reserved for
future issuance pursuant to the Company's 1994 Employee Stock Purchase Plan (the
"ESPP"), (v) 200,000 shares of Common Stock were reserved for future issuance
pursuant to the Warrant, and (vi) 400,000 shares of Common Stock were reserved
for future issuance pursuant to the Note. No material change in such
capitalization has occurred since May 23, 1998. Except as set forth in Section
4.1, this Section 4.3 or Section 4.11 or in Section 4.3 or Section 4.11 of the
Disclosure Schedule or the SEC Reports, there are no options, warrants or other
rights, agreements, arrangements or commitments of any character relating to the
issued or unissued capital stock of the Company or obligating the Company to
issue or sell any shares of capital stock of, or other equity interests in, the
Company. All shares of Common Stock subject to issuance as aforesaid, upon
issuance on the terms and conditions specified in the instruments pursuant to
which they are issuable, shall be duly authorized, validly issued, fully paid
and nonassessable. Except as disclosed in Section 4.3 of the Disclosure Schedule
or the SEC Reports, there are no obligations, contingent or otherwise, of the
Company to repurchase, redeem or otherwise acquire any shares of Common Stock or
to provide funds to or make any investment (in the form of a loan, capital
contribution or otherwise) in any other entity.
Section 4.4 Authority Relative to this Agreement. The Company has all
necessary corporate power and authority to execute and deliver this Agreement
and to perform its obligations hereunder 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 and validly authorized by all necessary corporate action, and no other
corporate proceedings on the part of the Company are necessary to authorize this
Agreement or to consummate the transactions so contemplated (other than the
adoption of this Agreement by the holders of at least a majority of the
outstanding shares of Common Stock entitled to vote in accordance with the DGCL
and the Company's Certificate of Incorporation and Bylaws). The Board of
Directors of the Company has determined that it is advisable and in the best
interest of the Company's stockholders for the Company to enter into this
Agreement and to consummate, upon the terms and subject to the conditions of
this Agreement, the transaction contemplated hereby. This Agreement has been
duly and validly executed and delivered by the Company and, assuming the due
authorization, execution and delivery by Parent and Sub, as applicable,
constitutes a legal, valid and binding obligation of the Company.
Section 4.5 Contracts; No Conflict; Required Filings and Consents. (a)
Section 4.5(a) of the Disclosure Schedule includes a list of (i) all loan
agreements, indentures, mortgages, pledges, conditional sale or title retention
agreements, security agreements, equipment obligations, guaranties, standby
letters of credit, equipment leases or lease purchase agreements, each in an
amount equal to or exceeding $100,000, to which the Company is a party or by
which any of them is bound; and (ii) all agreements which, as of the date
hereof, are required to be filed as "material contracts" pursuant to the
requirements of the Exchange Act, as amended, and the SEC's rules thereunder
(each of the foregoing and any contract or agreement of the Company with any
customer listed on Schedule 4.21 of the Disclosure Schedule, being referred to
as a "Material Contract"). Except as set forth in Section 4.5(a) of the
Disclosure Schedule, the Company is not in default or violation (and to
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the Company's best knowledge, no event has occurred which with notice or lapse
of time or both would constitute a default or violation) of any Material
Contract, nor, to the knowledge of the Company, is any other party to any
Material Contract in default or violation thereof (and no event has occurred
which with notice or lapse of time or both would constitute such a default or
violation), except as would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
(b) Except as set forth in Section 4.5(b) of the Disclosure Schedule,
the execution and delivery of this Agreement by the Company does not, and
the performance of this Agreement by the Company will not, (i) conflict with
or violate the Certificate of Incorporation or Bylaws of the Company, (ii)
conflict with or violate any law, rule, regulation, order, judgment or
decree applicable to the Company or by which its properties are bound or
affected, or (iii) result in any breach of or constitute a default (or an
event that with notice or lapse of time or both would become a default), or
impair the Company's rights or alter the rights or obligations of any third
party under, or give to others any rights of termination, amendment,
acceleration or cancellation of, or result in the creation of a lien or
encumbrance on any of the properties or assets of the Company pursuant to,
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 its properties is bound or affected,
except for any such conflicts, violations, breaches, defaults or other
occurrences that would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
(c) The execution and delivery of this Agreement by the Company does
not, and the performance of this Agreement by the Company will not, require
any consent, approval, authorization or permit of, or filing with or
notification to, any governmental or regulatory authority, domestic or
foreign, except (i) for applicable requirements, if any, of the Exchange
Act, the pre-merger notification requirements of the HSR, and the filing and
recordation of appropriate merger or other documents as required by the
DGCL, and (ii) where the failure to obtain such consents, approvals,
authorizations or permits, or to make such filings or notifications, would
not reasonably be expected to prevent or delay consummation of the Merger,
or otherwise prevent or delay the Company from performing its obligations
under this Agreement, or would not otherwise reasonably be expected to have
a Material Adverse Effect.
Section 4.6 Compliance; Permits. (a) Except as disclosed in Section 4.6 of
the Disclosure Schedule, the Company is not in conflict with, or in default or
violation of, any law, rule, regulation, order, judgment or decree applicable to
the Company or by which its properties is bound or affected, except for any such
conflicts, defaults or violations which would not reasonably be expected to have
a Material Adverse Effect.
(b) Except as disclosed in Section 4.6 of the Disclosure Schedule or
the SEC Reports, the Company holds all franchises, grants, authorization,
permits, licenses, easements, variances, exemptions, consents, certificates,
orders and approvals which are material to the operation of the business of
the Company as it is now being conducted
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("Permits"). The Company is in compliance with the terms of the Permits,
except where the failure to so comply would not reasonably be expected to
have a Material Adverse Effect.
Section 4.7 SEC Filings; Financial Statements. (a) The Company has filed all
forms, reports and documents required to be filed with the SEC since July 1,
1995 and has made available to Parent (i) its Annual Reports on Form 10-K for
the fiscal years ended July 1, 1995, June 29, 1996 and June 28, 1997, (ii) all
proxy statements relating to the Company's meetings of stockholders (whether
annual or special) held since July 1, 1995, (iv) all other reports or
registration statements filed by the Company with the SEC since July 1, 1997,
and (v) all amendments and supplements to all such reports and registration
statements filed by the Company with the SEC ((i) - (v) collectively, the "SEC
Reports"). Except as disclosed in Section 4.7 of the Disclosure Schedule or the
SEC Reports, the SEC Reports (i) were prepared in all material respects in
accordance with the requirements of the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder, or the Exchange Act, as the
case may be, and (ii) did not at the time they were filed (or if amended or
superseded by a filing prior to the date of this Agreement, then on the date of
such filing) contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
(b) Each of the financial statements (including, in each case, any
related notes thereto) contained in the SEC Reports was prepared in
accordance with generally accepted accounting principles ("GAAP") applied on
a consistent basis throughout the periods involved (except as may be
indicated in the notes thereto), and each fairly in all material respects
presents the financial position of the Company as at the respective dates
thereof and the results of its operations and cash flows for the periods
indicated, except that the unaudited interim financial statements were or
are subject to normal and recurring year-end adjustments which were not or
are not expected to be material in amount.
Section 4.8 Absence of Certain Changes or Events. Except as set forth in
Section 4.8 of the Disclosure Schedule or the SEC Reports, since March 31, 1998
the Company has conducted its business in the ordinary course and there has not
occurred: (i) any Material Adverse Effect; (ii) any amendments or changes in the
Certificate of Incorporation or Bylaws of the Company; (iii) any damage to,
destruction or loss of any asset of the Company (whether or not covered by
insurance) that would reasonably be expected to have a Material Adverse Effect;
(iv) any material change by the Company in its accounting methods, principles or
practices; (v) any material revaluation by the Company of any of its assets,
including writing down the value of inventory or writing off notes or accounts
receivable other than in the ordinary course of business; (vi) any other action
or event that would have required the consent of Parent pursuant to Section 5.1
had such action or event occurred after the date of this Agreement; or (vii) any
sale of a material amount of property of the Company, except in the ordinary
course of business.
Section 4.9 No Undisclosed Liabilities. Except as set forth in Section 4.9
of the Disclosure Schedule or the SEC Reports, the Company does not have any
liabilities (absolute, accrued, contingent or otherwise). Since March 31, 1998,
the Company has not
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incurred any liabilities (absolute, accrued, contingent or otherwise) other than
those liabilities incurred in the ordinary course of business consistent with
past practice, incurred in connection with this Agreement or which would not
reasonably be expected to have a Material Adverse Effect.
Section 4.10 Absence of Litigation. Except as set forth in Section 4.10 of
the Disclosure Schedule or the SEC Reports, there are no claims, actions, suits,
proceedings or investigations pending or, to the knowledge of the Company,
overtly threatened against the Company, or any properties or rights of the
Company, before any court, arbitrator or administrative, governmental or
regulatory authority or body, domestic or foreign, that would reasonably be
expected to have a Material Adverse Effect. Except as set forth in Section 4.10
of the Disclosure Schedule or the SEC Reports, since August 27, 1993, there have
been no actions, suits or proceedings made or pending against the Company
alleging (x) any Environmental Claims (as defined in Section 4.17) or (y) any
breach by the Company of applicable standards of conduct in rendering any
engineering, construction, design, operation, maintenance, management,
assessment, cleanup or remediation services, except for such actions, suits or
proceedings which, in the case of either clause (x) or (y) above, would not
reasonably be expected to result in liability to the Company of $25,000, in any
individual case, or $100,000 in the aggregate.
Section 4.11 Employee Benefit Plans; Employment Agreements. (a) Section
4.11(a) of the Company Disclosure Schedule lists all employee pension benefit
plans (as defined in Section 3(2) of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA")), all employee welfare benefit plans (as defined
in Section 3(1) of ERISA, and all other bonus, stock option, stock purchase,
incentive, deferred compensation, supplemental retirement, severance and other
similar fringe or employee benefit plans, programs or arrangements, and any
employment, executive compensation or severance agreements, written or
otherwise, as amended, modified or supplemented, for the benefit of, or relating
to, any former or current employee, officer or consultant (or any of their
beneficiaries) of the Company or any other entity (whether or not incorporated)
which is a member of a controlled group including the Company or which is under
common control with the Company (an "ERISA Affiliate") within the meaning of
Sections 414(b), (c), (m) or (o) of the Code or Section 4001(a) (14) or (b) of
ERISA, as well as each plan with respect to which the Company or an ERISA
Affiliate could incur liability under Title IV of ERISA or Section 412 of the
Internal Revenue Code of 1986, as amended (the "Code") (together for the
purposes of this Section 4.11, the "Employee Plans"). Prior to the date of this
Agreement, the Company has provided to Parent copies of (i) each such written
Employee Plan (or a written description of any Employee Plan which is not
written) and all related trust agreements, insurance and other contracts
(including policies), summary plan descriptions, summaries of material
modifications and communications distributed to plan participants, (ii) the
three most recent annual reports on Form 5500 series, with accompanying
schedules and attachments, filed with respect to each Employee Plan required to
make such a filing, (iii) the most recent actuarial valuation for each Employee
Plan subject to Title IV of ERISA, (iv) the latest reports which have been filed
with the Department of Labor with respect to each Employee Plan required to make
such filing and (v) the most recent favorable determination letters issued for
each Employee Plan and related trust which is subject to Parts 1, 2 and 4 of
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the Subtitle B of Title I of ERISA (and, if an application for such
determination is pending, a copy of the application for such determination). For
purposes of this Section 4.11, the term "material," when used with respect to
(i) any Employee Plan, shall mean that the Company or an ERISA Affiliate has
incurred or may incur obligations in an amount exceeding $100,000 with respect
to such Employee Plan, and (ii) any liability, obligation, breach or
non-compliance, shall mean that the Company or an ERISA Affiliate has incurred
or may incur obligations in an amount exceeding $50,000, with respect to any one
such or series of related liabilities, obligations, breaches, defaults,
violations or instances of non-compliance.
(b) Except as set forth in Section 4.11(b) of the Company Disclosure
Schedule, (i) none of the Employee Plans promises or provides retiree
medical or other retiree welfare benefits to any person, and none of the
Employee Plans is a "multiemployer plan" as such term is defined in Section
3(37) of ERISA; (ii) no party in interest or disqualified person (as defined
in Section 3(14) of ERISA and Section 4975 of the Code) has at any time
engaged in a transaction with respect to any Employee Plan which could
subject the Company or any ERISA Affiliate, directly or indirectly, to a
tax, penalty or other material liability for prohibited transactions under
ERISA or Section 4975 of the Code; (iii) no fiduciary of any Employee Plan
has breached any of the responsibilities or obligations imposed upon
fiduciaries under Title I of ERISA, which breach could result in any
material liability to the Company or any ERISA Affiliate; (iv) all Employee
Plans have been established and maintained substantially in accordance with
their terms and have operated in compliance in all material respects with
the requirements prescribed by any and all statutes (including ERISA and the
Code), orders, or governmental rules and regulations currently in effect
with respect thereto (including all applicable requirements for notification
to participants or the Department of Labor, Internal Revenue Service (the
"IRS") or Secretary of the Treasury), and may by their terms be amended
and/or terminated at any time subject to applicable law, and the Company has
performed all material obligations required to be performed by it under, is
not in any material respect in default under or violation of, and has no
knowledge of any default or violation by any other party to, any of the
Employee Plans; (v) each Employee Plan which is subject to Parts 1, 2 and 4
of Subtitle B of ERISA is the subject of a favorable determination letter
from the IRS, and nothing has occurred which may reasonably be expected to
impair such determination; (vi) all contributions required to be made with
respect to any Employee Plan pursuant to Section 412 of the Code, or the
terms of the Employee Plan or any collective bargaining agreement, have been
made on or before their due dates; (vii) with respect to each Employee Plan,
no "reportable event" within the meaning of Section 4043 of ERISA (excluding
any such event for which the 30 day notice requirement has been waived under
the regulations to Section 4043 of ERISA) or any event described in Section
4062, 4063 or 4041 of ERISA has occurred for which there is any material
outstanding liability to the Company or any ERISA Affiliate nor would the
consummation of the transaction contemplated hereby (including the execution
of this agreement) constitute a reportable event for which the 30-day
requirement has not been waived; and (viii) neither the Company nor any
ERISA Affiliate has incurred or reasonably expects to incur any liability
under Title IV of ERISA (other than liability for premium payments to the
Pension Benefit Guaranty Corporation (the "PBGC") arising in the ordinary
course).
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(c) Section 4.11(c) of the Company Disclosure Schedule sets forth a
true and complete list of each current or former employee, officer or
director of the Company who holds (i) any option to purchase Company Common
Stock as of the date hereof, together with the number of shares of Company
Common Stock subject to such option, the option price of such option (to the
extent determined as of the date hereof), whether such option is intended to
qualify as an incentive stock option within the meaning of Section 422(b) of
the Code (an "ISO"), and the expiration date of such option; (ii) any shares
of Company Common Stock that are restricted; and (iii) any other right,
directly or indirectly, to receive Company Common Stock, together with the
number of shares of Company Common Stock subject to such right. Section
4.11(c) of the Company Disclosure Schedule also sets forth the total number
of any such ISOs and any such nonqualified options and other such rights.
(d) Section 4.11(d) of the Company Disclosure Schedule sets forth a
true and complete list of (i) all employment agreements with officers of the
Company; (ii) all agreements with consultants who are individuals obligating
the Company to make annual cash payments in an amount exceeding $50,000;
(iii) all agreements with respect to the services of independent contractors
or leased employees whether or not they participate in any of the Employee
Plans; (iv) all officers of the Company who have executed a non-competition
agreement with the Company; (v) all severance agreements, programs and
policies of the Company with or relating to its employees, in each case with
outstanding commitments exceeding $750,000, excluding programs and policies
required to be maintained by law; and (vi) all plans, programs, agreements
and other arrangements of Company which contain change in control
provisions.
(e) Except as set forth in Section 4.11(e) of the Company Disclosure
Schedule, no employee of the Company has participated in any employee
pension benefit plans (as defined in Section 3(2) of ERISA) maintained by or
on behalf of the Company. The PBGC has not instituted proceedings to
terminate any Employee Benefit Plan that is subject to Title IV of ERISA
(each, a "Defined Benefit Plan"). The Defined Benefit Plans have no
accumulated or waived funding deficiencies within the meaning of Section 412
of the Code nor have any extensions of any amortization period within the
meaning of Section 412 of the Code or 302 of ERISA been applied for with
respect thereto. The present value of the benefit liabilities (within the
meaning of Section 4041 of ERISA) of the Defined Benefit Plans, determined
on a termination basis using actuarial assumptions that would be used by the
PBGC does not exceed by more than $100,000 the value of the Plans' assets.
All applicable premiums required to be paid to the PBGC with respect to the
Defined Benefit Plans have been paid. No facts or circumstances exist with
respect to any Defined Benefit Plan which would give rise to a lien on the
assets of the Company under Section 4068 of ERISA or otherwise. All the
assets of the Defined Benefit Plans are readily marketable securities or
insurance contracts.
(f) Except as provided in Schedule 4.11(f) of the Company Disclosure
Schedule, (i) the Company has never maintained an employee stock ownership
plan (within the meaning of Section 4975(e)(7) of the Code) or any other
Employee Plan that invests in Company stock; (ii) the Company has not
proposed nor agreed to any increase in benefits under any Employee Plan (or
the creation of new benefits) or change in employee coverage
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which would increase the expense of maintaining any Employee Plan; (iii) the
consummation of the transactions contemplated by this Agreement will not
result in an increase in the amount of compensation or benefits or
accelerate the vesting or timing of payment of any benefits or compensation
payable in respect of any employee; (iv) no person will be entitled to any
severance benefits under the terms of any Employee Plan solely by reason of
the consummation of this transaction contemplated by this Agreement. All
actions required to be taken by a fiduciary of any Employee Plan in order to
effectuate the transactions contemplated by this Agreement shall comply with
the terms of such Plan, ERISA and all other applicable laws. All actions
required to be taken by a trustee of any Employee Plan that owns Company
stock shall have been duly authorized by the appropriate fiduciaries of such
Plan, and shall comply with the terms of Plan, ERISA and other applicable
laws.
(g) Each Employee Plan covering non-U.S. employees (an "International
Plan") has been maintained in substantial compliance with its terms and with
the requirements prescribed by any and all applicable Laws (including any
special provisions relating to registered or qualified plans where such
International Plan was intended to so qualify) and has been maintained in
good standing with applicable regulatory authorities. The fair market value
of the assets of each funded International Plan (or the liability of each
funded International Plan funded through insurance) is sufficient to procure
or provide for the benefits accrued thereunder through the Closing Date
according to the actuarial assumptions and valuations most recently used to
determine employer contributions to the International Plan.
(h) The Company has fiduciary liability insurance of at least
$1,000,000 in effect covering the fiduciaries of the Employee Plans
(including the Company) with respect to whom the Company may have liability.
Section 4.12 Labor Matters. Except as set forth in Section 4.12 of the
Disclosure Schedule or the SEC Reports, (i) there are no controversies pending
or, to the knowledge of the Company, threatened, between the Company and its
employees, which controversies would reasonably be expected to have a Material
Adverse Effect; (ii) the Company is not a party to any material collective
bargaining agreement or other labor union contract applicable to persons
employed by the Company, nor does the Company know of any activities or
proceedings of any labor union to organize any such employees; and (iii) the
Company does not have any knowledge of any strikes, slowdowns, work stoppages,
lockouts, or threats thereof, by or with respect to any employees of the Company
which would reasonably be expected to have a Material Adverse Effect.
Section 4.13 Limitation on Business Conduct. Except as set forth in Section
4.13 of the Disclosure Schedule or the SEC Reports, the Company is not a party
to, and has no obligation under, any contract or agreement, written or oral,
which contains any covenants currently or prospectively limiting in any material
respect the freedom of the Company to engage in any line of business or to
compete with any entity.
Section 4.14 Title to Property. Except as set forth in Section 4.14 of the
Disclosure Schedule or the SEC Reports, the Company owns the properties and
assets that it purports to
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own free and clear of all liens, charges, mortgages, security interests or
encumbrances of any kind ("Liens"), except for Liens which arise in the ordinary
course of business and do not materially impair the Company's ownership or use
of such properties or assets or Liens for taxes not yet due. With respect to the
property and assets it leases, the Company and to the best of the Company's
knowledge each of the other parties thereto, is in material compliance with such
leases and the Company holds a valid leasehold interest free of any Liens. The
rights, properties and assets presently owned, leased or licensed by the Company
include all rights, properties and assets necessary to permit the Company to
conduct its business in all material respects in the same manner as its
businesses has been conducted prior to the date hereof.
Section 4.15 Real Property; Leased Premises. (a) Each of the buildings,
improvements and structures located upon any real property and land owned by the
Company (collectively, the "Real Property"), and each of the buildings,
structures and premises leased by the Company (the "Leased Premises"), is in
reasonably good repair and operating condition, except as would not reasonably
be expected to have a Material Adverse Effect.
(b) Except as set forth in Section 4.15 of the Disclosure Schedule, the
Company has not received any notice of or writing referring to any
requirements by any insurance company that has issued a policy covering any
part of any Real Property or Leased Premises or by any board of fire
underwriters or other body exercising similar functions, requiring any
repairs or work to be done on any part of any Real Property or Leased
Premises, except as would not reasonably be expected to have a Material
Adverse Effect.
(c) Except as set forth in Section 4.15 of the Disclosure Schedule, all
public utilities used in the operation of each Real Property or Leased
Premises in the manner currently operated are installed and operating, and
all installation and connection charges have been paid in full or provided
for; and the plumbing, electrical, heating, air conditioning, ventilating,
septic and all other structural or material mechanical systems in the
buildings upon the Real Property and Leased Properties are in good working
order and working condition, so as to be adequate for the operation of the
business of the Company as heretofore conducted, except as would not
reasonably be expected to have a Material Adverse Effect.
Section 4.16 Taxes. (a) The Company has filed, or caused to be filed, all
material Tax Returns (as hereinafter defined) required to be filed by it, and
has paid, collected or withheld, or caused to be paid, collected or withheld,
all material amounts of Taxes (as hereinafter defined) required to be paid,
collected or withheld, other than such Taxes for which adequate reserves in the
Company Financial Statements have been established or which are being contested
in good faith. All such Tax Returns are complete and correct in all material
respects. There are no material claims or assessments pending against the
Company for any alleged deficiency in any Tax, there are no pending or, to the
Company's best knowledge, threatened audits or investigations for or relating to
any liability in respect of any Taxes, and the Company has not been notified in
writing of any proposed Tax claims or assessments against the Company (other
than in each case, claims or assessments that have been satisfied, claims or
assessments for which adequate reserves in the Company Financial
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Statements have been established or which are being contested in good faith or
are immaterial in amount). The Company has not executed any waivers or
extensions of any applicable statute of limitations to assess any material
amount of Taxes. There are no outstanding requests by the Company for any
extension of time within which to file any material Tax Return or within which
to pay any material amounts of Taxes shown to be due on any Tax Return. To the
best knowledge of the Company, there are no liens for material amounts of Taxes
on the assets of the Company except for statutory liens for current Taxes not
yet due and payable.
(b) For purposes of this Agreement, the term "Tax" shall mean any
federal, state, local, foreign or provincial income, gross receipts,
property, sales, use, license, excise, franchise, employment, payroll,
alternative or add-on minimum, ad valorem, transfer or excise tax, or any
other tax, custom, duty, governmental fee or other like assessment or charge
of any kind whatsoever, together with any interest or penalty imposed by any
Governmental Authority. The term "Tax Return" shall mean a report, return or
other information (including any attached schedules or any amendments to
such report, return or other information) required to be supplied to or
filed with a governmental entity with respect to any Tax, including an
information return, claim for refund, amended return or declaration or
estimated Tax.
(c) Except as set forth in Section 4.16 of the Company's Disclosure
Schedule: (i) the Company has never been a member of an affiliated group
within the meaning of Section 1504 of the Code or filed or been included in
a combined, consolidated or unitary Tax Return; (ii) the Company is not
liable for Taxes of any other Person, nor is it currently under any
contractual obligation to indemnify any person with respect to Taxes (except
for customary agreements to indemnify lenders or security holders in respect
of taxes other than income taxes), nor is it a party to any tax sharing
agreement or any other agreement providing for payments by the Company with
respect to Taxes; (iii) the Company is not a party to any joint venture,
partnership or other arrangement or contract which could be treated as a
partnership for federal income tax purposes; (iv) the Company has not
entered into any sale leaseback or any leveraged lease transaction that
fails to satisfy the requirements of Revenue Procedure 75-21 (or similar
provisions of foreign law); (v) the Company has not agreed nor is it
required, as a result of a change in method of accounting or otherwise, to
include any adjustment under Section 481 of the Code (or any corresponding
provision of state, local or foreign law) in taxable income; (vi) the
Company is not a party to any agreement, contract, arrangement or plan that
would result (taking into account the transactions contemplated by this
Agreement), separately or in the aggregate, in the payment of any "excess
parachute payments" within the meaning of Section 280G of the Code; (vii)
the Company is not liable with respect to any indebtedness the interest of
which is not deductible for applicable federal, foreign, state or local
income tax purposes; (viii) the Company is not a "consenting corporation"
under Section 341(F) of the Code or any corresponding provision of state,
local or foreign law; and (ix) none of the assets owned by the Company is
property that is required to be treated as owned by any other person
pursuant to Section 168(g)(8) of the Internal Revenue Code of 1954, as
amended, as in effect immediately prior to the enactment of the Tax Reform
Act of 1986, or is "tax-exempt use property" within the meaning of Section
168(h) of the Code; provided that each of the
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statements made in clauses (i) through (ix) above shall be deemed true and
correct for purposes of this Agreement unless in any such case any failure
of such statement to be true or correct would reasonably be expected to
result in a Material Adverse Effect.
Section 4.17 Environmental Matters. (a) Except as set forth in Section 4.17
to the Company's Disclosure Schedule, the operations and properties of the
Company are in material compliance with the Environmental Laws (as hereinafter
defined), which compliance includes the possession by the Company of all permits
and governmental authorizations required under applicable Environmental Laws,
and compliance with the terms and conditions thereof. The Company has not
received any communication (written or oral), whether from a governmental
authority, citizens group, employee or otherwise, that alleges that the Company
is not in such compliance, and, to the Company's best knowledge, there are no
circumstances or conditions related to the operations or properties of the
Company that may give rise to any such non-compliance in the future.
(b) Except as set forth in Section 4.17 of the Company's Disclosure
Schedule, there are no Environmental Claims (as hereinafter defined),
including claims based on "arranger liability," pending or, to the best
knowledge of the Company, threatened against the Company or against any
person or entity whose liability for any Environmental Claim the Company has
retained or assumed either contractually or by operation of law.
(c) To the Company's best knowledge, there are no past or present
actions, inactions, activities, circumstances, conditions, events or
incidents, including the release, emission, discharge, presence or disposal
of any Material of Environmental Concern (as hereinafter defined), that
would form the basis of any Environmental Claim against the Company or
against any person or entity whose liability for any Environmental Claim the
Company has retained or assumed either contractually or by operation of law,
except for such Environmental Claims that would not reasonably be expected
to have a Material Adverse Effect.
(d) No off-site locations where the Company has stored, disposed or
arranged for the disposal of Materials of Environmental Concern has been
listed on the National Priority List, CERCLIS, state Superfund site list or
state analog to CERCLIS, and the Company has not been notified that it is a
potentially responsible party at any such location; (ii) there are no
underground storage tanks located on property owned or leased by the
Company; (iii) to the Company's best knowledge, there is no asbestos
containing material contained in or forming part of any building, building
component, structure or office space owned, leased or operated by the
Company; and (iv) there are no polychlorinated biphenyls (PCB's) or
PCB-containing items contained in or forming part of any building, building
component, structure or office space owned, leased or operated by the
Company.
(e) For purposes of this Agreement:
(i) "Environmental Claim" means any claim, action, cause of
action, investigation or notice (written or oral) by any person or
entity alleging potential liability (including potential liability for
investigatory costs, cleanup costs, governmental response
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costs, natural resources damages, property damages, personal injuries,
or penalties) arising out of, based on or resulting from (x) the
presence, or release into the environment, of any Material of
Environmental Concern at any location, whether or not owned or operated
by the Company, or (y) circumstances forming the basis of any
violation, or alleged violation, of any Environmental Law.
(ii) "Environmental Laws" means all Federal, state, local and
foreign laws, regulations, codes, ordinances, any guidance or directive
relating to pollution or protection of human health and the environment
(including ambient air, surface water, ground water, land surface or
sub- surface strata), including laws and regulations relating to
emissions, discharges, releases or threatened releases of Materials of
Environmental Concern, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport
or handling of Materials of Environmental Concern, including, but not
limited to CERCLA, RCRA, TSCA, OSHA, the Clean Air Act, the Clean Water
Act, each as amended or supplemented, and any applicable transfer
statutes or laws.
(iii) "Materials of Environmental Concern" means chemicals,
pollutants, contaminants, hazardous materials, hazardous substances and
hazardous wastes, toxic substances, petroleum and petroleum products,
asbestos-containing materials, poly chlorinated biphenyls, and any
other chemicals, pollutants or substances regulated under any
Environmental Law.
Section 4.18 Intellectual Property. (a) The Company owns, or is licensed or
otherwise possesses legally enforceable rights to use all patents, trademarks,
trade names, service marks, copyrights, and any applications therefor,
technology, know-how, computer software programs or applications, and tangible
or intangible proprietary information or material that are used in the business
of the Company as currently conducted, except as would not reasonably be
expected to have a Material Adverse Effect.
(b) To the best knowledge of the Company, there are no valid grounds
for any bona fide claims (i) to the effect that the business of the Company
infringes on any copyright, patent, trademark, service mark or trade secret;
(ii) against the use by the Company, of any trademarks, trade names, trade
secrets, copyrights, patents, technology, know-how or computer software
programs and applications used in the business of the Company as currently
conducted; (iii) challenging the ownership, validity or effectiveness of any
of the patents, registered and material unregistered trademarks and service
marks, registered copyrights, trade names and any applications therefor
owned by the Company (the "Company Intellectual Property Rights") or other
trade secret material to the Company; or (iv) challenging the license or
legally enforceable right to use of any third-party patents, trademarks,
service marks and copyrights by the Company, except, in each case, for
claims that, if determined adversely to the Company, would not reasonably be
expected to have a Material Adverse Effect.
(c) To the best knowledge of the Company, all material patents,
registered trademarks, service marks and copyrights held by the Company are
valid and subsisting. Except as set forth in Section 4.18(c) of the
Disclosure Schedule or the SEC Reports, to the
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Company's knowledge, there is no material unauthorized use, infringement or
misappropriation of any of the Company Intellectual Property by any third
party, including any employee or former employee of the Company.
Section 4.19 Insurance. All material fire and casualty, general liability,
professional liability, business interruption, product liability and sprinkler
and water damage insurance policies maintained by the Company are with reputable
insurance carriers, are in full force and effect with no premium delinquencies,
provide full and adequate coverage for all normal risks incident to the business
of the Company and its properties and assets and are in character and amount at
least equivalent to that carried by persons engaged in similar businesses and
subject to the same or similar perils or hazards, except as would not reasonably
be expected to have a Material Adverse Effect.
Section 4.20 Accounts Receivable. The accounts receivable of the Company as
reflected in the most recent financial statements contained in the SEC Reports,
to the extent uncollected on the date hereof, and the accounts receivable
reflected on the books of the Company are valid and existing and represent
monies due, and the Company has made reserves reasonably considered adequate for
receivables not collectible in the ordinary course of business, and (subject to
the aforesaid reserves) are not subject to any refunds or other adjustments or
to any defenses, rights of set-off, assignments, restrictions, encumbrances or
conditions enforceable by third parties on or affecting any thereof, except for
such refunds, adjustments, defenses, rights of set-off, assignments,
restrictions, encumbrances or conditions as would not reasonably be expected to
have a Material Adverse Effect.
Section 4.21 Customers. Section 4.21 of the Disclosure Schedule sets forth a
list of the Company's twenty five (25) largest customers (detailed, in the case
of government agencies, by separate government agency) in terms of gross sales
for the fiscal year ended June 28, 1997. Except as set forth in Section 4.21 of
the Disclosure Schedule, since June 28, 1997 there have not been any adverse
changes in the business relationships of the Company with any of the customers
named therein that would constitute a Material Adverse Effect.
Section 4.22 Interested Party Transactions. Except as set forth in Section
4.22 of the Disclosure Schedule or the SEC Reports, since the date of the
Company's proxy statement dated November 6, 1997, no event has occurred that
would be required to be reported as a Certain Relationship or Related
Transaction, pursuant to Item 404 of Regulation S-K promulgated by the SEC,
except for contracts entered into in the ordinary course of business of the
Company, on an arms-length basis, with terms no less favorable to the Company
than would reasonably be expected in a similar transaction with an unaffiliated
third party.
Section 4.23 Absence of Certain Payments. None of the Company or any of its
affiliates or any of their respective officers, directors, employees or agents
or other people acting on behalf of any of them have (i) engaged in any activity
prohibited by the United States Foreign Corrupt Practices Act of 1977 or any
other similar law, regulation, decree, directive or order of any other country
and (ii) without limiting the generality of the preceding clause (i), used any
corporate or other funds for unlawful contributions, payments,
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gifts or entertainment, or made any unlawful expenditures relating to political
activity to government officials or others. None of the Company or any of its
affiliates or any of their respective directors, officers, employees or agents
of other persons acting on behalf of any of them, has accepted or received any
unlawful contributions, payments, gifts or expenditures.
Section 4.24 Takeover Statute. The Board of Directors of the Company has
taken all appropriate action so that neither Parent nor Sub will be an
"interested stockholder" within the meaning of Section 203 of the DGCL.
Section 4.25 Opinion of Financial Advisor. The Company has been advised by
its financial advisor, J. C. Bradford & Co. that in its opinion, as of the date
hereof, the Merger Consideration is fair to the holders of the Common Stock.
Section 4.26 Brokers. No broker, finder or investment banker (other than J.
C. Bradford, the fees and expenses of whom will be paid by the Company) is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of the Company. The Company has heretofore furnished to
Parent a complete and correct copy of all agreements between the Company and J.
C. Bradford & Co. pursuant to which such firm would be entitled to any payment
relating to the transactions contemplated hereunder.
Section 4.27 Full Disclosure. (i) No statement contained in any certificate
or schedule furnished or to be furnished by the Company to Parent or Sub in, or
pursuant to the provisions of, this Agreement and (ii) none of the monthly
consolidated financial statements for April, 1998 furnished by the Company to
Parent, including the accompanying commentary, contains or shall contain any
untrue statement of a material fact or omits to state any material fact
necessary, in the light of the circumstances under which it was made, in order
to make the statements herein or therein not misleading.
ARTICLE V
COVENANTS RELATING TO CONDUCT OF BUSINESS
Section 5.1 Conduct of Business by the Company Pending the Merger. Except as
otherwise expressly contemplated by this Agreement or consented to in advance by
Parent (which consent is in writing or subsequently confirmed in writing), which
consent shall not be unreasonably withheld, during the period from the date of
this Agreement through the earlier of the time that the change in composition of
the Board of Directors of the Company contemplated by Section 6.8 has occurred
and the Effective Time, the Company shall in all material respects carry on its
business in, and not enter into any material transaction other than in
accordance with, the regular and ordinary course and, to the extent consistent
therewith, use its reasonable best efforts to preserve intact its current
business organization, keep available the services of its current officers and
employees and preserve its relationships with customers, suppliers and others
having business dealings with it. Without limiting the generality of the
foregoing, and except as otherwise expressly contemplated by this
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Agreement (including the time period specified above), the Company shall not,
without the prior consent of Parent (which consent is in writing or subsequently
confirmed in writing), which consent shall not be unreasonably withheld:
(a) (i) declare, set aside or pay any dividends on, or make any other
actual, constructive or deemed distributions in respect of, any of its
capital stock, or otherwise make any payments to stockholders of the Company
in their capacity as such, (ii) split, combine or reclassify any of its
capital stock or issue or authorize the issuance of any other securities in
respect of, in lieu of or in substitution for shares of its capital stock or
(iii) purchase, redeem or otherwise acquire any shares of capital stock of
the Company or any other securities thereof or any rights, warrants or
options to acquire any such shares or other securities;
(b) issue, deliver, sell, pledge, dispose of or otherwise encumber any
shares of its capital stock, any other voting securities or equity
equivalent or any securities convertible into, or any rights, warrants or
options to acquire, any such shares, voting securities or convertible
securities or equity equivalent (other than the issuance of Common Stock
during the period from the date of this Agreement through the Effective Time
upon the exercise of Stock Options or Warrants outstanding on the date of
this Agreement in accordance with their current terms);
(c) amend or change its Certificate of Incorporation or Bylaws;
(d) acquire or agree to acquire by merging or consolidating with, or by
purchasing a substantial portion of the assets of or equity in, or by any
other manner, any business or any corporation, partnership, association or
other business organization or division thereof or otherwise acquire or
agree to acquire any assets, in each case that are material, individually or
in the aggregate, to the Company;
(e) sell, lease or otherwise dispose of, or agree to sell, lease or
otherwise dispose of, any of its assets that are material, individually or
in the aggregate, to the Company;
(f) make any commitment or enter into any contract or agreement except
(i) in the ordinary course of business consistent with past practice or (ii)
for capital expenditures to be made in fiscal 1998 as identified in a
capital expenditure budget previously delivered to Parent;
(g) incur any indebtedness for borrowed money or guarantee any such
indebtedness or issue or sell any debt securities or guarantee any debt
securities of others, except for borrowings or guarantees incurred in the
ordinary course of business consistent with past practice under financing
arrangements in existence on the date hereof, or make any loans, advances or
capital contributions to, or investments in, any other person, other than in
the ordinary course of business consistent with past practice;
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(h) except as may be required as a result of a change in law or
pursuant to GAAP, change any of the accounting principles or practices used
by it;
(i) make any tax election or settle or compromise any material income
tax liability;
(j) pay, discharge or satisfy any claims, liabilities or obligations
(absolute, accrued, asserted or unasserted, contingent or otherwise), other
than the payment, discharge or satisfaction in the ordinary course of
business and consistent with past practice of liabilities reflected or
reserved against in, or contemplated by, the financial statements (or the
notes thereto) of the Company or incurred in the ordinary course of business
consistent with past practice;
(k) increase in any manner the compensation or fringe benefits of any
of its directors, officers and other key employees or pay any pension or
retirement allowance not required by any existing plan or agreement to any
such employees, or become a party to, amend or commit itself to any pension,
retirement, profit-sharing or welfare benefit plan or agreement or
employment agreement with or for the benefit of any employee, other than
increases in the compensation of employees who are not officers or directors
of the Company made in the ordinary course of business consistent with past
practice, or (except pursuant to the terms of preexisting plans or
agreements) accelerate the vesting of any compensation or benefit;
(l) except in connection with the exercise of its fiduciary duties by
the Board of Directors of the Company as set forth in Section 5.2, waive,
amend or allow to lapse any term or condition of any confidentiality or
"standstill" agreement to which the Company is a party; or
(m) take, or agree in writing or otherwise to take, any of the
foregoing actions or any action which would make any of the representations
or warranties of the Company contained in this Agreement untrue or incorrect
at or prior to the Effective Time.
Section 5.2 Acquisition Proposals. From and after the date of this Agreement
and prior to the Effective Time, except as provided below, the Company agrees
(i) that the Company shall not, and the Company shall direct and use its
reasonable best efforts to cause its officers, directors, employees and
authorized agents and representatives (including any investment banker, attorney
or accountant retained by it) not to, initiate, solicit or encourage, directly
or indirectly, any inquiries or the making or implementation of any proposal or
offer (including any proposal or offer to its stockholders) with respect to a
merger, acquisition, consolidation or similar transaction involving, or any
purchase of, any equity securities (except pursuant to the exercise of the
outstanding options, warrants or other rights set forth in Section 4.3 of this
Agreement, including, Section 4.3 of the Disclosure Schedule) or all or any
significant portion of the assets of, the Company (any such proposal or offer
being hereinafter referred to as an "Acquisition Proposal") or engage in any
negotiations concerning, or provide any confidential information or data to, or
have any discussions with,
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any person or entity relating to an Acquisition Proposal, or otherwise
facilitate any effort or attempt to make or implement an Acquisition Proposal;
(ii) that it will immediately cease and cause to be terminated any existing
activities, discussions or negotiations with any person or entity conducted
heretofore with respect to any of the foregoing and will take the necessary
steps to inform the person or entity referred to above of the obligations
undertaken in this Section 5.2; and (iii) that it will notify Parent immediately
if any such inquiries or proposals are received by, any such information is
requested from, or any such negotiations or discussions are sought to be
initiated or continued with, it (but the Company shall not be required to
disclose the names of any party making or the terms of any such proposal);
provided, however, that nothing contained in this Section 5.2 shall prohibit the
Board of Directors of the Company from (x) furnishing information to, or
entering into discussions or negotiations with, any person or entity that makes
an unsolicited bona fide proposal in writing to engage in an Acquisition
Proposal transaction which the Board of Directors of the Company in good faith
determines represents a financially superior transaction for the stockholders of
the Company as compared to the Offer and the Merger if, and only to the extent
that, (A) the Board of Directors determines, after consultation with outside
counsel of national reputation (which may be the Company's regularly engaged
counsel) for its expertise in corporate and securities law matters as the
Company shall select ("Company Counsel"), that failure to take such action would
be inconsistent with the compliance by the Board of Directors with its fiduciary
duties to stockholders imposed by law, (B) prior to or concurrently with
furnishing such information to, or entering into discussions or negotiations
with, such a person or entity, the Company provides written notice to Parent to
the effect that it is furnishing information to, or entering into discussions or
negotiations with, such a person or entity, and (C) the Company keeps Parent
informed of the status (excluding, however, the identity of such person) of any
such discussions or negotiations; and (y) to the extent applicable, complying
with Rule 14e-2 promulgated under the Exchange Act with regard to an Acquisition
Proposal. Nothing in this Section 5.2 shall (t) permit the Company to terminate
this Agreement (except as contemplated by Section 8.1(b)(ii)), (u) permit the
Company to enter into any agreement with respect to an Acquisition Proposal
during the term of this Agreement, or (v) affect any other obligation of any
party under this Agreement.
Section 5.3 Annual Meeting of Stockholders. The Company shall defer and/or
postpone the holding of its 1998 Annual Meeting of Stockholders (the "Annual
Meeting") indefinitely pending consummation of the Merger unless the Company is
otherwise required to hold the Annual Meeting by an order from a court of
competent jurisdiction.
Section 5.4 Conduct of Business of Sub Pending the Merger. During the period
from the date of this Agreement through the Effective Time, Sub shall not engage
in any activities of any nature except as provided in or contemplated by this
Agreement.
ARTICLE VI
ADDITIONAL AGREEMENTS
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Section 6.1 Company Stockholder Approval; Proxy Statement. (a) If approval
or action in respect of the Merger by the stockholders of the Company is
required by applicable law, the Company shall (i) if appropriate, call a meeting
of its stockholders (the "Stockholder Meeting") for the purpose of voting upon
the Merger and shall use its reasonable best efforts to obtain stockholder
approval of the Merger, (ii) hold the Stockholder Meeting as soon as practicable
following the purchase of shares of Common Stock pursuant to the Offer, (iii)
recommend to its stockholders the approval of the Merger through its Board of
Directors, and (iv) use its reasonable best efforts to obtain the necessary
approvals by its stockholders of the Merger, this Agreement and the transactions
contemplated hereby, but subject in each case to the fiduciary duties of its
Board of Directors under applicable law as determined by the Board of Directors
in good faith after consultation with Company Counsel. The record date for the
Stockholder Meeting shall be a date subsequent to the date Parent or Sub becomes
a record holder of Common Stock purchased pursuant to the Offer.
(b) If required by applicable law, the Company will, as soon as
practicable following the expiration of the Offer, prepare and file a
preliminary version of the proxy statement to be sent to the stockholders of
the Company in connection with the Stockholders Meeting (the "Proxy
Statement"), or, if applicable, an information statement in lieu of a proxy
statement pursuant to Rule 14C under the Exchange Act (with all references
herein to the Proxy Statement being deemed to refer to such information
statement, to the extent applicable) with the SEC with respect to the
Stockholders Meeting and will use its reasonable best efforts to respond to
any comments of the SEC or its staff and to cause the Proxy Statement to be
cleared by the SEC. The Company will notify Parent of the receipt of any
comments from the SEC or its staff and of any request by the SEC or its
staff for amendments or supplements to the Proxy Statement or for additional
information and will supply Parent with copies of all correspondence between
the Company or any of its representatives, on the one hand, and the SEC or
its staff, on the other hand, with respect to the Proxy Statement or the
Merger. The Company shall give Parent and its counsel the opportunity to
review the Proxy Statement prior to its being filed with the SEC and shall
give Parent and its counsel the opportunity to review all amendments and
supplements to the Proxy Statement and all responses to requests for
additional information and replies to comments prior to their being filed
with, or sent to, the SEC. Each of the Company and Parent agrees to use its
reasonable best efforts, after consultation with the other parties hereto,
to respond promptly to all such comments of and requests by the SEC. As
promptly as practicable after the Proxy Statement has been cleared by the
SEC, the Company shall mail the Proxy Statement to the stockholders of the
Company. If at any time prior to the approval of this Agreement by the
Company's stockholders there shall occur any event that should be set forth
in an amendment or supplement to the Proxy Statement, the Company will
prepare and mail to its stockholders such an amendment or supplement. The
Company represents and warrants to Parent and Sub that the Proxy Statement
(x) will not, on the date the Proxy Statement (or any amendment or
supplement thereto) is first mailed to stockholders, at the time of the
Stockholders Meeting, or at the Effective Time, 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 the light
of the circumstances under which they are made, not misleading; and (y) will
comply in all material respects with the requirements of the Exchange Act.
Notwithstanding the foregoing, the Company makes
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no representation or warranty with respect to any information supplied by
Parent or Sub in writing for inclusion in the Proxy Statement.
(c) Parent agrees to cause all shares of Common Stock purchased
pursuant to the Offer and all other shares of Common Stock owned by Sub or
any other subsidiary or affiliate of Parent to be voted in favor of the
approval of the Merger.
(d) Parent and Sub represent and warrant to the Company that the
information supplied by Parent or Sub in writing for inclusion in the Proxy
Statement (or any amendment or supplement thereto) will not, on the date the
Proxy Statement is first mailed to stockholders, at the time of the
Stockholders Meeting or at the Effective Time 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 the light
of the circumstances under which they were made, not misleading.
Section 6.2 Access to Information; Confidentiality. The Company shall afford
to Parent, and to Parent's accountants, counsel, financial advisers and other
representatives, reasonable access and permit them to make such inspections as
they may reasonably require during normal business hours during the period from
the date of this Agreement through the Effective Time to all their respective
properties, books, contracts, commitments and records and, during such period,
the Company shall furnish promptly to Parent (i) a copy of each report,
schedule, registration statement and other document filed by it during such
period pursuant to the requirements of federal or state securities laws and (ii)
all other information concerning its business, properties and personnel as
Parent may reasonably request.
Section 6.3 Fees and Expenses. (a) Except as provided in subsections (b) and
(c) below, whether or not the Merger is consummated, all costs and expenses
incurred in connection with this Agreement and the transactions contemplated
hereby shall be paid by the party incurring such costs and expenses.
(b) The Company agrees that if this Agreement is terminated pursuant
to:
(i) Section 8.1(d)(i) and
(I) (x) the Offer has remained open for a minimum of twenty
(20) business days, (y) the Minimum Condition has not been
satisfied and (z) an Acquisition Proposal existed during such
twenty day period; or
(II) at the time of such termination any person, entity or
group (as defined in Section 13(d)(3) of the Exchange Act)
(other than Parent or any of its affiliates) shall have
become the beneficial owner of more than 20% of the
outstanding shares of Common Stock and such person, entity or
group (or any affiliate of such person, entity or group)
thereafter (x) shall make an Acquisition Proposal at a price
per share of at least $10.50, and, in the case of a
consensual transaction with the Company, shall substantially
have negotiated the terms thereof, at any
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time on or prior to the date which is six months after such
termination of this Agreement, and (y) shall consummate such
Acquisition Proposal at any time on or prior to the date which
is one year after termination of this Agreement, in the case
of a consensual transaction, or six months after termination
of this Agreement, in the case of a non-consensual
transaction, in each case with a value per share of Common
Stock of at least $10.50 (with appropriate adjustments for
reclassifications of capital stock, stock dividends, stock
splits, reverse stock splits and similar events);
(ii) Section 8.1(b)(ii);
(iii) Section 8.1(c)(i); or
(iv) Section 8.1(c)(iii),
then the Company shall pay to Parent (such payment, with respect to clause (iv)
above only, to be Parent's sole and exclusive remedy) the sum of (a) $2 million,
plus (b) the amount of all documented out-of-pocket costs and expenses incurred
by Parent, Sub or their affiliates in an aggregate amount not to exceed $150,000
in connection with this Agreement or the transactions contemplated hereby. Such
payment shall be made as promptly as practicable but
in no event later than five business days following termination of this
Agreement pursuant to the immediately preceding sentence, or, in the case of
clause (i)(II) of the immediately preceding sentence, upon consummation of such
Acquisition Proposal, and shall be made by wire transfer of immediately
available funds to an account designated by Parent.
(c) The Company agrees that if this Agreement is terminated pursuant to
Section 8.1(c)(ii)(1), the Company shall pay to Parent the amount of all
documented out-of-pocket costs and expenses incurred by Parent, Sub or their
affiliates in an aggregate amount not to exceed $150,000 in connection with
this Agreement or the transactions contemplated hereby.
Section 6.4 Option Plans etc.. Prior to the Effective Time, the Company
shall take all such actions as shall be necessary to effectuate the provisions
of Sections 2.5(d), (e) and (f). The Company shall take such action as is
necessary to cause the ending date of the then current offering period under the
ESPP to be prior to the Effective Time and to terminate the ESPP as of the
Effective Time. The Company shall give written notice of the Merger to the
registered holder of the Warrant at least twenty (20) days prior to the
Effective Time or by such other time required pursuant to the terms thereof.
Section 6.5 Reasonable Best Efforts. Subject to Section 5.2 of this
Agreement, upon the terms and subject to the conditions set forth in this
Agreement, each of the parties agrees to use its reasonable best efforts to
take, or cause to be taken, all actions (including entering into transactions),
and to do, or cause to be done, and to assist and cooperate with the other
parties in doing, all things necessary, proper or advisable to consummate and
make effective, in the most expeditious manner practicable, the Merger, and the
other transactions
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contemplated by this Agreement, including (a) the prompt making of their
respective filings (including under the HSR Act) and thereafter the making of
any other required submission with respect to the Offer and the Merger, (b) the
obtaining of all additional necessary actions or non-actions, waivers, consents
and approvals from any applicable federal, state, foreign or supranational
court, commission, governmental body, regulatory or administrative agency,
authority or tribunal of competent jurisdiction (a "Governmental Entity") and
the making of all necessary registrations and filings (including filings with
Governmental Entities) and the taking of all reasonable steps as may be
necessary to obtain an approval or waiver from any Governmental Entity, (c) the
obtaining of all necessary consents, approvals or waivers from third parties,
(d) the defending of any lawsuits or other legal proceedings, whether judicial
or administrative, challenging this Agreement or the consummation of the
transactions contemplated hereby, including seeking to have any stay or
temporary restraining order entered by any court or other Governmental Entity
vacated or reversed, and (e) the execution and delivery of any additional
instruments necessary to consummate the transactions contemplated by this
Agreement; provided, however, that neither Parent, Sub nor the Company shall be
required to take any action pursuant to clauses (b), (c), (d) or (e) above that
would in any event have a Material Adverse Effect, in the case of the Company,
or any similar effect on Parent and/or its subsidiaries; and provided further
that neither Parent, Sub nor any of their affiliates shall be required to enter
into any transaction or take any other action that would require a waiver of, or
that is inconsistent with satisfaction of, the conditions of the Offer set forth
in clauses (a)(iii), (iv) or (v) in Exhibit A hereto.
Section 6.6 Public Announcements. Parent and Sub, on the one hand, and the
Company, on the other hand, will consult with each other before issuing any
press release or otherwise making any public statements with respect to the
transactions contemplated by this Agreement, and shall not issue any such press
release or make any such public statement prior to such consultation, except as
may be required by applicable law or by obligations pursuant to any listing
agreement with any national securities exchange.
Section 6.7 Indemnification; Directors and Officers Insurance. (a) From and
after the Effective Time, the Surviving Corporation shall indemnify and hold
harmless all past and present officers and directors (the "Indemnified Parties")
of the Company to the full extent such persons may be indemnified by the Company
pursuant to Delaware law, the Company's Certificate of Incorporation and Bylaws
as in effect from time to time for acts and omissions occurring at or prior to
the Effective Time and shall advance reasonable litigation expenses incurred by
such persons in connection with defending any action arising out of such acts or
omissions, provided that such persons provide the requisite affirmations and
undertaking, as set forth in Section 145(e) of the DGCL.
(b) In addition, Parent will provide, or cause the Surviving
Corporation to provide, for a period of not less than six years after the
Effective Time, the Company's current directors and officers an insurance
and indemnification policy that provides coverage for events occurring at or
prior to the Effective Time (the "D&O Insurance") that is no less favorable
than the existing policy or, if substantially equivalent insurance coverage
is unavailable, the best available coverage; provided, however, that Parent
and the Surviving Corporation shall not be required to pay an annual premium
for the D&O Insurance in excess
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of 200% of the annual premium currently paid by the Company for such
insurance, but in such case shall purchase as much such coverage as
possible for such amount.
(c) This Section 6.7 is intended to benefit the Indemnified Parties and
shall be binding on all successors and assigns of Parent, Sub, the Company
and the Surviving Corporation. Parent hereby guarantees the performance by
the Surviving Corporation of the indemnified obligations pursuant to this
Section 6.7, which guaranty is absolute and unconditional and shall not be
affected by any circumstance whatsoever, including the bankruptcy or
insolvency of the Surviving Corporation or any other person. The Indemnified
Parties shall be intended third-party beneficiaries of this Section 6.7.
Section 6.8 Board Representation. (a) Promptly upon the purchase of shares
of Common Stock pursuant to the Offer, Parent 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 Parent, subject to compliance with Section
14(f) of the Exchange Act, representation on the Board of Directors equal to the
product of (a) the total number of directors on the Board of Directors and (b)
the percentage that the number of shares of Common Stock purchased by Sub bears
to the number of shares of Common Stock outstanding, and the Company shall, upon
request by Parent, promptly increase the size of the Board of Directors and/or
exercise its reasonable best efforts to secure the resignations of such number
of directors as is necessary to enable Parent's designees to be elected to the
Board of Directors and shall cause Parent's designees to be so elected. The
Company shall take, at its expense, all action required pursuant to Section
14(f) and Rule 14f-1 in order to fulfill its obligations under this Section 6.8
and shall include in the Schedule 14D-9 or otherwise timely mail to its
stockholders such information with respect to the Company and its officers and
directors as is required by Section 14(f) and Rule 14f-1 in order to fulfill its
obligations under this Section 6.8. Parent will supply to the Company in writing
and be solely responsible for any information with respect to itself and its
nominees, officers, directors and affiliates required by Section 14(f) and Rule
14f-1.
(b) Following the election of designees of Parent pursuant to this
Section 6.8, prior to the Effective Time, any amendment of this Agreement or
the Certificate of Incorporation or Bylaws of the Company, any termination
of this Agreement by the Company, any extension by the Company of the time
for the performance of any of the obligations or other acts of Parent or Sub
or waiver of any of the Company's rights or obligations hereunder shall
require the concurrence of a majority of the directors of the Company then
in office who are directors as of the date hereof or persons designated by
such directors and neither were designated by Parent nor are employees of
the Company ("Continuing Directors"). Prior to the Effective Time, the
Company and Parent shall use all reasonable efforts to ensure that the
Company's Board of Directors at all times includes at least three Continuing
Directors.
Section 6.9 Notification of Certain Matters. The Company shall give prompt
notice to Parent and Sub, and Parent and Sub shall give prompt notice to the
Company, of (i) the occurrence or nonoccurrence of any event the occurrence or
nonoccurrence of which would be likely to cause any representation or warranty
contained in this Agreement to be untrue or
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inaccurate in any material respect at or prior to the Effective Time, or (ii)
any material failure of the Company, Parent or Sub, as the case may be, to
comply with or satisfy any covenant, condition or agreement to be complied with
or satisfied by it hereunder; provided, however, that the delivery of any notice
pursuant to this Section 6.9 shall not cure such breach or non-compliance or
limit or otherwise affect the remedies available hereunder to the party
receiving such notice.
ARTICLE VII
CONDITIONS PRECEDENT
Section 7.1 Conditions to Each Party's Obligation to Effect the Merger. The
respective obligations of each party to effect the Merger shall be subject to
the fulfillment at or prior to the Effective Time of the following conditions:
(a) Stockholder Approval. If approval of the Merger by the holders of
the Common Stock is required by applicable law, the Merger shall have been
approved by the requisite vote of such holders.
(b) No Order. No court or other Governmental Entity shall have enacted,
issued, promulgated, enforced or entered any law, rule, regulation,
executive order, decree or injunction which prohibits or has the effect of
prohibiting the consummation of the Merger; provided, however, that, prior
to invoking this provision, the Company, Parent and Sub shall use their
reasonable best efforts (subject to the other terms and conditions of this
Agreement) to have any such order, decree or injunction vacated.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
Section 8.1 Termination. This Agreement may be terminated at any time prior
to the Effective Time, whether before or after any approval by the stockholders
of the Company:
(a) by mutual written consent of Parent and the Company;
(b) by the Company if:
(i) the Offer has not been timely commenced (except as a result of
actions or omissions by the Company) in accordance with Section 1.1(a);
or
(ii) there is an Acquisition Proposal which the Board of Directors
of the Company in good faith determines represents a financially
superior transaction for the stockholders of the Company as compared to
the Offer and the Merger, and the Board of Directors of the Company
determines, after
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consultation with Company Counsel, that failure to terminate this
Agreement would be inconsistent with the compliance by the Board of
Directors with its fiduciary duties to stockholders imposed by law;
provided, however, that the right to terminate this Agreement pursuant
to this clause shall not be available (x) if the Company has breached
in any material respect its obligations under Section 5.2, or (y) if,
prior to or concurrently with any purported termination pursuant to
this clause, the Company shall not have paid the fees and expenses
contemplated by Section 6.3(b); or
(iii) any representation or warranty of Parent or Sub shall not
have been true and correct in all material respects when made or shall
have ceased at any later date to be true and correct in all material
respects as if made at such later date; or
(iv) Parent or Sub fails to comply in any material respect with
any of its material obligations or covenants contained herein,
including the obligation of Sub to purchase shares of Common Stock
pursuant to the Offer;
(c) by Parent if:
(i) the Board of Directors of the Company shall have failed to
recommend, or shall have withdrawn, modified or amended in any material
respect its approval or recommendations of the Offer or the Merger or
shall have resolved to do any of the foregoing; or
(ii) any representation or warranty of the Company shall not have
been true and correct (1) in all material respects when made or (2)
other than where the failure to be true and correct would not
reasonably be expected, individually, or in the aggregate, to have a
Material Adverse Effect, shall have ceased at any later date to be true
and correct as if made at such later date; provided, however, that the
right to terminate this Agreement pursuant to this clause shall not be
available to Parent if Sub or any affiliate of Sub shall acquire shares
of Common Stock pursuant to the Offer; or
(iii) the Company shall have failed to comply in any material
respect with any of its material obligations or covenants contained
herein; provided, however, that the right to terminate this Agreement
pursuant to this clause shall not be available to Parent if Sub or any
affiliate of Sub shall acquire shares of Common Stock pursuant to the
Offer;
(d) by either Parent or the Company if:
(i) either (x) as the result of the failure of the Minimum
Condition or any of the other conditions set forth in Exhibit A hereto,
the Offer shall have terminated or expired in accordance with its terms
without Sub having purchased any shares of Common Stock pursuant to the
Offer, or (y) the Offer
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shall not have been consummated on or before October 31, 1998;
provided, however, that the right to terminate this Agreement pursuant
to this clause shall not be available to any party whose failure to
fulfill any of its obligations under this Agreement results in the
failure of any such condition; or
(ii) any court of competent jurisdiction or any governmental,
administrative or regulatory authority, agency or body shall have
issued an order, decree or ruling or taken any other action permanently
enjoining, restraining or otherwise prohibiting the transactions
contemplated by this Agreement and such order, decree, ruling or other
action shall have become final and nonappealable.
Section 8.2 Effect of Termination. In the event of termination of this
Agreement by either Parent or the Company, as provided in Section 8.1, this
Agreement shall forthwith become void and there shall be no liability or further
obligation hereunder on the part of the Company, Parent or Sub or their
respective officers or directors (except for Section 6.3, which shall survive
the termination); provided, however, that nothing contained in this Section 8.2
shall relieve any party hereto from any liability for any willful and material
breach of this Agreement.
Section 8.3 Amendment. This Agreement may be amended by the parties hereto,
by or pursuant to action taken by their respective Boards of Directors, at any
time before or after any approval of the Merger by the stockholders of the
Company but, after the purchase of shares of Common Stock pursuant to the Offer,
no amendment shall be made which decreases the Merger Consideration or which in
any way materially adversely affects the rights of such stockholders, without
the further approval of such stockholders. This Agreement may not be amended
except by an instrument in writing signed on behalf of each of the parties
hereto.
Section 8.4 Waiver. At any time prior to the Effective Time, the parties
hereto may (i) subject to Section 1.1 of this Agreement, extend the time for the
performance of any of the obligations or other acts of the other parties hereto,
(ii) waive any inaccuracies in the representations and warranties contained
herein or in any document delivered pursuant hereto, or (iii) waive compliance
with any of the agreements or conditions contained herein which may legally be
waived. Any agreement on the part of a party hereto to any such extension or
waiver shall be valid only if set forth in an instrument in writing signed on
behalf of such party.
ARTICLE IX
GENERAL PROVISIONS
Section 9.1 Non-Survival of Representations and Warranties. None of the
representations and warranties in this Agreement or in any instrument delivered
pursuant to this Agreement shall survive the termination of this Agreement in
accordance with Article VIII or the Effective Time; provided, however, that
termination of this Agreement shall not
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relieve any party hereto from any liability for any willful and material breach
by such party of any such representations or warranties.
Section 9.2 Notices. All notices and other communications hereunder shall be
in writing and shall be deemed given if delivered personally, sent by overnight
courier or telecopied (with a confirmatory copy sent by overnight courier) to
the parties at the following addresses (or at such other address for a party as
shall be specified by like notice):
(a) if to Parent or Sub, to:
Tyco International Ltd.
c/o Tyco International (US) Inc.
One Tyco Park
Exeter, New Hampshire 03833
Attn: General Counsel, Tyco International (US) Inc.
Fax: (603) 778-7700
Conf: (603) 778-9700
with a copy to:
Kramer, Levin, Naftalis & Frankel
919 Third Avenue
New York, New York 10022
Attn: Joshua M. Berman, Esq.
Fax: (212) 715-8000
Conf: (212) 715-9100
(b) if to the Company to:
Sigma Circuits, Inc.
393 Mathew Street
Santa Clara, CA 95050
Attn: Philip S. Bushnell
Fax: (408) 727-0319
Conf: (408) 727-9169
with a copy to:
Cooley Godward LLP
3000 Sand Hill Road
Menlo Park, California 94025
Attn: Mark P. Tanoury, Esq.
Fax: (650) 854-2691
Conf: (650) 843-5000
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Section 9.3 Interpretation. When a reference is made in this Agreement to a
Section, such reference shall be to a Section of this Agreement unless otherwise
indicated. The table of contents and headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Whenever the words "include," "includes" or
"including" are used in this Agreement, they shall be deemed to be followed by
the words "without limitation." As used in this Agreement, (i) "business day"
shall have the meaning ascribed thereto in Rule 14d-1(c)(6) under the Exchange
Act, and (ii) "subsidiary" shall have the meaning ascribed thereto in Rule 12b-2
under the Exchange Act.
Section 9.4 Counterparts. This Agreement may be executed in counterparts,
each such counterpart being deemed to be an original instrument and all of which
shall be considered one and the same agreement and shall become effective when
one or more counterparts have been signed by each of the parties and delivered
to the other parties.
Section 9.5 Entire Agreement; No Third-Party Beneficiaries. This Agreement,
including the documents and instruments referred to herein, (a) constitutes the
entire agreement and supersedes all prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter hereof,
and (b) except for the provisions of Section 6.7 is not intended to confer upon
any person other than the parties any rights or remedies hereunder.
Section 9.6 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
laws thereof.
Section 9.7 Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
without the prior written consent of the other parties, except that Sub may
assign, in its sole discretion, any of or all its rights, interests and
obligations under this Agreement to Parent or to any direct or indirect wholly
owned subsidiary of Parent, but no such assignment shall relieve Sub of any of
its obligations hereunder. Subject to the preceding sentence, this Agreement
shall be binding upon, inure to the benefit of, and be enforceable by, the
parties and their respective successors and assigns.
Section 9.8 Severability. If any term or other provision of this Agreement
is invalid, illegal or incapable of being enforced by any rule of law, or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby are not affected in any manner materially
adverse to any party.
Section 9.9 Enforcement of this Agreement; Attorneys Fees. (a) The parties
agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to an injunction or injunctions to prevent breaches of
this Agreement and to enforce specifically the terms and
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provisions hereof in any court of the United States or any state having
jurisdiction, this being in addition to any other remedy to which they are
entitled at law or in equity.
(b) The prevailing party in any judicial action shall be entitled to
receive from the other party reimbursement for the prevailing party's
reasonable attorneys' fees and disbursements, and court costs. The
provisions of this Section 9.9(b) shall survive the termination of this
Agreement in accordance with Article VIII.
Section 9.10 Material Adverse Effect. When used in this Agreement, the term
"Material Adverse Effect" means any change, effect or circumstance that is or is
reasonably likely to be materially adverse to the business, assets (including
intangible assets), financial condition, prospects or results of operations of
the Company; provided, however, that the following shall be excluded from the
definition of "Material Adverse Effect" and from any determination as to whether
a Material Adverse Effect has occurred or may occur with respect to the Company:
the effects of changes that are applicable to (i) the Company's results of
operations for the fiscal quarter ending June 27, 1998, (ii) the United States
electronic interconnect industry generally, (iii) the United States economy
generally or (iv) the United States securities markets generally.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, Parent, Sub and the Company have caused this Agreement
to be signed by their respective officers thereunto duly authorized all as of
the date first written above.
TYCO INTERNATIONAL LTD.
By: /s/ Mark H.. Swartz
-------------------------------
Name: Mark H. Swartz
Title: Executive Vice President
T10 ACQUISITION CORP.
By: /s/ Mark H. Swartz
-------------------------------
Name: Mark H. Swartz
Title: Vice President
SIGMA CIRCUITS, INC.
By: /s/ B. Kevin Kelly
-------------------------------
Name: B. Kevin Kelly
Title: President and Chief Executive Officer
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EXHIBIT A
CONDITIONS OF THE OFFER
Notwithstanding any other term of the Offer or this Agreement, Sub shall not
be required to accept for payment or pay for, subject to any applicable rules
and regulations of the SEC, including Rule 14e-1(c) of the Exchange Act, any
shares of Common Stock not theretofore accepted for payment or paid for and may
terminate or amend the Offer as to such shares of Common Stock, unless (i) there
shall have been validly tendered and not withdrawn prior to the expiration of
the Offer that number of shares of Common Stock which would represent at least a
majority of the outstanding shares of Common Stock on a fully diluted basis (the
"Minimum Condition"), and (ii) any waiting period under the HSR Act applicable
to the purchase of shares of Common Stock pursuant to the Offer shall have
expired or been terminated; provided, however, that Parent and Sub shall extend
the expiration date of the Offer from time to time until July 31, 1998 if, when
and as necessary to satisfy any request for additional information by the DOJ or
FTC pursuant to the HSR Act. Furthermore, notwithstanding any other term of the
Offer or this Agreement, Sub shall not be required to accept for payment or,
subject as aforesaid, to pay for any shares of Common Stock not theretofore
accepted for payment or paid for, and may terminate or amend the Offer if at any
time on or after the date of this Agreement and before the acceptance of such
shares of Common Stock for payment or the payment therefor, any of the following
conditions exist or shall occur and remain in effect:
(a) there shall have been instituted, pending or threatened any action
or proceeding by any court or other Governmental Entity, which (i) seeks to
challenge the acquisition by Parent or Sub (or any of its affiliates) of
shares of Common Stock pursuant to the Offer, restrain, prohibit or delay
the making or consummation of the Offer or the Merger, or obtain damages in
connection therewith in an amount which would reasonably be expected to have
a Material Adverse Effect, (ii) seeks to make the purchase of or payment for
some or all of the shares of Common Stock pursuant to the Offer or the
Merger illegal, (iii) seeks to impose limitations on the ability of Parent
(or any of its affiliates) effectively to acquire or hold, or to require
Parent or the Company or any of their respective affiliates or subsidiaries
to dispose of or hold separate, any portion of the assets or the business of
Parent and its affiliates or any material portion of the assets or the
business of the Company and its subsidiaries taken as a whole, (iv) seeks to
impose material limitations on the ability of Parent (or its affiliates) to
exercise full rights of ownership of the shares of Common Stock purchased by
it, including, without limitation, the right to vote the shares purchased by
it on all matters properly presented to the stockholders of the Company, or
(v) seeks to materially restrict any future business activity by Parent (or
any of its affiliates) in the United States electronic interconnect
industry, including, without limitation, requiring the prior consent of any
person or entity (including any Governmental Entity) to future transactions
by Parent (or any of its affiliates); or
(b) there shall have been promulgated, enacted, entered, enforced or
deemed applicable to the Offer or the Merger, by any statute, rule,
regulation,
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judgment, decree, order or injunction, that is reasonably likely to
directly or indirectly result in any of the consequences referred to in
clauses (i) through (v) of subsection (a) above; or
(c) the Merger Agreement shall have been terminated in accordance with
its terms; or
(d) any of the representations and warranties made by the Company in
the Merger Agreement (1) shall not have been true and correct in all
material respects when made, or (2) other than where the failure to be true
and correct will not reasonably be expected, individually or in the
aggregate to have a Material Adverse Effect, shall thereafter have ceased to
be true and correct in all material respects as if made as of such later
date (other than representations and warranties made as of a specified
date), or the Company shall not in all material respects have performed in a
timely manner each material obligation and agreement and complied in a
timely manner with each covenant to be performed and complied with by it
under the Merger Agreement; or
(e) the Company's Board of Directors shall have modified or amended its
recommendation of the Offer in any manner adverse to Parent or shall have
withdrawn its recommendation of the Offer, or shall have recommended
acceptance of any Acquisition Proposal or shall have resolved to do any of
the foregoing; or
(f) (i) any corporation, entity or "group" (as defined in Section
13(d)(3) of the Exchange Act) ("person"), other than Parent and Sub, shall
have acquired beneficial ownership of more than 20% of the outstanding
shares of Common Stock, or shall have been granted any options or rights,
conditional or otherwise, to acquire a total of more than 20% of the
outstanding shares of Common Stock; (ii) any new group shall have been
formed which beneficially owns more than 20% of the outstanding shares of
Common Stock; or (iii) any person (other than Parent or one or more of its
affiliates) shall have entered into an agreement in principle or definitive
agreement with the Company with respect to a tender or exchange offer for
any shares of Common Stock or a merger, consolidation or other business
combination with or involving the Company; or
(g) there shall have occurred (i) any general suspension of, or
limitation on prices for, trading in securities on the New York Stock
Exchange, the American Stock Exchange or The Nasdaq Stock Market, (ii) a
declaration of a banking moratorium or any suspension of payments in respect
of banks in the United States (whether or not mandatory), (iii) a
commencement or escalation of a war, armed hostilities or other inter
national or national calamity directly involving the United States (that
materially and adversely effect the Company and/or Parent's electronic
interconnect business, (iv) any material limitation (whether or not
mandatory) by any Governmental Entity on, or any other event that is
reasonably likely materially and adversely to affect the extension of credit
by banks or other lending institutions in the
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United States, (v) any decline in either the Dow Jones Industrial Average or
the Standard and Poor's 500 Index by an amount in excess of 15% measured
from the close of business on the date of this Agreement, or (vi) in the
case of any of the foregoing existing at the time of the commencement of the
Offer, a material acceleration or worsening thereof; or
(h) any change, development, effect or circumstance shall have occurred
or be threatened that would reasonably be expected to have a Material
Adverse Effect; or
(i) the Company shall commence a case under any chapter of Title XI of
the United States Code or any similar law or regulation; or a petition under
any chapter of Title XI of the United States Code or any similar law or
regulation is filed against the Company which is not dismissed within 10
business days.
The foregoing conditions are for the sole benefit of Parent and Sub and may
be asserted by Parent or Sub regardless of the circumstances giving rise to any
such condition and may be waived by Parent or Sub, in whole or in part, at any
time and from time to time, in the sole discretion of Parent. The failure by
Parent or Sub at any time to exercise any of the foregoing rights shall not be
deemed a waiver of any right, the waiver of such right with respect to any
particular facts or circumstances shall not be deemed a waiver with respect to
any other facts or circumstances, and each right shall be deemed an ongoing
right which may be asserted at any time and from time to time.
Should the Offer be terminated pursuant to the foregoing provisions, all
tendered shares of Common Stock not theretofore accepted for payment shall
forthwith be returned by the Paying Agent to the tendering stockholders.
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STOCKHOLDER AGREEMENT
THIS STOCKHOLDER AGREEMENT is made and entered into as of this 1st day of
June, 1998, among TYCO INTERNATIONAL LTD., a Bermuda company ("Parent"), T10
ACQUISITION CORP., a Delaware corporation and an indirect, wholly owned
subsidiary of Parent ("Purchaser"), and the other parties signatory hereto
(each, a "Stockholder").
WHEREAS each Stockholder desires that SIGMA CIRCUITS, INC., a Delaware
corporation (the "Company"), Parent and Purchaser enter into an Agreement and
Plan of Merger dated as of the date hereof (as the same may be amended or
supplemented, the "Merger Agreement") with respect to the merger of Purchaser
with and into the Company (the "Merger"); and
WHEREAS each Stockholder is executing this Agreement as an inducement to
Parent to enter into and execute, and to cause Purchaser to enter into and
execute, the Merger Agreement.
NOW, THEREFORE, in consideration of the execution and delivery by Parent and
Purchaser of the Merger Agreement and the mutual covenants, conditions and
agreements contained herein and therein, the parties agree as follows:
SECTION 1. Representations and Warranties. Each Stockholder severally, and
not jointly, represents and warrants to Parent and Purchaser as follows:
(a) Such Stockholder (individually or together with such other Stockholders
as indicated on Schedule A hereto) is the record or beneficial owner of the
number of shares of Common Stock, par value $.001 per share, of the Company (the
"Company Common Stock") and options or rights to acquire shares of Company
Common Stock, set forth opposite such Stockholder's name in Schedule A hereto
(as may be adjusted from time to time pursuant to Section 5, such Stockholder's
"Securities"). Except for such Stockholder's Securities and any other securities
of the Company subject hereto, such Stockholder does not have dispositive or
voting power over any other securities of the Company.
(b) Such Stockholder's Securities and the certificates or agreements
representing such Securities are now and at all times during the term hereof
will be held by such Stockholder, or by a nominee or custodian for the benefit
of such Stockholder, free and clear of all liens, claims, security interests,
proxies, voting trusts or agreements, understandings or arrangements or any
other encumbrances whatsoever, except for any such encumbrances or proxies
arising hereunder.
(c) Such Stockholder understands and acknowledges that Parent is entering
into, and causing Purchaser to enter into, the Merger Agreement in reliance upon
such Stockholder's execution and delivery of this Agreement. Such Stockholder
acknowledges that the irrevocable proxy set forth in Section 4 is granted in
consideration for the execution and delivery of the Merger Agreement by Parent
and Purchaser.
SECTION 2. Agreement to Tender. Each Stockholder hereby severally agrees
that it shall tender its all of its shares of Company Common Stock, whether now
held or acquired anytime prior to expiration or termination of the Offer, into
the Offer (as defined in the Merger Agreement) and that it shall not withdraw
any Securities so tendered unless the Offer (i) is terminated in accordance with
the terms of the Merger Agreement or (ii) expires without such Stockholder's
Securities being purchased
<PAGE>
SECTION 3. Covenants. Each Stockholder severally, and not jointly, agrees
with, and covenants to, Parent and Purchaser as follows:
(a) Such Stockholder shall not, except as contemplated by the terms of this
Agreement, (i) transfer (the term "transfer" shall include, without limitation,
for the purposes of this Agreement, any sale, gift, pledge or other
disposition), or consent to any transfer of, any or all of such Stockholder's
Securities or any interest therein, (ii) enter into any contract, option or
other agreement or understanding with respect to any transfer of any or all of
such Securities or any interest therein, (iii) grant any proxy,
power-of-attorney or other authorization or consent in or with respect to such
Securities, (iv) deposit such Securities into a voting trust or enter into a
voting agreement or arrangement with respect to such Securities or (v) take any
other action that would in any way restrict, limit or interfere with the
performance of its obligations hereunder or the transactions contemplated
hereby; provided, however, that nothing in this Agreement shall prohibit a
Stockholder from making charitable contributions of up to a total of 10% of the
number of shares of Company Common Stock set forth for such Stockholder on
Schedule A.
(b) Such Stockholder shall not, nor shall it permit any investment banker,
attorney or other adviser or representative of such Stockholder acting on its
behalf to, directly or indirectly, (i) solicit, initiate or encourage the
submission of, any Acquisition Proposal (as defined in the Merger Agreement) or
(ii) participate in any discussions or negotiations regarding, or furnish to any
person any information with respect to, or take any other action to facilitate
any inquiries or the making of any proposal that constitutes, or may reasonably
be expected to lead to, any Acquisition Proposal, provided that the foregoing
restrictions shall not be applicable in any case to the extent that, pursuant to
the Merger Agreement, such restrictions would not be applicable to the Company.
SECTION 4. Grant of Irrevocable Proxy; Appointment of Proxy.
(a) Each Stockholder hereby irrevocably (except in accordance with the
provisions of Section 8) grants to, and appoints, Parent or its assignee and
Jeff Mattfolk, Brian Moroze and any other individual who shall hereafter be
designated by Parent or its assignee, such Stockholder's proxy and
attorney-in-fact (with full power of substitution), for and in the name, place
and stead of such Stockholder, to vote all of such Stockholder's Securities that
are voting securities, or grant a consent or approval in respect of such
Securities, at any meeting of stockholders of the Company or at any adjournment
thereof or in any other circumstances upon which their vote, consent or other
approval is sought, against (i) any merger agreement or merger (other than the
Merger Agreement and the Merger), consolidation, combination, sale of
substantial assets, reorganization, joint venture, recapitalization,
dissolution, liquidation or winding up of or by the Company and (ii) any
amendment of the Company's Certificate of Incorporation or By-laws or other
proposal or transaction (including any consent solicitation to remove or elect
any directors of the Company) involving the Company or any of its subsidiaries
which amendment or other proposal or transaction would in any manner impede,
frustrate, prevent or nullify, or result in a breach of any covenant,
representation or warranty or any other obligation or agreement of the Company
under or with respect to, the Offer, the Merger, the Merger Agreement or any of
the other transactions contemplated by the Merger Agreement (each of the
foregoing in clause (i) or (ii) above, a "Competing Transaction").
(b) Such Stockholder represents that any proxies heretofore given in respect
of such Stockholder's Securities are not irrevocable, and that any such proxies
are hereby revoked.
(c) Such Stockholder hereby affirms that the irrevocable proxy set forth in
this Section 4 is given in connection with the execution of the Merger
Agreement, and that such irrevocable proxy is given to secure the performance of
the duties of the Stockholder under this Agreement. Such Stockholder hereby
further affirms that the irrevocable proxy is coupled with an interest and may
under no circumstances be revoked (except in accordance with the provisions of
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Section 8). Such Stockholder hereby ratifies and confirms all that such
irrevocable proxy may lawfully do or cause to be done by virtue hereof. Such
irrevocable proxy is executed and intended to be irrevocable in accordance with
the provisions of Section 212 of the Delaware General Corporation Law (the
"DGCL").
SECTION 5. Certain Events. Each Stockholder agrees that this Agreement and
the obligations hereunder shall attach to such Stockholder's Securities and
shall be binding upon any person or entity to which legal or beneficial
ownership of such Securities shall pass, whether by operation of law or
otherwise, including without limitation such Stockholder's heirs, guardians,
administrators or successors. In the event of any stock split, stock dividend,
merger, reorganization, recapitalization or other change in the capital
structure of the Company affecting the Company Common Stock, or the acquisition
of additional shares of Company Common Stock or other securities or rights of
the Company by any Stockholder, the number of Securities listed on Schedule A
beside the name of such Stockholder shall be adjusted appropriately and this
Agreement and the obligations hereunder shall attach to any additional shares of
Company Common Stock or other securities or rights of the Company issued to or
acquired by such Stockholder.
SECTION 6. Stop Transfer. The Company agrees with, and covenants to, Parent
that the Company shall not register the transfer of any certificate or agreement
representing any Stockholder's Securities, unless such transfer is made to
Parent or Purchaser or otherwise in compliance with this Agreement. Each
Stockholder acknowledges that its Securities will be placed by the Company on
the "stop-transfer list" maintained by the Company's transfer agent until this
Agreement is terminated pursuant to its terms.
SECTION 7. Further Assurances. Each Stockholder shall, upon request of
Parent or Purchaser execute and deliver any additional documents and take such
further actions as may reasonably be deemed by Parent or Purchaser to be
necessary or desirable to carry out the provisions hereof and to vest the power
to vote such Stockholder's Securities that are voting securities as contemplated
by Section 4 in Parent and the other irrevocable proxies described therein.
SECTION 8. Termination. This Agreement, and all rights and obligations of
the parties hereunder and the proxy provided in Section 4, shall terminate upon
the earlier of (a) the date upon which the Merger Agreement is terminated in
accordance with its terms, (b) with respect to each Stockholder, the date that
Parent or Purchaser shall have purchased and paid for the Company Common Stock
Securities of each Stockholder pursuant to Section 2 or (c) upon termination or
expiration of the Offer.
SECTION 9. Miscellaneous.
(a) Capitalized terms used and not otherwise defined in this Agreement shall
have the respective meanings assigned to such terms in the Merger Agreement.
(b) All notices, requests, claims, demands and other communications under
this Agreement shall be in writing and shall be deemed given if delivered
personally or sent by overnight courier (providing proof of delivery) to the
parties at the following addresses (or at such other address for a party as
shall be specified by like notice): (i) if to Parent or Purchaser, to the
addresses set forth in Section 9.2 of the Merger Agreement; and (ii) if to a
Stockholder, to the address set forth on Schedule A hereto, or such other
address as may be specified in writing by such Stockholder.
(c) The headings contained in this Agreement are for reference purposes only
and shall not affect in any way the meaning or interpretation of this Agreement.
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(d) This Agreement may be executed in two or more counterparts, all of which
shall be considered one and the same agreement, and shall become effective (even
without the signature of any other Stockholder) as to any Stockholder when one
or more counterparts have been signed by each of Parent, Purchaser and such
Stockholder and delivered to Parent, Purchaser and such Stockholder.
(e) This Agreement (including the documents and instruments referred to
herein) constitutes the entire agreement, and supersedes all prior agreements
and understandings, both written and oral, among the parties with respect to the
subject matter hereof.
(f) This Agreement shall be governed by, and construed in accordance with,
the laws of the state of New York and, to the extent expressly provided herein,
the DGCL, regardless of the laws that might otherwise govern under applicable
principles of conflicts of laws thereof.
(g) Neither this Agreement nor any of the rights, interests or obligations
under this Agreement shall be assigned, in whole or in part, by operation of law
or otherwise, by any of the parties without the prior written consent of the
other parties, except (i) by laws of descent and (ii) Parent may assign, in its
sole discretion, any and all of its rights, interests or obligations under this
Agreement to any entity controlling, controlled by or under common control with
Parent. Any assignment in violation of the foregoing shall be void.
(h) If any term, provision, covenant or restriction herein, or the
application thereof to any circumstance, shall, to any event, be held by a court
of competent jurisdiction to be invalid, void or unenforceable, the remainder of
the terms, provisions, covenants and restrictions herein and the application
thereof to any other circumstances, shall remain in full force and effect, shall
not in any way be affected, impaired or invalidated, and shall be enforced to
the fullest extent permitted by law.
(i) Each Stockholder agrees that irreparable damage would occur and that
Parent and Purchaser would not have any adequate remedy at law in the event that
any of the provisions of this Agreement were not performed in accordance with
their specific terms or were otherwise breached. It is accordingly agreed that
Parent and Purchaser shall be entitled to an injunction or injunctions to
prevent breaches by any Stockholder of this Agreement and to enforce
specifically the terms and provisions of this Agreement. Each of the parties
hereto (i) consents to submit such party to the personal jurisdiction of any
Federal court located in the State of New York in the event any dispute arises
out of this Agreement or any of the transactions contemplated hereby, (ii)
agrees that such party will not attempt to deny or defeat such personal
jurisdiction by motion or other request for leave from any such court, (iii)
agrees that such party will not bring any action relating to this Agreement or
any of the transactions contemplated hereby in any court other than a Federal
court located in the State of New York. The prevailing party in any judicial
action shall be entitled to receive from the other party reimbursement for the
prevailing party's reasonable attorneys' fees and disbursements, and court
costs.
(j) No amendment, modification or waiver in respect of this Agreement shall
be effective against any party unless it shall be in writing and signed by such
party.
[The Remainder of this Page is Blank]
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<PAGE>
IN WITNESS WHEREOF, Parent, Purchaser and the Stockholders have caused this
Agreement to be duly executed and delivered as of the date first written above.
TYCO INTERNATIONAL LTD.
By: /s/ Mark H. Swartz
----------------------------
Name: Mark H. Swartz
Title: Executive Vice President
T10 ACQUISITION CORP.
By: /s/ Mark H. Swartz
----------------------------
Name: Mark H. Swartz
Title: Vice President
ACKNOWLEDGED AND AGREED
TO AS TO SECTION 6:
SIGMA CIRCUITS, INC.
By: /s/ B. Kevin Kelly
--------------------------
Name: B. Kevin Kelly
Title: President and Chief
Executive Officer
5
<PAGE>
Schedule A
<TABLE>
<CAPTION>
Number of Shares of Number of
Common Stock Options or other
Name, Address and Signature of Stockholder Owned Rights Owned
- ------------------------------------------ ----- ------------
<S> <C> <C>
Carl H.R. Brockl 378,786 413,000
Linda Brockl
1950 W. Fremont Street
Stockton, CA 94023
/s/ Carl H.R. Brockl
- -------------------------
CARL H.R. BROCKL
/s/ Linda Brockl
- -------------------------
LINDA BROCKL
/s/ Kevin Kelly
- -------------------------
B. Kevin Kelly 355,814
c/o Sigma Circuits, Inc.
/s/ Philip S. Bushnell
- -------------------------
Philip S. Bushnell 49,360 152,951
c/o Sigma Circuits, Inc.
/s/ Robert P. Cummins
- -------------------------
Robert P. Cummins 30,000 20,454
c/o Sigma Circuits, Inc.
</TABLE>
6
