<PAGE>
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- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
SCHEDULE 14D-1
TENDER OFFER STATEMENT
PURSUANT TO SECTION 14(D)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
------------------------
PACIFIC SCIENTIFIC COMPANY
(NAME OF SUBJECT COMPANY)
ACC ACQUISITION CORP.
DANAHER CORPORATION
(BIDDERS)
COMMON STOCK, $1.00 PAR VALUE
(including the Associated Preferred Share Purchase Rights)
(TITLE OF CLASS OF SECURITIES)
694806
------------------------
(CUSIP NUMBER OF CLASS OF SECURITIES)
PATRICK W. ALLENDER
DANAHER CORPORATION
1250 24TH ST., N.W.
WASHINGTON, D.C. 20037
(202) 828-0850
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO
RECEIVE NOTICES AND COMMUNICATIONS ON BEHALF OF BIDDERS)
Copy to:
ERIC J. FRIEDMAN, ESQ.
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
919 THIRD AVENUE
NEW YORK, NEW YORK 10022
(212) 735-3000
------------------------
CALCULATION OF FILING FEE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TRANSACTION VALUATION* $412,445,742.50 AMOUNT OF FILING FEE $82,490.00
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
* Estimated for purposes of calculating the amount of the filing fee only. The
amount assumes the purchase of 13,634,570 shares of common stock, $1.00 par
value (the 'Shares'), of Pacific Scientific Company (the 'Company'), at a
price per Share of $30.25 in cash. Such number of Shares represents all of
the 12,481,306 Shares outstanding as of January 31, 1998, plus 1,153,264
Shares issuable upon the exercise of outstanding stock options.
/ / Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the form
or schedule and the date of its filing.
Amount Previously Paid: None
Form or Registration No.: N/A
Filing Party: N/A
Date Filed: N/A
- --------------------------------------------------------------------------------
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Exhibit Index is located on Page 8
<PAGE>
CUSIP NO. 694806 14D-1
<TABLE>
<S> <C>
1. Names of Reporting Persons
S.S. or I.R.S. Identification Nos. of the Above Persons
ACC Acquisition Corp.
2. Check the Appropriate Box if a Member of a Group (a) / /
(b) / /
3. SEC Use only
4. Source 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
California
7. Aggregate Amount Beneficially Owned by Each Reporting Person
none
8. Check Box if the Aggregate Amount in Row (7) Excludes Certain Shares / /
9. Percent of Class Represented by Amount in Row (7)
not applicable
10. Type of Reporting Person
CO
2
<PAGE>
CUSIP NO. 694806 14D-1
</TABLE>
<TABLE>
<S> <C>
1. Names of Reporting Persons
S.S. or I.R.S. Identification Nos. of the Above Person
Danaher Corporation
2. Check the Appropriate Box if a Member of a Group (a) / /
(b) / /
3. SEC Use only
4. Source of Funds
WC or BK
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
none
8. Check Box if the Aggregate Amount in Row (7) Excludes Certain Shares / /
9. Percent of Class Represented by Amount in Row (7)
not applicable
10. Type of Reporting Person
CO
</TABLE>
3
<PAGE>
TENDER OFFER
This Tender Offer Statement on Schedule 14D-1 relates to the offer by ACC
Acquisition Corp., a California corporation (the 'Purchaser') and an indirect
wholly owned subsidiary of Danaher Corporation, a Delaware corporation
('Parent'), to purchase all outstanding shares of common stock, par value $1.00
per share (the 'Common Shares'), of Pacific Scientific Company, a California
corporation, including the associated Preferred Share Purchase Rights (together
with the Common Shares, the 'Shares'), at $30.25 per Share, net to the seller in
cash, on the terms and subject to the conditions set forth in the Offer to
Purchase, dated February 6, 1998 (the 'Offer to Purchase'), and in the related
Letter of Transmittal, copies of which are attached hereto as Exhibits (a)(1)
and (a)(2), respectively (which, as amended or supplemented from time to time,
together constitute the 'Offer'). The item numbers and responses thereto below
are in accordance with the requirements of Schedule 14D-1.
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is Pacific Scientific Company, a
California corporation (the 'Company'). The address of the Company's principal
executive offices is 620 Newport Center Drive, Suite 700, Newport Beach,
California 92660.
(b) 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)-(d), (g) This Statement is filed by the Purchaser and Parent. The
information set forth in the Introduction, in Section 9--'Certain Information
Concerning the Purchaser and Parent' and in Schedule I of the Offer to Purchase
is incorporated herein by reference.
(e)-(f) During the last five years, none of the Purchaser Entities (as
defined in the Offer to Purchase) nor, to their knowledge, any of the persons
listed in Schedule I (Directors and Executive Officers) to the Offer to
Purchase, (i) has been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) or (ii) has been a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction and as
a result of such proceeding was or is subject to a judgment, decree or final
order enjoining future violations of, or prohibiting activities subject to,
federal or state securities laws or finding any violation of such laws.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
(a)-(b) The information set forth in the Introduction, in Section
9--'Certain Information Concerning the Purchaser and Parent,' in Section
11--'Background of the Offer; Contacts with the Company' and in Section
12--'Purpose of the Offer, the Merger and the Merger Agreement' of the Offer to
Purchase is incorporated herein by reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a)-(b) The information set forth in Section 10--'Source and Amount of
Funds' of the Offer to Purchase is incorporated herein by reference.
(c) Not applicable.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDERS.
(a)-(g) The information set forth in the Introduction, in Section
7--'Effect of the Offer on the Market for the Shares; Exchange Listing and
Exchange Act Registration' and in Section 12--'Purpose of the Offer, the Merger
and the Merger Agreement' of the Offer to Purchase is incorporated herein by
reference.
4
<PAGE>
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a)-(b) The information set forth in the Introduction, in Section
9--'Certain Information Concerning the Purchaser and Parent' and in Section
12--'Purpose of the Offer, the Merger and the Merger Agreement' 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, in Section 9--'Certain
Information Concerning the Purchaser and Parent,' in Section 11--'Background of
the Offer; Contacts with the Company' and in Section 12--'Purpose of the Offer,
the Merger and the Merger Agreement' of the Offer to Purchase is incorporated
herein by reference.
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in the Introduction, in Section 16--'Fees and
Expenses' and in Section 17--'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 the
Purchaser and Parent,' of the Offer to Purchase, including the financial
statements and related notes thereto incorporated by reference in Section 9, is
incorporated herein by reference.
The incorporation by reference herein of the above-referenced 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
shares being sought in the Offer.
ITEM 10. ADDITIONAL INFORMATION.
(a) The information set forth under Introduction, in Section 9--'Certain
Information Concerning the Purchaser and Parent,' in Section 11--'Background of
the Offer; Contacts with the Company,' and in Section 12--'Purpose of the Offer,
the Merger and the Merger Agreement' of the Offer to Purchase is incorporated
herein by reference.
(b)-(c) The information set forth in Section 12--'Purpose of the Offer, the
Merger and the Merger Agreement' and in Section 15--'Certain Legal Matters' of
the Offer to Purchase is incorporated herein by reference.
(d) The information set forth in Section 7--'Effect of the Offer on the
Market for the Shares; Exchange Listing and Exchange Act Registration' of the
Offer to Purchase is incorporated herein by reference.
(e) Not applicable.
(f) The information set forth in the Offer to Purchase and the Letter of
Transmittal, copies of which are attached hereto as Exhibits (a)(1) and (a)(2),
respectively, is incorporated herein by reference.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
(a)(1) Offer to Purchase, dated February 6, 1998
(a)(2) Letter of Transmittal
(a)(3) Notice of Guaranteed Delivery
(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and
Other Nominees
(a)(5) Letter to Clients for use by Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees
(a)(6) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9
5
<PAGE>
(a)(7) Form of Summary Advertisement, dated February 6, 1998
(a)(8) Text of Press Release, dated February 2, 1998
(a)(9) Text of Press Release, dated February 6, 1998
(b)(1) Credit Agreement, dated as of September 7, 1990, among Danaher
Corporation, the financial institutions listed therein and Bankers Trust
Company, as Agent, filed as Exhibit 10(b) to the Annual Report on Form 10-K of
Danaher Corporation, for the year ended December 31, 1996, and incorporated by
reference herein.
(b)(2) Commitment Letter from the Bank of Nova Scotia to Danaher
Corporation, dated February 3, 1998
(c)(1) Agreement and Plan of Merger, dated as of January 31, 1998, by and
among Danaher Corporation, the Purchaser and the Company, filed as Exhibit 1 to
the Company's Current Report on Form 8-K filed February 2, 1998, and
incorporated by reference herein
(c)(2) Confidentiality Letter Agreement, dated January 9, 1998, by and
among Danaher Corporation and the Company, filed as Exhibit 3 to the Company's
Schedule 14D-9 filed on February 6, 1998, and incorporated by reference herein
(d) None
(e) Not applicable
(f) None
6
<PAGE>
SIGNATURES
After due inquiry and to the best of my knowledge and belief, the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
Dated: February 6, 1998
ACC ACQUISITION CORP.
BY: /s/ PATRICK W. ALLENDER
---------------------------------
NAME: PATRICK W. ALLENDER
TITLE: Vice President, Treasurer
and Director
DANAHER CORPORATION
BY: /s/ PATRICK W. ALLENDER
---------------------------------
NAME: PATRICK W. ALLENDER
TITLE: Senior Vice President,
Chief Financial Officer
and Secretary
7
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT PAGE NO.
- --------------------------------------------------------------------- ----------
<S> <C> <C>
(a)(1) -- Offer to Purchase, dated February 6, 1998
(a)(2) -- Letter of Transmittal
(a)(3) -- Notice of Guaranteed Delivery
(a)(4) -- Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees
(a)(5) -- Letter to Clients for use by Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees
(a)(6) -- Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9
(a)(7) -- Form of Summary Advertisement, dated February 6, 1998
(a)(8) -- Text of Press Release, dated February 2, 1998
(a)(9) -- Text of Press Release, dated February 6, 1998
(b)(1) -- Credit Agreement, dated as of September 7, 1990, among
Danaher Corporation, the financial institutions listed
therein and Bankers Trust Company, as Agent, filed as
Exhibit 10(b) to the Annual Report on Form 10-K of Danaher
Corporation, for the year ended December 31, 1996, and
incorporated by reference herein
(b)(2) -- Commitment Letter from the Bank of Nova Scotia to
Danaher Corporation, dated February 3, 1998
(c)(1) -- Agreement and Plan of Merger, dated as of January 31,
1998, by and among Danaher Corporation, the Purchaser and
the Company, filed as Exhibit 1 to the Company's Current
Report on 8-K filed February 2, 1998, and incorporated by
reference herein
(c)(2) -- Confidentiality Letter Agreement, dated January 9, 1998,
by and among Danaher Corporation and the Company, filed as
Exhibit 3 to the Company's Schedule 14D-9 filed on
February 6, 1998, and incorporated by reference herein
(d) -- None
(e) -- Not Applicable
(f) -- None
</TABLE>
8
<PAGE>
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
OF
PACIFIC SCIENTIFIC COMPANY
AT
$30.25 NET PER SHARE
BY
ACC ACQUISITION CORP.
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
DANAHER CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON FRIDAY, MARCH 6, 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 THAT NUMBER OF
SHARES (AS DEFINED HEREIN) WHICH REPRESENTS AT LEAST NINETY PERCENT OF THE
SHARES OUTSTANDING ON THE DATE OF PURCHASE. THE OFFER IS ALSO SUBJECT TO OTHER
TERMS AND CONDITIONS. SEE SECTION 14.
------------------------
THE BOARD OF DIRECTORS OF PACIFIC SCIENTIFIC COMPANY (THE 'COMPANY') HAS
APPROVED THE OFFER AND THE MERGER (AS DEFINED HEREIN), HAS DETERMINED THAT THE
OFFER AND THE MERGER ARE FAIR TO AND IN THE BEST INTERESTS OF THE SHAREHOLDERS
OF THE COMPANY AND RECOMMENDS THAT SHAREHOLDERS ACCEPT THE OFFER AND TENDER
THEIR SHARES PURSUANT TO THE OFFER.
------------------------
IMPORTANT
Any shareholder desiring to tender all or any portion of such shareholder's
shares of common stock, par value $1.00 per share, of the Company (the 'Common
Shares'), together with the associated Preferred Share Purchase Rights (together
with the Common Shares, the 'Shares'), should either (a) complete and sign the
Letter of Transmittal (or a facsimile thereof) in accordance with the
instructions in the Letter of Transmittal and mail or deliver it together with
the certificate(s) evidencing tendered Shares, and any other required documents,
to the Depositary or tender such Shares pursuant to the procedures for
book-entry transfer set forth in Section 3 or (b) request such shareholder's
broker, dealer, commercial bank, trust company or other nominee to effect the
transaction for such shareholder. A shareholder whose Shares are 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 such shareholder desires to tender such Shares.
Any shareholder who desires to tender Shares and whose certificates
evidencing such Shares are not immediately available or who cannot comply with
the procedures for book-entry transfer described in this Offer to Purchase on a
timely basis may tender such Shares by following the procedures for guaranteed
delivery set forth in Section 3.
Questions and requests for assistance may be directed to the Dealer Manager
or the Information Agent at their respective addresses and telephone numbers set
forth on the back cover of this Offer to Purchase. Requests for additional
copies of this Offer to Purchase, the Letter of Transmittal, the Notice of
Guaranteed Delivery and other tender offer materials may also be directed to the
Information Agent. A shareholder may also contact brokers, dealers, commercial
banks and trust companies for assistance concerning the Offer.
------------------------
The Dealer Manager for the Offer is:
FURMAN SELZ
February 6, 1998
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
INTRODUCTION............................................................................................... 1
1. Terms of the Offer................................................................................... 3
2. Acceptance for Payment and Payment for Shares........................................................ 4
3. Procedures for Tendering Shares...................................................................... 5
4. Withdrawal Rights.................................................................................... 7
5. Certain Federal Income Tax Consequences.............................................................. 8
6. Price Range of Shares; Dividends..................................................................... 9
7. Effect of the Offer on the Market for the Shares; Exchange Listing and Exchange Act Registration..... 9
8. Certain Information Concerning the Company........................................................... 10
9. Certain Information Concerning the Purchaser and Parent.............................................. 12
10. Source and Amount of Funds........................................................................... 13
11. Background of the Offer; Contacts with the Company................................................... 14
12. Purpose of the Offer, the Merger and the Merger Agreement............................................ 15
13. Dividends and Distributions.......................................................................... 24
14. Conditions to the Offer.............................................................................. 24
15. Certain Legal Matters................................................................................ 25
16. Fees and Expenses.................................................................................... 27
17. Miscellaneous........................................................................................ 27
SCHEDULE I DIRECTORS AND EXECUTIVE OFFICERS OF PARENT AND THE PURCHASER..................................
I-1
SCHEDULE II CHAPTER 13 OF THE GENERAL CORPORATION LAW OF THE STATE OF CALIFORNIA..........................
II-1
</TABLE>
i
<PAGE>
TO THE HOLDERS OF COMMON STOCK OF
PACIFIC SCIENTIFIC COMPANY:
INTRODUCTION
ACC Acquisition Corp., a California corporation (the 'Purchaser') and an
indirect wholly owned subsidiary of Danaher Corporation, a Delaware corporation
('Parent'), hereby offers to purchase all outstanding shares of common stock,
par value $1.00 per share (the 'Common Shares'), of Pacific Scientific Company,
a California corporation (the 'Company'), together with the associated Preferred
Share Purchase Rights (the 'Rights' and, together with the Common Shares, the
'Shares') issued pursuant to the Rights Agreement, dated as of December 21,
1997, as amended as of January 31, 1998, between the Company and ChaseMellon
Shareholder Services, L.L.C., as Rights Agent (as amended, the 'Rights
Agreement'), at $30.25 per Share (the 'Offer Price'), net to the seller in cash,
without interest, upon the terms and subject to the conditions set forth in this
Offer to Purchase and in the related Letter of Transmittal (which, as amended or
supplemented from time to time, together constitute the 'Offer').
Tendering shareholders will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, stock transfer taxes on the purchase of Shares by the Purchaser
pursuant to the Offer. The Purchaser will pay all fees and expenses of Furman
Selz LLC, which is acting as the Dealer Manager (the 'Dealer Manager'), First
Chicago Trust Company of New York, which is acting as the Depositary (the
'Depositary'), and D.F. King & Co., Inc., which is acting as the Information
Agent (the 'Information Agent'), incurred in connection with the Offer. See
Section 16.
The Offer is conditioned upon, among other things, there being validly
tendered and not withdrawn prior to the expiration of the Offer that number of
Shares which represents at least ninety percent of the Shares outstanding on the
date of purchase (the 'Minimum Condition'). See Section 14.
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of January 31, 1998 (the 'Merger Agreement'), by and among the Company, DH
Holdings Corp., a Delaware corporation and a direct wholly owned subsidiary of
Parent ('Holdings'), and the Purchaser. The Merger Agreement provides that,
among other things, following the consummation of the Offer and the satisfaction
or waiver of the other conditions set forth in the Merger Agreement, the
Purchaser will be merged with and into the Company (the 'Merger'), with the
Company continuing as the surviving corporation (the 'Surviving Corporation').
At the effective time of the Merger (the 'Effective Time'), each outstanding
Share (other than Shares held in the treasury of the Company or by any wholly
owned subsidiary of the Company and Shares owned by Holdings, the Purchaser or
any other wholly owned subsidiary of Holdings or the Purchaser or held by
shareholders, if any, who are entitled to and who properly exercise dissenters'
rights under California law) will be converted into the right to receive an
amount in cash equal to the Offer Price, without interest. See Section 12.
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE OFFER AND THE
MERGER, HAS DETERMINED THAT THE TERMS OF THE OFFER AND THE MERGER ARE FAIR TO
AND IN THE BEST INTERESTS OF THE SHAREHOLDERS OF THE COMPANY AND RECOMMENDS THAT
SHAREHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER.
BancAmerica Robertson Stephens, the Company's financial advisor, has
delivered to the Board of Directors of the Company its written opinion to the
effect that, as of the date of such opinion, and based on the assumptions made,
matters considered and limits of review set forth therein, the consideration to
be received by the holders of the Shares (other than Holdings, the Purchaser,
any affiliates of Holdings or the Purchaser and holders of Shares, if any, who
are entitled to and who properly exercise dissenters' rights under California
law) in the Offer and the Merger is fair to the holders of Shares, from a
financial point of view. Such opinion is set forth in full as an exhibit to the
Company's Solicitation/Recommendation Statement on Schedule 14D-9 (the 'Schedule
14D-9'), which is being mailed to shareholders of the Company herewith.
Pursuant to the Merger Agreement, promptly upon the purchase by the
Purchaser of Shares representing at least such number of Shares as shall satisfy
the Minimum Condition, and from time to time thereafter, Holdings shall be
entitled to designate up to such number of directors, rounded up to the next
whole number, on the Board of Directors of the Company as is equal to the number
of directors which is the product of (a) the total number of directors on the
Board of Directors of the Company (giving effect to the directors elected
pursuant to this sentence) multiplied by (b) the percentage that the aggregate
number of Shares beneficially owned by Holdings or its affiliates bears to the
total number of Shares then outstanding on a fully diluted basis.
Notwithstanding the foregoing, the Company, Holdings and the Purchaser have
agreed that, until the Effective Time, the Board of
<PAGE>
Directors of the Company shall have at least two directors (the 'Independent
Directors') who are not officers, directors or designees of the Purchaser or any
of its affiliates; provided, however, that, in such event, if the number of
Independent Directors shall be reduced below two, the remaining Independent
Director shall be entitled to designate a person to fill such vacancy who shall
not be an officer, director or designee of the Purchaser or any of its
affiliates and who shall be deemed to be an Independent Director for purposes of
the Merger Agreement. In the Merger Agreement, the Company has agreed, upon
request of Holdings, to take all actions necessary to cause Holdings' designees
to be so elected, including mailing to its shareholders the Information
Statement containing the information required by Section 14(f) of the Securities
Exchange Act of 1934, as amended (the 'Exchange Act'), and Rule 14f-1
promulgated thereunder, and, if necessary, seeking the resignation of one or
more existing directors.
Following the satisfaction or waiver of the conditions to the Offer, the
Purchaser will accept for payment, in accordance with the terms of the Offer,
all Shares validly tendered pursuant to the Offer as soon as practicable after
the Expiration Date (as hereinafter defined). The Merger Agreement provides that
the Purchaser may under certain circumstances, from time to time, extend the
expiration date of the Offer beyond the time it would otherwise be required to
accept validly tendered Shares for payment. The Offer will not remain open
following the time Shares are accepted for payment.
As indicated above, the Merger Agreement contemplates a two-step
transaction in which, following consummation of the Offer, the Merger occurs.
Under the General Corporation Law of the State of California (the 'GCL'), if the
Purchaser acquires, pursuant to the Offer or otherwise, at least 90% of the then
outstanding Shares, the Purchaser will be able to approve and adopt the Merger
Agreement and the transactions contemplated thereby, including the Merger,
without a vote of the Company's shareholders. In such event, Holdings, the
Purchaser and the Company have agreed to take all necessary and appropriate
action to cause the Merger to become effective as soon as practicable after such
acquisition, without a meeting of the Company's shareholders, in accordance with
the GCL. However, under the GCL, the Merger may not be accomplished for cash
paid to the remaining Company shareholders if the Purchaser, Holdings or Parent
owns directly or indirectly more than 50% but less than 90% of the then
outstanding Shares unless either all of the remaining shareholders of the
Company consent to the Merger or the Commissioner of Corporations of the State
of California approves, after a hearing, the terms and conditions of the Merger
and the fairness thereof. Accordingly, Parent and the Company intend to proceed
simultaneously with an alternative to this two-step transaction in which the
Company pursues a one-step cash merger at the Offer Price. This one-step
transaction would require the affirmative vote of a majority of the Company's
outstanding voting stock. In the event the Minimum Condition is not fulfilled,
the Merger Agreement contemplates that the Offer will be terminated and Parent
and the Company will seek to implement the one-step cash merger transaction. In
furtherance of the foregoing, if on the scheduled Expiration Date (or any
extension thereof) all of the conditions to the Offer other than the Minimum
Condition are satisfied but less than 90% of the outstanding Shares have been
validly tendered and not withdrawn in the Offer, the Purchaser has agreed to
extend the Offer for one additional business day (or such longer time as may be
agreed to by the Purchaser and the Company), and to effect additional extensions
as necessary until the earlier of (i) the close of business on the business day
immediately prior to the Special Meeting (as defined herein) or (ii) such time
as the Minimum Condition has been satisfied. See Section 12.
Pursuant to the Merger Agreement, the Company has agreed to duly call, give
notice of, convene and hold a special meeting of its shareholders (the 'Special
Meeting') as soon as practicable following the date of the Merger Agreement for
the purpose of considering and taking action upon the Merger and the adoption of
the Merger Agreement pursuant to a one-step cash merger. The Merger Agreement
provides that the Company will prepare and file with the Securities and Exchange
Commission (the 'SEC') a preliminary proxy statement relating to the Special
Meeting and cause a definitive proxy statement relating to the Special Meeting
to be mailed to its shareholders for the purpose of obtaining the necessary
approvals of the Merger and the Merger Agreement from its shareholders. The
affirmative vote of a majority of the outstanding Shares would be required to
approve the Merger and the Merger Agreement at the Special Meeting. However, if
the Minimum Condition and the other conditions to the Offer are satisfied prior
to the Special Meeting, the Purchaser will acquire at least 90% of the Shares
outstanding and will be able to approve and adopt the Merger and the Merger
Agreement without a vote of the Company's shareholders and the Special Meeting
will be cancelled.
2
<PAGE>
According to the Company, as of January 30, 1998 there were 12,481,306
Shares issued and outstanding, no Shares held by the Company in its treasury and
1,153,264 Shares reserved for issuance pursuant to the Company's outstanding
employee stock options ('Options') granted pursuant to stock option programs or
arrangements of the Company (the 'Stock Plans'). Based upon the foregoing
information, the Minimum Condition would be satisfied if 11,233,176 Shares were
validly tendered (assuming no Shares are issued pursuant to the exercise of
Options after January 30, 1998) or if 12,271,113 Shares were validly tendered
(assuming the exercise of all Options prior to the Expiration Date).
The Company has distributed one Right for each outstanding Common Share
pursuant to the Rights Agreement. The Company has represented in the Merger
Agreement that it has taken all action which may be necessary under the Rights
Agreement and has, on January 31, 1998, amended the Rights Agreement, so that
the execution of the Merger Agreement, the making of the Offer, the acquisition
of Shares pursuant to the Offer and the consummation of the Merger will not
cause (i) any Rights issued pursuant to the Rights Agreement to become
exercisable or to separate from the share certificates to which they are
attached, (ii) Holdings, the Purchaser, or any of their affiliates to become an
Acquiring Person (as defined in the Rights Agreement), or (iii) trigger other
provisions of the Rights Agreement, including giving rise to a Distribution Date
(as defined in the Rights Agreement).
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE
WITH RESPECT TO THE OFFER.
1. TERMS OF THE OFFER
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any extension or
amendment), the Purchaser will accept for payment and pay for all Shares which
are validly tendered prior to the Expiration Date and not withdrawn in
accordance with Section 4. The term 'Expiration Date' means 12:00 Midnight, New
York City time, on Friday, March 6, 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 Offer is conditioned upon, among other things, satisfaction of the
Minimum Condition and the expiration or termination of all waiting periods
imposed by the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended
(the 'HSR Act'). See Section 14, which sets forth in full the conditions to the
Offer. If any condition is not satisfied or any or all of the other events set
forth in Section 14 shall have occurred or shall be determined by the Purchaser
to have occurred prior to the Expiration Date, the Purchaser reserves the right
(but shall not be obligated) to (i) decline to purchase any of the Shares
tendered in the Offer and terminate the Offer and return all tendered Shares to
the tendering shareholders, (ii) waive any or all conditions to the Offer, to
the extent permitted by applicable law and the provisions of the Merger
Agreement, and, subject to complying with applicable rules and regulations of
the SEC, purchase all Shares validly tendered or (iii) extend the Offer and,
subject to the right of shareholders to withdraw Shares until the Expiration
Date, retain the Shares which have been tendered during the period or periods
for which the Offer is extended. The Merger Agreement provides that the
Purchaser will not, without the prior written consent of the Company, decrease
the Offer Price or change the form of consideration payable in the Offer, waive
the Minimum Condition or decrease the number of Shares sought in the Offer, add
to the conditions of the Offer set forth in Section 14 below or amend any other
term of the Offer in any manner adverse to holders of Shares. Notwithstanding
the foregoing, (i) if any condition of the Offer (other than the Minimum
Condition) has not been satisfied or waived on any scheduled Expiration Date,
the Purchaser may, without the consent of the Company, (a) extend the Offer for
a period of time as is reasonably expected by the Purchaser to be necessary to
satisfy the unsatisfied conditions and (b) extend the Offer for any period
required by any rule, regulation, interpretation or position of the SEC or the
staff thereof applicable to the Offer, and (ii) if all of the conditions of the
Offer other than the Minimum Condition have been satisfied on any scheduled
Expiration Date, the Purchaser has agreed to extend the Offer for one additional
business day (or such longer time as may be agreed to by the Purchaser and the
Company), and to continue to effect such extensions until the earlier of (a) the
close of business on the business day immediately prior to the Special Meeting
and (b) the Minimum Condition has been satisfied, after which time the Purchaser
has agreed not to extend the Offer for any reason.
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<PAGE>
Subject to the conditions described in the preceding paragraph, the
Purchaser expressly reserves the right, in its sole discretion, at any time or
from time to time, subject to the terms of the Merger Agreement and regardless
of whether or not any of the events set forth in Section 14 shall have occurred
or shall have been determined by the Purchaser to have occurred, to amend the
Offer in any respect by giving oral or written notice of such amendment to the
Depositary. The rights reserved by the Purchaser in this paragraph are in
addition to the Purchaser's rights to terminate the Offer pursuant to Section
14. Any extension, amendment or termination will be followed as promptly as
practicable by public announcement thereof, the 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
Rules 14d-4(c), 14d-6(d) and 14e-1(d) under the Exchange Act. Without limiting
the obligation of the Purchaser under such rules or the manner in which the
Purchaser may choose to make any public announcement, the Purchaser currently
intends to make announcements by issuing a release to the Dow Jones News
Service.
If the Purchaser extends the Offer, or if the Purchaser (whether before or
after its acceptance for payment of Shares) is delayed in its purchase of or
payment for Shares or is unable to pay for Shares pursuant to the Offer for any
reason, then, without prejudice to the Purchaser's rights under the Offer, the
Depositary may retain tendered Shares on behalf of the Purchaser, and such
Shares may not be withdrawn except to the extent tendering shareholders are
entitled to withdrawal rights as described in Section 4. However, the ability of
the Purchaser to delay the payment for Shares which the Purchaser has accepted
for payment is limited by Rule 14e-1(c) under the Exchange Act, which requires
that a bidder pay the consideration offered or return the securities deposited
by or on behalf of holders of securities promptly after the termination or
withdrawal of the Offer.
If the Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer or waives a material condition of the Offer
(including the Minimum Condition, subject to the Merger Agreement), the
Purchaser will disseminate additional tender offer materials and extend the
Offer to the extent required by Rules 14d-4(c) and 14d-6(d) under the Exchange
Act. The minimum period during which the Offer must remain open following
material changes in the terms of the Offer or information concerning the Offer,
other than a change in price or a change in percentage of securities sought,
will depend upon the facts and circumstances, including the relative materiality
of the terms or information. With respect to a change in price or a change in
percentage of securities sought, a minimum ten business day period is required
to allow for adequate dissemination to shareholders and investor response. If,
prior to the Expiration Date, the Purchaser should decide to increase the price
per Share being offered in the Offer, such increase will be applicable to all
shareholders whose Shares are accepted for payment pursuant to the Offer. The
Merger Agreement provides that, without the Company's consent, the Purchaser
will not decrease the price or the number of Shares sought in the Offer. As used
in this Offer to Purchase, 'business day' has the meaning set forth in Rule
14d-1 under the Exchange Act.
The Company has provided the Purchaser with its list of shareholders and
security position listings for the purpose of disseminating the Offer to holders
of Shares. This 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, commercial banks, trust companies and similar
persons whose names, or the names of whose nominees, appear on the shareholder
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. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any such extension
or amendment), the Purchaser will purchase, by accepting for payment, and will
pay for, all Shares validly tendered prior to the Expiration Date (and not
properly withdrawn in accordance with Section 4) promptly after the later to
occur of (i) the Expiration Date and (ii) any waiting period under the HSR Act
applicable to the purchase of Shares pursuant to the Offer having expired or
been terminated. Subject to the applicable rules of the SEC and the terms of the
Merger Agreement, the Purchaser expressly reserves the right to delay acceptance
for payment of, or payment for, Shares pending expiration of the waiting period
under the HSR Act applicable to the purchase of Shares pursuant to the Offer.
See Sections 14 and 15. The Purchaser understands that, in accordance with the
applicable rules of the SEC, any delay in accepting Shares regardless of cause
may not exceed an 'unreasonable length of time.' Accordingly, if it appears at
the time that the Offer is scheduled to expire that the expiration of the
waiting period under the HSR Act is not likely to be
4
<PAGE>
obtained within a reasonable length of time thereafter, the Purchaser will
either extend the Offer or terminate the Offer.
In all cases, payment for Shares purchased pursuant to the Offer will be
made only after timely receipt by the Depositary of (i) certificates evidencing
such Shares ('Share Certificates') or timely confirmation of a book-entry
transfer (a 'Book-Entry Confirmation') of such Shares into the Depositary's
account at The Depository Trust Company ('DTC' or the 'Book-Entry Transfer
Facility') pursuant to the procedures set forth in Section 3, (ii) a properly
completed and duly executed Letter of Transmittal (or facsimile thereof) or, in
the case of a book-entry transfer, an Agent's Message (as defined below) and
(iii) any other documents required by the Letter of Transmittal.
The term 'Agent's Message' means a message, transmitted by the Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that the Book-Entry Transfer Facility has
received an express acknowledgment from the participant in the Book-Entry
Transfer Facility tendering the Shares that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that the
Purchaser may enforce such agreement against the participant. Participants in
DTC may tender their Shares in accordance with DTC's Automated Tender Offer
Program, to the extent it is available to such participants for the Shares they
wish to tender.
For purposes of the Offer, the Purchaser will be deemed to have accepted
for payment, and thereby purchased, tendered Shares if, as and when the
Purchaser gives oral or written notice to the Depositary of the Purchaser's
acceptance of such Shares for payment. Payment for Shares accepted pursuant to
the Offer will be made by deposit of the purchase price with the Depositary,
which will act as agent for tendering shareholders for the purpose of receiving
payments from the Purchaser and transmitting payments to such tendering
shareholders. UNDER NO CIRCUMSTANCES WILL INTEREST ON THE PURCHASE PRICE FOR
SHARES BE PAID BY THE PURCHASER, REGARDLESS OF ANY DELAY IN MAKING SUCH PAYMENT.
Upon the deposit of funds with the Depositary for the purpose of making
payments to tendering shareholders, the Purchaser's obligation to make such
payment shall be satisfied and tendering shareholders must thereafter look
solely to the Depositary for payment of amounts owed to them by reason of the
acceptance for payment of Shares pursuant to the Offer.
If any tendered Shares are not accepted pursuant to the Offer for any
reason, or if Share Certificates are submitted evidencing more Shares than are
tendered, Share Certificates evidencing Shares not purchased or tendered will be
returned, without expense to the tendering shareholder (or in the case of Shares
tendered by book-entry transfer into the Depositary's account at the Book-Entry
Transfer Facility pursuant to the procedures set forth in Section 3, such Shares
will be credited to an account maintained at the Book-Entry Transfer Facility),
as promptly as practicable after the expiration, termination or withdrawal of
the Offer.
The Purchaser reserves the right to transfer or assign, in whole at any
time or in part from time to time, to Parent or to one or more of its
affiliates, the right to purchase all or a portion of the Shares tendered
pursuant to the Offer, but any such transfer or assignment will not relieve the
Purchaser of its obligations under the Offer and will in no way prejudice the
rights of tendering shareholders to receive payment for Shares validly tendered
and accepted for payment pursuant to the Offer.
3. PROCEDURES FOR TENDERING SHARES
Valid Tender. For Shares to be validly tendered pursuant to the Offer, a
properly completed and duly executed Letter of Transmittal (or facsimile
thereof), with any required signature guarantees, or an Agent's Message (in the
case of any book-entry transfer), and any other required documents, must be
received by the Depositary at its address set forth on the back cover of this
Offer to Purchase prior to the Expiration Date. In addition, either (i) the
Share Certificates evidencing Shares must be received by the Depositary along
with the Letter of Transmittal or Shares must be tendered pursuant to the
procedures for book-entry transfer described below and a Book-Entry Confirmation
must be received by the Depositary, in each case prior to the Expiration Date or
(ii) the tendering shareholder must comply with the guaranteed delivery
procedures described below.
Book-Entry Transfer. The Depositary will establish an account with respect
to the Shares at the Book-Entry Transfer Facility for purposes of the Offer
within two business days after the date of this Offer to Purchase, and any
financial institution that is a participant in the Book-Entry Transfer
Facility's systems may make book-
5
<PAGE>
entry delivery of Shares by causing the Book-Entry Transfer Facility to transfer
such Shares into the Depositary's account at the Book-Entry Transfer Facility in
accordance with the Book-Entry Transfer Facility's procedures for transfer.
However, although delivery of Shares may be effected through book-entry transfer
at the Book-Entry Transfer Facility, the Letter of Transmittal (or facsimile
thereof), with any required signature guarantees, or an Agent's Message in
connection with a book-entry delivery of Shares, and any other required
documents, must, in any case, be transmitted to and received by the Depositary
at its address set forth on the back cover of this Offer to Purchase prior to
the Expiration Date or the tendering shareholder must comply with the guaranteed
delivery procedures described below. 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.
Signature Guarantees. Signatures on all Letters of Transmittal must be
guaranteed by a participant in the Security Transfer Agents Medallion Program
(each, an 'Eligible Institution'), unless the Shares tendered thereby are
tendered (i) by a registered holder of Shares who has not completed either the
box entitled 'Special Delivery Instructions' or the box entitled 'Special
Payment Instructions' on the Letter of Transmittal, or (ii) for the account of
an Eligible Institution. See Instruction 1 of the Letter of Transmittal.
If a Share Certificate is registered in the name of a person other than the
signer of the Letter of Transmittal, or if payment is to be made, or a Share
Certificate not accepted for payment or not tendered is to be returned, to a
person other than the registered holder(s), then the Share Certificate 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 Share
Certificate, with the signature(s) on such Share Certificate or stock powers
guaranteed as described above. See Instructions 1 and 5 of the Letter of
Transmittal.
THE METHOD OF DELIVERY OF SHARE CERTIFICATES, THE LETTER OF TRANSMITTAL AND
ANY OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER
FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING SHAREHOLDER 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.
Guaranteed Delivery. If a shareholder desires to tender Shares pursuant to
the Offer and such shareholder's Share Certificates are not immediately
available or time will not permit all required documents to reach the Depositary
prior to the Expiration Date, or the procedures for book-entry transfer cannot
be completed on a timely basis, such Shares may nevertheless be tendered if all
the following conditions are satisfied:
(i) the tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by the Purchaser herewith, is
received by the Depositary prior to the Expiration Date as provided below;
and
(iii) the Share Certificates for all tendered Shares, in proper form
for transfer (or a Book-Entry Confirmation), together with a properly
completed and duly executed Letter of Transmittal (or facsimile thereof),
with any required signature guarantees (or, in the case of a book-entry
transfer, an Agent's Message) and any other documents required by the
Letter of Transmittal, are received by the Depositary within three New York
Stock Exchange, Inc. ('NYSE') trading days after the date of execution of
the Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted
by telegram, facsimile transmission or mail to the Depositary and must include a
guarantee by an Eligible Institution in the form set forth in the Notice of
Guaranteed Delivery.
Notwithstanding any other provision hereof, payment for Shares purchased
pursuant to the Offer will in all cases be made only after timely receipt by the
Depositary of (i) Share Certificates evidencing such Shares or a Book-Entry
Confirmation of the delivery of such Shares, (ii) a Letter of Transmittal (or
facsimile thereof), properly completed and duly executed, with any required
signature guarantees (or, in the case of a book-entry transfer, an Agent's
Message) and (iii) any other documents required by the Letter of Transmittal.
BACKUP FEDERAL INCOME TAX WITHHOLDING. TO PREVENT BACKUP FEDERAL INCOME
TAX WITHHOLDING WITH RESPECT TO PAYMENT OF THE PURCHASE PRICE FOR SHARES
PURCHASED PURSUANT TO THE OFFER, EACH TENDERING SHAREHOLDER MUST PROVIDE THE
DEPOSITARY WITH SUCH SHAREHOLDER'S CORRECT TAXPAYER IDENTIFICATION NUMBER
6
<PAGE>
('TIN') AND CERTIFY THAT SUCH SHAREHOLDER IS NOT SUBJECT TO BACKUP WITHHOLDING.
IF A SHAREHOLDER DOES NOT PROVIDE SUCH SHAREHOLDER'S CORRECT TIN OR FAILS TO
PROVIDE THE CERTIFICATIONS DESCRIBED ABOVE, THE INTERNAL REVENUE SERVICE MAY
IMPOSE A PENALTY ON SUCH SHAREHOLDER AND PAYMENTS THAT ARE MADE TO SUCH
SHAREHOLDER WITH RESPECT TO SHARES PURCHASED PURSUANT TO THE OFFER MAY BE
SUBJECT TO BACKUP WITHHOLDING AT A RATE OF 31%. ALL SHAREHOLDERS SURRENDERING
SHARES PURSUANT TO THE OFFER SHOULD COMPLETE AND SIGN THE MAIN SIGNATURE FORM
AND THE SUBSTITUTE FORM W-9 INCLUDED AS PART OF THE LETTER OF TRANSMITTAL TO
PROVIDE THE INFORMATION AND CERTIFICATION NECESSARY TO AVOID BACKUP WITHHOLDING
(UNLESS AN APPLICABLE EXEMPTION EXISTS AND IS PROVED IN A MANNER SATISFACTORY TO
THE PURCHASER AND THE DEPOSITARY). SEE INSTRUCTION 9 AND 'IMPORTANT TAX
INFORMATION' IN THE LETTER OF TRANSMITTAL.
Determination of Validity. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance for payment of any
tendered Shares pursuant to any of the procedures described above will be
determined by the Purchaser, in its sole discretion, whose determination will be
final and binding on all parties. The Purchaser reserves the absolute right to
reject any or all tenders of any Shares determined by it not to be in proper
form or if the acceptance for payment of, or payment for, such Shares may, in
the opinion of the Purchaser's counsel, be unlawful. The Purchaser also reserves
the absolute right, in its sole discretion, subject to the Merger Agreement, to
waive any of the conditions of the Offer or any defect or irregularity in any
tender with respect to Shares of any particular shareholder, 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. None of the
Purchaser, Parent, the Dealer Manager, the Depositary, the Information Agent or
any other person will be under any duty to give notification of any defects or
irregularities in tenders or will incur any liability for failure to give any
such notification.
Other Requirements. By executing a Letter of Transmittal as set forth
above, a tendering shareholder irrevocably appoints designees of the Purchaser
as the shareholder's attorneys-in-fact and proxies, in the manner set forth in
the Letter of Transmittal, each with full power of substitution, to the full
extent of the shareholder's rights with respect to the Shares tendered by the
shareholder and accepted for payment by the Purchaser (and any and all other
Shares or other securities issued or issuable in respect of such Shares on or
after the date of the Merger Agreement). All such proxies shall be considered
coupled with an interest in the tendered Shares. This appointment will be
effective when, and only to the extent that, the Purchaser accepts Shares for
payment. Upon acceptance for payment, all prior proxies given by the shareholder
with respect to the Shares or other securities will, without further action, be
revoked, and no subsequent proxies may be given nor any subsequent written
consent executed by such shareholder (and if given or executed, will not be
deemed to be effective) with respect thereto. The designees of the Purchaser
will, with respect to the Shares and other securities, be empowered to exercise
all voting and other rights of such shareholder as they in their sole discretion
may deem proper at any annual, special or adjourned meeting of the Company's
shareholders, by written consent 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 and other rights of a record and beneficial
holder, including rights in respect of acting by written consent, with respect
to such Shares.
A tender of Shares pursuant to any one of the procedures described above
will constitute the tendering shareholder's acceptance of the terms and
conditions of the Offer. The Purchaser's acceptance for payment of Shares
tendered pursuant to the Offer will constitute a binding agreement between the
tendering shareholder and the Purchaser upon the terms and subject to the
conditions of the Offer.
4. WITHDRAWAL RIGHTS
Except as otherwise provided in this Section 4, tenders of Shares made
pursuant to the Offer are irrevocable, provided that Shares tendered pursuant to
the Offer may be withdrawn at any time prior to the Expiration Date and, unless
theretofore accepted for payment by the Purchaser pursuant to the Offer, may
also be withdrawn at any time after April 6, 1998, or at such later time as may
apply if the Offer is extended.
For a withdrawal to be effective, a written, telegraphic or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
its address set forth on the back cover of this Offer to Purchase. Any such
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 of the
registered holder, if different from that of the person who tendered
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<PAGE>
such Shares. If Share Certificates evidencing Shares to be withdrawn have been
delivered or otherwise identified to the Depositary, then, prior to the physical
release of such Share Certificates, the serial numbers of the particular Share
Certificates and a signed notice of withdrawal with signatures guaranteed by an
Eligible Institution, except in the case of Shares tendered for the account of
an Eligible Institution, must also be furnished to the Depositary as described
above. If Shares have been tendered pursuant to the procedures for book-entry
transfer as set forth in Section 3, any notice of withdrawal must also specify
the name and number of the account at the Book-Entry Transfer Facility to be
credited with the withdrawn Shares.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by the Purchaser, in its sole
discretion, whose determination will be final and binding. None of the
Purchaser, Parent, the Dealer Manager, the Depositary, the Information Agent or
any other person will be under any duty to give notification of any defects or
irregularities in any notice of withdrawal or incur any liability for failure to
give any such notification.
ANY SHARES PROPERLY WITHDRAWN WILL BE DEEMED NOT TO HAVE BEEN VALIDLY
TENDERED FOR PURPOSES OF THE OFFER. However, withdrawn Shares may be re-tendered
by following one of the procedures described in Section 3 at any time prior to
the Expiration Date.
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The receipt of cash for Shares pursuant to the Offer (or the Merger) will
be a taxable transaction for U.S. federal income tax law purposes and may also
be a taxable transaction under applicable state, local or foreign tax laws. The
tax consequences of such receipt pursuant to the Offer (or the Merger) may vary
depending upon, among other things, the particular circumstances of the
shareholder. In general, a shareholder who receives cash for Shares pursuant to
the Offer (or the Merger) will recognize gain or loss for U.S. federal income
tax purposes equal to the difference between the amount of cash received in
exchange for the Shares sold and such shareholder's adjusted tax basis in such
Shares.
Provided that the Shares constitute capital assets in the hands of the
shareholder, such gain or loss will be capital gain or loss and, in the case of
an individual shareholder, will be taxable at various preferential rates
depending on the extent to which such shareholder's holding period for the
Shares sold pursuant to the Offer (or the Merger) exceeds one year. Gain or loss
will be calculated separately for each block of Shares (i.e., Shares acquired at
the same time and price) sold pursuant to the Offer (or the Merger). The
deduction of capital losses is subject to certain limitations.
A shareholder that tenders Shares may be subject to backup withholding at a
rate of 31% unless such shareholder provides a correct TIN and certifies that
such shareholder is not subject to backup withholding, or unless an exemption
applies. See 'Backup Federal Income Tax Withholding' under Section 3 herein, and
Instruction 9 and 'Important Tax Information' in the Letter of Transmittal.
THE U.S. FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR
GENERAL INFORMATION ONLY AND IS BASED UPON PRESENT LAW. SHAREHOLDERS ARE URGED
TO CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE SPECIFIC TAX CONSEQUENCES OF
THE OFFER (OR THE MERGER) TO THEM, INCLUDING THE APPLICATION AND EFFECT OF THE
ALTERNATIVE MINIMUM TAX, AND STATE, LOCAL AND FOREIGN TAX LAWS. IN ADDITION, THE
DISCUSSION SET FORTH ABOVE MAY NOT APPLY TO PARTICULAR CATEGORIES OF
SHAREHOLDERS, INCLUDING, FOR EXAMPLE, INDIVIDUALS WHO ARE NOT CITIZENS OR
RESIDENTS OF THE UNITED STATES, FOREIGN CORPORATIONS, LIFE INSURANCE COMPANIES,
TAX-EXEMPT ORGANIZATIONS, FINANCIAL INSTITUTIONS, AND HOLDERS WHO ACQUIRED
SHARES PURSUANT TO THE EXERCISE OF EMPLOYEE STOCK OPTIONS OR OTHERWISE AS
COMPENSATION.
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6. PRICE RANGE OF SHARES; DIVIDENDS
The Shares trade on the NYSE under the symbol 'PSX.' The following table
sets forth, for the fiscal quarters indicated, the high and low sales price per
Share on the NYSE, as well as dividends paid. All prices set forth below are as
reported in published financial sources:
<TABLE>
<CAPTION>
MARKET PRICE
-----------------------
HIGH LOW DIVIDENDS
------------ ------- ---------
<S> <C> <C> <C>
YEAR ENDED DECEMBER 31, 1996:
First Quarter............................................ $ 24.875 $18.750 $ .03
Second Quarter........................................... 22.375 15.250 .03
Third Quarter............................................ 16.500 11.000 .03
Fourth Quarter........................................... 12.750 10.250 .03
YEAR ENDED DECEMBER 31, 1997:
First Quarter............................................ $ 14.000 $11.125 $ .03
Second Quarter........................................... 14.625 11.125 .03
Third Quarter............................................ 17.875 13.250 .03
Fourth Quarter........................................... 17.375 13.500 .03
YEAR ENDING DECEMBER 31, 1998:
First Quarter (through February 5, 1998)................. $ 30.063 $23.125 --
</TABLE>
On January 30, 1998, the last full trading day prior to the announcement of
the terms of the Merger Agreement, the reported closing sales price per Share on
the NYSE was $25.125. On February 5, 1998, the last full trading day prior to
the commencement of the Offer, the reported closing sales price per Share on the
NYSE was $29.938. SHAREHOLDERS ARE URGED TO OBTAIN A CURRENT MARKET QUOTATION
FOR THE SHARES.
7. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES; EXCHANGE LISTING AND
EXCHANGE ACT REGISTRATION
The purchase of Shares pursuant to the Offer will reduce the number of
Shares that might otherwise trade publicly and could reduce the number of
holders of Shares, which could adversely affect the liquidity and market value
of the remaining Shares held by the public. Following consummation of the Offer,
unless the Minimum Condition is waived or amended with the consent of the
Company, at least 90% of the outstanding Shares will be owned by Purchaser.
According to the NYSE's published guidelines, the NYSE would consider
delisting the Shares if, among other things, the number of record holders of at
least 100 Shares should fall below 1,200, the number of publicly held Shares
(exclusive of holdings of officers, directors and their families and other
concentrated holdings of 10% or more (the 'NYSE Excluded Holdings')) should fall
below 600,000 or the aggregate market value of publicly held Shares (exclusive
of NYSE Excluded Holdings) should fall below $5,000,000. If, as a result of the
purchase of Shares pursuant to the Offer or otherwise, the Shares no longer meet
the requirements of the NYSE for continued listing and the listing of the Shares
is discontinued, the market for the Shares could be adversely affected.
If the NYSE were to delist the Shares, it is possible that the Shares would
continue to trade on another securities exchange or in the over-the-counter
market and that price or other quotations would be reported by such exchange or
through the Nasdaq or other sources. The extent of the public market therefor
and the availability of such quotations would depend, however, upon such factors
as the number of shareholders and/or the aggregate market value of such
securities remaining at such time, the interest in maintaining a market in the
Shares on the part of securities firms, the possible termination of registration
under the Exchange Act as described below and other factors. 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 higher or lower than the Offer Price.
The Shares are currently 'margin securities' under the regulations of the
Board of Governors of the Federal Reserve System (the 'Federal Reserve Board'),
which has the effect, among other things, of allowing brokers to extend credit
on the collateral of the Shares. Depending upon factors similar to those
described above regarding
9
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listing and market quotations, following the Offer it is possible that the
Shares would no longer constitute 'margin securities' for the purposes of the
margin regulations of the Federal Reserve Board and therefore could no longer be
used as collateral for loans made by brokers.
The Shares are currently registered under the Exchange Act. Such
registration may be terminated upon application by the Company to the SEC if the
Shares are not listed on a national securities exchange and there are fewer than
300 record holders of the Shares. The termination of registration of the Shares
under the Exchange Act would substantially reduce the information required to be
furnished by the Company to holders of Shares and to the SEC and would make
certain provisions of the Exchange Act, such as the short-swing profit recovery
provisions of Section 16(b), the requirement of furnishing a proxy statement in
connection with shareholders' meetings pursuant to Section 14(a), and the
requirements of Rule 13e-3 under the Exchange Act with respect to 'going
private' transactions, no longer applicable to the Shares. In addition,
'affiliates' of the Company and persons holding 'restricted securities' of the
Company may be deprived of the ability to dispose of such securities pursuant to
Rule 144 promulgated under the Securities Act of 1933, as amended. If
registration of the Shares under the Exchange Act were terminated, the Shares
would no longer be 'margin securities' or be eligible for NYSE listing. It is
the present intention of the Purchaser to seek to cause the Company to make an
application for termination of registration of the Shares under the Exchange Act
as soon as possible following the Offer if the requirements for termination of
registration are met.
8. CERTAIN INFORMATION CONCERNING THE COMPANY
The information concerning the Company contained in this Offer to Purchase,
including financial information (other than the projections of the Company's
operating results provided below) has been taken from or based upon publicly
available documents and records on file with the Commission and other public
sources. Neither Purchaser nor Parent assumes any responsibility for the
accuracy or completeness of the information concerning the Company contained in
such documents and records or for any failure by the Company to disclose events
which may have occurred or may affect the significance or accuracy of any such
information but which are unknown to Purchaser or Parent.
The Company is a California corporation with its principal executive
offices located at 620 Newport Center Drive, Suite 700, Newport Beach,
California 92660. The telephone number at such address is (714) 720-1714. The
Company manufactures and sells the products of two segments--electrical
equipment and safety equipment. The electrical equipment segment produces:
electric motors and generators and related motion control devices such as
controllers and drivers, electronic instruments for particle measurement, and
electromechanical and electronic controls for use mainly by electric utilities,
including the controls for street and highway lighting. The safety equipment
segment produces: fire detection and suppression equipment, personnel safety
restraints, mechanical and electromechanical flight control components and
pyrotechnics. This segment also provides service for products already delivered
to customers. These products are used mainly in commercial and military aircraft
and vehicles, but are also used in a variety of other commercial and industrial
applications.
Financial Information. Set forth below is a summary of certain
consolidated financial information with respect to the Company, excerpted or
derived from the information contained in the Company's Annual Report on Form
10-K for the fiscal year ended December 26, 1996 and the Company's Form 10-Q for
the nine months ended September 27, 1996. The operating results for the nine
months ended September 26, 1997 are not necessarily indicative of the results
that may be expected for the fiscal year ended December 26, 1997. More
comprehensive financial information is included in such reports and other
documents filed by the Company with the SEC, and the following summary should be
read in conjunction with, and is qualified in its entirety by reference to, such
reports and other documents 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 SEC in the manner set forth
below.
The Company reports quarterly and annual earnings results using methods
required by generally accepted accounting principles. The Company prepares its
financial statements on the basis of a fiscal year beginning the day following
the end of the prior fiscal year and ending on the last Friday in December.
10
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PACIFIC SCIENTIFIC COMPANY
SUMMARY SELECTED CONSOLIDATED FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
NINE MONTHS FOR THE FISCAL YEARS ENDED(1)
ENDED (AUDITED)
(UNAUDITED) --------------------------------
9/26/97 12/27/96 12/29/95 12/30/94
----------- -------- -------- --------
<S> <C> <C> <C> <C>
CONTINUING OPERATIONS:
Net Sales.......................................................... $ 227,744 $294,779 $284,812 $247,683
Cost of Sales...................................................... 154,428 203,074 186,224 164,941
----------- -------- -------- --------
Gross Profit..................................................... 73,316 91,705 98,588 82,742
Selling and Administration......................................... 47,397 63,569 59,519 51,967
Research and Development........................................... 9,880 15,974 15,750 11,793
Cost of Solium Restructuring and Other Charges..................... -- 7,500 -- --
----------- -------- -------- --------
Operating Income................................................. 16,039 4,662 23,319 18,982
Interest and Other (Net)........................................... (1,630) (4,362) (3,229) (2,240)
----------- -------- -------- --------
Income before Income Taxes....................................... 14,409 300 20,090 16,742
Income Taxes....................................................... (5,384) (131) (7,340) (6,481)
----------- -------- -------- --------
Income from Continuing Operations................................ $ 9,025 $ 169 $ 12,750 $ 10,261
----------- -------- -------- --------
----------- -------- -------- --------
DISCONTINUED OPERATIONS:
Net Income (Loss)................................................ $ (13,563) $ 0 $ 0 $ 0
----------- -------- -------- --------
NET INCOME (LOSS).................................................. (4,538) 169 12,750 10,261
----------- -------- -------- --------
----------- -------- -------- --------
NET INCOME (LOSS) PER SHARE (DILUTED):............................. ($ 0.36) $ 0.01 $ 1.01 $ 0.83
BALANCE SHEET DATA:(2)
Total Assets....................................................... $ 220,800 $229,490 $225,018 $180,635
Long-Term Debt..................................................... 70,187 83,108 63,719 42,936
Common Stock Outstanding at Par Value.............................. 12,382 12,195 12,071 11,922
Total Shareholders' Equity......................................... 102,865 106,810 106,486 92,773
</TABLE>
- ------------------
(1) Statements of operations for the fiscal years presented do not include the
operating results of the Solium business as a discontinued operation (refer
to the Company's Current Report on Form 8-K dated April 21, 1997).
(2) Balance sheet data for the fiscal years presented do not include the Solium
business as a discontinued operation.
Other Financial Information. During the course of the discussions between
Parent and the Company that led to the execution of the Merger Agreement, the
Company provided Parent with certain information about the Company and its
financial performance which is not publicly available. The information provided
included financial projections for the Company as an independent company (i.e.,
without regard to the impact to the Company of a transaction with Parent), which
included the following: projections of revenue, earnings before income and taxes
('EBIT') and net income of approximately $353.0 million, 31.7 million and $17.1
million, respectively, for fiscal 1998, and projections of revenue, EBIT and net
income of approximately $413.9 million, $43.4 million and $25.1 million,
respectively, for fiscal 1999. The foregoing information was prepared by the
Company solely for internal use and not for publication or with a view to
complying with the published guidelines of the SEC regarding projections or with
the guidelines established by the American Institute of Certified Public
Accountants and are included in this Offer to Purchase only because they were
furnished to Parent. The foregoing information is 'forward-looking' and
inherently subject to significant uncertainties and contingencies, many of which
are beyond the control of the Company, including industry performance, general
business and economic conditions, changing competition, adverse changes in
applicable laws, regulations or rules governing environmental, tax or accounting
matters and other matters. One cannot predict whether the assumptions made in
preparing the foregoing information will be accurate, and actual results may be
materially
11
<PAGE>
higher or lower than those contained described above. The inclusion of this
information should not be regarded as an indication that Parent, the Purchaser,
the Company or anyone who received this information considered it a reliable
predictor of future events, and this information should not be relied on as
such. None of Parent, the Purchaser or the Company assumes any responsibility
for the validity, reasonableness, accuracy or completeness of the projections
and the Company has made no representation to Parent or the Purchaser regarding
the financial information described above.
Available Information. The Company is subject to the informational filing
requirements of the Exchange Act and, in accordance therewith, is required to
file periodic reports, proxy statements and other information with the SEC
relating to its business, financial condition and other matters. Information as
of particular dates concerning the Company's directors and officers, their
remuneration, stock options granted to them, the principal holders of the
Company's securities and any material interest of such persons in transactions
with the Company is required to be disclosed in proxy statements distributed to
the Company's shareholders and filed with the SEC. Such reports, proxy
statements and other information should be available for inspection at the
public reference facilities maintained by the SEC at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549, and also should be available for
inspection at the SEC's regional offices located at Seven World Trade Center,
13th Floor, New York, New York 10048 and Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661-2511. The SEC also maintains an
Internet site on the World Wide Web at http:// www.sec.gov that contains
reports, proxy statements and other information. Copies of such materials may
also be obtained by mail, upon payment of the SEC's customary fees, by writing
to its principal office at 450 Fifth Street, N.W., Washington, D.C. 20549. The
information should also be available for inspection at the NYSE, 20 Broad
Street, New York, New York 10005.
9. CERTAIN INFORMATION CONCERNING THE PURCHASER AND PARENT
Parent is a Delaware corporation which operates a variety of businesses through
two business segments: Tools and Components and Process/Environmental Controls.
The Tools and Components segment is one of the largest domestic producers and
distributors of general purpose mechanics' hand tools and automotive specialty
tools. Other products manufactured by this segment include tool boxes and
storage devices, diesel engine retarders, wheel service equipment, drill chucks,
custom designed headed tools and components, hardware and components for the
power generation and transmission industries, high quality precision socket
screws, fasteners, and high quality miniature precision parts. The companies in
the Process Environmental segment produce and sell underground storage tank leak
detection systems and temperature, level and position sensing devices, power
switches and controls, telecommunication line products, power protection
products, liquid flow measuring devices and electronic and mechanical counting
and controlling devices.
Approximately 39.4% of the outstanding common stock of Parent is
beneficially owned by Steven M. Rales and Mitchell P. Rales. The aggregate
holdings for Steven and Mitchell Rales include shares of Parent common stock
owned by Equity Group Holdings L.L.C. ('EGH') and Equity Group Holding II L.L.C.
('EGH II'), of which Steven and Mitchell Rales are the only members, along with
other shares of common stock of Parent which are owned directly or through the
Danaher Corporation 401(k) Plan by such individuals. Steven and Mitchell Rales
are directors and executive officers of Parent. EGH and EGH II are principally
engaged in the business of investing in the common stock of Parent. The offices
of Steven M. Rales, Mitchell P. Rales, EGH and EGH II are located at 1250 24th
Street, N.W., Suite 800, Washington, D.C. 20037.
The Purchaser is a newly incorporated California corporation and a wholly
owned subsidiary of Holdings which to date has not conducted any business other
than in connection with the Offer and the Merger Agreement. Holdings, a Delaware
corporation and a direct wholly owned subsidiary of Parent, owns all outstanding
shares of the Purchaser and is the holding company for a majority of Parent's
operating subsidiaries. None of Parent, the Purchaser, Holdings, or their
affiliates own any securities of the Company.
Financial information with respect to Parent and its subsidiaries is
included in Parent's Annual Report on Form 10-K for the fiscal year ended
December 31, 1996, in Parent's Quarterly Reports on Form 10-Q for the fiscal
quarters ended March 31, 1997, June 30, 1997 and September 30, 1997 and in
Parent's Current Report on Form 8-K dated February 4, 1998, which are
incorporated herein by reference, and other documents filed by Parent with the
SEC. Such reports and other documents should be available for inspection and
copies thereof should be obtainable from the SEC in the same manner as is set
forth below under 'Available Information.'
12
<PAGE>
The principal executive offices of Parent, the Purchaser and Holdings are
located at 1250 24th Street, N.W., Suite 800, Washington, D.C. 20037.
Available Information. Parent is subject to the informational requirements
of the Exchange Act and, in accordance therewith, files reports relating to its
business, financial condition and other matters. Information as of particular
dates concerning Parent's directors and officers, their remuneration, stock
options granted to them, the principal holders of Parent's securities and any
material interest of such persons in transactions with Parent is required to be
disclosed in proxy statements distributed to Parent's shareholders and filed
with the SEC. Such reports, proxy statements and other information should be
available for inspection at the SEC and copies thereof should be obtainable from
the SEC in the same manner as is set forth with respect to the Company under the
heading 'Available Information' in Section 8, and should also be available for
inspection at the offices of the NYSE, 20 Broad Street, New York, New York
10005.
Contacts with the Company. Except as set forth in this Offer to Purchase,
neither Parent, the Purchaser, Holdings or any other affiliate of Parent nor, to
the best knowledge of Parent, the Purchaser or Holdings, any of the persons
listed in Schedule I hereto, or any associate or majority-owned subsidiary of
such persons (collectively, the 'Purchaser Entities'), beneficially owns any
equity security of the Company, and no Purchaser Entity, or, to the best
knowledge of Parent, Purchaser, Holdings, or any other affiliate of Parent, any
of the other persons referred to above, or any of the respective directors,
executive officers or subsidiaries of any of the foregoing, has effected any
transaction in any equity security of the Company during the past 60 days.
Except as set forth in this Offer to Purchase, no Purchaser Entity, or, to
the best knowledge of any Purchaser Entity, any of the persons listed in
Schedule I hereto has any contract, arrangement, understanding or relationship
with any other person with respect to any securities of the Company, including,
without limitation, any contract arrangement, understanding or relationship
concerning the transfer or the voting of any securities of the Company, joint
ventures, loan or option arrangements, puts or calls, guaranties of loans,
guaranties against loss or the giving or withholding of proxies. Except as set
forth in this Offer to Purchase, no Purchaser Entity, or, to the best knowledge
of any Purchaser Entity, any of the persons listed in Schedule I hereto has had
any transactions with the Company, or any of its executive officers, directors
or affiliates that would require reporting under the rules of the SEC.
Except as set forth in this Offer to Purchase, there have been no contacts,
negotiations or transactions between any Purchaser Entity, or their respective
subsidiaries, or, to the best knowledge of any Purchaser Entity, any of the
persons listed in Schedule I hereto, on the one hand, and the Company or its
executive officers, directors or affiliates, on the other hand, concerning a
merger, consolidation or acquisition, tender offer or other acquisition of
securities, election of directors, or a sale or other transfer of a material
amount of assets that would require reporting under the rules of the SEC.
10. SOURCE AND AMOUNT OF FUNDS
The total amount of funds required by the Purchaser to purchase all of the
Shares pursuant to the Offer, to repay outstanding indebtedness of the Company
and to pay related fees and expenses is approximately $460 million. The
Purchaser plans to obtain all funds needed for the Offer and the Merger through
a capital contribution from Parent.
Parent intends to obtain the funds for its capital contribution through its
existing Credit Agreement, dated as of September 7, 1990, as amended, among
Parent and the banks listed therein (the 'Credit Facility'), and through a
committed credit line to be provided by the Bank of Nova Scotia (the 'Committed
Line'). The Credit Facility provides for revolving credit of up to $250 million
for general corporate purposes through September 30, 2001. At present, there
is no outstanding indebtedness under the Credit Facility. Loans under the
Credit Facility bear interest at one of the following rates, as selected by
Parent on the date of borrowing: (i) the Base Rate (as defined in the Credit
Facility); (ii) the Adjusted CD Rate (as defined in the Credit Facility);
or (iii) the Eurodollar Rate (as defined in the Credit Facility) plus, in
the case of (ii) and (iii), a margin ranging from 1/8 of one percent to
3/8 of one percent) based on the leverage ratio of Parent at the end
of the fiscal quarter most recently then ended. As of the date hereof, the
applicable margin would be 1/8 of one percent, which margin is expected to
increase to 1/4 of one percent based on the pro forma capitalization of Parent
after the Offer and the Merger. The effective interest rate as of the date
hereof would be approximately 6.0%. The Credit Facility contains covenants and
13
<PAGE>
restrictions on the payment of dividends. The members of the bank group
providing the Credit Facility are Bankers Trust Company, Bank of America
Illinois, the First National Bank of Chicago, The Chase Manhattan Bank (National
Association), Bank of Nova Scotia, Industrial Bank of Japan, Bank of Tokyo,
NationsBank Corporation, Dresdner Bank Aktiengesellschaft, The Fuji Bank,
SunTrust Bank, The Northern Trust Company, Sumitomo Bank, Wachovia Bank of
Georgia, and Sanwa Bank. The Committed Line provides for credit of up to $250
million through a date 364 days following execution of final credit
documentation, under substantially the same terms and conditions as the Credit
Facility.
The foregoing summary of the Credit Facility and the Committed Line is
qualified in its entirety by reference to the Credit Facility and the Committed
Line, which are filed as exhibits to Parent's and the Purchaser's Tender Offer
Statement on Schedule 14D-1 (the 'Schedule 14D-1') and incorporated herein by
reference.
Although no definitive plan or arrangement for repayment of borrowings
under the Credit Facility or Committed Line has been made, Parent anticipates
such borrowings will be repaid with internally generated funds, (including, if
the Merger is accomplished, those of the Company) and from other sources which
may include the proceeds of future bank refinancings or the public or private
sale of debt or equity securities. No decision has been made concerning the
method Parent will use to repay the borrowings under the Credit Facility. Such
decision will be made based on Parent's review from time to time of the
advisability of particular actions, as well as prevailing interest rates,
financial and other economic conditions and such other factors as Parent may
deem appropriate.
11. BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY
Parent regularly reviews possible acquisition candidates and, over the past
few years, has monitored the Company as a potential acquisition candidate.
On December 9, 1997, the Company received an unsolicitated proposal by
Kollmorgen Corporation ('Kollmorgen') to acquire the Company. On December 15,
1997, Kollmorgen commenced a cash tender offer for a majority of the Shares at a
price of $20.50 per Share in cash, as disclosed in a Tender Offer Statement on
Schedule 14D-1 filed on December 15, 1997 (the 'Kollmorgen 14D-1'). In the
Kollmorgen 14D-1, Kollmorgen also proposed a merger with the Company pursuant to
which Shares not purchased in its tender offer would be converted into the right
to receive shares of common stock of Kollmorgen valued at $20.50 per share,
subject to certain limitations.
Shortly after Kollmorgen's tender offer was commenced, Parent contacted the
Company about its possible interest in acquiring the Company. On January 9,
1998, Parent and Company executed a Confidentiality Letter Agreement (the
'Confidentiality Agreement') preceding Parent's review of certain information
about the Company. Parent received certain information from the Company about
its operations the week of January 12, 1998. During the week of January 19,
1998, representatives of Parent met with management of the Company to discuss
the Company's business and valuation parameters of the Company. In addition,
representatives of Parent visited various Company facilities.
During the week of January 26, 1998, Parent and its representatives
conducted further financial, operational and legal due diligence investigation
of the Company. In addition, representatives of Parent and representatives of
the Company continued to discuss valuation parameters of the Company and the
general terms of a possible transaction, including pricing.
On January 29, 1998, Parent provided the Company with a revised Merger
Agreement in response to a form of Merger Agreement furnished by the Company. On
January 30, 1998, representatives of Parent and representatives of the Company
began negotiating the terms of a definitive Merger Agreement. Also on January
30, Kollmorgen increased the price of its tender offer for a majority of the
Shares to $23.75 per Share.
Negotiations between Parent and the Company continued through January 31,
1998, culminating in Parent and the Company agreeing upon a form of Merger
Agreement which was presented to and approved by Parent's Board of Directors and
by the Company's Board of Directors at meetings held on January 31, 1998,
subject to finalization of certain open items. The definitive Merger Agreement
was executed later that day. The transactions were publicly announced on
February 2, 1998.
14
<PAGE>
On February 2, 1998, Kollmorgen terminated its tender offer for a majority
of the Shares.
On February 6, 1988, the Purchaser commenced the Offer.
12. PURPOSE OF THE OFFER, THE MERGER AND THE MERGER AGREEMENT
The purpose of the Offer, the Merger and the Merger Agreement is to enable
Parent to acquire control of, and the entire equity interest in, the Company.
Upon consummation of the Merger, the Company will become a subsidiary of
Holdings. The Offer is intended to increase the likelihood that the Merger will
be effected.
Merger Agreement
The following is a summary of certain provisions of the Merger Agreement.
The summary is qualified in its entirety by reference to the Merger Agreement
which is incorporated herein by reference and a copy of which has been filed
with the SEC as an exhibit to the Schedule 14D-1. The Merger Agreement may be
examined and copies may be obtained at the places and in the manner set forth in
Section 8 of this Offer to Purchase.
The Offer. The Merger Agreement provides that the Purchaser will commence
the Offer and that, upon the terms and subject to prior satisfaction or waiver
of the conditions of the Offer, as set forth in Section 14, the Purchaser will
accept for payment and pay for all Shares validly tendered pursuant to the
Offer. The Purchaser agreed to purchase all such Shares at a price of $30.25 per
Share. The Merger Agreement provides that the Purchaser will not, without the
prior written consent of the Company, reduce the number of Shares sought in the
Offer, reduce the Offer Price or change the form of consideration payable in the
Offer, waive the Minimum Condition or impose additional conditions or amend any
other term of the Offer set forth in Section 14 below or amend the Offer in any
manner adverse to the holders of Shares. Notwithstanding the foregoing, (i) if
any condition of the Offer (other than the Minimum Condition) has not been
satisfied or waived on any scheduled Expiration Date, the Purchaser may, without
the consent of the Company, (a) extend the Offer for a period of time as is
reasonably expected by the Purchaser to be necessary to satisfy the unsatisfied
conditions and (b) extend the Offer for any period required by any rule,
regulation, interpretation or position of the SEC or the staff thereof
applicable to the Offer and (ii) if all of the conditions of the Offer other
than the Minimum Condition have been satisfied on any scheduled Expiration Date,
the Purchaser has agreed to extend the Offer for one additional business day (or
such longer time as may be agreed to by the Purchaser and the Company), and to
continue to effect such extensions until the earlier of (a) the close of
business on the business day immediately prior to the Special Meeting and (b)
the Minimum Condition has been satisfied, after which time the Purchaser has
agreed not to extend the Offer for any reason.
One-Step Transaction. As indicated above, the Merger Agreement
contemplates a two-step transaction in which, following consummation of the
Offer, the Merger occurs. Under the GCL, if the Purchaser acquires, pursuant to
the Offer or otherwise, at least 90% of the then outstanding Shares, the
Purchaser will be able to approve and adopt the Merger and the Merger Agreement
without a vote of the Company's shareholders. However, under the GCL, the Merger
may not be accomplished for cash paid to the remaining Company shareholders if
the Purchaser, Holdings or Parent owns directly or indirectly more than 50% but
less than 90% of the then outstanding Shares unless either all of the
shareholders of the Company consent to the Merger or the Commissioner of
Corporations of the State of California approves, after a hearing, the terms and
conditions of the Merger and the fairness thereof. Accordingly, Parent and the
Company intend to proceed simultaneously with an alternative to this two-step
transaction in which the Company pursues a one-step cash merger at the Offer
Price. This one-step transaction would require the affirmative vote of a
majority of the Company's outstanding voting stock. In the event the Minimum
Condition is not fulfilled, the Merger Agreement contemplates that the Offer
will be terminated and Parent and the Company will seek to implement the
one-step cash merger transaction.
Pursuant to the Merger Agreement, the Company has agreed to duly call, give
notice of, convene and hold the Special Meeting as soon as practicable following
the date of the Merger Agreement for the purpose of considering and taking
action upon the Merger and the adoption of the Merger Agreement pursuant to a
one-step cash merger. The Merger Agreement provides that the Company will
prepare and file with the SEC a preliminary proxy statement and cause a
definitive proxy statement relating to the Special Meeting to be mailed to its
shareholders for the purpose of obtaining the necessary approvals of the Merger
and the Merger Agreement from its shareholders. The Board of Directors of the
Company, subject to the provisions described under 'No Solicitation' below has
agreed to include in the proxy statement its recommendation that the
shareholders of the
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<PAGE>
Company vote in favor of the approval of the Merger and the Merger Agreement.
The affirmative vote of a majority of the outstanding Shares would be required
to approve the Merger and the Merger Agreement at the Special Meeting. However,
if the Minimum Condition and the other conditions to the Offer are satisfied
prior to the Special Meeting, the Purchaser will acquire at least 90% of the
Shares outstanding and will be able to approve and adopt the Merger without a
vote of the Company's shareholders and the Special Meeting will be cancelled.
Recommendation. The Merger Agreement provides that, subject to the
conditions thereof, the Board of Directors of the Company has (i) determined
that the Offer and the Merger are fair and in the best interests of the Company
an its shareholders, (ii) approved an amendment to the Rights Agreement such
that the Purchaser does not become an 'Acquiring Person' thereunder to the
extent of its acquisition of Shares pursuant to the Merger Agreement and (iii)
resolved to recommend acceptance of the Offer and approval and adoption of the
Merger and the Merger Agreement by the Company's shareholders.
The Merger. Following the consummation of the Offer, the Merger Agreement
provides that, subject to the terms and conditions thereof, and in accordance
with California law, the Purchaser will be merged with and into the Company. As
a result of the Merger, the separate corporate existence of the Purchaser will
cease and the Company will continue as the Surviving Corporation. The time the
Merger becomes effective is referred to as the 'Effective Time.'
Conversion of Shares. At the Effective Time, each Share issued and
outstanding immediately prior to the Effective Time (other than Shares held by
Holdings, the Purchaser, any wholly owned subsidiary of Holdings or the
Purchaser, in the treasury of the Company or by any wholly owned subsidiary of
the Company, which Shares, by virtue of the Merger and without any action on the
part of the holder thereof, will be canceled and retired and will cease to exist
with no payment being made with respect thereto, and shareholders who perfect
their dissenters' rights under California law) will be converted into the right
to receive in cash the Offer Price. At the Effective Time, each issued and
outstanding share of the Purchaser will be converted into one validly issued,
fully paid and nonassessable share of common stock, par value $1.00 per share,
of the Surviving Corporation.
Pursuant to the Merger Agreement, immediately following the Effective Time,
each holder of an outstanding Option granted under any Stock Plan, whether or
not fully exercisable, will be entitled to receive in settlement of such Option
a cash payment from the Company equal to the product of (i) the total number of
Shares previously subject to such Option and (ii) the excess of the Offer Price
over the exercise price per Share subject to such Option, subject to any
required withholding of taxes.
Dissenting Shares. If the Merger is consummated, Shares outstanding
immediately prior to the Effective Time and held by a shareholder who has not
voted in favor of the Merger and who has perfected such shareholder's right to
demand cash payment for the fair market value of such holder's Shares in
accordance with Chapter 13 of the GCL will not be converted into a right to
receive the Offer Price, unless such shareholder fails to perfect or withdraws
or otherwise loses such shareholder's right to a determination of the fair
market value of such shareholder's Shares under the GCL, in which case such
Shares will be treated as if they have been converted as of the Effective Time
into a right to receive the Offer Price. The Company has agreed to give Holdings
prompt notice of any dissenting shareholders and Holdings will have the right to
participate in all negotiations and proceedings with respect to such demands.
See Section 15.
Board of Directors. Promptly upon the purchase by the Purchaser of Shares
representing at least such number of Shares as shall satisfy the Minimum
Condition, and from time to time thereafter, Holdings shall be entitled to
designate up to such number of directors, rounded up to the next whole number,
on the Board of Directors of the Company as is equal to the number of directors
which is the product of (a) the total number of directors on the Board of
Directors of the Company (giving effect to the directors elected pursuant to
this sentence) multiplied by (b) the percentage that the aggregate number of
Shares beneficially owned by Holdings or its affiliates bears to the total
number of Shares then outstanding on a fully diluted basis. Notwithstanding the
foregoing, the Company, Holdings and the Purchaser have agreed that, until the
Effective Time, the Board of Directors of the Company shall have at least two
Independent Directors; provided, however, that, in such event, if the number of
Independent Directors shall be reduced below two, the remaining Independent
Director shall be entitled to designate a person to fill such a vacancy who
shall not be an officer, director or designee of the Purchaser or any of its
affiliates and who shall be deemed to be an Independent Director for purposes of
the Merger Agreement. In the Merger Agreement, the Company has agreed, upon
request of Holdings, to take all
16
<PAGE>
actions necessary to cause Holdings' designees to be so elected, including
mailing to its shareholders the Information Statement containing the information
required by Section 14(f) of the Exchange Act and Rule 14f-1 promulgated
thereunder, and, if necessary, seeking the resignation of one or more existing
directors.
The Rights Agreement. The Company has distributed one Right for each
outstanding Share pursuant to the Rights Agreement. The Company has represented
in the Merger Agreement that it has taken all action which may be necessary
under the Rights Agreement and has, on January 31, 1998, amended the Rights
Agreement, so that the execution of the Merger Agreement, the making of the
Offer, the acquisition of Shares pursuant to the Offer and the consummation of
the Merger will not cause (i) any Rights issued pursuant to the Rights Agreement
to become exercisable or to separate from the stock certificates to which they
are attached, (ii) Holdings, the Purchaser, or any of their affiliates to become
an Acquiring Person (as defined in the Rights Agreement), or (iii) trigger other
provisions of the Rights Agreement, including giving rise to a Distribution Date
(as defined in the Rights Agreement).
Representations and Warranties. Pursuant to the Merger Agreement, the
Company has made customary representations and warranties to Holdings and the
Purchaser with respect to, among other things, its organization and
subsidiaries, capitalization, authority, the absence of violations, financial
statements, public filings, compliance with law, litigation, information in the
proxy statement, employee benefit plans, tax matters, intellectual property,
contracts, the absence of any material adverse effects on the Company since
December 27, 1996, the Rights Agreement and the opinion of its financial
advisor. Holdings and the Purchaser have made customary representations and
warranties to the Company with respect to, among other things, its organization,
authority, the absence of violations, information in the proxy statement and
financing.
Covenants. The Merger Agreement contains certain covenants of the Company,
Holdings and the Purchaser in contemplation of the Merger, including, without
limitation, access by Holdings and the Purchaser to information concerning the
Company, use of reasonable best efforts to consummate the Merger, use of
reasonable best efforts to obtain all consents necessary for the consummation of
the Merger, and notification of the other parties of certain matters.
Conduct of Business of the Company. Pursuant to the Merger Agreement, the
Company agreed that, except with the prior written consent of Holdings, during
the period from the date of the Merger Agreement to the Effective Time, the
Company and each of its subsidiaries will conduct its operations according to
its ordinary and usual course of business and consistent with past practice and
will use reasonable efforts to preserve intact the business organization of the
Company and each of its subsidiaries, to keep available the services of its and
their present officers and key employees, and to preserve the good will of those
having business relationships with it. The Company has also agreed that except
as (a) otherwise expressly provided in the Merger Agreement, (b) required by
law, (c) previously disclosed to Parent in the Company's 1998 operating budget,
or (d) set forth on the Company's disclosure schedule, prior to the Effective
Time, the Company and its subsidiaries will not, without the prior written
consent of Holdings:
(i) except with respect to annual bonuses made in the ordinary course
of business consistent with past practice, adopt or amend in any material
respect any bonus, profit sharing, compensation, severance, termination,
stock option, stock appreciation right, pension, retirement, employment or
other employee benefit agreement, trust, plan or other arrangement for the
benefit or welfare of any director, officer or employee of the Company or
any of its subsidiaries or increase in any manner the compensation or
fringe benefits of any director, officer or employee of the Company or any
of its subsidiaries or pay any benefit not required by any existing
agreement or place any assets in any trust for the benefit of any director,
officer or employee of the Company or any of its subsidiaries (in each
case, except with respect to employees, non-executive officers and
directors in the ordinary course of business consistent with past
practice);
(ii) incur any indebtedness for borrowed money (other than under
existing lines of credit) or guarantee any such indebtedness of another
person, issue or sell any debt securities or warrants or other rights to
acquire any debt securities of the Company or any of its subsidiaries,
guarantee any debt securities of another person, enter into any 'keep well'
or other agreement to maintain any financial statement condition of another
person or enter into any arrangement having the economic effect of any of
the foregoing, or make any loans, advances or capital contributions to, or
investments in, any other person, other than to the Company or any direct
or indirect wholly owned subsidiary of the Company;
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(iii) expend funds for capital expenditures in excess of $4,000,000
per fiscal quarter,including amounts reflected in the Company's 1998
operating budget;
(iv) sell, lease, license, mortgage or otherwise encumber or subject
to any lien or otherwise dispose of any of its properties or assets other
than immaterial properties or assets (or immaterial portions of properties
or assets), except in the ordinary course of business consistent with past
practice;
(v) (x) declare, set aside or pay any dividends on, or make any other
distributions in respect of, any of its capital stock (except (A) as
contemplated by the Rights Agreement, (B) for dividends paid by
subsidiaries to the Company with respect to capital stock and (C) for
regular quarterly dividends not to exceed $.03 per quarter), (y) 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 (z) purchase, redeem or
otherwise acquire any shares of capital stock of the Company or any of its
subsidiaries or any other securities thereof or any rights, warrants or
options to acquire any such shares or other securities;
(vi) authorize for issuance, issue, deliver, sell or agree or commit
to issue, sell or deliver (whether through the issuance or granting of
options, warrants, commitments, subscriptions, rights to purchase or
otherwise), pledge or otherwise encumber any shares of its capital stock or
the capital stock of any of its subsidiaries, any other voting securities
or any securities convertible into, or any rights, warrants or options to
acquire, any such shares, voting securities or convertible securities or
any other securities or equity equivalents (including without limitation
stock appreciation rights) (other than issuances upon exercise of Options
outstanding on the date hereof pursuant to the Stock Plans or the Rights
Agreement);
(vii) amend its Restated Articles of Incorporation, By-Laws or
equivalent organizational documents or alter through merger, liquidation,
reorganization, restructuring or in any other fashion the corporate
structure or ownership of any material subsidiary of the Company;
(viii) make or agree to make any acquisition of assets which is
material to the Company and its subsidiaries, taken as a whole, except for
(x) purchases of inventory, supplies and material in the ordinary course of
business or (y) pursuant to purchase orders entered into in the ordinary
course of business which do not call for payments in excess of $1,000,000
per annum;
(ix) settle or compromise any shareholder derivative suits arising out
of the transactions contemplated by the Merger Agreement or any other
litigation (whether or not commenced prior to the date of the Merger
Agreement) or settle, pay or compromise any claims not required to be paid,
individually in an amount in excess of $1,000,000, other than in
consultation and cooperation with Holdings, and, with respect to any such
settlement, with the prior written consent of Holdings, which consent shall
not be unreasonably withheld;
(x) make any material tax election or settle or compromise any
material tax liability (whether with respect to amount or timing); or
(xi) except in the ordinary course of business, modify, amend or
terminate any material contract or waive or release or assign any material
rights or claims.
Employee Benefits. Holdings has agreed to cause the Surviving Corporation
to honor the employment, severance and bonus arrangements to which the Company
is a party. Holdings has also agreed that for a period of two years following
the Effective Time, the Surviving Corporation will provide employees of the
Company and its subsidiaries compensation and employee benefit and welfare plans
which are not materially less favorable in the aggregate to such employee than
those generally in effect on the date of the Merger Agreement with respect to
similarly situated employees of the Company.
No Solicitation. Pursuant to the Merger Agreement, the Company has agreed
that it will cause its subsidiaries and its and their officers, directors,
employees, investment bankers, attorneys and other agents and representatives
to, immediately cease any existing discussions or negotiations with any person
other than Holdings or the Purchaser (a 'Third Party') with respect to any
Acquisition Transaction (as hereinafter defined). The Company has also agreed
that it will not, and will cause its subsidiaries and its and their officers,
directors, employees, investment bankers, attorneys and other agents and
representatives not to, directly or indirectly,
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(w) solicit, initiate, continue, facilitate or encourage (including by way of
furnishing or disclosing non-public information) any inquiries, proposals or
offers from any Third Party with respect to, or that could reasonably be
expected to lead to, any acquisition or purchase of a material portion of the
assets (other than in the ordinary course of business) or business of, or any
significant equity interest in (including by way of a tender offer), or any
merger, consolidation or business combination with, or any recapitalization or
restructuring, or any similar transaction involving, the Company or any of its
subsidiaries (the foregoing being referred to collectively as an 'Acquisition
Transaction') or (x) negotiate, explore or otherwise communicate in any way with
any Third Party with respect to any Acquisition Transaction; or (y) enter into,
approve or recommend any agreement, arrangement or understanding requiring the
Company to abandon, terminate or fail to consummate the Offer and/or the Merger
or any other transaction contemplated thereby; or (z), withdraw or modify, or
propose publicly to withdraw or modify, in a manner adverse to Holdings, the
approval or recommendation by the Company's Board of Directors of the Offer, the
Merger or the Merger Agreement; provided, however, that nothing in the Merger
Agreement will prevent the Company's Board of Directors from taking, and
disclosing to the Company's shareholders, a position contemplated by Rules 14d-9
and 14e-2 promulgated under the Exchange Act with respect to any tender offer.
The Company has agreed to promptly notify Holdings of the receipt of any
proposal relating to an Acquisition Transaction. Notwithstanding anything to the
contrary in the foregoing, the Company may, in response to an unsolicited
written proposal with respect to an Acquisition Transaction involving the
acquisition of all of the Shares (or all or substantially all of the assets of
Company and its subsidiaries) from a Third Party, (i) furnish or disclose
non-public information to such Third party and (ii) negotiate, explore or
otherwise communicate with such Third Party, in each case only if (a) after
being advised by (x) its outside counsel with respect to its fiduciary
obligations and (y) its financial advisors with respect to the financial terms
of any such proposed Acquisition Transaction, the Board of Directors of the
Company determines in good faith by a majority vote that taking such action is
necessary in the exercise of its fiduciary obligations under applicable law (the
proposal with respect to an Acquisition Transaction meeting the requirements of
this clause (a), a 'Superior Proposal'), and (b) prior to furnishing or
disclosing any non-public information to, or entering into discussions or
negotiations with, such Third Party, the Company receives from such Third Party
an executed confidentiality agreement (which the Company is expressly permitted
to negotiate with such party) with terms no less favorable in the aggregate to
Company than those contained in the Confidentiality Agreement but which
confidentiality agreement shall not provide for any exclusive right to negotiate
with the Company or any payments by the Company and need not contain any
'stand-still' or similar provisions. In addition, the Company's Board of
Directors may approve or recommend (and, in connection therewith withdraw or
modify its approval or recommendation of the Offer, the Merger Agreement or the
Merger) a Superior Proposal and may terminate the Merger Agreement solely to
enter into a definitive agreement with respect to a Superior Proposal; provided,
however, that Company may not, and will cause its affiliates not to, enter into
a definitive agreement with respect to a Superior Proposal unless the Company
concurrently terminates the Merger Agreement in accordance with the terms
thereof and pays any amounts required under the Merger Agreement, as described
under 'Fees and Expenses' below.
The Merger Agreement provides that the Company will promptly (but in any
event within one business day of Company becoming aware of same) advise Holdings
of the receipt by the Company, any of its subsidiaries or any of Company's
bankers, attorneys or other agents or representatives of any written inquires or
proposals relating to an Acquisition Transaction and any actions taken pursuant
to provisions of the Merger Agreement described in the immediately preceding
paragraph and the Company will promptly (but in any event within one business
day of the Company becoming aware of same) provide Parent with a copy of any
such written inquiry or proposal. The Company will keep Holdings reasonably
informed of the status and content of and material developments (including the
calling of meetings of the Company's Board of Directors to take action with
respect to such Acquisition Transaction) with respect to any discussions
regarding any Acquisition Transaction with a Third Party. The Company agrees
that it will not enter into any agreement with respect to a Superior Proposal
unless and until Holdings has been given notice of the identity of the parties
making such Superior Proposal, the material terms thereof and material
developments referred to in the preceding sentence at least two business days
prior to the entering into such agreement.
Indemnification; Directors' and Officers' Insurance. Pursuant to the
Merger Agreement, from and after the Effective Time, Holdings has agreed, and
will cause the Surviving Corporation to, indemnify the present and former
officers, directors, employees and agents of the Company and its subsidiaries
(the 'Indemnified Parties')
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against all losses, claims, damages, expenses or liabilities arising out of or
related to actions or alleged actions or omissions occurring at or prior to the
Effective Time to the full extent permitted under California law or, if greater,
in the Company's Restated Articles of Incorporation and By-Laws and agreements
(including indemnification agreements to which directors or officers of the
Company or its subsidiaries are parties) between the Company or one of its
subsidiaries and such employee, in effect on the date of the Merger Agreement
and identified to Purchaser by the Company (to the extent consistent with
applicable law), which provisions and agreements will survive the Merger and
continue in full force and effect. If such Indemnified Party becomes involved in
any action or proceeding, Holdings has agreed to advance reasonable legal and
other expenses as incurred by an Indemnified Party, provided, however, Holdings
will not, in connection with one action or separate but substantially similar
actions arising out of the same general allegations, be liable for fees and
expenses of more than one separate firm of attorneys (in addition to any local
counsel) at any time for all Indemnified Parties, except in certain
circumstances. Parent will be entitled to participate in the defense of any such
action or proceeding. In addition, pursuant to the Merger Agreement, Holdings
has agreed to maintain the current policies for officers and director liability
insurance for not less than six years from the Effective Time.
Merger Conditions. In the event the Offer is consummated, the obligations
of the parties to consummate the Merger would be subject to the satisfaction, at
or before the Effective Time, of each of the following conditions: (i) the
shareholders of the Company having duly approved the transactions contemplated
by the Merger Agreement, if required by applicable law or the Restated
Certificate of Incorporation of the Company; (ii) no statute, rule, regulation,
executive order, decree or injunction having been enacted, entered, promulgated
or enforced by any court of competent jurisdiction or other governmental entity
which prohibits the consummation of the Merger; provided, however, that the
Company, Holdings and the Purchaser will use their reasonable best efforts to
have any such order, decree or injunction vacated; or (iv) any waiting period
(any extension thereof) under the HSR Act applicable to the Merger having
expired or terminated.
If the Offer has not been consummated, the obligations of Holdings to
consummate the Merger pursuant to a one-step transaction are subject to the
satisfaction, at or before the Effective Time, of the conditions described in
the immediately preceding paragraph and the following additional conditions: (i)
the representations and warranties of the Company set forth in the Merger
Agreement being true and correct in all respects in each case as of the date of
the Merger Agreement and as of the closing date of the Merger (the 'Closing
Date') as though made on and as of the Closing Date; provided, however, that,
with respect to representations and warranties other than those with respect to
the Company's capitalization and subsidiaries and the Company's authority to
enter in the Merger Agreement and the transactions contemplated thereby and
representations and warranties otherwise qualified by material adverse effect,
such representations and warranties and statements will be deemed to be true and
correct in all respects unless the failure or failures of such representations
and warranties and statements to be so true and correct, individually or in the
aggregate would result in a material adverse effect on the Company; (ii) the
Company having performed the obligations required to be performed by it under
the Merger Agreement at or prior to the Closing Date, except for such failures
to perform as have not had or would not, individually or in the aggregate, have
a material adverse effect on the Company or materially adversely affect the
ability of the Company to consummate the transactions contemplated by the Merger
Agreement; and (iii) Holdings having received evidence, in form and substance
reasonably satisfactory to it, that all licenses, permits, consents, approvals,
authorizations, qualifications and orders of governmental authorities and other
third parties relating to the Merger have been obtained.
If the Offer has not been consummated, the obligations of the Company to
effect the Merger pursuant to a one-step transaction are subject to the
satisfaction, at or before the Effective Time, of the conditions in the first
paragraph of this subsection and the following additional conditions: (i) the
representations and warranties of Holdings and the Purchaser set forth in the
Merger Agreement being true and correct in all respects in each case as of the
date of the Merger Agreement and as of the Closing Date as though made on and as
of the Closing Date; provided, however, that, with respect to representations
and warranties other than those with respect to Holdings' and the Purchaser's
authority to enter into the Merger Agreement and the transactions contemplated
thereby, and representations and warranties otherwise qualified by material
adverse effect on Holdings, such representations and warranties will be deemed
to be true and correct in all respects unless the failure or failures of such
representations and warranties and statements to be so true and correct,
individually or in the aggregate would result in a material adverse effect on
Holdings; and (ii) each of Holdings and the Purchaser having performed the
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obligations required to be performed by it under the Merger Agreement at or
prior to the Closing Date, except for such failures to perform as have not had
or would not reasonably be expected individually or in the aggregate, to have a
material adverse effect on Holdings or adversely affect the ability of Holdings
or the Purchaser to consummate the transactions contemplated by the Merger
Agreement.
Termination. The Merger Agreement may be terminated and the Merger may be
abandoned at any time prior to the Effective Time, whether or not approval
thereof by the shareholders has been obtained:
(a) by the mutual written consent of Parent and the Company, by action
of their respective Board of Directors;
(b) by the Company if the Company is not in material breach of any of
its representations, warranties, covenants or agreements contained in the
Merger Agreement and if (i) Holdings or the Purchaser fails to commence the
Offer, or (ii) (x) at or any time following the initial Expiration Date as
it may be extended pursuant to the terms of the Merger Agreement, the
Minimum Condition shall have been satisfied and all other conditions to the
Offer shall have been satisfied or waived in accordance with the terms
hereof and (y) Holdings or the Purchaser shall not have accepted for
payment and paid for Shares pursuant to the Offer in accordance with the
terms of the Merger Agreement;
(c) by Parent or the Company if the Merger shall not have been
consummated on or before June 30, 1998; provided, however, that neither
Holdings nor the Company may terminate the Merger Agreement as described in
this clause (c) if such party shall have materially breached the Merger
Agreement; and provided, further, that Holdings may not terminate the
Merger Agreement as described in this clause (c) if the Offer shall have
theretofore been consummated;
(d) by Holdings or the Company if any court of competent jurisdiction
in the United States or other United States governmental entity has issued
an order, decree or ruling or taken any other action restraining, enjoining
or otherwise prohibiting the Merger and such order, decree, ruling or other
action shall have become final and nonappealable; provided, however, that
the party seeking to terminate the Merger Agreement shall have used its
reasonable best efforts to remove or lift such order, decree, ruling or
other action;
(e) by the Company if, prior to the acceptance for payment of Shares
pursuant to the Offer, (i) there shall have occurred, on the part of
Holdings or Purchaser, a material breach of any representation or warranty,
covenant or agreement contained in the Merger Agreement which is not
curable or (ii) the Company (A) to the extent permitted by the provisions
of the Merger Agreement described under 'No Solicitation' above, enters
into a definitive agreement with respect to a Superior Proposal and (B)
concurrently pays any termination fee and agrees to pay any other amounts
required under the Merger Agreement, as described under 'Fees and Expenses'
below;
(f) by Parent if the Company breaches its covenant not to amend the
Rights Agreement or redeem the Rights, provided, however, that such breach
occurs prior to the time that designees of Holdings constitute a majority
of the Company's Board of Directors; or
(g) by Holdings, prior to the purchase of Shares pursuant to the
Offer, if (i) there shall have occurred, on the part of the Company, a
breach of any representation, warranty, covenant or agreement contained in
the Merger Agreement which (except in the case of a breach of certain of
the representations and warranties) individually or in the aggregate if not
cured would be reasonably likely to have a material adverse effect on the
Company and which is not curable or (ii) the Company's Board of Directors
shall have withdrawn or modified (including by amendment of the Company's
Solicitation/Recommendation Statement on Schedule 14D-9) in a manner
adverse to the Purchaser its approval or recommendation of the Offer, the
Merger Agreement or the Merger, shall have approved or recommended a
Superior Proposal, or shall have resolved to effect any of the foregoing.
Fees and Expenses. The Merger Agreement provides that whether or not the
Merger is consummated, except as otherwise provided below, all costs and
expenses incurred in connection with the Offer, the Merger Agreement and the
transactions contemplated thereby shall be paid by the party incurring such
expenses.
In the event the Merger Agreement is terminated as described in clause
(e)(ii), (f) or (g)(ii) under 'Termination' above, then the Company will
promptly pay the documented fees and expenses of Holdings and
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the Purchaser related to the Merger Agreement, the transactions contemplated
thereby and any related financing (subject to a maximum of $2.0 million) and in
the event the Merger Agreement is terminated as described in clause (e)(ii) or
(g)(ii) under 'Termination' above, then the Company will promptly pay Holdings a
termination fee of $15 million (the 'Termination Fee'); provided that in no
event shall more than one Termination Fee be paid by the Company.
The Merger Agreement also provides that in the event that (i) any person
shall have publicly disclosed a proposal regarding an Acquisition Transaction
and (ii) following such disclosure (and provided that neither Holdings nor the
Purchaser is in any material breach of any of its representations, warranties,
covenants or agreements contained in the Merger Agreement), either (x) June 30,
1998 occurs without the Minimum Condition being satisfied (other than as a
result of a material breach thereof by Holding or the Purchaser that has not
been cured) or the requisite shareholder approval of the Merger being obtained
or (y) if the Merger Agreement is terminated as described in clause (f) or
(g)(ii) under 'Termination' above, and (iii) not later than six months after any
such termination the Company shall have entered into an agreement for an
Acquisition Transaction, or an Acquisition Transaction shall have been
consummated, then the Company will promptly, but in no event later than
immediately prior to, and as a condition of, entering into such definitive
agreement, or, if there is no such definitive agreement then immediately upon
consummation of the Acquisition Transaction, pay Parent a Termination Fee of $15
million.
Extension; Waiver. Subject to the terms of the Merger Agreement, at any
time prior to the Effective Time, the parties may (i) extend the time for the
performance of any of the obligations or other acts of the other, (ii) waive any
inaccuracies in the representations and warranties contained in the Merger
Agreement or in any other document delivered pursuant to the Merger Agreement by
the other, or (iii) waive compliance by the other with any of the agreements or
conditions.
Confidentiality Agreement
Pursuant to the Confidentiality Agreement, Parent and the Company agreed to
provide, among other things, for the confidential treatment of their discussions
regarding the Offer and the Merger and the exchange of certain confidential
information concerning the Company. The Confidentiality Agreement is
incorporated herein by reference and a copy of it has been filed with the SEC as
an exhibit to the Schedule 14D-1. The Confidentiality Agreement may be examined
and copies may be obtained at the places and in the manner set forth under the
heading 'Available Information' in Section 8 of this Offer to Purchase.
Other Matters
Articles of Incorporation. Article Fifth of the Company's Restated
Articles of Incorporation ('Article Fifth') provides that the adoption of any
agreement for the merger of the Company with, or sale or other disposition of
all or substantially all of the assets of the Company (or in any case greater
than 50% of the then fair market value thereof) to a person that is an
'associate' of the Company (an 'Acquiring Associate') requires (a) the
affirmative vote of the holders of at least a majority of the outstanding shares
of stock of the Company entitled to vote exclusive of shares owned beneficially
by the Acquiring Associate, and (b) the affirmative vote of holders of at least
two-thirds of the outstanding shares of the stock of the Company entitled to
vote. Shares held beneficially by an Acquiring Associate include the shares
beneficially owned by any affiliate or associate of such person and shares such
person or its affiliates or associates have the right to acquire pursuant to
agreement or with respect to which such person or its affiliates or associates
have any agreement or understanding for the purposes of acquiring, holding,
voting or disposing of voting securities of the Company. Article Fifth thus has
the effect of increasing the voting requirements that would otherwise be
required under applicable law for approval of extraordinary transaction to which
it applies.
Under the Article Fifth, (a) an 'associate' of a specified person is (i)
any person who is, directly or indirectly, the beneficial owner of 5% or more of
any class of equity securities of such specified person or who is an officer,
director, trustee or partner of such specified person or any affiliate of such
specified person, (ii) any trust or estate in which such specified person has a
substantial beneficial interest or as to which such specified person serves as a
trustee or in a similar fiduciary capacity, and (iii) any relative or spouse of
such specified person, or any relative of such spouse, having the same home as
specified person; and (b) an 'affiliate' of a specified person is any other
person that directly or indirectly through one or more intermediaries controls,
or is controlled by, or is under common control with the specified person.
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The enhanced voting requirements of Article Fifth do not apply under
certain circumstances, including any transaction (a) between the Company and its
wholly owned subsidiaries; (b) that is merger for which approval of the
Company's shareholders is not required under California law; (c) that is a
merger in which the Company is the surviving entity; or (iv) that has been
approved by the Company's Board of Directors either unanimously or prior to the
acquisition by any associate of the Company of the beneficial ownership of 5% or
more of the outstanding Common Stock.
The Company's Board of Directors has unanimously approved the Offer and the
Merger with the effect that the voting requirements of Article Fifth are not
applicable to the Merger.
Short-Form Merger. Under the GCL, the affirmative vote of holders of a
majority of the outstanding Shares entitled to vote, including any Shares owned
by the Purchaser, would be required to adopt the Merger. However, the GCL also
provides that if a parent company owns at least 90% of each class of stock of a
subsidiary, the parent company can effect a merger with the subsidiary without
the authorization of the other shareholders of the subsidiary. Accordingly, if,
as a result of the Offer the Purchaser acquires at least 90% of the outstanding
Shares (which would be the case if the Minimum Condition is satisfied), the
Purchaser could, and intends to, effect the Merger without approval of any other
shareholder of the Company.
Dissenters' Rights. Holders of Shares do not have dissenters' rights as a
result of the Offer. However, in connection with the Merger, holders of Shares,
by complying with the provisions of Chapter 13 of the GCL, may have certain
rights to dissent and to require the Company to purchase their Shares for cash
at 'fair market value.' In general, holders of Shares will be entitled to
exercise dissenters' rights under the GCL only if the holders of five percent or
more of the outstanding Shares properly file demands for payment or if the
Shares held by such holders are subject to any restriction on transfer imposed
by the Company or any law or regulation ('Restricted Shares'). Accordingly, any
holder of Restricted Shares and, if the holders of five percent or more of the
Shares properly file demands for payment, all other such holders who fully
comply with all other applicable provisions of Chapter 13 of the GCL will be
entitled to require the Company to purchase their Shares for cash at their 'fair
market value' if the Merger is consummated. In addition, if immediately prior to
the Effective Time, the Shares are not listed on a national securities exchange
such as the NYSE or on the list of OTC margin stocks issued by the Federal
Reserve Board, holders of Shares may likewise exercise their dissenters' rights
as to any or all of their Shares entitled to such rights. If the statutory
procedures under the GCL relating to dissenters' rights were complied with, such
rights could lead to a judicial determination of the fair market value of the
Shares. The 'fair market value' would be determined as of the day before the
first announcement of the terms of the Merger, excluding any appreciation or
depreciation as a consequence of the Merger. The value so determined could be
more or less than the Offer Price.
Rule 13e-3. The SEC 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
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 because it is
anticipated that the Merger will be effected within one year following
consummation of the Offer. Rule 13e-3 requires, among other things, that certain
financial information concerning the Company and certain information relating to
the fairness of the proposed transaction and the consideration offered to
minority shareholders in such transaction be filed with the SEC and disclosed to
shareholders prior to consummation of the transaction.
General. The Purchaser or an affiliate of the Purchaser may, following the
consummation or termination of the Offer, seek to acquire additional Shares
through open market purchases, privately negotiated transactions, a tender offer
or exchange offer or otherwise, upon such terms and at such prices as it shall
determine, which may be more or less than the price to be paid pursuant to the
Offer. The Purchaser and its affiliates also reserve the right to dispose of any
or all Shares acquired by them.
Upon the completion of the Offer, Parent intends to conduct a detailed
review of the Company and its assets, corporate structure, dividend policy,
capitalization, operations, properties, policies, management and personnel and
consider what, if any, changes would be desirable in light of the circumstances
which then exist. Such changes could include changes in the Company's business,
corporate structure, charter, by-laws, capitalization, Board of Directors,
management or dividend policy, although, except as described in this Offer to
Purchase, Parent has no current plans with respect to any of such matters.
23
<PAGE>
Except as noted in this Offer to Purchase, neither Parent nor the Purchaser
has any present plans or proposals that would result in an extraordinary
corporate transaction, such as a merger, reorganization, liquidation, relocation
of operations, or sale or transfer of assets, involving the Company or any of
its subsidiaries, or any material changes in the Company's corporate structure,
business or composition of its management or personnel.
13. DIVIDENDS AND DISTRIBUTIONS
As described above, the Merger Agreement provides that, prior to the
Effective Time, the Company will not, except as explicitly permitted by the
Merger Agreement, (i) declare, set aside or pay any dividend on, or make any
other distributions in respect of, any of its capital stock, other than (A) as
contemplated by the Rights Agreement, (B) dividends paid by subsidiaries of the
Company to the Company with respect to capital stock, and (C) for regular
quarterly dividends not to exceed $.03 per quarter, (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 of its subsidiaries or any other securities
thereof or any rights, warrants or options to acquire any such shares or other
securities.
14. CONDITIONS TO THE OFFER
Notwithstanding any other provisions of the Offer, the Purchaser will not
be required to accept for payment or, subject to any applicable rules and
regulations of the SEC, including Rule 14e-1(c) promulgated under the Exchange
Act, pay for any tendered Shares and may terminate or, subject to the terms of
the Merger Agreement, amend the Offer, if (i) there shall not be validly
tendered and not properly withdrawn prior to the Expiration Date that number of
Shares which represents at least 90% of the total number of outstanding Shares
on the date of purchase (not taking into account the Rights), (ii) any
applicable waiting period under the HSR Act or under any applicable foreign
statutes or regulations shall not have expired or been terminated prior to the
Expiration Date, or (iii) at any time on or after the date of the Merger
Agreement and prior to the Expiration Date, any of the following events shall
occur:
(a) an order shall have been entered in any action or proceeding
before any United States federal or state court or governmental agency or
other United States regulatory or administrative agency or commission (an
'Order'), or a preliminary or permanent injunction by a United States court
of competent jurisdiction shall have been issued and remain in effect (an
'Injunction'), which, in either case, would have the effect of (i) making
the purchase of, or payment for, some or all of the Shares pursuant to the
Offer or Merger Agreement illegal, (ii) otherwise preventing consummation
of the Offer or Merger, or (iii) imposing material limitations on the
ability of the Purchaser or Holdings effectively to exercise full rights of
ownership of the Shares, including the right to vote the Shares purchased
by it on all matters properly presented to the shareholders of the Company;
provided, however, that in order to invoke this condition, Parent and the
Purchaser shall have used their best efforts to prevent such Order or
Injunction or ameliorate the effects thereof; and provided, further, that,
if the Order or Injunction is a temporary restraining order or preliminary
injunction of a court of competent jurisdiction, the Purchaser may not, by
virtue of this condition alone amend or terminate the Offer, but may only
extend the Offer and thereby postpone acceptance for payment or purchase of
Shares; or
(b) there shall have been any United States or foreign federal or
state statute, rule or regulation enacted or promulgated after the date of
the Offer that would reasonably be expected to result in any of the
material adverse consequences referred to in paragraph (a) above; or
(c) there shall have occurred (i) any general suspension of, or
limitation on prices for, trading in securities on the New York Stock
Exchange, (ii) a declaration of a general banking moratorium or any
suspension of payments in respect of banks in the United States, (iii) the
commencement of a war, armed hostilities or other international or national
calamity directly or indirectly involving the United States (other than in
connection with actual or potential United States military activities in
the Republic of Iraq as have been generally discussed in print and other
news media during the four weeks preceding the date of the Merger
Agreement), (iv) any limitation by any United States governmental entity on
the extension of credit generally to banks and other financial
institutions, or (v) in the case of any of the foregoing existing at the
time of the commencement of the Offer, a material acceleration or worsening
thereof; or
24
<PAGE>
(d) the Company shall have breached or failed to perform in any
material respect any of its obligations, covenants or agreements contained
in the Merger Agreement or any of the representations and warranties of the
Company set forth in the Merger Agreement that are (i) qualified as to
materiality or material adverse effect or (ii) with respect to the
Company's capitalization and subsidiaries and the Company's authority to
enter in the Merger Agreement and the transactions contemplated thereby
shall not be true and correct or any such representations and warranties
that are not so qualified as to materiality or material adverse effect
shall not be true in any material respect, in each case as if made at such
time; or
(e) the Merger Agreement shall have been terminated in accordance with
its terms; or
(f) the Company's Board of Directors shall have publicly withdrawn or
modified in any manner adverse to the Purchaser its recommendation that
shareholders accept the Offer.
The foregoing conditions (including those set forth in clauses (i) and (ii)
of the initial paragraph) are for the benefit of Holdings and the Purchaser and
may be asserted by Holdings or the Purchaser regardless of the circumstances
giving rise to any such conditions and, except for the Minimum Condition, which
may not be waived without the prior written consent of the Company, may be
waived by Holdings or the Purchaser, in whole or in part, at any time and from
time to time, in their reasonable discretion, in each case, subject to the terms
of the Merger Agreement. The failure by Holdings or the Purchaser at any time to
exercise any of the foregoing rights shall not be deemed a waiver of any such
right and each such right shall be deemed an ongoing right which may be asserted
at any time and from time to time.
15. CERTAIN LEGAL MATTERS
Except as described in this Section 15, based on a review of publicly
available filings by the Company with the SEC and other publicly available
information concerning the Company, the Purchaser is not aware of any regulatory
license or permit that appears to be material to the business of the Company and
its subsidiaries, taken as a whole, that might be adversely affected by the
acquisition of Shares by the Purchaser pursuant to the Offer or, except as set
forth below, of any approval or other action by any governmental, administrative
or regulatory agency or authority, domestic or foreign, that would be required
prior to the acquisition of Shares by the Purchaser pursuant to the Offer.
Should any such approval or other action be required, the Purchaser currently
contemplates that it will be sought. While the Purchaser does not currently
intend to delay the 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 needed, would be obtained or would be obtained
without substantial conditions or that adverse consequences might not result to
the Company's business or that certain parts of the Company's business might not
have to be disposed of in the event that such approvals were not obtained or any
other actions were not taken. The Purchaser's obligation under the Offer to
accept for payment and pay for Shares is subject to certain conditions,
including conditions relating to the legal matters discussed in this Section 15.
See Section 14.
State Takeover Statutes. The GCL requires that holders of non-redeemable
common stock receive non-redeemable common stock in a merger of a corporation
with a holder (or such holder's affiliate) of more than 50% of the voting power
of such corporation but less than 90% of such outstanding shares of common
stock, unless all of the holders of such common stock consent to the transaction
or it is approved by the California Department of Corporations at a 'fairness
hearing' held with respect to such transactions. This provision of California
law may have the effect of making a 'cash-out' merger by a majority shareholder
more difficult to accomplish.
The GCL also provides that, except in certain circumstances, when a tender
offer or a proposal for a reorganization (including certain mergers) or for a
sale of assets is made by an interested party (generally a controlling or
managing party of the target corporation), an affirmative opinion in writing as
to the fairness of the consideration to be paid to the shareholders of the
target must be delivered to such shareholders. Furthermore, if a tender of
shares or vote is sought pursuant to an interested party's proposal and another
party subsequently makes a proposal, the shareholders of the target company must
be informed of the later offer and be afforded a reasonable opportunity to
withdraw any vote, consent or proxy therefore given, or to withdraw any shares
tendered in response to the original interested party proposal, as the case may
be.
In addition, the GCL provides that in any action to attack the validity of
a reorganization (including certain mergers) or to have such reorganization set
aside or rescinded, a party to such a reorganization which controls
25
<PAGE>
another party to the reorganization shall have the burden of proving that the
transaction is just and reasonable as to the shareholders of the controlled
party, and a person who controls two or more parties to a reorganization shall
have the burden of proving that the transaction is just and reasonable as to the
shareholders of any party so controlled.
A number of other states have adopted 'takeover' statutes that purport to
apply to attempts to acquire corporations that are incorporated in such states,
or whose business operations have substantial economic effects in such states,
or which have substantial assets, security holders, employees, principal
executive offices or principal places of business in such states. In Edgar v.
MITE Corp., the Supreme Court of the United States, invalidated on
constitutional grounds the Illinois Business Takeover Statute, which, as a
matter of state securities law, made takeovers of corporation meeting certain
requirements more difficult. However, in 1997 CTS Corp. v. Dynamics Corp. of
America, the United States Supreme Court held that the State of Indiana
permissibly could, as a matter of corporate law and, in particular, with respect
to those aspects of corporate law relating to corporate governance,
constitutionally disqualify a potential acquiror from voting on the affairs of a
target corporation without the prior approval of the remaining shareholders. In
such case, the law before the Court was by its terms applicable only to
corporations that had a substantial number of shareholders in the state and were
incorporated there. The Company, directly or through subsidiaries, conducts
business in a number of states throughout the United States, some of which have
enacted 'takeover' statutes. The Purchaser does not know whether any of these
statutes will, by their terms, apply to the Offer, and has not complied with any
such statutes. To the extent that certain provisions of these statutes purport
to apply to the Offer, the Purchaser believes that there are reasonable bases
for contesting such statutes. If any person should seek to apply any state
takeover statute, the Purchaser would take such action as then appears
desirable, which action may include challenging the validity or applicability of
any such statute in appropriate court proceedings. If it is asserted that one or
more takeover statutes apply to the Offer, and it is not determined by an
appropriate court that such statute or statutes do not apply or are invalid as
applied to the Offer, the Purchaser might be required to file certain
information with, or receive approvals from, the relevant state authorities, and
the Purchaser might be unable to purchase or pay for Shares tendered pursuant to
the Offer, or be delayed in continuing or consummating the Offer. In such case,
the Purchaser may not be obligated to accept for payment or pay for Shares
tendered. See Section 14.
United States Antitrust. The Offer and the Merger are subject to the HSR
Act, which provides that certain acquisition transactions may not be consummated
unless certain information has been furnished to the Antitrust Division of the
Department of Justice (the 'Antitrust Division') and the Federal Trade
Commission ('FTC') and certain waiting period requirements have been satisfied.
Parent intends to promptly file a Notification and Report Form with respect to
the Offer and the Merger.
Under the provisions of the HSR Act applicable to the Offer, the purchase
of Shares under the Offer may not be consummated until the expiration of a
15-calendar day waiting period following the filing by Parent, unless Parent
receives a request for additional information or documentary material, or the
Antitrust Division and the FTC terminate the waiting period prior thereto. If,
within such 15-day period, either the Antitrust Division or the FTC requests
additional information or material from Parent concerning the Offer, the waiting
period will be extended and would expire at 11:59 p.m., New York City time, on
the tenth calendar day after the date of substantial compliance by Parent with
such request. Only one extension of the waiting period pursuant to a request for
additional information is authorized by the HSR Act. Thereafter, such waiting
period may be extended only by court order or with the consent of Parent. The
Purchaser will not accept for payment Shares tendered pursuant to the Offer
unless and until the waiting period requirements imposed by the HSR Act with
respect to the Offer have been satisfied. See Section 14.
The Merger would not require an additional filing under the HSR Act if the
Purchaser owns 50% or more of the outstanding Shares at the time of the Merger
or if the Merger occurs within one year after the HSR Act waiting period
applicable to the Offer expires or is terminated.
German Antitrust. German competition law requires the preclosing approval
of any merger or acquisition where (a) one party has consolidated worldwide net
sales in its most recent financial year exceeding 2 billion Deutsche marks
(approximately US$ 1.15 billion) or each of at least two parties to such
transaction has consolidated worldwide net sales exceeding 1 billion Deutsche
marks (approximately US$ 570 million), and (b) the transaction has effects in
Germany.
26
<PAGE>
The German Federal Cartel Office has an initial one-month review period in
which it may either (i) approve the Merger, or (ii) initiate a full
investigation to examine the consequences of the Merger. If a full investigation
is opened, it can last up to a total of no more than four months from the date
of the original notification. The parties are preparing the notification and do
not expect any delay in obtaining approval of the Merger within the initial
one-month review period.
The FTC and the Antitrust Division frequently scrutinize the legality under
the antitrust laws of transactions such as the Purchaser's acquisition of Shares
pursuant to the Offer and the Merger. At any time before or after the
Purchaser's acquisition of Shares, the Antitrust Division or the FTC could take
such action under the antitrust laws as it deems necessary or desirable in the
public interest, including seeking to enjoin the acquisition of Shares pursuant
to the Offer or otherwise or seeking divestiture of Shares acquired by the
Purchaser or divestiture of substantial assets of Parent or its subsidiaries.
Private parties and state attorneys general may also bring legal action under
the antitrust laws under certain circumstances. Based upon an examination of
publicly available information relating to the businesses in which Parent and
the Company are engaged, Parent and the Purchaser believe that the acquisition
of Shares by the Purchaser will not violate the antitrust laws. Nevertheless,
there can be no assurance that a challenge to the Offer or other acquisition of
Shares by the Purchaser on antitrust grounds will not be made or, if such a
challenge is made, of the result. See Section 14.
16. FEES AND EXPENSES
The Purchaser has retained Furman Selz LLC to act as the Dealer Manager,
D.F. King & Co., Inc. to act as the Information Agent and First Chicago Trust
Company of New York to act as the Depositary in connection with the Offer. The
Dealer Manager and the Information Agent may contact holders of Shares by mail,
telephone, telex, telegraph and personal interview and may request brokers,
dealers, commercial banks, trust companies and other nominees to forward the
Offer material to beneficial owners. The Dealer Manager, the Information Agent
and the Depositary each will receive reasonable and customary compensation for
their services, will be reimbursed for certain reasonable out-of-pocket expenses
and will be indemnified against certain liabilities and expenses in connection
therewith, including certain liabilities under the federal securities laws. None
of the Dealer Manager, the Information Agent or the Depositary has been retained
to make solicitations or recommendations in connection with the Offer. Neither
Parent nor the Purchaser will pay any fees or commissions to any broker or
dealer or other person (other than the Dealer Manager or the Information Agent)
for soliciting tenders of Shares pursuant to the Offer. Brokers, dealers,
commercial banks and trust companies will be reimbursed by the Purchaser for
reasonable expenses incurred by them in forwarding material to their customers.
17. MISCELLANEOUS
The Purchaser is not aware of any jurisdiction in which the making of the
Offer is not in compliance with applicable law. If the Purchaser becomes aware
of any jurisdiction in which the making of the Offer would not be in compliance
with applicable law, the Purchaser will make a good faith effort to comply with
any such law. If, after such good faith effort, the Purchaser cannot comply with
any such law, the Offer will not be made to (nor will tenders be accepted from
or on behalf of) the holders of Shares residing in such jurisdiction. In those
jurisdictions whose securities or blue sky laws require the Offer to be made by
a licensed broker or dealer, the Offer is being made on behalf of the Purchaser
by the Dealer Manager or by one or more registered brokers or dealers which are
licensed under the laws of such jurisdiction.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION ON BEHALF OF THE PURCHASER OR PARENT NOT CONTAINED IN THIS OFFER
TO PURCHASE OR IN THE LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED.
The Purchaser has filed with the SEC the Schedule 14D-1 pursuant to Rule
14d-3 under the Exchange Act, furnishing certain additional information with
respect to the Offer, and may file amendments thereto. The Schedule 14D-1 and
any amendments thereto, including exhibits, may be inspected and copies may be
obtained at the same places and in the same manner as set forth under the
heading 'Available Information' in Section 8 (except that they will not be
available at the regional offices of the SEC).
ACC Acquisition Corp.
February 6, 1998
27
<PAGE>
SCHEDULE I
DIRECTORS AND EXECUTIVE
OFFICERS OF PARENT AND THE PURCHASER
Parent. Set forth below are the name, business address and present
principal occupation or employment, and material occupations, positions,
officers or employments for the past five years of each director and executive
officer of Parent. Except as otherwise noted, the business address of each such
person is 1250 24th Street N.W., Washington, D.C. 20037, and each such person is
a United States citizen. In addition, except as otherwise noted, each director
and executive officer of Parent has been employed in his or her present
principal occupation listed below during the last five years. Directors of
Parent are indicated by an asterisk.
<TABLE>
<CAPTION>
NAME PRINCIPAL OCCUPATION OR EMPLOYMENT, 5-YEAR EMPLOYMENT HISTORY
- ------------------------------------- --------------------------------------------------------------------------
<S> <C>
Patrick W. Allender.................. Mr. Allender is Senior Vice President, Chief Financial Officer and
Secretary of Parent. He has held such position since 1987.
C. Scott Brannan..................... Mr. Brannan is Vice President Administration and Controller of Parent. He
has held such position since 1987.
Mortimer M. Caplin*.................. Mr. Caplin has been Senior member of Caplin & Drysdale, a law firm in
One Thomas Circle, N.W. Washington, D.C. for more than five years. He is a Director of Fairchild
Washington, D.C. 20005 Industries, Inc., Fairchild Corporation, Presidential Realty Corporation
and Unigene Laboratories, Inc.
Dennis D. Claramunt.................. Mr. Claramunt was appointed Vice President and Group Executive of Parent
in 1994. He has served as President of Jacobs Chuck Manufacturing Company
for more than five years.
James H. Ditkoff..................... Mr. Ditkoff is Vice President-Finance/Tax of Parent. He has held such
position since 1991.
Donald J. Ehrlich*................... Mr. Ehrlich is the Chairman, President, Chief Executive Wabash National
1000 Sagamore Parkway South Corporation Officer and a Director of Wabash National Corporation. He is a
Lafayette, Indiana 47905 director of Indiana Secondary Market for Educational Loans, Inc. and INB
National Bank, N.W.
Walter G. Lohr. Jr.*................. Mr. Lohr has been a Partner of Hogan & Hartson, a law firm in Baltimore,
111 South Calvert Street Maryland for more than five years.
Baltimore, Maryland 21202
Mitchell P. Rales*................... Mr. Rales is Chairman of the Executive Committee of Parent. He has held
such position since February 1990. In addition, during the past five years
he has been a principal in a number of private business activities with
interests in manufacturing companies, media operations and publicly
traded securities. He is also a director of Imo Industries Inc.
George M. Sherman*................... Mr. Sherman is President, Chief Executive Officer and a Director of
Parent. He has held such positions since February 1990.
A. Emmet Stephenson, Jr.*............ Mr. Stephenson has been President of Stephenson & Company, a private
100 Garfield Street, Suite 400 investment management firm in Denver, Colorado and Senior Partner of
Denver, Colorado 80206 Stephenson Merchant Banking for more than five years.
John P. Watson....................... Mr. Watson was appointed Vice President and Group Executive of Parent in
1993. He has served Parent in an executive capacity in its Tool Group
since September 1990.
</TABLE>
I-1
<PAGE>
<TABLE>
<S> <C>
Steven M. Rales*..................... Mr. Rales is Chairman of the Board of Parent, a position he has held since
1984. He was Chief Executive Office of Parent until February 1990. In
addition, during the past five years he has been a principal in a number
of private business activities with interests in manufacturing companies,
media operations and publicly traded securities. He is also a director of
Imo Industries Inc.
Gregory T. H. Davies................. Mr. Davies, was appointed Vice President and Group Executive of Parent in
1995. He has served as President of Jacobs Vehicle Systems, Inc. for more
than the past five years.
H. Lawrence Culp, Jr................. Mr. Culp was appointed Vice President and Group Executive of Parent in
1995. He has served Parent in an executive capacity (including President
since 1993) at Veeder-Root Company for more than the past five years.
Daniel L. Comas...................... Mr. Comas was appointed Vice President--Corporate Development of Parent in
1996. He has served Parent in an executive capacity in the corporate
development area for more than the past five years.
Steven E. Simms...................... Mr. Simms was appointed Vice President and Group Executive of Parent in
1996. He had previously served Black & Decker, most recently as
President--Worldwide Accessories Business.
Mark C. DeLuzio...................... Mr. DeLuzio was appointed Vice President-Parent Corporation Business
System ('DBS') of Parent in 1996. He has served Parent as Director--DBS
and in financial and operating positions with Jacobs Vehicle Systems, Inc.
for more than the past five years.
Dennis A. Longo...................... Mr. Longo was appointed Vice President--Human Resources in May 1997. He
has served Parent in human resource management positions since 1991.
</TABLE>
The Purchaser. The name and position with the Purchaser of each director
and executive officer of the Purchaser are set forth below. The business
address, present principal occupation or employment, five-year employment
history and citizenship of each such person is set forth above.
<TABLE>
<CAPTION>
NAME POSITION WITH THE PURCHASER
- ---------------------------------------------- ----------------------------------------------
<S> <C>
George M. Sherman............................. President and Director
Patrick W. Allender........................... Vice President, Treasurer and Director
C. Scott Brannan.............................. Vice President, Secretary and Director
James H. Ditkoff.............................. Vice President
Daniel L. Comas............................... Vice President
</TABLE>
I-2
<PAGE>
SCHEDULE II
CHAPTER 13 OF THE GENERAL CORPORATION LAW OF
THE STATE OF CALIFORNIA
DISSENTERS' RIGHTS
LEGISLATIVE COMMITTEE COMMENT
(1975)--ASSEMBLY
[CORRECTED]
Dissenters' rights are generally eliminated for shares having a highly
liquid public market (i.e., listed on the New York or American stock exchange or
included on the OTC margin stock list published by the Federal Reserve Board).
However, dissenters' rights will exist with respect to such shares if they are
subject to certain restrictions upon transfer or a substantial proportion (5%)
of the holders of a particular class of shares demand appraisal rights.
If dissenters' rights exist due to these exceptions, the holder is
generally required to vote against the reorganization and demand payment in cash
for the fair market value of his shares not later than the shareholder meeting
at which the reorganization is approved. The new law also requires the
corporation to include in the notice of such meeting a statement of the possible
existence of a procedure for perfecting dissenters' rights.
The fair market value of the shares is determined as of the day before the
first announcement of the terms of the proposed merger. If an appraisal action
is initiated in court by a dissenter and the appraised price exceeds 125% of the
fair market value of the shares as determined by the corporation, the
corporation may be required to pay all of the costs of the action, including
attorney's and other fees.
The provisions regulating corporate repurchases of its own shares apply to
the purchase of dissenting shares is prevented thereunder, the holder of such
shares becomes a creditor of the corporation but subordinated to all other
creditors of the corporation.
SECTION 1300 REORGANIZATION OR SHORT-FORM MERGER; DISSENTING SHARES; CORPORATE
PURCHASE AT FAIR MARKET VALUE; DEFINITIONS
(a) If the approval of the outstanding shares (Section 152) of a
corporation is required for a reorganization under subdivisions (a) and (b) or
subdivision (e) or (f) of Section 1201, each shareholder of the corporation
entitled to vote on the transaction and each shareholder of a subsidiary
corporation in a short-form merger may, by complying with this chapter, require
the corporation in which the shareholder holds shares to purchase for cash at
their fair market value the shares owned by the shareholder which are dissenting
shares as defined in subdivision (b). The fair market value shall be determined
as of the day before the first announcement of the terms of the proposed
reorganization or short-form merger, excluding any appreciation or depreciation
in consequence of the proposed action, but adjusted for any stock split, reverse
stock split, or share dividend which becomes effective thereafter.
(b) As used in this chapter, 'dissenting shares' means shares which come
within all of the following descriptions:
(1) Which were not immediately prior to the reorganization or
short-form merger either (A) listed on any national securities exchange
certified by the Commissioner of Corporations under subdivision (o) of
Section 25100 or (B) listed on the list of OTC margin stocks issued by the
Board of Governors of the Federal Reserve System, and the notice of meeting
of shareholders to act upon the reorganization summarizes this section and
Sections 1301, 1302, 1303 and 1304; provided, however, that this provision
does not apply to any shares with respect to which there exists any
restriction on transfer imposed by the corporation or by any law or
regulation; and provided, further, that this provision does not apply to
any class of shares described in subparagraph (A) or (B) if demands for
payment are filed with respect to 5 percent or more of the outstanding
shares of that class.
II-1
<PAGE>
(2) Which were outstanding on that date for the termination of
shareholders entitled to vote on the reorganization and (A) were not voted
in favor of the reorganization or, (B) if described in subparagraph (A) or
(B) of paragraph (1) (without regard to the provisos in that paragraph),
were voted against the reorganization, or which were held of record on the
effective date of a short-form merger; provided, however, that subparagraph
(A) rather than subparagraph (B) of this paragraph applies in any case
where the approval required by Section 1201 is sought by written consent
rather than at a meeting.
(3) Which the dissenting shareholder has demanded that the corporation
purchase at their fair market value, in accordance with Section 1301.
(4) Which the dissenting shareholder has submitted for endorsement, in
accordance with Section 1302.
(c) As used in this chapter,'dissenting shareholder' means the recordholder
of dissenting shares and includes a transferee of record.
(Amended by Stats.1990, c. 1018 (A.B.2259), Section 2; Stats.1993, c. 543
(A.B.2063), Section 13.)
SECTION 1301 NOTICE TO HOLDERS OF DISSENTING SHARES IN REORGANIZATIONS; DEMAND
FOR PURCHASE; TIME; CONTENTS
(a) If, in the case of a reorganization, any shareholders of a corporation
have a right under Section 1300, subject to compliance with paragraphs (3) and
(4) of subdivision (b) thereof, to require the corporation to purchase their
shares for cash, such corporation shall mail to each such shareholder a notice
of the approval of the reorganization by its outstanding shares (Section l52)
within 10 days after the date of such approval, accompanied by a copy of
Sections 1300, 1302, 1303, 1304 and this section, a statement of the price
determined by the corporation to represent the fair market value of the
dissenting shares, and a brief description of the procedure to be followed if
the shareholder desires to exercise the shareholder's right under such sections.
The statement of price constitutes an offer by the corporation to purchase at
the price stated any dissenting shares as defined in subdivision (b) of Section
1300, unless they lose their status as dissenting shares under Section 1309.
(b) Any shareholder who has a right to require the corporation to purchase
the shareholder's shares for cash under Section 1300, subject to compliance with
paragraphs (3) and (4) of subdivision (b) thereof, and who desires the
corporation to purchase such shares shall make written demand upon the
corporation for the purchase of such shares and payment to the shareholder in
cash of their fair market value. The demand is not effective for any purpose
unless it is received by the corporation or any transfer agent thereof (1) in
the case of shares described in clause (i) or (ii) of paragraph (1) of
subdivision (b) of Section 1300 (without regard to the provisos in that
paragraph), not later than the date of the shareholders' meeting to vote upon
the reorganization, or (2) in any other case within 30 days after the date on
which the notice of the approval by the outstanding shares pursuant to
subdivision (a) or the notice pursuant to subdivision (i) of Section 1110 was
mailed to the shareholder.
(c) The demand shall state the number and class of the shares held of
record by the shareholder which the shareholder demands that the corporation
purchase and shall contain a statement of what such shareholder claims to be the
fair market value of those shares as of the day before the announcement of the
proposed reorganization or short-form merger. The statement of fair market value
constitutes an offer by the shareholder to sell the shares at such price.
(Added by Stats.1975, c. 682, Section 7, eff. Jan. 1, 1977. Amended by
Stats.1976, c. 641, Section 21.6, eff. Jan. 1, 1977; Stats.1980, c. 501, p.
1052, Section 5; Stats.1980, c. 1155, p. 3831, Section 1.)
SECTION 1302 SUBMISSION OF SHARE CERTIFICATES FOR ENDORSEMENT; UNCERTIFICATED
SECURITIES
Within 30 days after the date on which notice of the approval by the
outstanding shares or the notice pursuant to subdivision (i) of Section 1110 was
mailed to the shareholder, the shareholder shall submit to the corporation at
its principal office or at the office of any transfer agent thereof, (a) if the
shares are certificated securities, the shareholder's certificates representing
any shares which the shareholder demands that the corporation purchase, to be
stamped or endorsed with a statement that the shares are dissenting shares or to
be exchanged for certificates of appropriate denomination so stamped or endorsed
or (b) if the shares are uncertificated securities, written notice of the
number of shares which the shareholder demands that the corporation purchase.
Upon subsequent transfers of the dissenting shares on the books of the
corporation, the new certificates,
II-2
<PAGE>
initial transaction statement, and other written statements issued therefor
shall bear a like statement, together with the name of the original dissenting
holder of the shares.
(Added by Stats.1975, c. 682, Section 7, eff. Jan. 1, 1977. Amended by
Stats.1986, c. 766, Section 23.)
SECTION 1303 PAYMENT OF AGREED PRICE WITH INTEREST; AGREEMENT FIXING FAIR MARKET
VALUE; FILING; TIME OF PAYMENT
(a) If the corporation and the shareholder agree that the shares are
dissenting shares and agree upon the price of the shares, the dissenting
shareholder is entitled to the agreed price with interest thereon at the legal
rate on judgments from the date of the agreement. Any agreements fixing the fair
market value of any dissenting shares as between the corporation and the holders
thereof shall be filed with the secretary of the corporation.
(b) Subject to the provisions of Section 1306, payment of the fair market
value of dissenting shares shall be made within 30 days after the amount thereof
has been agreed or within 30 days after any statutory or contractual conditions
to the reorganization are satisfied, whichever is later, and in the case of
certificated securities, subject to surrender of the certificates therefor,
unless provided otherwise by agreement.
(Added by Stats.1975, c. 682, Section 7, eff. Jan. 1, 1977. Amended by
Stats.1980, c. 501, p. 1053, Section 6, Stats.1986, c. 766, Section 24.)
SECTION 1304 ACTION TO DETERMINE WHETHER SHARES ARE DISSENTING SHARES OR FAIR
MARKET VALUE; LIMITATION; JOINDER; CONSOLIDATION; DETERMINATION OF ISSUES;
APPOINTMENT OF APPRAISERS
(a) If the corporation denies that the shares are dissenting shares, or the
corporation and the shareholder fail to agree upon the fair market value of the
shares, then the shareholder demanding purchase of such shares as dissenting
shares or any interested corporation, within six months after the date on which
notice of the approval by the outstanding shares (Section 152) or notice
pursuant to subdivision (i) of Section 1110 was mailed to the shareholder, but
not thereafter, may file a complaint in the superior court of the proper county
praying the court to determine whether the shares are dissenting shares or the
fair market value of the dissenting shares or both or may intervene in any
action pending on such a complaint.
(b) Two or more dissenting shareholders may join as plaintiffs or be joined
as defendants in any such action and two or more such actions may be
consolidated.
(c) On the trial of the action, the court shall determine the issues. If
the status of the shares as dissenting shares is in issue, the court shall first
determine that issue. If the fair market of the dissenting shares is in issue,
the court shall determine, or shall appoint one or more impartial appraisers to
determine, the fair market value of the shares.
(Added by Stats.1975, c. 682, Section 7, eff. Jan. 1, 1977.)
SECTION 1305 REPORT OF APPRAISERS; CONFIRMATION; DETERMINATION BY COURT;
JUDGMENT; PAYMENT; APPEAL; COSTS
(a) If the court appoints an appraiser or appraisers, they shall proceed
forthwith to determine the fair market value per share. Within the time fixed by
the court, the appraisers, or a majority of them, shall make and file a report
in the office of the clerk of the court. Thereupon, on the motion of any party,
the report shall be submitted to the court and considered on such evidence as
the court considers relevant. If the court finds the report reasonable, the
court may confirm it.
(b) If a majority of the appraisers appointed fail to make and file a
report within 10 days from the date of their appointment or within such further
time as may be allowed by the court or the report is not confirmed by the court,
the court shall determine the fair market value of the dissenting shares.
(c) Subject to the provisions of Section 1306, judgment shall be rendered
against the corporation for payment of an amount equal to the fair market value
of each dissenting share multiplied by the number of dissenting shares which any
dissenting shareholder who is a party, or who has intervened, is entitled to
require the corporation to purchase, with interest thereon at the legal rate
from the date on which judgment was entered.
II-3
<PAGE>
(d) Any such judgment shall be payable forthwith with respect to
uncertificated securities and, with respect to certificated securities, only
upon the endorsement and delivery to the corporation of the certificates for the
shares described in the judgment. Any party may appeal from the judgment.
(e) The costs of the action, including reasonable compensation to the
appraisers to be fixed by the court, shall be assessed or apportioned as the
court considers equitable, but, if the appraisal exceeds the price offered by
the corporation, the corporation shall pay the costs (including in the
discretion of the court attorneys' fees, fees of expert witnesses and interest
at the legal rate on judgments from the date of compliance with Sections 1300,
1301 and 1302 if the value awarded by the court for the shares is more than 125
percent of the price offered by the corporation under subdivision (a) of Section
1301).
(Added by Stats.1975, c. 682, Section 7, eff. Jan. 1, 1977. Amended by
Stats.1976, c. 641, Section 22, eff. Jan. 1, 1977; Stats.1977, c. 235, p. 1068,
Section 16; Stats.1986, c. 766, Section 25.)
SECTION 1306 PREVENTION OF IMMEDIATE PAYMENT; STATUS AS CREDITORS; INTEREST
To the extent that the provisions of Chapter 5 prevent the payment to any
holders to dissenting shares of their fair market value, they shall become
creditors of the corporation for the amount thereof together with interest at
the legal rate on judgments until the date of payment, but subordinate to all
other creditors in any liquidation proceeding, such debt to be payable when
permissible under the provisions of Chapter 5.
(Added by Stats.1975, c. 682, Section 7, eff. Jan. 1, 1977.)
SECTION 1307 DIVIDENDS ON DISSENTING SHARES
Cash dividends declared and paid by the corporation upon the dissenting
shares after the date of approval of the reorganization by the outstanding
shares of (Section 152) and prior to payment for the shares by the corporation
shall be credited against the total amount to be paid by the corporation
therefor.
(Added by Stats.1975, c. 682, Section 7, eff. Jan. 1, 1977.)
SECTION 1308 RIGHTS OF DISSENTING SHAREHOLDERS PENDING VALUATION; WITHDRAWAL OF
DEMAND FOR PAYMENT
Except as expressly limited in this chapter, holders of dissenting shares
continue to have all the rights and privileges incident to their shares, until
the fair market value of their shares is agreed upon or determined. A dissenting
shareholder may not withdraw a demand for payment unless the corporation
consents thereto.
(Added by Stats.1975, c. 682, Section 7, eff. Jan. 1, 1977.)
SECTION 1309 TERMINATION OF DISSENTING SHARE AND SHAREHOLDER STATUS
Dissenting shares lose their status as dissenting shares and the holders
thereof cease to be dissenting shareholders and cease to be entitled to require
the corporation to purchase their shares upon the happening of any of the
following:
(a) The corporation abandons the reorganization. Upon abandonment of
the reorganization, the corporation shall pay on demand to any dissenting
shareholder who has initiated proceedings in good faith under this chapter
all necessary expenses incurred in such proceedings and reasonable
attorneys' fees.
(b) The shares are transferred prior to their submission for
endorsement in accordance with Section 1302 or are surrendered for
conversion into shares of another class in accordance with the articles.
(c) The dissenting shareholder and the corporation do not agree upon
the status of the shares as dissenting shares or upon the purchase price of
the shares, and neither files a complaint or intervenes in a pending action
as provided in Section 1304, within six months after the date on which
notice of the approval by the outstanding shares or notice pursuant to
subdivision (i) of Section 1110 was mailed to the shareholder.
II-4
<PAGE>
(d) The dissenting shareholder, with the consent of the corporation,
withdraws the shareholder's demand for purchase of the dissenting shares.
(Added by Stats.1975, c. 682, Section 7, eff. Jan. 1, 1977.)
SECTION 1310 SUSPENSION OF RIGHT TO COMPENSATION OR VALUATION PROCEEDINGS;
LITIGATION OF SHAREHOLDERS' APPROVAL
If litigation is instituted to test the sufficiency or regularity of the
votes of the shareholders in authorizing a reorganization, any proceedings under
Sections 1304 and 1305 shall be suspended until final determination of such
litigation.
(Added by Stats.1975, c. 682, Section 7, eff. Jan. 1, 1977.)
SECTION 1311 EXEMPT SHARES
This chapter, except Section 1312, does not apply to classes of shares
whose terms and provisions specifically set forth the amount to be paid in
respect to such shares in the event of a reorganization or merger.
(Added by Stats.1975, c. 682, Section 7, eff. Jan. 1, 1977. Amended by
Stats.1988, c. 919, Section 8.)
SECTION 1312 RIGHT OF DISSENTING SHAREHOLDER TO ATTACK, SET ASIDE OR RESCIND
MERGER OR REORGANIZATION; RESTRAINING ORDER OR INJUNCTION; CONDITIONS
(a) No shareholder of a corporation who has a right under this chapter to
demand payment of cash for the shares held by the shareholder shall have any
right at law or in equity to attach the validity of the reorganization or
short-form merger, or to have the reorganization or short-form merger set aside
or rescinded, except in an action to test whether the number of shares required
to authorize or approve the reorganization have been legally voted in favor
thereof; but any holder of shares of a class whose terms and provisions
specifically set forth the amount to be paid in respect to them in the event of
a reorganization or short-form merger is entitled to payment in accordance with
those terms and provisions or, if the principal terms of the reorganization are
approved pursuant to subdivision (b) of Section 1202, is entitled to payment in
accordance with the terms and provisions of the approved reorganization.
(b) If one of the parties to a reorganization or short-form merger is
directly or indirectly controlled by, or under common control with, another
party to the reorganization or short-form merger, subdivision (a) shall not
apply to any shareholder of such party who has not demanded payment of cash for
such shareholder's shares pursuant to this chapter; but if the shareholder
institutes any action to attach the validity of the reorganization or short-form
merger or to have the reorganization or short-form merger set aside or
rescinded, the shareholder shall not thereafter have any right to demand payment
of cash for the shareholder's shares pursuant to this chapter. The court in any
action attacking the validity of the reorganization or short-form merger or to
have the reorganization or short-form merger set aside or rescinded shall not
restrain or enjoin the consummation of the transaction except upon 10 days'
prior notice to the corporation and upon a determination by the court that
clearly no other remedy will adequately protect the complaining shareholder or
the class of shareholders of which such shareholder is a member.
(c) If one of the parties to a reorganization or short-form merger is
directly or indirectly controlled by, or under common control with, another
party to the reorganization or short-form merger, in any action to attack the
validity of the reorganization or short-form merger or to have the
reorganization or short-form merger set aside or rescinded, (1) a party to a
reorganization or short-form merger which controls another party to the
reorganization or short-form merger shall have the burden of proving that the
transaction is just and reasonable as to the shareholders of the controlled
party, and (2) a person who controls two or more parties to a reorganization
shall have the burden of proving that the transaction is just and reasonable as
to the shareholders of any party so controlled.
(Added by Stats.1975, c. 682, Section7, eff. Jan. 1, 1977. Amended by
Stats.1976, c. 641, Section 22.5, eff. Jan. 1, 1977; Stats.1988, c. 919,
Section 9.)
II-5
<PAGE>
Manually signed facsimile copies of the Letter of Transmittal will be
accepted. The Letter of Transmittal, certificates for Shares and any other
required documents should be sent or delivered by each shareholder of the
Company or such shareholder's broker, dealer, commercial bank, trust company or
other nominee to the Depositary at one of its addresses set forth below.
The Depositary for the Offer is:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
<TABLE>
<S> <C> <C>
By Hand: By Mail: By Overnight Courier:
First Chicago Trust Company First Chicago Trust Company First Chicago Trust Company
of New York of New York of New York
Attention: Tenders & Exchanges Attention: Tenders & Exchanges Attention: Tenders & Exchanges
c/o THE DEPOSITORY TRUST COMPANY P.O. Box 2569, Suite 4660-PSC Suite 4680-PSC
55 Water Street, DTC TAD Jersey City, NJ 07303-2569 14 Wall Street, 8th Floor
Vietnam Veterans Memorial Plaza New York, NY 10005
New York, NY 10041
Facsimile for Eligible Institutions:
(201) 222-4720
or
(201) 222-4721
To confirm fax only:
(201) 222-4707
</TABLE>
Any questions or requests for assistance may be directed to the Dealer
Manager or the Information Agent at their respective telephone numbers and
locations listed below. Additional copies of this Offer to Purchase, the Letter
of Transmittal and the Notice of Guaranteed Delivery may be obtained from the
Information Agent at its address and telephone numbers set forth below. You may
also contact your broker, dealer, commercial bank or trust company or nominee
for assistance concerning the Offer.
The Dealer Manager for the Offer is:
Furman Selz
230 Park Avenue
New York, New York 10169
(888) 584-4166
The Information Agent for the Offer is:
D.F. King & Co., Inc.
77 Water Street
New York, New York 10005
(800) 848-3409 (Toll Free)
<PAGE>
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
OF
PACIFIC SCIENTIFIC COMPANY
PURSUANT TO THE OFFER TO PURCHASE DATED FEBRUARY 6, 1998
BY
ACC ACQUISITION CORP.
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
DANAHER CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON FRIDAY, MARCH 6, 1998, UNLESS THE OFFER IS EXTENDED.
The Depositary for the Offer is:
First Chicago Trust Company of New York
<TABLE>
<S> <C> <C>
By Overnight Courier: By Mail: By Hand:
First Chicago Trust Company First Chicago Trust Company First Chicago Trust Company
of New York of New York of New York
Tenders & Exchanges Tenders & Exchanges Tenders & Exchanges
Suite 4680-PSC Suite 4660-PSC c/o The Depository Trust Company
14 Wall Street, 8th Floor P.O. Box 2569 55 Water Street, DTC TAD
New York, NY 10005 Jersey City, NJ 07303-2569 Vietnam Veterans Memorial Plaza
New York, NY 10041
</TABLE>
By Facsimile Transmission
(for Eligible Institutions only):
(201) 222-4720 or (201) 222-4721
Confirm by Telephone:
(201) 222-4707
DELIVERY OF THIS LETTER OF TRANSMITTAL 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.
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 shareholders if either
certificates evidencing Shares (as defined below) are to be forwarded herewith
or if delivery of Shares is to be made by book-entry transfer to the
Depositary's account at The Depository Trust Company ("DTC" or the "Book-Entry
Transfer Facility") pursuant to the book-entry transfer procedure described in
Section 3 of the Offer to Purchase (as defined below). Delivery of documents to
the Book-Entry Transfer Facility does not constitute delivery to the Depositary.
Shareholders whose certificates evidencing Shares ("Share Certificates") are
not immediately available or who cannot deliver their Share Certificates and all
other documents required hereby to the Depositary prior to the Expiration Date
(as defined in Section l of the Offer to Purchase) or who cannot complete the
procedure for delivery by book-entry transfer on a timely basis and who wish to
tender their Shares must do so pursuant to the guaranteed delivery procedure
described in Section 3 of the Offer to Purchase. See Instruction 2.
/ / CHECK HERE IF SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO THE
DEPOSITARY'S ACCOUNT AT THE BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE
FOLLOWING:
Name(s) of Tendering
Institution: ___________________________________________________________________
Account Number: _________________ Transaction Code Number: __________________
/ / CHECK HERE IF SHARES ARE BEING TENDERED PURSUANT TO A NOTICE OF GUARANTEED
DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING:
<PAGE>
Name(s) of Registered
Holder(s): _____________________________________________________________________
Window Ticket Number (if any): _________________________________________________
Date of Execution of Notice of Guaranteed Delivery: ____________________________
Name of Institution which Guaranteed Delivery: _________________________________
If Delivered by Book-Entry Transfer, Check Box of Book-Entry Transfer Facility:
(check) / / DTC
Account Number: __________________ Transaction Code Number: __________________
<TABLE>
<CAPTION>
DESCRIPTION OF SHARES TENDERED
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S)
(PLEASE FILL IN, IF BLANK, EXACTLY AS NAME(S) APPEAR(S) ON SHARE CERTIFICATE(S) AND SHARE(S) TENDERED
SHARE CERTIFICATE(S)) (ATTACH ADDITIONAL LIST IF NECESSARY)
<S> <C> <C> <C>
<CAPTION>
TOTAL NUMBER
OF SHARES
SHARE EVIDENCED BY NUMBER OF
CERTIFICATE(S) SHARE SHARES
NUMBER(S)* CERTIFICATE(S)* TENDERED**
TOTAL SHARES
</TABLE>
* Need not be completed by shareholders delivering Shares by book-entry
transfer.
** Unless otherwise indicated, it will be assumed that all Shares evidenced
by each Share Certificate delivered to the Depositary are being tendered
hereby. See Instruction 4.
<PAGE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE INSTRUCTIONS SET FORTH IN THIS
LETTER OF TRANSMITTAL CAREFULLY.
Ladies and Gentlemen:
The undersigned hereby tenders to ACC Acquisition Corp., a California
corporation (the "Purchaser") and an indirect wholly owned subsidiary of Danaher
Corporation, a Delaware corporation, the above-described shares of common stock,
par value $1.00 per share (the "Common Shares"), of Pacific Scientific Company,
a California corporation (the "Company"), including the associated preferred
share purchase rights (together with the Common Shares, the "Shares") issued
pursuant to the Rights Agreement, dated as of December 21, 1997, as amended as
of January 31, 1998, between the Company and ChaseMellon Shareholder Services,
L.L.C., as Rights Agent, pursuant to the Purchaser's offer to purchase all
outstanding Shares at $30.25 per Share, net to the seller in cash, upon the
terms and subject to the conditions set forth in the Offer to Purchase, dated
February 6, 1998 (the "Offer to Purchase"), receipt of which is hereby
acknowledged, and in this Letter of Transmittal (which, as amended or
supplemented from time to time, together constitute the "Offer"). The
undersigned understands that the Purchaser reserves the right to transfer or
assign, in whole or from time to time in part, to one or more of its affiliates,
the right to purchase all or any portion of the Shares tendered pursuant to the
Offer.
Subject to, and effective upon, acceptance for payment of the Shares
tendered herewith, in accordance with the terms of the Offer (including, if the
Offer is extended or amended, the terms and conditions of such extension or
amendment), the undersigned hereby sells, assigns and transfers to, or upon the
order of, the Purchaser all right, title and interest in and to all the Shares
that are being tendered hereby and all dividends, distributions (including,
without limitation, distributions of additional Shares) and rights declared,
paid or distributed in respect of such Shares on or after January 31, 1998,
(collectively, "Distributions"), and irrevocably appoints the Depositary the
true and lawful agent and attorney-in-fact of the undersigned with respect to
such Shares and all Distributions, with full power of substitution (such power
of attorney being deemed to be an irrevocable power coupled with an interest),
to (i) deliver Share Certificates evidencing such Shares and all Distributions,
or transfer ownership of such Shares and all Distributions on the account books
maintained by the Book-Entry Transfer Facility, together, in either case, with
all accompanying evidences of transfer and authenticity, to or upon the order of
the Purchaser, (ii) present such Shares and all Distributions for transfer on
the books of the Company and (iii) receive all benefits and otherwise exercise
all rights of beneficial ownership of such Shares and all Distributions, all in
accordance with the terms of the Offer.
The undersigned hereby irrevocably appoints Patrick W. Allender and C.
Scott Brannan, and each of them, as 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 (by written consent or otherwise) 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 other action and all Shares and
other securities issued in Distributions in respect of such Shares, which the
undersigned is entitled to vote at any meeting of shareholders of the Company
(whether annual or special and whether or not an adjourned or postponed meeting)
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, is
irrevocable and is granted in consideration of, and is effective upon, the
acceptance for payment of such Shares by the Purchaser in accordance with the
terms of the Offer. Such acceptance for payment shall revoke all other proxies
and powers of attorney granted by the undersigned at any time with respect to
such Shares (and all Shares and other securities issued in Distributions in
respect of such Shares), and no subsequent proxy or power of attorney shall be
given or written consent executed (and if given or executed, shall not be
effective) by the undersigned with respect thereto. The undersigned understands
that, in order for Shares to be deemed validly tendered, immediately upon the
Purchaser's acceptance of such Shares for payment, the Purchaser must be able to
exercise full voting and other rights with respect to such Shares, including,
without limitation, voting at any meeting of the Company's stockholders then
scheduled.
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 all Distributions, and that when such Shares are accepted
for payment by the Purchaser, the Purchaser will acquire good, marketable and
unencumbered title thereto and to all Distributions, free and clear of all
liens, restrictions, charges and encumbrances, and that none of such Shares and
Distributions will be subject to any adverse claim. The undersigned, upon
request, shall execute and deliver all 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 all Distributions. In
addition, the undersigned shall remit and transfer promptly to the Depositary
for the account of the Purchaser all Distributions in respect of the Shares
tendered hereby, accompanied by appropriate documentation of transfer, and,
pending such remittance and transfer or appropriate assurance thereof, the
Purchaser shall be entitled to all rights and privileges as owner of each such
Distribution and may withhold the entire purchase price of the Shares tendered
hereby or deduct from such purchase price the amount or value of such
Distribution as determined by the Purchaser in its sole discretion.
<PAGE>
No authority herein conferred or agreed to be conferred shall be affected
by, and all such authority shall survive, the death or incapacity of the
undersigned. All obligations of the undersigned hereunder shall be binding upon
the heirs, personal representatives, successors and assigns of the undersigned.
Except as stated in the Offer to Purchase, this tender is irrevocable.
The undersigned understands that tenders of Shares pursuant to any one of
the procedures described in Section 3 of the Offer to Purchase and in the
instructions hereto will constitute the undersigned's acceptance of the terms
and conditions of the Offer. The Purchaser's acceptance of such Shares for
payment will constitute a binding agreement between the undersigned and the
Purchaser upon the terms and subject to the conditions of the Offer.
Unless otherwise indicated herein in the box entitled "Special Payment
Instructions," please issue the check for the purchase price of all Shares
purchased, and return all Share Certificates evidencing Shares not purchased or
not tendered, in the name(s) of the registered holder(s) appearing above under
"Description of Shares Tendered." Similarly, unless otherwise indicated in the
box entitled "Special Delivery Instructions," please mail the check for the
purchase price of all Shares purchased and all Share Certificates evidencing
Shares not tendered or not purchased (and accompanying documents, as
appropriate) to the address(es) of the registered holder(s) appearing above
under "Description of Shares Tendered." In the event that the boxes entitled
"Special Payment Instructions" and "Special Delivery Instructions" are both
completed, please issue the check for the purchase price of all Shares purchased
and return all Share Certificates evidencing Shares not purchased or not
tendered in the name(s) of, and mail such check and Share Certificates to, the
person(s) so indicated. 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
purchase any of the Shares tendered hereby.
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if the check for the purchase price of Shares
purchased or Share Certificates evidencing Shares not tendered or not
purchased are to be issued in the name of someone other than the undersigned.
Issue / / check / / Share Certificate(s) to:
Name: ________________________________________________________________________
(Print)
Address: _____________________________________________________________________
______________________________________________________________________________
(Include Zip Code)
(TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NUMBER)
(SEE SUBSTITUTE FORM W-9 ON REVERSE SIDE)
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if the check for the purchase price of Shares
purchased or Share Certificates evidencing Shares not tendered or not
purchased are to be mailed to someone other than the undersigned, or to the
undersigned at an address other than that shown under "Description of Shares
Tendered."
Mail / / check / / Share Certificate(s) to:
Name: ________________________________________________________________________
(Print)
Address:______________________________________________________________________
______________________________________________________________________________
(Include Zip Code)
<PAGE>
IMPORTANT
SHAREHOLDERS: SIGN HERE
(PLEASE COMPLETE SUBSTITUTE FORM W-9 ON REVERSE)
Signature(s) of Holder(s)
Dated: , 199
(Must be signed by registered holder(s) exactly as name(s) appear(s) on Share
Certificates or on a security position listing or by a person(s) authorized to
become registered holder(s) by certificates and documents transmitted
herewith. If signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, officer of a corporation or other person acting in a
fiduciary or representative capacity, please provide the following
information. See Instruction 5.)
Name(s): _____________________________________________________________________
(Please Print)
Capacity (full title): _______________________________________________________
_______________________________________________________________________________
Address: _____________________________________________________________________
_______________________________________________________________________________
(include Zip Code)
Area Code and Telephone Number:_______________________________________________
Tax Identification or Social Security Number:_________________________________
(See Substitute Form W-9 on reverse side)
GUARANTEE OF SIGNATURE(S)
(If Required--See Instructions 1 and 5)
FOR USE BY FINANCIAL INSTITUTIONS ONLY. PLACE MEDALLION GUARANTEE IN SPACE
BELOW.
Authorized Signature: ________________________________________________________
Name: ________________________________________________________________________
(Please Print)
Name of Firm: ________________________________________________________________
Address: _____________________________________________________________________
_______________________________________________________________________________
(Include Zip Code)
Area Code and Telephone Number: ______________________________________________
Dated: ________________________________________________________________, 199__
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. Guarantee of Signatures. Except as otherwise provided below, all
signatures on this Letter of Transmittal must be guaranteed by a financial
institution (including most banks, savings and loan associations and brokerage
houses) that is a participant in the Security Transfer Agents Medallion Program
(each an "Eligible Institution"). No signature guarantee is required on this
Letter of Transmittal (a) if this Letter of Transmittal is signed by the
registered holder(s) (which term, for purposes of this document, shall include
any participant in the Book-Entry Transfer Facility whose name appears on a
security position listing as the owner of Shares) of Shares tendered herewith,
unless such holder(s) has completed either the box entitled "Special Delivery
Instructions" or the box entitled "Special Payment Instructions" on the reverse
hereof, or (b) if such Shares are tendered for the account of an Eligible
Institution. See Instruction 5.
2. Delivery of Letter of Transmittal and Share Certificates. This Letter of
Transmittal is to be used if either Share Certificates are to be forwarded
herewith or if Shares are to be delivered by book-entry transfer pursuant to the
procedure set forth in Section 3 of the Offer to Purchase. Share Certificates
evidencing all physically tendered Shares, or a confirmation of a book-entry
transfer into the Depositary's account at the Book-Entry Transfer Facility of
all Shares delivered by book-entry transfer as well as a properly completed and
duly executed Letter of Transmittal (or facsimile thereof) with any required
signature guarantees (or, in the case of a book-entry transfer, an Agent's
Message, as defined below) and any other documents required by this Letter of
Transmittal, must be received by the Depositary at one of its addresses set
forth on the reverse hereof prior to the Expiration Date (as defined in Section
l of the Offer to Purchase). If Share Certificates are forwarded to the
Depositary in multiple deliveries, a properly completed and duly executed Letter
of Transmittal must accompany each such delivery. Shareholders whose Share
Certificates are not immediately available, who cannot deliver their Share
Certificates and all other required documents to the Depositary prior to the
Expiration Date or who cannot complete the procedure for delivery by book-entry
transfer on a timely basis may tender their Shares pursuant to the guaranteed
delivery procedure described in Section 3 of the Offer to Purchase. Pursuant to
such procedure: (i) such tender must be made by or through an Eligible
Institution; (ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form made available by the Purchaser, must be
received by the Depositary prior to the Expiration Date; and (iii) the Share
Certificates evidencing all physically delivered Shares in proper form for
transfer by delivery, or a confirmation of a book-entry transfer into the
Depositary's account at the Book-Entry Transfer Facility of all Shares delivered
by book-entry transfer, in each case together with a Letter of Transmittal (or a
facsimile thereof), properly completed and duly executed, with any required
signature guarantees (or, in the case of a book-entry transfer, an Agent's
Message), and any other documents required by this Letter of Transmittal, must
be received by the Depositary within three New York Stock Exchange trading days
after the date of execution of such Notice of Guaranteed Delivery, all as
described in Section 3 of the Offer to Purchase. The term "Agent's Message"
means a message, transmitted by the Book-Entry Transfer Facility to, and
received by, the Depositary and forming a part of the 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 this Letter of Transmittal and that the Purchaser may enforce
such agreement against the participant.
THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, SHARE CERTIFICATES AND
ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER
FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING SHAREHOLDER, AND THE
DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF
DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY
INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO
ENSURE TIMELY DELIVERY.
No alternative, conditional or contingent tenders will be accepted and no
fractional Shares will be purchased. By execution of this Letter of Transmittal
(or a facsimile hereof), all tendering shareholders waive any right to receive
any notice of the acceptance of their Shares for payment.
3. Inadequate Space. If the space provided herein under "Description of
Shares Tendered" is inadequate, the Share Certificate numbers, the number of
Shares evidenced by such Share Certificates and the number of Shares tendered
should be listed on a separate schedule and attached hereto.
4. Partial Tenders (not applicable to shareholders who tender by book-entry
transfer). If fewer than all the Shares evidenced by any Share Certificate
delivered to the Depositary herewith are to be tendered hereby, fill in the
number of Shares which are to be tendered in the box entitled "Number of Shares
Tendered." In such cases, new Share Certificate(s) evidencing the remainder of
the Shares that were evidenced by the Share Certificates delivered to the
Depositary herewith will be sent to the person(s) signing this Letter of
Transmittal, unless otherwise provided in the box entitled "Special Delivery
Instructions" on the reverse hereof, as soon as practicable after the expiration
or termination of the Offer. All Shares evidenced by Share Certificates
delivered to the Depositary will be deemed to have been tendered unless
otherwise indicated.
5. Signatures on Letter of Transmittal; Stock Powers and Endorsements. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signature(s) must correspond with the name(s) as written on
the face of the Share Certificates evidencing such Shares without alteration,
enlargement or any other change whatsoever. If any Share tendered hereby is
owned of record by two or more persons, all such persons must sign this Letter
of Transmittal.
<PAGE>
If any of the Shares tendered hereby are registered in the names of
different holders, it will be necessary to complete, sign and submit as many
separate Letters of Transmittal as there are different registrations of such
Shares.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares tendered hereby, no endorsements of Share Certificates or separate stock
powers are required, unless payment is to be made to, or Share Certificates
evidencing Shares not tendered or not purchased are to be issued in the name of,
a person other than the registered holder(s), in which case the Share
Certificate(s) evidencing the Shares tendered hereby must be endorsed or
accompanied by appropriate stock powers, in either case signed exactly as the
name(s) of the registered holder(s) appear(s) on such Share Certificate(s).
Signatures on such Share Certificate(s) and stock powers must be guaranteed by
an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Shares tendered hereby, the Share Certificate(s)
evidencing the Shares tendered hereby must be endorsed or accompanied by
appropriate stock powers, in either case signed exactly as the name(s) of the
registered holder(s) appear(s) on such Share Certificate(s). Signatures on such
Share Certificate(s) and stock powers must be guaranteed by an Eligible
Institution.
If this Letter of Transmittal or any Share Certificate or stock power is
signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or representative
capacity, such person should so indicate when signing, and proper evidence
satisfactory to the Purchaser of such person's authority so to act must be
submitted.
6. Stock Transfer Taxes. Except as otherwise provided in this Instruction
6, the Purchaser will pay all stock transfer taxes with respect to the sale and
transfer of any Shares to it or its order pursuant to the Offer. If, however,
payment of the purchase price of any Shares purchased is to be made to, or Share
Certificate(s) evidencing Shares not tendered or not purchased are to be issued
in the name of, a person other than the registered holder(s), the amount of any
stock transfer taxes (whether imposed on the registered holder(s), such other
person or otherwise) payable on account of the transfer to such other person
will be deducted from the purchase price of such Shares purchased, unless
evidence satisfactory to the Purchaser of the payment of such taxes, or
exemption therefrom, is submitted. Except as provided in this Instruction 6, it
will not be necessary for transfer tax stamps to be affixed to the Share
Certificates evidencing the Shares tendered hereby.
7. Special Payment and Delivery Instructions. If a check for the purchase
price of any Shares tendered hereby is to be issued, or Share Certificate(s)
evidencing Shares not tendered or not purchased are to be issued, in the name of
a person other than the person(s) signing this Letter of Transmittal or if such
check or any such Share Certificate is to be sent to someone other than the
person(s) signing this Letter of Transmittal or to the person(s) signing this
Letter of Transmittal but at an address other than that shown in the box
entitled "Description of Shares Tendered" on the reverse hereof, the appropriate
boxes on the reverse of this Letter of Transmittal must be completed.
8. Questions and Requests for Assistance or Additional Copies. Questions
and requests for assistance may be directed to the Dealer Manager or the
Information Agent at their respective addresses or telephone numbers set forth
below. Additional copies of the Offer to Purchase, this Letter of Transmittal
and the Notice of Guaranteed Delivery may be obtained from the Information Agent
or from brokers, dealers, commercial banks or trust companies.
9. Substitute Form W-9. Each tendering shareholder is required to provide
the Depositary with a correct Taxpayer Identification Number ("TIN") on the
Substitute Form W-9 which is provided under "Important Tax Information" below,
and to certify, under penalties of perjury, that such number is correct and that
such shareholder is not subject to backup withholding of federal income tax. If
a tendering shareholder has been notified by the Internal Revenue Service that
such shareholder is subject to backup withholding, such shareholder must cross
out item (2) of the Certification box of the Substitute Form W-9, unless such
shareholder has since been notified by the Internal Revenue Service that such
shareholder is no longer subject to backup withholding. Failure to provide the
information on the Substitute Form W-9 may subject the tendering shareholder to
31% federal income tax withholding on the payment of the purchase price of all
Shares purchased from such shareholder. If the tendering shareholder has not
been issued a TIN and has applied for one or intends to apply for one in the
near future, such shareholder should write "Applied For" in the space provided
for the TIN in Part I of the Substitute Form W-9, sign and date the Substitute
Form W-9 and complete the Certificate of Awaiting Taxpayer Identification Number
below. Notwithstanding that "Applied For" is written in Part I and the
Certificate of Awaiting Taxpayer Identification Number is completed, the
Depositary will withhold 31% of all payments of the purchase price to such
shareholder until a TIN is provided to the Depositary. Such amounts will be
refunded to such shareholder if a TIN is provided to the Depositary within 60
days.
10. Lost, Destroyed or Stolen Certificates. If any certificate(s)
representing Shares has been lost, destroyed or stolen, the tendering
shareholder should promptly notify the Depositary. The tendering shareholder
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.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE HEREOF), PROPERLY
COMPLETED AND DULY EXECUTED (TOGETHER WITH ANY REQUIRED SIGNATURE GUARANTEES AND
SHARE CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND ALL OTHER REQUIRED
DOCUMENTS) OR A PROPERLY COMPLETED AND DULY EXECUTED NOTICE OF GUARANTEED
DELIVERY MUST BE RECEIVED BY THE DEPOSITARY PRIOR TO THE EXPIRATION DATE (AS
DEFINED IN THE OFFER TO PURCHASE).
<PAGE>
IMPORTANT TAX INFORMATION
Under the federal income tax law, a shareholder whose tendered Shares are
accepted for payment is required by law to provide the Depositary (as payer)
with such shareholder's correct TIN on Substitute Form W-9 below. If such
shareholder is an individual, the TIN is such shareholder's social security
number. If the Depositary is not provided with the correct TIN, the shareholder
may be subject to a $50 penalty imposed by the Internal Revenue Service. In
addition, payments that are made to such shareholder with respect to Shares
purchased pursuant to the Offer may be subject to backup withholding at a rate
of 31%.
Certain shareholders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. In order for a foreign individual to qualify as an exempt
recipient, such individual must submit a statement, signed under penalties of
perjury, attesting to such individual's exempt status. Forms of such statements
can be obtained from the Depositary. See the enclosed Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9 for
additional instructions.
If backup withholding applies, the Depositary is required to withhold 31% of
any payments made to the shareholder. 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 Internal Revenue Service.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments that are made to a shareholder
with respect to Shares purchased pursuant to the Offer, the shareholder is
required to notify the Depositary of such shareholder's correct TIN by
completing the form below certifying (a) that the TIN provided on Substitute
Form W-9 is correct (or that such shareholder is awaiting a TIN), and (b) that
such shareholder is not subject to backup withholding because (i) such
shareholder has not been notified by the Internal Revenue Service that such
shareholder is subject to backup withholding as a result of a failure to report
all interest or dividends, (ii) the Internal Revenue Service has notified such
shareholder that such shareholder is no longer subject to backup withholding or
(iii) such shareholder is exempt from backup withholding.
WHAT NUMBER TO GIVE THE DEPOSITARY
The shareholder is required to give the Depositary the social security
number or employer identification number of the record holder of the Shares
tendered hereby. If the Shares are in more than one name or are not in the name
of the actual owner, consult the enclosed Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9 for additional guidance on
which number to report. If the tendering shareholder has not been issued a TIN
and has applied for a number or intends to apply for a number in the near
future, the shareholder should write "Applied For" in the space provided for the
TIN in Part I, sign and date the Substitute Form W-9 and complete the
Certificate of Awaiting Taxpayer Identification Number below. Notwithstanding
that "Applied For" is written in Part I and the Certificate of Awaiting Taxpayer
Identification Number is completed, the Depositary will withhold 31% of all
payments of the purchase price to such shareholder until a TIN is provided to
the Depositary. Such amounts will be refunded to such shareholder if a TIN is
provided to the Depositary within 60 days.
<PAGE>
<TABLE>
<CAPTION>
PAYER'S NAME: FIRST CHICAGO TRUST COMPANY OF NEW YORK
<S> <C> <C>
SUBSTITUTE PART I--Taxpayer Identification Number-- ------------------------
For all accounts, enter taxpayer identification number in Social Security Number
FORM W-9 the box at right. (For most individuals, this is your social OR ---------------------
DEPARTMENT OF THE TREASURY security number. If you do not have a number, see Obtaining Employer Identification Number
INTERNAL REVENUE SERVICE a Number in the enclosed Guidelines.) Certify by signing and (If awaiting TIN write
dating below. Note: If the account is in more than one name, "Applied For")
see the chart in the enclosed Guidelines to determine which
number to give the payer.
<CAPTION>
<S> <C>
Payer's Request for Taxpayer PART II--For Payees Exempt From Backup Withholding, see the enclosed Guidelines and complete
Identification as instructed therein.
Number (TIN)
</TABLE>
CERTIFICATION--Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct Taxpayer Identification Number
(or a Taxpayer Identification Number has not been issued to me and either
(a) I have mailed or delivered an application to receive a Taxpayer
Identification Number to the appropriate Internal Revenue Service Center
("IRS") or Social Security Administration Office or (b) I intend to
mail or deliver an application in the near future. I understand that,
notwithstanding that I have written "Applied For" in Part I and have
completed the Certificate of Awaiting Taxpayer Identification Number,
31% of all reportable payments made to me thereafter will be withheld
until I provide a correct Taxpayer Identification Number), and
(2) I am not subject to backup withholding either because (a) I am exempt from
backup withholding, (b) I have not been notified by the IRS that I am
subject to backup withholding as a result of failure to report all
interest or dividends, or (c) the IRS has notified me that I am no longer
subject to backup withholding.
CERTIFICATE INSTRUCTIONS--You must cross out item (2) above if you have been
notified by the IRS that you are subject to backup withholding because of
underreporting interest or dividends on your tax return. However, if after
being notified by the IRS that you were subject to backup withholding you
received another notification from the IRS that you are no longer subject to
backup withholding, do not cross out item (2). (Also see instructions in the
enclosed Guidelines.)
SIGNATURE: DATE:
--------------------------------------- ------------------------
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 DETAILS.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I CERTIFY UNDER PENALTIES OF PERJURY THAT A TAXPAYER IDENTIFICATION NUMBER HAS
NOT BEEN ISSUED TO ME, AND EITHER (1) I HAVE MAILED OR DELIVERED AN APPLICATION
TO RECEIVE A TAXPAYER IDENTIFICATION NUMBER TO THE APPROPRIATE INTERNAL REVENUE
SERVICE CENTER OR SOCIAL SECURITY ADMINISTRATION OFFICE OR (2) I INTEND TO MAIL
OR DELIVER AN APPLICATION IN THE NEAR FUTURE. I UNDERSTAND THAT, NOTWITHSTANDING
THAT I HAVE WRITTEN "APPLIED FOR" IN PART I AND HAVE COMPLETED THE CERTIFICATE
OF AWAITING TAXPAYER IDENTIFICATION NUMBER, 31% OF ALL REPORTABLE PAYMENTS MADE
TO ME PRIOR TO THE TIME I PROVIDE A PROPERLY CERTIFIED TAXPAYER IDENTIFICATION
NUMBER WILL BE WITHHELD.
SIGNATURE: DATE:
-------------------------------- --------------------------------
<PAGE>
Any questions or requests for assistance may be directed to the Dealer
Manager or the Information Agent at their respective telephone numbers and
addresses listed below. Additional copies of the Offer to Purchase, this Letter
of Transmittal and the Notice of Guaranteed Delivery may be obtained from the
Information Agent at its address and telephone numbers set forth below. You may
also contact your broker, dealer, commercial bank or trust company or nominee
for assistance concerning the Offer.
The Dealer Manager for the Offer is:
Furman Selz
230 Park Avenue
New York, New York 10169
(888) 584-4166
The Information Agent for the Offer is:
D.F. King & Co., Inc.
77 Water Street
New York, New York
(800) 848-3409
<PAGE>
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
OF
PACIFIC SCIENTIFIC COMPANY
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
This Notice of Guaranteed Delivery, or one substantially in the form
hereof, must be used to accept the Offer (as defined below) (i) if certificates
("Share Certificates") evidencing shares of common stock, par value $1.00 per
share (the "Shares"), of Pacific Scientific Company, a California corporation
(the "Company"), are not immediately available, (ii) if Share Certificates and
all other required documents cannot be delivered to First Chicago Trust Company
of New York, as Depositary (the "Depositary"), prior to the Expiration Date (as
defined in Section 1 of the Offer to Purchase (as defined below)) or (iii) if
the procedure for delivery by book-entry transfer cannot be completed on a
timely basis. This Notice of Guaranteed Delivery may be delivered by hand or
mail or transmitted by telegram or facsimile transmission to the Depositary. See
Section 3 of the Offer to Purchase.
The Depositary for the Offer is:
FIRST CHICAGO TRUST COMPANY OF NEW YORK
By Facsimile Transmission (for Eligible Institutions only):
(201) 222-4720 or (201) 222-4721
Confirm by Telephone: (201) 222-4707
<TABLE>
<S> <C> <C>
By Overnight Courier: By Mail: By Hand:
First Chicago Trust Company First Chicago Trust Company First Chicago Trust Company
of New York of New York of New York
Tenders & Exchanges Tenders & Exchanges Tenders & Exchanges
Suite 4680-PSC Suite 4660-PSC c/o The Depository Trust Company
14 Wall Street, 8th Floor P.O. Box 2569 55 Water Street, DTC TAD
New York, NY 10005 Jersey City, NJ 07303-2569 Vietnam Veterans Memorial Plaza
New York, NY 10041
</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.
<PAGE>
LADIES AND GENTLEMEN:
The undersigned hereby tenders to ACC Acquisition Corp., a California
corporation and an indirect wholly owned subsidiary of Danaher Corporation, a
Delaware corporation, upon the terms and subject to the conditions set forth in
the Offer to Purchase, dated February 6, 1998 (the "Offer to Purchase"), and the
related Letter of Transmittal (which, as amended or supplemented from time to
time, together constitute the "Offer"), receipt of each of which is hereby
acknowledged, the number of Shares specified below pursuant to the guaranteed
delivery procedures described in Section 3 of the Offer to Purchase.
Number of Shares: ______________________________________________________________
Name(s) of Record Holder(s): ___________________________________________________
________________________________________________________________________________
(PLEASE PRINT)
Certificate Nos. (if available): _______________________________________________
________________________________________________________________________________
Check ONE box if Shares will be tendered by book-entry transfer:
/ / The Depository Trust Company
Participant Number: ____________________________________________________________
Dated: ________________________, 199_
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a participant in the Security Transfer Agents Medallion
Program, hereby guarantees to deliver to the Depositary either the certificates
representing the Shares tendered hereby, in proper form for transfer, or a
Book-Entry Confirmation (as defined in Section 2 of the Offer to Purchase) of a
transfer of such Shares, in any such case together with a properly completed and
duly executed Letter of Transmittal, or a manually signed facsimile thereof,
with any required signature guarantees, or an Agent's Message (as defined in
Section 2 of the Offer to Purchase), and any other documents required by the
Letter of Transmittal within three New York Stock Exchange trading days after
the date of execution of this Notice of Guaranteed Delivery.
The Eligible Institution that completes this form must communicate the
guarantee to the Depositary and must deliver the Letter of Transmittal and
certificates for Shares to the Depositary within the time period shown herein.
Failure to do so could result in financial loss to such Eligible Institution.
Name of Firm: __________________________________________________________________
________________________________________________________________________________
(AUTHORIZED SIGNATURE)
Address: _______________________________________________________________________
(ZIP CODE)
Area Code and Tel. No.: ________________________________________________________
Name: __________________________________________________________________________
Title: _________________________________________________________________________
Date: ________________________, 199_
NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE.
SHARE CERTIFICATES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.
<PAGE>
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
OF
PACIFIC SCIENTIFIC COMPANY
AT $30.25 NET PER SHARE
BY
ACC ACQUISITION CORP.
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
DANAHER CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON FRIDAY, MARCH 6, 1998, UNLESS THE OFFER IS EXTENDED.
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been appointed by ACC Acquisition Corp., a California corporation
(the "Purchaser") and an indirect wholly owned subsidiary of Danaher
Corporation, a Delaware corporation ("Parent"), to act as Dealer Manager in
connection with the Purchaser's offer to purchase all outstanding shares of
common stock, par value $1.00 per share (together with the associated rights,
the "Shares"), of Pacific Scientific Company, a California corporation (the
"Company"), at a price of $30.25 per Share, net to the seller in cash, upon the
terms and subject to the conditions set forth in the Offer to Purchase dated
February 6, 1998 (the "Offer to Purchase"), and the related Letter of
Transmittal (which, as amended or supplemented from time to time, together
constitute the "Offer") enclosed herewith. 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 that number of
Shares which represents at least 90% of the Shares outstanding on the date of
purchase. The Offer is also subject to other terms and conditions contained in
the Offer to Purchase.
Enclosed for your information and use are copies of the following
documents:
1. Offer to Purchase;
2. Letter of Transmittal to be used by holders of Shares in accepting the
Offer and tendering Shares;
3. A letter to stockholders of the Company from Lester Hill, Chairman and
Chief Executive Officer of the Company, together with a
Solicitation/Recommendation Statement on Schedule 14D-9 filed with the
Securities and Exchange Commission by the Company;
4. A letter which may be sent to your clients for whose accounts you hold
Shares registered in your name or in the name of your nominee, with space
provided for obtaining such clients' instructions with regard to the Offer;
5. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9; and
6. Return envelope addressed to the Depositary.
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. PLEASE NOTE
THAT THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON FRIDAY, MARCH 6, 1998, UNLESS THE OFFER IS EXTENDED.
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of January 31, 1998 (the "Merger Agreement"), by and among the Company, DH
Holdings Corp., a Delaware corporation ("Holdings") and a direct wholly owned
subsidiary of Parent, and the Purchaser. The Merger Agreement provides, among
other things, that following the consummation of the Offer and the satisfaction
or waiver of the other conditions set forth in the Merger Agreement, the
Purchaser will be merged with and into the Company (the "Merger"),
<PAGE>
with the Company continuing as the surviving corporation. At the effective time
of the Merger, each outstanding Share (other than Shares held in the treasury of
the Company or by any wholly owned subsidiary of the Company and Shares owned by
Holdings, the Purchaser or any other wholly owned subsidiary of Holdings or the
Purchaser or held by shareholders, if any, who are entitled to and who properly
exercise dissenters' rights under California law) will be converted into the
right to receive an amount in cash equal to the Offer Price.
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 the
certificates evidencing such Shares or timely confirmation of a book-entry
transfer of such Shares into the Depositary's account at the Book-Entry Transfer
Facility (as defined in the Offer to Purchase) pursuant to the procedures set
forth in the Offer to Purchase, a Letter of Transmittal (or a facsimile
thereof), properly completed and duly executed, with any required signature
guarantees or an Agent's Message (as defined in the Offer to Purchase) in
connection with a book-entry transfer, and any other documents required by the
Letter of Transmittal.
If a holder of Shares wishes to tender Shares, but cannot deliver such
holder's certificates or other required documents, or cannot comply with the
procedure for book-entry transfer, prior to the expiration of the Offer, a
tender of Shares may be effected by following the guaranteed delivery procedure
described in Section 3 of the Offer to Purchase.
The Purchaser will not pay any fees or commissions to any broker, dealer or
other person (other than the Dealer Manager or the Information Agent as
described in the Offer) in connection with the solicitation of tenders of Shares
pursuant to the Offer. However, the Purchaser will reimburse you for customary
mailing and handling expenses incurred by you in forwarding any of the enclosed
materials to your clients. The Purchaser will pay or cause to be paid any stock
transfer taxes payable with respect to the transfer of Shares to it, except as
otherwise provided in Instruction 6 of the Letter of Transmittal.
Any questions or requests for assistance may be directed to the Dealer
Manager or the Information Agent at their respective telephone numbers and
addresses set forth on the back cover of the Offer to Purchase. Additional
copies of the enclosed material may be obtained from the Information Agent at
its address and telephone numbers set forth on the back cover of the Offer to
Purchase.
Very truly yours,
Furman Selz
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR
ANY OTHER PERSON THE AGENT OF PARENT, HOLDINGS, THE PURCHASER, THE COMPANY, THE
DEALER MANAGER, THE INFORMATION AGENT OR THE DEPOSITARY, OR OF ANY AFFILIATE OF
ANY OF THEM, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR TO MAKE
ANY STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN
THE ENCLOSED DOCUMENTS AND THE STATEMENTS CONTAINED THEREIN.
<PAGE>
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED PREFERRED SHARE PURCHASE RIGHTS)
OF
PACIFIC SCIENTIFIC COMPANY
AT
$30.25 NET PER SHARE
BY
ACC ACQUISITION CORP.
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
DANAHER CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON FRIDAY, MARCH 6, 1998, UNLESS THE OFFER IS EXTENDED.
To Our Clients:
Enclosed for your consideration is an Offer to Purchase, dated February 6,
1998 (the "Offer to Purchase"), and a related Letter of Transmittal (which, as
amended or supplemented from time to time, together constitute the "Offer") in
connection with the offer by ACC Acquisition Corp., a California corporation
(the "Purchaser") and an indirect wholly owned subsidiary of Danaher
Corporation, a Delaware corporation ("Parent"), to purchase all outstanding
shares of common stock, par value $1.00 per share (together with the associated
rights, the "Shares"), of Pacific Scientific Company, a California corporation
(the "Company"), at a price of $ 30.25 per Share, net to the seller in cash,
upon the terms and subject to the conditions set forth in the Offer. Also
enclosed is the Letter to Stockholders of the Company from the Chairman and
Chief Executive Officer of the Company accompanied by the Company's
Solicitation/Recommendation Statement on Schedule 14D-9.
WE ARE THE HOLDER OF RECORD OF SHARES HELD BY US FOR YOUR ACCOUNT. A
TENDER OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF RECORD AND
PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR
YOUR INFORMATION ONLY AND CANNOT BE USED 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, upon the terms
and subject to the conditions set forth in the Offer.
Your attention is invited to the following:
1. The tender price is $30.25 per Share, net to the seller in cash.
2. The Offer is being made for all outstanding Shares.
3. The Board of Directors of the Company has approved the Offer and the
Merger (as defined in the Offer to Purchase) and has determined that the terms
of the Offer and the Merger are fair to and in the best interests of the
stockholders of the Company, and recommends that stockholders accept the Offer
and tender their Shares pursuant to the Offer.
4. The Offer and withdrawal rights will expire at 12:00 Midnight, New
York City time, on Friday, March 6, 1998, unless the Offer is extended.
5. The Offer is conditioned upon, among other things, there being
validly tendered and not withdrawn prior to the expiration of the Offer that
number of Shares which represents at least 90% of the Shares outstanding on the
date of purchase.
<PAGE>
6. Tendering shareholders will not be obligated to pay brokerage fees
or commissions or, except as otherwise provided in Instruction 6 of the Letter
of Transmittal, stock transfer taxes with respect to the purchase of Shares by
the Purchaser pursuant to the Offer.
If you wish to have us tender any or all of your Shares, please so
instruct us by completing, executing and returning to us the instruction form
contained in this letter. An envelope in which 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 in your instructions. YOUR INSTRUCTIONS
SHOULD BE FORWARDED TO US IN AMPLE TIME TO PERMIT US TO SUBMIT A TENDER 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 is being made to all holders of Shares. The Offer is
not being made to (nor will tenders be accepted from or on behalf of) the
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. However, the Purchaser may, in its discretion, take such action as
it may deem necessary to make the Offer in any jurisdiction and extend the Offer
to holders of Shares in such jurisdiction. In any jurisdiction where the
securities, blue sky or other laws require the Offer to be made by a licensed
broker or dealer, the Offer shall be deemed to be made on behalf of the
Purchaser by the Dealer Manager or by one or more registered brokers or dealers
licensed under the laws of such jurisdiction.
<PAGE>
INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE
FOR CASH ALL OUTSTANDING SHARES OF COMMON STOCK
OF PACIFIC SCIENTIFIC COMPANY BY ACC ACQUISITION CORP.
The undersigned acknowledge(s) receipt of your letter and the
enclosed Offer to Purchase, dated February 6, 1998, and the related
Letter of Transmittal (which, as amended or supplemented from time to
time, together constitute the "Offer"), in connection with the offer by
ACC Acquisition Corp., a California corporation and an indirect wholly
owned subsidiary of Danaher Corporation, a Delaware corporation, to
purchase all outstanding shares of common stock, par value $1.00 per
share (together with the associated rights, the "Shares"), of Pacific
Scientific Corporation, a California corporation.
This will instruct you to instruct your nominee to tender the number of
Shares indicated below (or, if no number is indicated below, all Shares)
that are held for the account of the undersigned, upon the terms and
subject to the conditions set forth in the Offer.
NUMBER OF SHARES TO BE TENDERED: SIGN HERE
--------------------------------
Shares*
- ----------------- --------------------------------
Signature(s)
Dated: --------------, 199
--------------------------------
--------------------------------
Please Type or Print Name(s)
--------------------------------
--------------------------------
Please Type or Print Address
--------------------------------
Area Code and Telephone Number
--------------------------------
Taxpayer Identification or Social Security Number
* Unless otherwise indicated, it will be assumed that all Shares held by us for
your account are to be tendered.
<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
SOCIAL SECURITY
FOR THIS TYPE OF ACCOUNT: NUMBER OF--
- ----------------------------------------------------------------
<S> <C> <C>
1. An individual's account The individual
2. Two or more individuals The actual owner of the account or,
(joint account) if combined funds, any one of the
individuals(1)
3. Husband and wife The actual owner of the account or,
(joint account) if joint funds, either person(1)
4. Custodian account of a minor (Uniform The minor(2)
Gift to Minors Act)
5. Adult and minor The adult or, if the minor is the
(joint account) only contributor, the minor(1)
6. Account in the name of guardian or The ward, minor, or incompetent
committee for a designated ward, person(3)
minor, or incompetent person
7. a. The usual revocable savings trust The grantor-trustee(1)
account (grantor is also trustee)
b. So-called trust account that is The actual owner(1)
not a legal or valid trust under
State law
8. Sole proprietorship account The owner(4)
- ----------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------
GIVE THE EMPLOYER IDENTIFICATION
FOR THIS TYPE OF ACCOUNT: NUMBER OF--
- ----------------------------------------------------------------
<S> <C> <C>
9. A valid trust, estate, or pension The legal entity (Do not furnish the
trust identifying number of the personal
representative or trustee unless the
legal entity itself is not
designated in the account title.)(5)
10. Corporate account The corporation
11. Religious, charitable, or educational The organization
organization account
12. Partnership account held in the name The partnership
of the business
13. Association, club, or other The organization
tax-exempt organization
14. A broker or registered nominee The broker or nominee
15. Account with the Department of The public entity
Agriculture in the name of a public
entity (such as a State or local
government, school district, or
prison) that receives agricultural
program payments
</TABLE>
- ----------------------------------------------------------------
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show the name of the owner.
(5) List first and circle the name of the legal trust, estate, or pension trust.
NOTE: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card, or Form
SS-4, Application for Employer Identification Number, at the local office of the
Social Security Administration or the Internal Revenue Service and apply for a
number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments include the
following:
o A corporation.
o A financial institution.
o An organization exempt from tax under section 501(a), or an individual
retirement plan.
o The United States or any agency or instrumentality thereof.
o A State, the District of Columbia, a possession of the United States, or any
subdivision or instrumentality thereof.
o A foreign government, a political subdivision of a foreign government, or any
agency or instrumentality thereof.
o An international organization or any agency, or instrumentality thereof.
o A registered dealer in securities or commodities registered in the U.S. or a
possession of the U.S.
o A real estate investment trust.
o A common trust fund operated by a bank under section 584(a).
o An exempt charitable remainder trust, or a nonexempt trust described in
section 4947(a)(1).
o An entity registered at all times under the Investment Company Act of 1940.
o A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to
backup withholding include the following:
o Payments to nonresident aliens subject to withholding under section 1441.
o Payments to partnerships not engaged in a trade or business in the U.S. and
which have at least one nonresident partner.
o Payments of patronage dividends where the amount received is not paid in
money.
o Payments made by certain foreign organizations.
o Payments made to a nominee.
Payments of interest not generally subject to backup withholding include the
following:
o 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.
o Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
o Payments described in section 6049(b)(5) to non-resident aliens.
o Payments on tax-free covenant bonds under section 1451.
o Payments made by certain foreign organizations.
o Payments made to a nominee.
Exempt payees described above should file Form W-9 to avoid possible erroneous
backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER
IDENTIFICATION NUMBER, WRITE 'EXEMPT' ON THE FACE OF THE FORM, AND RETURN IT TO
THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS, ALSO
SIGN AND DATE THE FORM.
Certain payments other than interest, dividends, and patronage dividends,
that are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under sections 6041, 6041(a),
6045, and 6050A.
PRIVACY ACT NOTICE.--Section 6109 requires most recipients of dividend,
interest, or other payments to give taxpayer identification numbers to payers
who must report the payments to IRS. IRS uses the numbers for identification
purposes. Payers must be given the numbers whether or not recipients are
required to file tax returns. Beginning January 1, 1984, payers must generally
withhold 20% of taxable interest, dividend, and certain other payments to a
payee who does not furnish a taxpayer identification number to a payer. Certain
penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you fail
to furnish your taxpayer identification number to a payer, you are subject to a
penalty of $50 for each such failure unless your failure is due to reasonable
cause and not to willful neglect.
(2) FAILURE TO REPORT CERTAIN DIVIDEND AND INTEREST PAYMENTS.--If you fail to
include any portion of an includible payment for interest, dividends, or
patronage dividends in gross income, such failure will be treated as being due
to negligence and will be subject to a penalty of 5% on any portion of an
under-payment attributable to that failure unless there is clear and convincing
evidence to the contrary.
(3) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(4) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.-- Falsifying certifications or
affirmations may subject you to criminal penalties including fines and/or
imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE.
<PAGE>
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 February
6, 1998 and the related Letter of Transmittal and is being made to all holders
of Shares. The Offer is not being made to (nor will tenders be accepted from or
on behalf of) holders of Shares in any jurisdiction in which the making of the
Offer or the acceptance thereof would not be in compliance with the securities,
blue sky or other laws of such jurisdiction. However, the Purchaser may, in its
discretion, take such action as it may deem necessary to make the Offer in any
jurisdiction and extend the Offer to holders of Shares in such jurisdiction. In
those jurisdictions where securities, blue sky or other laws require the Offer
to be made by a licensed broker or dealer, the Offer shall be deemed to be made
on behalf of the Purchaser by Furman Selz LLC or one or more registered brokers
or dealers licensed under the laws of such jurisdiction.
Notice of Offer to Purchase for Cash
All Outstanding Shares of Common Stock
(Including the associated Preferred Share Purchase Rights)
of
Pacific Scientific Company
at
$30.25 Net Per Share
by
ACC Acquisition Corp.
an indirect wholly owned subsidiary of
Danaher Corporation
ACC Acquisition Corp., a California corporation (the
"Purchaser") and an indirect wholly owned subsidiary of Danaher
Corporation, a Delaware corporation ("Danaher"), is offering to purchase
all outstanding shares of common stock, par value $1.00 per share (the
"Common Shares"), of Pacific Scientific Company, a California corporation
(the "Company"), including the associated preferred share purchase rights
(together with the Common Shares, the "Shares") issued pursuant to the
Rights Agreement, dated as of December 31, 1997, as amended as of January
31, 1998, between the Company and ChaseMellon Shareholder Services, L.L.C.,
as Rights Agent, at $30.25 per Share, net to the seller in cash, without
interest thereon (the "Offer Price"), upon the terms and subject to the
conditions set forth in the Offer to Purchase, dated February 6, 1998 (the
"Offer to Purchase"), and in the related Letter of Transmittal (which, as
amended or supplemented from time to time, together constitute the
"Offer"). Following the Offer, the Purchaser intends to effect the Merger
described below.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON FRIDAY, MARCH 6, 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 THAT NUMBER OF SHARES WHICH REPRESENTS AT LEAST 90% OF THE SHARES
OUTSTANDING ON THE DATE OF PURCHASE ("THE MINIMUM CONDITION"). THE OFFER IS
ALSO SUBJECT TO OTHER TERMS AND CONDITIONS.
The Offer is being made pursuant to an Agreement and Plan of
Merger, dated as of January 31, 1998 (the "Merger Agreement"), by and among
the Company, DH Holdings Corp., a Delaware corporation and a direct wholly
owned subsidiary of Danaher ("Holdings"), and the Purchaser. The Merger
Agreement provides, among other things, that following the consummation of
the Offer and the satisfaction or waiver of the other conditions set forth
in the Merger Agreement, the Purchaser will be merged with and into the
Company (the "Merger"), with the Company continuing as the surviving
corporation. At the effective time of the Merger, each outstanding Share
(other than Shares held in the treasury of the Company or by any wholly
owned subsidiary of the Company and Shares owned by Holdings, the Purchaser
or any other wholly owned subsidiary of Holdings or the Purchaser or held
by shareholders, if any, who are entitled to and who properly exercise
dissenters' rights under California law) will be converted into the right
to receive an amount in cash equal to the Offer Price, without interest.
As indicated above, the Merger Agreement contemplates a
two-step transaction in which, following consummation of the Offer, the
Merger occurs. Under California law, if the Purchaser acquires, pursuant to
the Offer or otherwise, at least 90% of the then outstanding Shares, the
Purchaser will be able to approve and adopt the Merger Agreement and the
transactions contemplated thereby, including the Merger, without a vote of
the Company's shareholders. In such event, Holdings, the Purchaser and the
Company have agreed to take, at the request of the Purchaser, all necessary
and appropriate action to cause the Merger to become effective as soon as
practicable after such acquisition, without a meeting of the Company's
shareholders, in accordance with the General Corporation Law of the State
of California. However, under California law, the Merger may not be
accomplished for cash paid to the remaining Company shareholders if the
Purchaser, Holdings or Parent owns directly or indirectly more than 50% but
less than 90% of the then outstanding Shares unless either all of the
remaining shareholders of the Company consent to the Merger or the
Commissioner of Corporations of the State of California approves, after a
hearing, the terms and conditions of the Merger and the fairness thereof.
Accordingly, Parent and the Company intend to proceed simultaneously with
an alternative to this two-step transaction in which the Company pursues a
one-step cash merger at the Offer Price. This one-step transaction would
require the affirmative vote of a majority of the Company's outstanding
voting stock. In the event the Minimum Condition is not fulfilled, the
Merger Agreement contemplates that the Offer will be terminated and Parent
and the Company will seek to implement the one-step cash merger
transaction. In furtherance of the foregoing, if on the scheduled
Expiration Date (or any extension thereof) all of the conditions to the
Offer other than the Minimum Condition are satisfied but less than 90% of
the outstanding Shares have been validly tendered and not withdrawn in the
Offer, the Purchaser has agreed to extend the Offer for one additional
business day (or such longer time as may be agreed to by the Purchaser and
the Company), and to effect additional extensions as necessary until the
earlier of (i) the close of business on the business day immediately prior
to the Special Meeting of the Company's shareholders to be called to
approve the Merger or (ii) such time as the Minimum Condition has been
satisfied.
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE OFFER
AND THE MERGER, HAS DETERMINED THAT THE TERMS OF THE OFFER AND THE MERGER
ARE FAIR TO AND IN THE BEST INTERESTS OF THE SHAREHOLDERS OF THE COMPANY
AND RECOMMENDS THAT SHAREHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES
PURSUANT TO THE OFFER.
For purposes of the Offer, the Purchaser will be deemed to
have accepted for payment, and thereby purchased, tendered Shares if, as
and when the Purchaser gives oral or written notice to First Chicago Trust
Company of New York (the "Depositary") of the Purchaser's acceptance of
such Shares for payment. Payment for Shares accepted pursuant to the Offer
will be made by deposit of the purchase price with the Depositary, which
will act as agent for tendering shareholders for the purpose of receiving
payments from the Purchaser and transmitting payments to such tendering
shareholders. Under no circumstance will interest on the purchase price for
Shares be paid by the Purchaser, regardless of any delay in making such
payment. In all cases, payment for Shares tendered and accepted for payment
pursuant to the Offer will be made only after timely receipt by the
Depositary of (i) the certificates evidencing such Shares (the "Share
Certificates") or timely confirmation of a book-entry transfer of such
Shares into the Depositary's account at the Book-Entry Transfer Facility
(as defined in Section 2 of the Offer to Purchase) pursuant to the
procedures set forth in Section 2 of the Offer to Purchase, (ii) the Letter
of Transmittal (or a facsimile thereof), properly completed and duly
executed, with any required signature guarantees or an Agent's Message (as
defined in Section 2 of the Offer to Purchase) in connection with a
book-entry transfer, and (iii) any other documents required by the Letter
of Transmittal.
Tenders of Shares made pursuant to the Offer are irrevocable
except that such Shares may be withdrawn at any time prior to 12:00
midnight, New York City time, on Friday, March 6, 1998 (or the latest time
and date at which the Offer, if extended by the Purchaser, shall expire)
and, unless theretofore accepted for payment by the Purchaser pursuant to
the Offer, may also be withdrawn at any time after April 6, 1998, or at
such later time as may apply if the Offer is extended. For a withdrawal to
be effective, a written, telegraphic or facsimile transmission notice of
withdrawal must be timely received by the Depositary at its address set
forth on the back cover of the Offer to Purchase. Any such 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 of the
registered holder, if different from that of the person who tendered such
Shares. If Share Certificates evidencing Shares to be withdrawn have been
delivered or otherwise identified to the Depositary, then, prior to the
physical release of such Share Certificates, the serial numbers of the
particular Share Certificates and a signed notice of withdrawal with
signatures guaranteed by an Eligible Institution (as defined in Section 2
of the Offer to Purchase), except in the case of Shares tendered for the
account of an Eligible Institution, must also be furnished to the
Depositary. If Shares have been tendered pursuant to the procedure for
book-entry transfer as set forth in Section 3 of the Offer to Purchase, any
notice of withdrawal must also specify the name and number of the account
at the Book-Entry Transfer Facility to be credited with the withdrawn
Shares. All questions as to the form and validity (including time of
receipt) of notices of withdrawal will be determined by the Purchaser, in
its sole discretion, whose determination will be final and binding.
The information required to be disclosed by Rule
14d-6(e)(1)(vii) of the General Rules and Regulations under the Securities
Exchange Act of 1934, as amended, is contained in the Offer to Purchase and
is incorporated herein by reference.
The Company has provided the Purchaser with its list of
shareholders and security position listings for the purpose of
disseminating the Offer to holders of Shares. 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, commercial
banks, trust companies and similar persons whose names, or the names of
whose nominees, appear on the shareholder list or, if applicable, who are
listed as participants in a clearing agency's security position listing,
for subsequent transmittal to beneficial owners of Shares.
THE OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL
CONTAIN IMPORTANT INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY
DECISION IS MADE WITH RESPECT TO THE OFFER.
Questions and requests for assistance may be directed to the
Dealer Manager or the Information Agent at their respective telephone
numbers and locations listed below. Additional copies of the Offer to
Purchase, the Letter of Transmittal and other tender offer materials may be
obtained from the Information Agent at its address and telephone number set
forth below. Such copies will be furnished promptly at the Purchaser's
expense. No fees or commissions will be paid to brokers, dealers or other
persons (other than the Dealer Manager and the Information Agent) for
soliciting tenders of Shares pursuant to the Offer.
The Information Agent for the Offer is:
D.F. King & Co., Inc.
77 Water Street
New York, New York 10005
(800) 848-3409
The Dealer Manager for the Offer is:
Furman Selz
230 Park Avenue
New York, New York 10169
(888) 584-4166
February 6, 1998
<PAGE>
EXHIBIT a(8)
[on news release letterhead of Pacific Scientific Company]
FOR IMMEDIATE RELEASE
<TABLE>
<CAPTION>
Contacts: For Danaher Corporation: For Pacific Scientific:
----------------------- ----------------------
<S> <C>
Patrick W. Allender Winston Hickman or Chuck Burgess/Joele Frank
Chief Financial Officer Chief Financial Officer Abernathy MacGregor Frank
202-828-0850 714-720-1714 212-371-5999
</TABLE>
DANAHER CORPORATION TO ACQUIRE PACIFIC SCIENTIFIC
FOR $30.25 PER SHARE IN CASH
Washington D.C. and Newport Beach, CA, February 2, 1998 - Danaher Corporation
(NYSE:DHR) and Pacific Scientific Company (NYSE:PSX) announced today that
Danaher will acquire Pacific Scientific in an all-cash transaction in which
Pacific Scientific shareholders will receive $30.25 per share. The transaction
has a total value, including the Pacific Scientific debt to be assumed by
Danaher, of approximately $460 million. Pursuant to the terms of the definitive
merger agreement, a subsidiary of Danaher intends to promptly commence a cash
tender offer for Pacific Scientific stock. Any shares not purchased in the
tender offer will be acquired in a merger for $30.25 per share in cash.
The directors of Pacific Scientific have unanimously approved the Danaher
transaction and recommend that Pacific Scientific shareholders accept the
Danaher offer and tender their shares.
"We are pleased with the combination of Danaher and Pacific Scientific," George
M. Sherman, President and Chief Executive Officer of Danaher Corporation, said.
"The businesses Danaher will be acquiring represent attractive strategic
opportunities for our process/environmental controls segment."
Lester Hill, Chairman and Chief Executive Officer of Pacific Scientific, said,
"I'm very excited that our board and management have fulfilled their promise to
deliver full value for shareholders. The global strength of Danaher will allow
worldwide customers to enjoy the premium performance of Pacific Scientific
products while accelerating our improvement process to enhance quality,
manufacturing efficiency, and superior customer service."
-more-
<PAGE>
2
The completion of the transaction is subject to customary conditions, including
Hart-Scott-Rodino regulatory approval. The purchase of shares in the tender
offer is subject to, among other things, the valid tender of Pacific Scientific
stock representing at least 90% of the outstanding shares. If this condition is
met, the tender offer will be completed and Pacific Scientific will be merged
with a wholly owned subsidiary of Danaher, and all Pacific Scientific
shareholders, including those who have not tendered their shares, will receive
$30.25 per share in cash. Pacific Scientific also expects to schedule a special
meeting of its shareholders to vote upon the proposed acquisition by Danaher. In
the event the minimum condition of the tender offer is not satisfied prior to
the special meeting, the transaction may otherwise be approved by a vote of a
simple majority of the Pacific Scientific shares outstanding at the special
meeting. If so approved, Pacific Scientific would be merged with a wholly owned
subsidiary of Danaher, and all Pacific Scientific shareholders would receive
$30.25 per share in cash.
BancAmerica Robertson Stephens, Pacific Scientific's financial advisor, has
delivered to Pacific Scientific's directors its opinion that the consideration
to be received by Pacific Scientific's common shareholders in the Danaher tender
offer and merger is fair to shareholders from a financial point of view. The
full text of BancAmerica Robertson Stephens' fairness opinion will be included
in Pacific Scientific's Schedule 14-D9 and Pacific Scientific shareholders are
referred thereto.
Pacific Scientific Company is an international business that designs,
manufactures and markets motion control, process control and safety equipment.
Danaher is a leading manufacturer of Tools and Components, and
Process/Environmental Controls.
###
<PAGE>
EXHIBIT a(9)
[Letterhead of Danaher Corporation]
FOR IMMEDIATE RELEASE
Contact: C. Scott Brannan
Vice President
Danaher Corporation
(202) 828-0850
DANAHER CORPORATION COMMENCES TENDER OFFER FOR SHARES OF
PACIFIC SCIENTIFIC COMPANY
Washington D.C., February 6, 1998 - Danaher Corporation (NYSE:DHR) announced
today that its wholly owned subsidiary, ACC Acquisition Corp., had commenced an
all-cash tender offer for all of the outstanding shares of common stock of
Pacific Scientific Company (NYSE:PSX) at a price of $30.25 per share. The tender
offer is being made pursuant to the previously announced Merger Agreement
between a Danaher subsidiary and Pacific Scientific. Any shares not purchased in
the tender offer will be acquired in a merger for $30.25 per share in cash.
The offer is subject to, among other things, the tender of Pacific
Scientific stock representing at least 90% of the outstanding shares. The offer
and withdrawal rights will expire at 12:00 midnight, New York City time, on
March 6, 1998, unless extended.
Pacific Scientific Company is an international business that designs,
manufactures and markets motion control, process control and safety equipment.
Danaher is a leading manufacturer of Tools and Components, and
Process/Environmental Controls. (http://www.danaher.com)
###
<PAGE>
EXHIBIT (b)(2)
February 3, 1998
Mr. C. Scott Brannan
Vice President Administration & Controller
Danaher Corporation
1250 24th Street, N.W.
Washington, D.C. 20037
Dear Scott:
The Bank of Nova Scotia is pleased to extend to Danaher Corporation a
commitment to provide a $250 million 364-day revolving credit facility. The
terms and conditions of this facility are summarized on the attached indicative
term sheet and are subject to execution of definitive credit documentation.
Unless accepted, this commitment terminates on April 30, 1998.
Sincerely,
/s/ JAMES T. TRIMBLE
James T. Trimble
Accepted and Agreed:
DANAHER CORPORATION
By:
TITLE:
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DATE:
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ATTACHMENT
DANAHER CORPORATION
INDICATIVE TERMS AND CONDITIONS
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Borrower: Danaher Corporation
Bank: The Bank of Nova Scotia
Facility: 364-day revolving credit facility.
Purpose: General corporate, including potential
acquisitions.
Amount: Up to US$250,000,000
Maturity: 364 days from closing of credit documentation,
but no later than April 30, 1999.
Pricing: Facility Fee: 0.075% (7.5 bp) per annum, payable
on the commitment amount regardless of usage,
payable on the calendar quarter-end in arrears,
based upon a 360-day year. The Facility Fee
shall become effective beginning on the earlier
of: 1) the closing date, and 2) 30 days
following the acceptance of this commitment.
LIBOR Interest Rate: 0.125% (12.5 bp) for
interest periods of 1, 2 or 3 months, payable at
the end of each interest period, based upon a
360 day year.
Annual Administrative Agency Fee: to be
negotiated.
Financial Covenants: Identical to those found in the Borrower's
existing US$250,000,000 syndicated revolving
credit agreement dated September 7, 1990 and as
amended from time to time (the 'Existing Credit
Agreement').
Representations and
Warranties: Similar to those found in the Borrower's
Existing Credit Agreement, including but not
limited to:
o acquisitions are in the same general lines of
business in which the Borrower is currently
engaged.
Covenants: Similar to those found in the Borrower's
Existing Credit Agreement.
Events of Default: Similar to those found in the Borrower's
Existing Credit Agreement.
Miscellaneous: Similar provisions to those found in the
Borrower's Existing Credit Agreement.
Whether or not the transactions contemplated
hereby are consummated, the Borrower hereby
agrees to indemnify and hold harmless the Bank
and its respective directors, officers,
employees and affiliates (each, an 'indemnified
person') from and against any and all losses,
claims, damages, liabilities (or actions or
other proceedings commenced or threatened in
respect thereof) and expenses that arise out of,
result from or in any way relate to this
commitment letter or the provision of the
Facility, and to reimburse each indemnified per-
son, upon its demand, for any legal or other
expenses (including the allocated cost of
in-house counsel) incurred in connection with
in-
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vestigating, defending or participating in any
such loss, claim, damage, liability or action or
other proceeding (whether or not such in-
demnified person is a party to any action or
proceeding out of which any such expenses
arise), other than any of the foregoing claimed
by any indemnified person to the extent of such
person. The Bank shall not be responsible or
liable to the Borrower or any other person for
any consequential damages which may be alleged.
The obligation contained in this paragraph will
survive the closing of the Facility.
Whether or not any of the credit facilities
described herein is extended to the Borrower, or
a credit agreement or other document is
executed, the Borrower shall pay and reimburse
the Bank, immediately upon demand, for all costs
and out-of-pocket expenses (including the
allocated costs of in-house counsel) expended or
incurred by the Bank in connection with the
negotiation, preparation, administration
(including waivers and amendments), and
enforcement of his commitment letter and the
loan documents contemplated hereby.
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