<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO SECTION 14(D)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
AND
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
------------------------
EXIDE ELECTRONICS GROUP INC.
(NAME OF SUBJECT COMPANY)
BTR ACQUISITION CORPORATION
BTR PLC
(Bidders)
------------------------
COMMON STOCK, PAR VALUE $.01 PER SHARE
(INCLUDING THE ASSOCIATED RIGHTS)
(TITLE OF CLASS OF SECURITIES)
302052 6 10 5
(CUSIP NUMBER OF CLASS OF SECURITIES)
WARRANTS TO PURCHASE SHARES OF COMMON STOCK
(TITLE OF CLASS OF SECURITIES)
302052 6 11 3
(CUSIP NUMBER OF CLASS OF SECURITIES)
------------------------
DAVID J. STEVENS, ESQ.
BTR ACQUISITION CORPORATION
C/O BTR PLC
BTR HOUSE
CARLISLE PLACE
LONDON, SW1P 1BX
TELEPHONE: (0171) 821 3805
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON
AUTHORIZED TO RECEIVE NOTICES AND COMMUNICATIONS
ON BEHALF OF BIDDERS)
with a copy to:
W. LESLIE DUFFY, ESQ.
CAHILL GORDON & REINDEL
80 PINE STREET
NEW YORK, NEW YORK 10005-1702
TELEPHONE: (212) 701-3000
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CALCULATION OF FILING FEE
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Transaction Valuation* Amount of Filing Fee**
$367,444,977 $73,489
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* For purposes of calculating the filing fee only. This calculation assumes the
purchase of an aggregate of (i) 12,504,942 shares of Common Stock (including
the associated Rights) consisting of 10,423,440 shares of Common Stock,
894,502 shares of Common Stock issuable upon exercise of options, 1,067,000
shares of Common Stock issuable upon conversion of the Series G Convertible
Preferred Stock (including accrued and unpaid dividends) and 119,000 issuable
upon exercise of Employee Stock Purchase Plan rights, at a purchase price of
$29.00 per share of Common Stock and (ii) Warrants to purchase an aggregate
of 309,283 shares of Common Stock, at a purchase price of $15.525 per
Warrant.
** The amount of the filing fee, calculated in accordance with Rule 0-11(d) of
the Securities Exchange Act of 1934, as amended, equals 1/50th of one percent
of the value of the aggregate shares of Common Stock and Warrants purchased.
/ / Check box if any part of the fee is offset as provided by Rule
0-11(a)(2) and identify the filing with which the offsetting fee was previously
paid. Identify the previous filing by registration statement number, or the Form
or Schedule and date of its filing.
Amount Previously Paid: None
Form or Registration No.: Not Applicable
Filing Party: Not Applicable
Date Filed: Not Applicable
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2
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1. Names of Reporting Persons
I.R.S. Identification Nos. of Above Persons
BTR plc I.R.S. No. (Not Applicable)
2. Check the Appropriate Box if a Member of a Group
(See Instructions) (a) / /
(b) /x/
3. SEC Use Only
4. Sources of Funds (See Instructions)
WC
5. Check if Disclosure of Legal Proceedings is
Required Pursuant to Items 2(e) or 2(f) / /
6. Citizenship or Place of Organization
United Kingdom
7. Aggregate Amount Beneficially Owned by Each
Reporting Person
2,273,033*
8. Check if the Aggregate Amount in Row (7)
Excludes Certain Shares (See Instructions)
9. Percent of Class Represented by Amount in Row (7) / /
19.9%
10. Type of Reporting Person (See Instructions)
HC and CO
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* On October 16, 1997, BTR Acquisition Corporation (the 'Purchaser') and BTR plc
('Parent') entered into a Stockholder Agreement (the 'Stockholder Agreement')
with certain shareholders (the 'Four Shareholders') of Exide Electronics
Group, Inc. (the 'Company'), pursuant to which, upon the terms set forth
therein, the Four Shareholders have agreed to tender, in accordance with the
terms of the tender offer described in this statement (the 'Offer'), 2,273,033
shares of common stock, par value $.01 per share (the 'Common Stock'),
(including shares of Common Stock issuable upon conversion of the Series G
Convertible Preferred Stock, par value $.01 per share (the 'Preferred
Stock')), owned (beneficially or of record) by the
(Footnote continued on next page.)
3
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1. Names of Reporting Persons
I.R.S. Identification Nos. of Above Persons
BTR Acquisition Corporation I.R.S. No. (Pending)
2. Check the Appropriate Box if a Member of a Group
(See Instructions) (a) / /
(b) /x/
3. SEC Use Only
4. Sources of Funds (See Instructions)
AF
5. Check 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
2,273,033*
8. Check if the Aggregate Amount in Row (7)
Excludes Certain Shares (See Instructions) / /
9. Percent of Class Represented by Amount in Row (7)
19.9%
10. Type of Reporting Person (See Instructions)
CO
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(Footnote continued from previous page.)
Four Shareholders. In addition, the Four Shareholders have granted an option
to purchase, and an irrevocable proxy with respect to, such Shares to Parent
and the Purchaser which Shares are reflected in Rows 7 and 9 in each of the
tables above. The Stockholder Agreement is described in more detail in Section
10 of the Offer to Purchase dated October 20, 1997.
4
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This Schedule 14D-1 Tender Offer Statement (this 'Statement') relates to
the offer by BTR Acquisition Corporation, a Delaware corporation (the
'Purchaser'), and an indirect wholly owned subsidiary of BTR plc, an English
public limited company ('the Parent'), to purchase all outstanding shares of
common stock, par value $.01 per share (the 'Common Stock'), and all outstanding
warrants to purchase shares of Common Stock at $13.475 per share of Common Stock
(the 'Warrants') of Exide Electronics Group, Inc., a Delaware corporation (the
'Company'), at a price of $29.00 per share of Common Stock and $15.525 per
Warrant to purchase one share of Common Stock, in each case 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 October 20, 1997
(the 'Offer to Purchase') and in the related Letter of Transmittal (which, as
amended from time to time, together constitute the 'Offer'). Copies of the Offer
to Purchase and the Letter of Transmittal are annexed hereto as Exhibits (a)(1)
and (a)(2), respectively.
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is Exide Electronics Group, Inc. a
Delaware corporation. The address of the Company's principal executive offices
is 8609 Six Forks Road, Raleigh, North Carolina 27615.
(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 on Shares') of the Offer to Purchase is incorporated herein by
reference.
ITEM 2. IDENTITY AND BACKGROUND.
This Statement is being filed on behalf of Parent and the Purchaser for
purposes of the Schedule 14D-1. The information set forth in the Introduction,
Section 8 ('Certain Information Concerning Parent and Purchaser') and Schedule I
('Directors and Executive Officers of Parent and Purchaser') of the Offer to
Purchase is incorporated herein by reference.
(e)-(f) During the last five years, neither Parent nor the Purchaser, nor,
to the best knowledge of Parent and the Purchaser, the persons listed in
Schedule I ('Directors and Executive Officers of Parent and Purchaser') of the
Offer to Purchase, has been (i) convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors) or (ii) 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, Sections 8 ('Certain
Information Concerning Parent and Purchaser'), 9 ('Background of the Offer') and
10 ('The Offer and Merger; Merger Agreement; Stockholder Agreement') and
Schedule I ('Directors and Executive Officers of Parent and Purchaser') 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 12 ('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 BIDDER.
(a)-(b) The information set forth in the Introduction, and Sections 9
('Background of the Offer'), 10 ('The Offer and Merger; Merger Agreement;
Stockholder Agreement'), and 11 ('Purpose of the Offer; Plans for the Company')
of the Offer to Purchase is incorporated herein by reference.
5
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(c) The information set forth in Section 10 ('The Offer and Merger; Merger
Agreement; Stockholder Agreement') of the Offer to Purchase is incorporated
herein by reference.
(d)-(e) The information set forth in Sections 9 ('Background of the
Offer'), 10 ('The Offer and Merger; Merger Agreement; Stockholder Agreement'),
11 ('Purpose of the Offer; Plans for the Company') and 14 ('Dividends and
Distributions') of the Offer to Purchase is incorporated herein by reference.
(f)-(g) The information set forth in Sections 11 ('Purpose of the Offer;
Plans for the Company') and 13 ('Effect of the Offer on the Market for the
Shares') of the Offer to Purchase is incorporated herein by reference.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a)-(b) The information set forth in the Introduction, Sections 8 ('Certain
Information Concerning Parent and Purchaser') and 9 ('Background of the Offer')
of the Offer to Purchase and the Stockholder Agreement, a copy of which is
attached hereto as Exhibit (c)(1) is incorporated herein by reference.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE SUBJECT COMPANY'S SECURITIES.
The information set forth in the Introduction, and Sections 9 ('Background
of the Offer') and 10 ('The Offer and Merger; Merger Agreement; Stockholder
Agreement') of the Offer to Purchase and the Stockholder Agreement, a copy of
which is attached hereto as Exhibit (c)(1) is incorporated herein by reference.
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in the Introduction and Sections 9 ('Background
of the Offer') and 17 ('Fees and Expenses') of the Offer to Purchase is
incorporated herein by reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
Not applicable.
ITEM 10. ADDITIONAL INFORMATION.
(a) The information set forth in Sections 7 ('Certain Information
Concerning the Company'), 8 ('Certain Information Concerning Parent and
Purchaser'), 10 ('The Offer and Merger; Merger Agreement; Stockholder
Agreement') and 11 ('Purpose of the Offer; Plans for the Company') of the Offer
to Purchase is incorporated herein by reference.
(b)-(c), (e) The information set forth in Sections 10 ('The Offer and
Merger; Merger Agreement; Stockholder Agreement') and 16 ('Certain Legal
Matters') of the Offer to Purchase is incorporated herein by reference.
(d) The information set forth in Sections 10 ('The Offer and Merger; Merger
Agreement; Stockholder Agreement'), 11 ('Purpose of the Offer; Plans for the
Company') and 13 ('Effect of the Offer on the Market for the Shares; Exchange
Act Registration; Margin Regulations') of the Offer to Purchase is incorporated
herein by reference.
(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.
6
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ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
<TABLE>
<S> <C>
(a)(1) -- Offer to Purchase dated October 20, 1997.
(a)(2) -- Letter of Transmittal.
(a)(3) -- Notice of Guaranteed Delivery.
(a)(4) -- Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees.
(a)(5) -- Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust Companies and Other
Nominees.
(a)(6) -- Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9.
(a)(7) -- Text of Joint Press Release issued by Parent and the Company on October 16, 1997.
(a)(8) -- Form of Summary Advertisement dated October 20, 1997.
(b) -- Not applicable.
(c)(1) -- Stockholder Agreement between Parent, the Purchaser, Conrad A. Plimpton Trust, James A.
Risher, Lance L. Knox 1990 Trust, and Fiskars Oy Ab dated October 16, 1997.
(c)(2) -- Agreement and Plan of Merger among the Parent, the Purchaser and the Company dated October 16,
1997.
(d) -- Not applicable.
(e) -- Not applicable.
(f) -- Not applicable.
</TABLE>
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SIGNATURE
AFTER DUE INQUIRY AND TO THE BEST OF ITS KNOWLEDGE AND BELIEF, THE
UNDERSIGNED CERTIFIES THAT THE INFORMATION SET FORTH IN THIS STATEMENT IS TRUE,
COMPLETE AND CORRECT.
Dated: October 20, 1997
BTR ACQUISITION CORPORATION
By: /s/ David J. Stevens
__________________________________
NAME: David J. Stevens
Title: Director
BTR PLC
By: /s/ David J. Stevens
__________________________________
NAME: David J. Stevens
Title: General Counsel
8
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EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT SEQUENTIAL
NUMBER DESCRIPTION PAGE NO.
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<S> <C> <C>
(a)(1) -- Offer to Purchase dated October 20, 1997.
(a)(2) -- Letter of Transmittal.
(a)(3) -- Notice of Guaranteed Delivery.
(a)(4) -- Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees.
(a)(5) -- Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust Companies and
Other Nominees.
(a)(6) -- Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9.
(a)(7) -- Text of Joint Press Release issued by Parent and the Company on October 16, 1997.
(a)(8) -- Form of Summary Advertisement dated October 20, 1997.
(b) -- Not applicable.
(c)(1) -- Stockholder Agreement between Parent, the Purchaser, Conrad A. Plimpton Trust, James A.
Risher, Lance L. Knox 1990 Trust and Fiskars Oy Ab dated October 16, 1997.
(c)(2) -- Agreement and Plan of Merger among the Parent, the Purchaser and the Company dated
October 16, 1997.
(d) -- Not applicable.
(e) -- Not applicable.
(f) -- Not applicable.
</TABLE>
9
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OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
(INCLUDING THE ASSOCIATED RIGHTS)
AND
ALL OUTSTANDING WARRANTS TO PURCHASE SHARES OF COMMON STOCK
OF
EXIDE ELECTRONICS GROUP, INC.
AT
$29.00 NET PER SHARE OF COMMON STOCK
AND
$15.525 NET PER WARRANT
BY
BTR ACQUISITION CORPORATION
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
BTR PLC
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON MONDAY, NOVEMBER 17, 1997, UNLESS THE OFFER IS EXTENDED.
THE OFFER IS BEING MADE PURSUANT TO AN AGREEMENT AND PLAN OF MERGER, DATED
AS OF OCTOBER 16, 1997 (THE 'MERGER AGREEMENT'), BY AND AMONG BTR PLC
('PARENT'), BTR ACQUISITION CORPORATION (THE 'PURCHASER') AND EXIDE
ELECTRONICS GROUP, INC. (THE 'COMPANY'). THE BOARD OF DIRECTORS OF THE COMPANY
HAS UNANIMOUSLY APPROVED THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED
THEREBY, INCLUDING THE OFFER AND THE MERGER, AND DETERMINED THAT THE OFFER AND
MERGER ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE COMPANY AND ITS
SHAREHOLDERS. THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY RECOMMENDS
THAT SHAREHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES (INCLUDING WARRANTS)
PURSUANT TO THE OFFER.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (I) THERE BEING VALIDLY
TENDERED A NUMBER OF SHARES WHICH WOULD REPRESENT AT LEAST 80% OF THE SHARES OF
COMMON STOCK OUTSTANDING ON A FULLY DILUTED BASIS ON THE DATE OF PURCHASE (THE
'MINIMUM CONDITION') AND (II) ALL APPLICABLE WAITING PERIODS UNDER THE
HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED, AND THE
REGULATIONS THEREUNDER (THE 'HSR ACT'), AND UNDER CERTAIN OTHER APPLICABLE
FOREIGN ANTITRUST STATUTES HAVING EXPIRED OR TERMINATED. THE OFFER IS ALSO
SUBJECT TO OTHER TERMS AND CONDITIONS DESCRIBED IN SECTION 15. THE OFFER IS NOT
CONDITIONED ON THE RECEIPT OF FINANCING. THE PARTIES HAVE ALSO AGREED THAT IF
THE MINIMUM CONDITION IS NOT ACHIEVED, THEY WILL PURSUE A CASH MERGER, AT THE
SAME PRICE, WHICH WOULD REQUIRE THE VOTE OF A MAJORITY OF THE COMPANY'S
OUTSTANDING VOTING STOCK.
------------------------
IMPORTANT
Any Shareholder desiring to tender all or any portion of such Shareholder's
Shares should either (i) complete and sign the Letter of Transmittal (or a
facsimile thereof) in accordance with the instructions in the Letter of
Transmittal, have such Shareholder's signature thereon guaranteed if required by
Instruction 1 to the Letter of Transmittal, mail or deliver the Letter of
Transmittal (or such facsimile) and any other required documents to the
Depositary and either deliver the certificates for such Shares to the Depositary
along with the Letter of Transmittal (or facsimile) or deliver such Shares
pursuant to the procedure for book-entry transfer as set forth in Section 2,
hereof, or (ii) request such Shareholder's broker, dealer, commercial bank,
trust company or other nominee to effect the transaction for such Shareholder. A
Shareholder having Shares registered in the name of a broker, dealer, commercial
bank, trust company or other nominee must contact such broker, dealer,
commercial bank, trust company or other nominee if such Shareholder desires to
tender such Shares. As used herein, Shares means shares of Common Stock and the
Warrants, and Shareholders means holders of Shares, unless the context indicates
otherwise.
References to shares of Common Stock include references to the associated
Rights, unless the context indicates otherwise. In order validly to tender
shares of Common Stock, a Shareholder must tender the associated Rights. Unless
and until the Distribution Date of the Rights, the tender of a share of Common
Stock will constitute the tender of the associated Rights. See Section 2.
If a Shareholder desires to tender Shares and such Shareholder's
certificates for Shares are not immediately available or the procedure for
book-entry transfer cannot be completed on a timely basis, or time will not
permit all required documents to reach the Depositary prior to the Expiration
Date, such Shareholder's tender may be effected by following the procedure for
guaranteed delivery set forth in Section 2.
Questions and requests for assistance may be directed to Wasserstein Perella
& Co., Inc., the Dealer Manager, or MacKenzie Partners, Inc., the Information
Agent, at their respective addresses and telephone numbers set forth on the back
cover of this Offer to Purchase. Additional copies of this Offer to Purchase,
the Letter of Transmittal, the Notice of Guaranteed Delivery and other related
materials may be obtained from the Information Agent or from brokers, dealers,
commercial banks, trust companies and other nominees.
------------------------
The Dealer Manager for the Offer is:
WASSERSTEIN PERELLA & CO., INC.
October 20, 1997
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C> <C>
INTRODUCTION.......................................................................................... 1
SECTION 1. TERMS OF THE OFFER..................................................................... 3
SECTION 3. PROCEDURES FOR TENDERING SHARES........................................................ 4
SECTION 3. WITHDRAWAL RIGHTS...................................................................... 7
SECTION 4. ACCEPTANCE FOR PAYMENT AND PAYMENT..................................................... 7
SECTION 5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES................................................ 8
SECTION 6. PRICE RANGE OF SHARES; DIVIDENDS ON THE SHARES......................................... 9
SECTION 7. CERTAIN INFORMATION CONCERNING THE COMPANY............................................. 10
SECTION 8. CERTAIN INFORMATION CONCERNING PARENT AND THE PURCHASER................................ 12
SECTION 9. BACKGROUND OF THE OFFER................................................................ 13
SECTION 10. THE MERGER AGREEMENT; THE STOCKHOLDER AGREEMENT........................................ 14
SECTION 11. PURPOSE OF THE OFFER; PLANS FOR THE COMPANY............................................ 21
SECTION 12. SOURCE AND AMOUNT OF FUNDS............................................................. 22
SECTION 13. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES; EXCHANGE ACT REGISTRATION; MARGIN
REGULATIONS.......................................................................... 22
SECTION 14. DIVIDENDS AND DISTRIBUTIONS............................................................ 23
SECTION 15. CERTAIN CONDITIONS OF THE OFFER........................................................ 23
SECTION 16. CERTAIN LEGAL MATTERS.................................................................. 24
SECTION 17. FEES AND EXPENSES...................................................................... 26
SECTION 18. MISCELLANEOUS.......................................................................... 27
SCHEDULE I. DIRECTORS AND EXECUTIVE OFFICERS OF PARENT AND PURCHASER............................... S-1
</TABLE>
i
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To the Holders of Shares of
Exide Electronics Group, Inc.:
INTRODUCTION
The Purchaser, a Delaware corporation and an indirect wholly owned
subsidiary of Parent, an English public limited company, hereby offers to
purchase all outstanding shares of common stock, par value $.01 per share (the
'Common Stock'), and all outstanding warrants to purchase shares of Common Stock
at $13.475 per share of Common Stock (the 'Warrants') of the Company, a Delaware
corporation, at a price of $29.00 per share of Common Stock (the 'Stock Price')
and $15.525 per Warrant to purchase one share of Common Stock (the 'Warrant
Price'), in each case net to the seller in cash, without interest thereon (the
'Offer Price'), upon the terms and subject to the conditions set forth in this
Offer to Purchase and in the related Letter of Transmittal (which, as amended
from time to time, together constitute the 'Offer'). Unless the context
indicates otherwise, as used herein, Shares shall mean shares of Common Stock
and Warrants, and Shareholders shall mean holders of Shares. Unless the context
indicates otherwise, all references to shares of Common Stock shall include the
associated Rights issued pursuant to the Rights Agreement, dated as of November
25, 1992, as amended (the 'Rights Agreement'), between the Company and First
Union National Bank of North Carolina, as Rights Agent.
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 pursuant to the
Offer. However, any tendering Shareholder or other payee who fails to complete
and sign the Substitute Form W-9 that is included in the Letter of Transmittal
may be subject to a required backup federal income tax withholding of 31% of the
gross proceeds payable to such Shareholder or other payee pursuant to the Offer.
See Section 2. The Purchaser will pay all charges and expenses of Wasserstein
Perella & Co., Inc. ('Wasserstein Perella'), as Dealer Manager (in such
capacity, the 'Dealer Manager'), ChaseMellon Shareholder Services, L.L.C., as
Depositary (the 'Depositary'), and MacKenzie Partners, Inc., as Information
Agent (the 'Information Agent'), incurred in connection with the Offer.
The Offer is being made pursuant to the Merger Agreement which provides
that the Purchaser will commence the Offer and that upon the terms and subject
to the prior satisfaction or waiver of the conditions of the Offer (including
the Minimum Condition (as defined below)), the Purchaser will purchase all
shares validly tendered pursuant to the Offer. The Merger Agreement also
provides that following consummation of the Offer, the Purchaser will merge with
and into the Company (the 'Merger'). Pursuant to the terms of the Certificate of
Incorporation of the Company, the Merger will require the affirmative vote of
holders of 80% of the outstanding voting stock. Parent and the Company intend to
proceed simultaneously with an alternative to this two-step transaction in which
the Company pursues a cash merger at the Offer Price (the 'One-Step
Transaction'). The 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 Transaction.
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE MERGER
AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING THE OFFER AND THE
MERGER, AND DETERMINED THAT THE OFFER AND MERGER ARE FAIR TO, AND IN THE BEST
INTERESTS OF, THE COMPANY AND ITS SHAREHOLDERS. THE BOARD OF DIRECTORS OF THE
COMPANY UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS ACCEPT THE OFFER AND TENDER
THEIR SHARES (INCLUDING WARRANTS) PURSUANT TO THE OFFER.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (I) THERE BEING VALIDLY
TENDERED A NUMBER OF SHARES WHICH WOULD REPRESENT AT LEAST 80% OF THE SHARES OF
COMMON STOCK OUTSTANDING ON A FULLY DILUTED BASIS ON THE DATE OF PURCHASE AND
(II) ALL APPLICABLE WAITING PERIODS UNDER THE HSR ACT AND UNDER CERTAIN OTHER
APPLICABLE FOREIGN ANTITRUST STATUTES HAVING EXPIRED OR TERMINATED. THE OFFER IS
ALSO SUBJECT TO OTHER TERMS AND CONDITIONS DESCRIBED IN SECTION 15. THE OFFER IS
NOT CONDITIONED ON THE RECEIPT OF FINANCING.
At the effective time of the Merger (the 'Effective Time'), each share of
Common Stock issued and outstanding immediately prior to the Effective Time
(other than shares held by Parent, the Purchaser, any wholly owned subsidiary of
Parent or the Purchaser, in the treasury of the Company or by any wholly owned
subsidiary of the Company, or Shareholders that perfect their dissenter's rights
under Delaware law) will be converted into
1
<PAGE>
the right to receive the Stock Price and each holder of a Warrant which has not
been purchased by Parent in the Offer, shall receive in respect to each Common
Share that may have been acquired upon exercise of such Warrant an amount equal
to the amount (if any) by which the Stock Price applicable to one share of
Common Stock exceeds the exercise price per share of such Warrant. The Merger
Agreement is more fully described in Section 10.
The Merger Agreement provides that, except as provided therein, following
satisfaction or waiver, if permissible, of the conditions to the Offer and
subject to the terms and conditions thereof, the Purchaser will accept for
payment, in accordance with the terms of the Offer, all Shares validly tendered
pursuant to the Offer and not withdrawn as soon as it is permitted to do so
pursuant to applicable law. The Offer will not remain open following the time
Shares are accepted for payment.
Under the General Corporation Law of the State of Delaware (the 'DGCL'), if
the Purchaser acquires, pursuant to the Offer or otherwise, at least 90% of the
outstanding shares of each outstanding class of capital stock of the Company,
the Purchaser will be able to approve the Merger without a vote of the
Shareholders. In such event, the Parent, the Purchaser, and the Company have
agreed in the Merger Agreement to take, at the request of the Purchaser and
subject to the satisfaction of the conditions set forth in the Merger Agreement,
all necessary and appropriate actions to cause the Merger to become effective as
soon as reasonably practicable after the acquisition of such 90% without a
meeting of the Shareholders, in accordance with Section 253 of the DGCL. If,
however, the Purchaser does not acquire at least 90% of the outstanding shares
of each outstanding class of capital stock of the Company pursuant to the Offer
or otherwise and a vote of the Shareholders is required under the DGCL, a
significantly longer period of time would be required to effect the Merger. In
the Merger Agreement, Parent, the Purchaser, and the Company have agreed that if
immediately prior to the scheduled Expiration Date (as hereinafter defined) the
Shares tendered pursuant to the Offer are less than 90% of the outstanding
shares of each outstanding class of capital stock of the Company, Purchaser may
extend the Offer for a period or periods aggregating up to ten business days
from the then applicable Expiration Date (as hereinafter defined) and,
thereafter, with the written consent of the Company.
Concurrently with the execution of the Merger Agreement, Parent and the the
Purchaser entered into a Stockholder Agreement (the 'Stockholder Agreement')
with certain Shareholders (the 'Four Shareholders'). Pursuant to the Stockholder
Agreement, upon the terms set forth therein, the Four Shareholders have agreed
to tender, in accordance with the terms of the Offer, 2,273,033 Shares
(including Shares issuable upon conversion of Series G Convertible Preferred
Stock, par value $.01 per share (the 'Preferred Stock')) owned (beneficially or
of record) by such Four Shareholders. The Shares subject to the Stockholder
Agreement represent approximately 19.9% of the shares of the outstanding Common
Stock. See Section 10.
The Company has represented and warranted that, as of October 15, 1997,
there were (a) 10,745,802 shares of Common Stock issued, of which 322,462 were
owned by the Company, (b) 1,000,000 shares of Preferred Stock outstanding, (c)
309,283 shares of Common Stock reserved for issuance upon exercise of Warrants,
(d) 894,502 shares of Common Stock reserved for issuance pursuant to options and
(e) 119,000 shares of Common reserved for issuance upon exercise of Employee
Stock Purchase Plan, as amended (the 'ESPP') rights. Each share of Preferred
Stock is convertible into a number of shares of Common Stock based upon a share
for share exchange together with shares issuable for accrued and unpaid
dividends and is entitled to a vote equal to the number of shares of Common
Stock into which such share of Preferred Stock is convertible. The Preferred
Stock votes together with the Common Stock as a single class. The Merger
Agreement provides, among other things, that the Company will not, without the
prior written consent of the Purchaser, issue any additional Shares (except on
the exercise of outstanding options, Warrants, Preferred Stock and employee
stock purchase rights).
Based on the foregoing and assuming no additional Shares (or options,
warrants or rights exercisable for, or securities convertible into, Shares) have
been issued other than as set forth above (other than Shares issued pursuant to
the exercise of the stock options, Warrants, Preferred Stock and employee
purchase stock rights referred to above), if the Purchaser were to purchase
approximately 10,251,000 Shares pursuant to the Offer (including the 2,273,033
Shares held by the Four Shareholders who have previously agreed to tender such
shares), the Minimum Condition would be satisfied.
THIS OFFER TO PURCHASE AND THE LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER.
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SECTION 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 validly
tendered prior to the Expiration Date. The term 'Initial Expiration Date' means
12:00 midnight, New York City time, on Monday, November 17, 1997, unless and
until the Purchaser, in its sole discretion, shall have extended the period of
time during which the Offer is open, in which event the term 'Expiration Date'
shall mean the latest time and date at which the Offer, as so extended by the
Purchaser, will expire.
The Offer is conditioned upon, among other things, the satisfaction of the
Minimum Condition and the expiration or termination of all waiting periods
imposed by the HSR Act and under certain other applicable foreign antitrust
statutes. See Section 15. If such conditions are not satisfied 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 and terminate the Offer,
subject to the terms of the Merger Agreement, (ii) waive any of the 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 Securities and Exchange Commission (the 'Commission'),
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 will have been tendered during the period or periods for which
the Offer is extended. The Merger Agreement provides that if the conditions to
the Offer are not satisfied, or waived by the Parent, as of the Initial
Expiration Date (or any subsequently scheduled expiration date), Parent will
extend the Offer from time to time for the shortest time periods which it
reasonably believes are necessary until the consummation of the Offer.
Subject to the Merger Agreement and the applicable rules and regulations of
the Commission, the Purchaser reserves the right, in its sole discretion, at any
time and from time to time, and regardless of whether or not any of the events
set forth in Section 15 hereof shall have occurred or shall have been determined
by the Purchaser to have occurred, to (a) extend the period of time during which
the Offer is open, and thereby delay acceptance for payment of any Shares, by
giving oral or written notice of such extension and delay to the Depositary or
(b) waive or reduce any condition or amend the Offer in any other respect by
giving oral or written notice of such waiver or amendment to the Depositary.
During any such extension, all Shares previously tendered and not properly
withdrawn will remain subject to the Offer, subject to the right of a tendering
Shareholder to withdraw such Shareholder's Shares. See Section 3. Under no
circumstances will interest be paid on the purchase price for tendered Shares,
whether or not the Purchaser exercises its right to extend the Offer. Without
the prior written consent of the Company, the Purchaser will not decrease the
Offer Price or change the form of consideration payable in the Offer, decrease
the number of Shares or Warrants sought to be purchased in the Offer, change the
conditions to the Offer set forth in Section 15 of this Offer to Purchase, waive
or reduce the Minimum Condition to lower than 50% of the fully diluted Common
Shares, impose additional conditions to the Offer or amend any other term of the
Offer, provided, however, that if all the conditions to the Offer are then
satisfied or waived, Parent, in order to permit the Merger to become effective
without a meeting of the Shareholders in accordance with Section 253 of the
DGCL, shall have the right (i) to extend the Offer for a period or periods
aggregating up to ten business days from the then effective Expiration Date,
provided, that prior to any such extension Parent and the Purchaser shall
deliver to the Company a written notice that all conditions set forth in Section
15 of this Offer to Purchase are permanently deemed to be satisfied except for a
failure of the Minimum Condition to occur or any other such conditions the
failure of which results from an intentional breach thereof by the Company, and
(ii) thereafter to extend the Offer with the prior written consent of the
Company and, provided further, that Parent may extend the Offer to the extent
required by law or regulation.
If by the Expiration Date any or all of the conditions to the Offer have
not been satisfied or waived, the Purchaser reserves the right (but shall not be
obligated), subject to the Merger Agreement and the applicable rules and
regulations of the Commission, to (a) terminate the Offer and not accept for
payment or pay for any Shares and return all tendered Shares to tendering
Shareholders, (b) waive or reduce all the unsatisfied conditions and accept for
payment and pay for all Shares validly tendered prior to the Expiration Date,
(c) extend the Offer and, subject to the right of Shareholders to withdraw
Shares until the Expiration Date, retain the Shares that have been tendered
during the period or periods for which the Offer is extended or (d) amend the
Offer.
The rights reserved by the Purchaser in the two preceding paragraphs are in
addition to the Purchaser's rights pursuant to Section 15. There can be no
assurance that the Purchaser will exercise its right to extend the Offer. Any
extension, amendment, delay, waiver or termination will be followed as promptly
as practicable by
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public announcement. In the case of an extension, Rule 14e-l(d) under the
Securities Exchange Act of 1934, as amended (the 'Exchange Act'), requires that
the announcement be issued no later than 9:00 a.m., New York City time, on the
next business day after the previously scheduled Expiration Date, or the first
opening of the Nasdaq National Market on the next business day after the
previously scheduled Expiration Date, in accordance with the public announcement
requirements of Rule 14e-1 under the Exchange Act. Subject to applicable law
(including Rules 14d-4(c) and 14d-6(d) under the Exchange Act, which require
that any material change in the information published, sent or given to
Shareholders in connection with the Offer be promptly disseminated to
Shareholders in a manner reasonably designed to inform Shareholders of such
change), and without limiting the manner in which the Purchaser may choose to
make any public announcement, the Purchaser will not have any obligation to
publish, advertise or otherwise communicate any such public announcement other
than by making a release to the Dow Jones News Service. As used in this Offer to
Purchase, 'business day' has the meaning set forth in Rule 14d-1 under the
Exchange Act.
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,
the Purchaser will extend the Offer and disseminate additional tender offer
materials to the extent required by Rules 14d-4(c), 14d-6(d) and 14e-1 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 the percentage of
securities sought, will depend upon the facts and circumstances then existing,
including the relative materiality of the changed terms. For information with
respect to a change in price or a change in the percentage of securities sought,
a minimum period of 10 business days is generally required to allow for adequate
dissemination to Shareholders and investor response. If the Purchaser should
decide to change the price offered or the percentage of securities sought of any
of the Common Stock or Warrants, such change will be applicable to all
Shareholders who hold any of such respective class of securities.
The Merger Agreement provides that the Company will supply the Parent with
the Company's Shareholder lists and security position listings for the purpose
of disseminating the Offer to holders of Shares. This Offer to Purchase, the
related Letter of Transmittal and other relevant materials will be mailed to
record holders of Shares, and will be furnished to brokers, dealers, commercial
banks, trust companies and similar persons whose names, or the names of whose
nominees, appear on the Shareholder lists, or, if applicable, who are listed as
participants in a clearing agency's security position listing, for subsequent
transmittal to beneficial owners of Shares, by the Purchaser following receipt
of such lists or listings from the Company, or by the Company if it so elects.
SECTION 2. PROCEDURES FOR TENDERING SHARES
Valid Tender. For a Shareholder validly to tender Shares pursuant to the
Offer, either (a) a properly completed and duly executed Letter of Transmittal
(or facsimile thereof), together with any required signature guarantees, or in
the case of a book-entry transfer, an Agent's Message (as defined below), and
any other required documents, must be received by the Depositary at one of its
addresses set forth on the back cover of this Offer to Purchase prior to the
Expiration Date and either (i) certificates for tendered Shares ('Share
Certificates') must be received by the Depositary at one of such addresses or
(ii) such Shares must be delivered pursuant to the procedures for book-entry
transfer set forth below (and a Book-Entry Confirmation (as defined below)
received by the Depositary), in each case prior to the Expiration Date, or (b)
the tendering Shareholder must comply with the guaranteed delivery procedures
set forth below.
Book-Entry Transfer. The Depositary will establish accounts with respect
to the Common Stock at the Depositary Trust Company ('DTC') and the Philadelphia
Depository Trust Company (collectively, the 'Book-Entry Transfer Facilities')
for purposes of the Offer. Any financial institution that is a participant in
any of the Book-Entry Transfer Facilities' systems may make book-entry delivery
of Shares by causing a Book-Entry Transfer Facility to transfer such Shares into
the Depositary's account in accordance with such Book-Entry Transfer Facility's
procedures for such transfer. However, although delivery of Shares may be
effected through book-entry transfer into the Depositary's account at a
Book-Entry Transfer Facility, the Letter of Transmittal (or facsimile thereof),
properly completed and duly executed, with any required signature guarantees, or
an Agent's Message, and any other required documents, must, in any case, be
transmitted to, and received by, the Depositary at one of its addresses set
forth on the back cover of this Offer to Purchase prior to the Expiration Date,
or the tendering Shareholder must comply with the guaranteed delivery procedures
described below. The confirmation of a book-entry transfer of Shares into the
Depositary's account at a Book-Entry Transfer Facility as described above is
referred to herein as a 'Book-Entry Confirmation.'
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DELIVERY OF DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE WITH
SUCH BOOK-ENTRY TRANSFER FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY TO
THE DEPOSITARY.
The term 'Agent's Message' means a message transmitted by electronic means
by a Book-Entry Transfer Facility to, and received by, the Depositary and
forming a part of a Book-Entry Confirmation, which states that such Book-Entry
Transfer Facility has received an express acknowledgment from the participant in
such 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 such participant.
Participants in DTC may tender their Shares in accordance with DTC's
Automated Tender Offer Program ('ATOP'), to the extent it is available to such
participants for the Shares they wish to tender. A Shareholder tendering through
ATOP must expressly acknowledge that the Shareholder has received and agreed to
be bound by the Letter of Transmittal and that the Letter of Transmittal may be
enforced against such Shareholder.
If Rights Certificates have been distributed to holders of Shares, such
holders are required to tender, or (if such procedure is available) make
book-entry transfer of, Rights Certificates representing a number of Rights
equal to the number of Shares being tendered in order to effect a valid tender
of such Shares.
Warrants may not be tendered by book-entry transfer or ATOP. Neither
Book-Entry Confirmations, Agent's Messages nor ATOP procedures are available
with respect to Warrants.
THE METHOD OF DELIVERY OF SHARE CERTIFICATES, THE LETTER OF TRANSMITTAL AND
ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY TRANSFER
FACILITY, IS AT THE ELECTION AND RISK OF THE TENDERING SHAREHOLDER. SHARE
CERTIFICATES, THE LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS WILL BE
DEEMED DELIVERED ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY (INCLUDING, IN
THE CASE OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION). IF DELIVERY IS
BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS
RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY
DELIVERY.
Signature Guarantees. No signature guarantee is required on the Letter of
Transmittal (a) if the Letter of Transmittal is signed by the registered holder
(which term, for purposes of this Section, includes any participant in any of
the Book-Entry Transfer Facilities' systems whose name appears on a security
position listing as the owner of the Shares) of Shares tendered therewith and
such registered holder has not completed either the box entitled 'Special
Delivery Instructions' or the box entitled 'Special Payment Instructions' on the
Letter of Transmittal or (b) if such Shares are tendered for the account of a
member firm of a national securities exchange registered with the Securities and
Exchange Commission or of the National Association of Securities Dealers, Inc.,
or a commercial bank or trust company having an office or correspondent in the
United States (an 'Eligible Institution'). In all other cases, all signatures on
the Letter of Transmittal must be guaranteed by an Eligible Institution. See
Instructions 1 and 5 to the Letter of Transmittal. If Share Certificates are
registered in the name of a person other than the signer of the Letter of
Transmittal, or if payment is to be made or Share Certificates for Shares not
tendered or not accepted for payment are to be returned to a person other than
the registered holder of the Share Certificates surrendered, the tendered Share
Certificates must be endorsed or accompanied by appropriate stock powers, in
either case signed exactly as the name or names of the registered holders appear
on the Share Certificates, with the signatures on the Share Certificates or
stock powers guaranteed as described above. See Instructions 1 and 5 to the
Letter of Transmittal.
Guaranteed Delivery. If a Shareholder desires to tender Shares pursuant to
the Offer and such Shareholder's Share Certificates are not immediately
available or the procedure for book-entry transfer cannot be completed on a
timely basis or time will not permit all required documents to reach the
Depositary prior to the Expiration Date, such Shareholder's tender may be
effected if all the following conditions are met:
(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, is received
by the Depositary, as provided below, prior to the Expiration Date; and
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(iii) the Share Certificates and Rights Certificates, representing all
tendered Shares, in proper form for transfer (or a Book-Entry Confirmation
with respect to all such Shares), together with a properly completed and
duly executed Letter of Transmittal (or facsimile thereof), with any
required signature guarantees, or, in the case of a book-entry transfer, an
Agent's Message, and any other required documents are received by the
Depositary within three trading days after the date of execution of such
Notice of Guaranteed Delivery, or in the case of the Rights Certificates,
three business days after the date Rights Certificates are distributed to
Shareholders. A 'trading day' is any day on which the New York Stock
Exchange (the 'NYSE') is open for business.
The Notice of Guaranteed Delivery may be delivered by hand to the
Depositary or transmitted by telegram, telex, facsimile transmission or mail to
the Depositary and must include a guarantee by an Eligible Institution in the
form set forth in such Notice of Guaranteed Delivery.
Notwithstanding any other provision hereof, payment for Shares accepted for
payment pursuant to the Offer will in all cases be made only after timely
receipt by the Depositary of (a) Share Certificates for (or a timely Book-Entry
Confirmation with respect to) such Shares and if the Distribution Date has
occurred, Rights Certificates for (or a timely Book-Entry Confirmation, if
available, with respect to) such Rights (unless the Purchaser elects, in its
sole discretion, to make payment for such Shares pending receipt of the Rights
Certificates for, or a Book-Entry Confirmation, if available, with respect to,
such Rights), (b) a Letter of Transmittal (or facsimile thereof), properly
completed and duly executed, with any required signature guarantees, or, in the
case of a book-entry transfer, an Agent's Message, and (c) any other documents
required by the Letter of Transmittal. Accordingly, tendering Shareholders may
be paid at different times depending upon when Share Certificates (or Rights
Certificates) or Book-Entry Confirmations with respect to Shares (or Rights, if
available) are actually received by the Depositary. Under no circumstances will
interest be paid on the purchase price of the Shares to be paid by the
Purchaser, regardless of any extension of the Offer or any delay in making such
payment.
The Purchaser's acceptance for payment of Shares validly 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.
Appointment as Proxy. By executing a Letter of Transmittal as set forth
above, a tendering Shareholder irrevocably appoints designees of the Purchaser
as such 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 such Shareholder's rights with respect to the Shares tendered by such
Shareholder and accepted for payment by the Purchaser. All such proxies will be
irrevocable and considered coupled with an interest in the tendered Shares. Such
appointment will be effective when, and only to the extent that, the Purchaser
accepts such Shares for payment pursuant to the Offer. Upon such acceptance for
payment, all prior powers of attorney, proxies and consents given by such
Shareholder with respect to such Shares or other securities or rights will,
without further action, be revoked and no subsequent powers of attorney,
proxies, consents or revocations may be given (and, if given, will not be deemed
effective). The designees of the Purchaser will thereby be empowered to exercise
all voting and other rights with respect to such Shares and other securities or
rights in respect of any annual, special, adjourned or postponed meeting of the
Company's Shareholders, actions by written consent in lieu of any such meeting
or otherwise, as they in their sole discretion deem proper. 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, consent and other
rights with respect to such Shares and other securities or rights, including
voting at any meeting of Shareholders.
The foregoing proxies are effective only upon acceptance for payment of
Shares pursuant to the Offer. The Offer does not constitute a solicitation of
proxies, absent a purchase of Shares, for any meeting of the Company's
Shareholders, which will be made only pursuant to separate proxy solicitation
materials complying with the Exchange Act.
Determination of Validity. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance for payment of any tender
of Shares 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 determined by it not to be in
proper form or the acceptance for payment of or payment for which may, in the
opinion of the Purchaser's counsel, be unlawful. The Purchaser also reserves the
absolute right to waive any defect or irregularity in the tender of any Shares
of any particular Shareholder whether or not similar defects or
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irregularities are waived in the case of other Shareholders. No tender of Shares
will be deemed to have been validly made until all defects or irregularities
relating thereto have been cured or waived. None of the Purchaser, Parent, the
Depositary, the Information Agent, the Dealer Manager or any other person will
be under any duty to give notification of any defects or irregularities in
tenders or incur any liability for failure to give any such notification. The
Purchaser's interpretation of the terms and conditions of the Offer (including
the Letter of Transmittal and the instructions thereto) will be final and
binding on all parties.
Backup Withholding. In order to avoid 'backup withholding' of federal
income tax on payments of cash pursuant to the Offer, a Shareholder surrendering
Shares in the Offer must, unless an exemption applies, provide the Depositary
with such Shareholder's correct taxpayer identification number ('TIN') on a
Substitute Form W-9 and certify under penalties of perjury that such TIN is
correct and that such Shareholder is not subject to backup withholding. If a
Shareholder does not provide such Shareholder's correct TIN or fails to provide
the certifications described above, the Internal Revenue Service may impose a
penalty on such Shareholder and the payment of cash to such Shareholder pursuant
to the Offer may be subject to backup withholding of 31% of the amount of such
payment. 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).
Noncorporate foreign Shareholders should complete and sign the main
signature form and a Form W-8, Certificate of Foreign Status, a copy of which
may be obtained from the Depositary, in order to avoid backup withholding. See
Instruction 9 to the Letter of Transmittal.
SECTION 3. WITHDRAWAL RIGHTS
Except as otherwise provided in this Section 3, tenders of Shares pursuant
to the Offer are irrevocable. Shares tendered pursuant to the Offer may be
withdrawn pursuant to the procedures set forth below 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 December 19,
1997.
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 and must
specify the name of the person having tendered the Shares to be withdrawn, the
number of Shares to be withdrawn and the name of the registered holder of the
Shares to be withdrawn, if different from the name of the person who tendered
the Shares. If Share Certificates or Rights Certificates have been delivered or
otherwise identified to the Depositary, then, prior to the physical release of
such Share Certificates or Rights Certificates, the serial numbers shown on such
Share Certificates or Rights Certificates must be submitted to the Depositary
and, unless such Shares have been tendered by an Eligible Institution, the
signatures on the notice of withdrawal must be guaranteed by an Eligible
Institution. If Shares or Rights have been delivered pursuant to the procedure
for book-entry transfer as set forth in Section 2, any notice of withdrawal must
also specify the name and number of the account at the appropriate Book-Entry
Transfer Facility to be credited with the withdrawn Shares or Rights and
otherwise comply with such Book-Entry Transfer Facility's procedures.
Withdrawals of tenders of Shares may not be rescinded and any Shares
properly withdrawn will thereafter be deemed not validly tendered for purposes
of the Offer. However, withdrawn Shares may be retendered by again following one
of the procedures described in Section 2 at any time prior to the Expiration
Date.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by the Purchaser, in its sole
discretion, whose determination will be final and binding on all parties. None
of the Purchaser, Parent, the Depositary, the Information Agent, the Dealer
Manager or any other person will be under any duty to give notification of any
defects or irregularities in any notice of withdrawal or incur any liability for
failure to give any such notification.
SECTION 4. ACCEPTANCE FOR PAYMENT AND PAYMENT
Upon the terms and subject to the conditions of the Offer (including, if
the Offer is extended or amended, the terms and conditions of any such extension
or amendment), the Purchaser will accept for payment and will pay for all Shares
validly tendered promptly after the Expiration Date. All questions as to the
satisfaction of such terms and conditions will be determined by the Purchaser,
in its sole discretion, whose determination will be final
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and binding on all parties. See Sections 1, 10 and 15. The Purchaser expressly
reserves the right, in its sole discretion, to delay acceptance for payment of
Shares in order to comply in whole or in part with any applicable laws,
including, without limitation, the HSR Act and antitrust statutes in Germany,
Belgium, Ireland, Italy, Mexico and Sweden. See Section 16. Any such delays will
be effected in compliance with Rule 14e-l(c) under the Exchange Act (relating to
a bidder's obligation to pay for or return tendered securities promptly after
the termination or withdrawal of such bidder's Offer).
In all cases, payment for Shares accepted for payment pursuant to the Offer
will be made only after timely receipt by the Depositary of (a) Share
Certificates for (or a timely Book-Entry Confirmation with respect to) such
Shares, (b) a Letter of Transmittal (or facsimile thereof), properly completed
and duly executed, with any required signature guarantees, or, in the case of a
book-entry transfer, an Agent's Message, and (c) any other documents required by
the Letter of Transmittal. The per Share consideration paid to any Shareholder
pursuant to the Offer will be the highest per Share consideration paid to any
other Shareholder of the same class pursuant to the Offer.
For purposes of the Offer, the Purchaser will be deemed to have accepted
for payment, and thereby purchased, Shares validly tendered to the Purchaser as,
if and when the Purchaser gives oral or written notice to the Depositary of the
Purchaser's acceptance for payment of such Shares. Payment for Shares accepted
for payment pursuant to the Offer will he made by deposit of the purchase price
therefor with the Depositary, which will act as agent for validly tendering
Shareholders for the purpose of receiving payment from the Purchaser and
transmitting payment to tendering Shareholders.
UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE PURCHASE PRICE OF THE
SHARES TO BE PAID BY THE PURCHASER, REGARDLESS OF ANY EXTENSION OF THE OFFER OR
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
payments 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. The Purchaser will pay
any stock transfer taxes with respect to the transfer and sale to it or its
order pursuant to the Offer, except as otherwise provided in Instruction 6 of
the Letter of Transmittal, as well as any charges and expenses of the
Depositary, the Dealer Manager and the Information Agent.
If the Purchaser is delayed in its acceptance for payment of or payment for
Shares or is unable to accept for payment or pay for Shares pursuant to the
Offer for any reason, then, without prejudice to the Purchaser's rights under
the Offer (but subject to compliance with Rule 14e-l(c) under the Exchange Act),
the Depositary may, nevertheless, on behalf of the Purchaser, retain tendered
Shares, and such Shares may not be withdrawn except to the extent tendering
Shareholders are entitled to exercise, and duly exercise, withdrawal rights as
described in Section 3.
If any tendered Shares are not purchased pursuant to the Offer for any
reason, Share Certificates for any such unpurchased Shares will be returned,
without expense to the tendering Shareholder (or, in the case of Shares
delivered by book-entry transfer of such Shares into the Depositary's account at
a Book-Entry Transfer Facility pursuant to the procedure set forth in Section 2,
such Shares will be credited to an account maintained at the appropriate
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 or from
time to time in part, to Parent, or to one or more direct or indirect wholly
owned subsidiaries of Parent, the right to purchase 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.
SECTION 5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The receipt of cash pursuant to the Offer or the Merger will be a taxable
transaction for federal income tax purposes under the Internal Revenue Code of
1986, as amended (the 'Code'), and may also be a taxable transaction under
applicable state, local or foreign income or other tax laws. Generally, for
federal income tax
8
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purposes, a tendering Shareholder will recognize gain or loss equal to the
difference between the amount of cash received by the Shareholder pursuant to
the Offer or the Merger and the aggregate tax basis in the Shares tendered by
the Shareholder and purchased pursuant to the Offer or converted in the Merger,
as the case may be. Gain or loss will be calculated separately for each block of
Shares tendered and purchased pursuant to the Offer or converted in the Merger,
as the case may be.
If Shares are held by a Shareholder as capital assets, gain or loss
recognized by the Shareholder will be capital gain or loss, which will be
long-term capital gain or loss subject to a maximum rate of 20% if the
Shareholder's holding period for the Shares exceeds 18 months. Under present
law, an individual will be taxed on his or her net capital gain at a rate of 28%
for property held 18 months or less, but more than one year. Special rules (and
generally lower maximum rates) apply for individuals in lower tax brackets.
Long-term capital gains recognized by a corporate Shareholder will be taxed at a
maximum federal marginal tax rate of 35%.
THE FOREGOING DISCUSSION IS INCLUDED FOR GENERAL INFORMATION ONLY AND MAY
NOT BE APPLICABLE WITH RESPECT TO SHARES RECEIVED AS COMPENSATION OR WITH
RESPECT TO HOLDERS OF SHARES WHO ARE SUBJECT TO SPECIAL TAX TREATMENT UNDER THE
CODE, SUCH AS NON-U.S. PERSONS, LIFE INSURANCE COMPANIES, TAX-EXEMPT
ORGANIZATIONS AND FINANCIAL INSTITUTIONS, AND MAY NOT APPLY TO A HOLDER OF
SHARES IN LIGHT OF INDIVIDUAL CIRCUMSTANCES. SHAREHOLDERS ARE URGED TO CONSULT
THEIR OWN TAX ADVISORS TO DETERMINE THE PARTICULAR TAX CONSEQUENCES TO THEM
(INCLUDING THE APPLICATION AND EFFECT OF ANY STATE, LOCAL OR FOREIGN INCOME AND
OTHER TAX LAWS) OF THE OFFER AND THE MERGER.
SECTION 6. PRICE RANGE OF SHARES; DIVIDENDS ON THE SHARES
The Common Stock is listed on the Nasdaq National Market System (the
'Nasdaq Stock Market') under the symbol 'XUPS.' The following table sets forth
the high and low sales prices per share of Common Stock, as reported in publicly
available sources for the periods indicated. The Company did not pay any
dividends on the Common Stock during such periods.
<TABLE>
<CAPTION>
HIGH LOW
---- ---
<S> <C> <C>
1995:
First quarter.......................................................................... $20 $15 3/4
Second quarter......................................................................... 23 14 1/4
Third quarter.......................................................................... 25 1/2 17
Fourth quarter......................................................................... 20 3/4 13 7/8
1996:
First quarter.......................................................................... 15 1/4 8 3/4
Second quarter......................................................................... 17 1/2 8 1/2
Third quarter.......................................................................... 13 1/8 8 3/4
Fourth quarter......................................................................... 15 1/4 9 3/4
1997:
First quarter.......................................................................... 16 1/2 10 5/8
Second quarter......................................................................... 12 1/8 8 1/8
Third quarter.......................................................................... 24 3/8 11 3/4
Fourth quarter (through October 14, 1997).............................................. 23 1/4 22 15/64
</TABLE>
On July 8, 1997, the last full trading day prior to the first public
announcement of Danaher Corporation's ('Danaher') intention to commence a tender
offer for the Shares of the Company, the last reported sale price of the Common
Stock was $12 7/8 per share. On July 9, 1997, the date of the announcement of
Danaher's intention to commence a tender offer and the last full trading day
before commencement of Danaher's tender offer, the last reported sale price of
the Common Stock was $20 5/8. On October 15, 1997, the last full trading day
prior to the first public announcement of the intention to commence the Offer,
the last reported sale price of the Common Stock was $22 1/4 per share. On
October 17, 1997, the last full day prior to the commencement of the Offer, the
last reported sale price of the Common Stock was $28 9/16.
9
<PAGE>
SHAREHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE COMMON
STOCK.
The Warrants do not pay dividends. No price quotations are available for
the Warrants.
SECTION 7. CERTAIN INFORMATION CONCERNING THE COMPANY
The Company is a Delaware corporation with its principal offices at 8609
Six Forks Road, Raleigh, North Carolina 27615. According to the Company's Annual
Report on Form 10-K for 1996 (the 'Company 10-K'), the Company's principal line
of business is the design, manufacture, marketing and servicing of a broad line
of uninterruptible power systems ('UPS'), related equipment, and power
management and facilities monitoring software. UPS products protect computers
and other sensitive electronic equipment against electrical power distortions
and interruptions by providing temporary backup power from batteries in the
event of an outage. More sophisticated UPS products also provide additional
protection by continuously cleaning and conditioning electrical power. The
Company's broad range of UPS products include small systems for use with
personal computers, workstations, client/server platforms, telecommunications
hardware, servers/intranets, hubs/routers, and large standard or customized
systems for use with mainframe computers, data centers and similar applications.
The Company's power management software products monitor, track and communicate
electrical power data and other related environmental events in an enterprise's
power, network and computer systems infrastructure that can threaten performance
of information technology ('IT') systems, thereby giving network and facilities
managers the ability to control their IT and power systems more effectively.
Selected Financial Information. Set forth below is certain selected
consolidated financial information with respect to the Company and its
subsidiaries excerpted from the information contained in the Company 10-K and
the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1997
(the 'Company 10-Q'). More comprehensive financial information is included in
the Company 10-K, the Company 10-Q and other documents filed by the Company with
the Commission, and the following summary is qualified in its entirety by
reference to such information. The Company 10-K, the Company 10-Q and such other
documents should be available for inspection and copies thereof should be
obtainable in the manner set forth below under 'Available Information.'
EXIDE ELECTRONICS GROUP, INC.
SELECTED FINANCIAL INFORMATION
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
NINE MONTHS FISCAL YEAR ENDED
ENDED JUNE 30, SEPTEMBER 30,
-------------------- --------------------------------
1997 1996 1996 1995 1994
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Income Statement Data:
Net Sales.......................................... $417,518 $315,445 $459,936 $390,978 $363,983
Net Earnings (Loss) Applicable to Common
Shareholders Before Extraordinary Item.......... (60) (11,965) (11,065) 6,793 8,385
Primary Earnings (Loss) per Share:
Net Earnings (Loss) Before Extraordinary Item...... 0.23 (1.26) (1.15) 0.84 1.07
Net Earnings (Loss)................................ (0.01) (1.26) (1.15) 0.84 1.07
Balance Sheet Data (at end of period):
Total Assets....................................... 506,441 502,141 489,474 256,451 224,676
Working Capital.................................... 118,282 121,509 115,867 105,543 93,337
Long Term Debt and Subordinated Notes.............. 220,678 250,181 232,267 80,258 58,400
Redeemable Preferred Stock......................... 18,739 18,170 18,312 -- 10,000
Total Shareholders' Equity......................... 93,872 95,360 96,339 83,767 67,462
</TABLE>
Subordinated Notes. There are approximately $125,000,000 outstanding
principal amount of 11 1/2% Senior Subordinated Notes due 2006 of the Company
(the 'Notes'). Upon a change of control of the Company (which would include the
consummation of the Offer) or the first day on which a majority of the members
of the Board of Directors of the Company are not Continuing Directors (which
would be the case if, as pursuant to the Merger Agreement, the Purchaser
designates, and the Company elects, such number of directors as is equal to the
product
10
<PAGE>
of the total number of directors on the Board multiplied by the percentage that
the aggregate number of Shares of Common Stock beneficially owned by the Parent
or its affiliates bears to the total number of Shares of Common Stock then
outstanding), each holder of Notes will have the right to demand that the
Company offer to repurchase the holder's Notes at 101% of their principal
amount, plus accrued interest, within ten days of the consummation of the Offer.
A 'Continuing Director' as the term applies to the Notes, means, as of any date
of determination, any member of the Board of Directors of the Company who (i)
was a member of such Board of Directors on the date of the indenture governing
the Notes or (ii) was nominated for election or elected to such Board of
Directors with the approval of a majority of the Continuing Directors who were
members of such Board at the time of such nomination or election. Parent is
exploring alternatives with respect to the Notes. Parent believes that adequate
funds would be available to make such repurchases.
Projected Financial Information. Prior to entering into the Merger
Agreement, the Purchaser conducted a due diligence review of the Company and in
connection with such review received certain non-public information from the
Company. The non-public information included, among other things, projected
financial information (the 'Financial Model') for fiscal years ending September
30, 1997 to 2000. The Financial Model was prepared by the Company's management
based on numerous assumptions, including among others, the estimated 1997
financial results and projections of revenue, net gross profit, operating
expenses, depreciation and amortization, capital expenditures and working
capital requirements. Set forth below is a summary of projected income statement
and cash flow items for fiscal years ending September 30, 1997 to 2000. None of
the assumptions in the Financial Model give effect to the Offer, the Merger or
the financing thereof or the potential combined operations of the Parent and the
Company after consummation of such transactions.
THE COMPANY HAS ADVISED THE PURCHASER THAT IT DOES NOT AS A MATTER OF
COURSE DISCLOSE PROJECTIONS AS TO FUTURE REVENUES OR EARNINGS, AND THE
PROJECTIONS DISCUSSED IN THE FINANCIAL MODEL WERE NOT INTENDED TO FORECAST
LIKELY OR ANTICIPATED OPERATING RESULTS, BUT INSTEAD WERE MERELY ONE SCENARIO
INTENDED TO AID THE COMPANY IN SETTING INTERNAL GOALS AND ILLUSTRATING CAPITAL
NEEDS. THE PROJECTIONS DISCUSSED IN THE FINANCIAL MODEL WERE NOT PREPARED WITH A
VIEW TO PUBLIC DISCLOSURE OR COMPLIANCE WITH PUBLISHED GUIDELINES OF THE
COMMISSION OR THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS FOR
PROJECTIONS. THE FORECASTED INFORMATION IS INCLUDED HEREIN SOLELY BECAUSE SUCH
INFORMATION WAS FURNISHED TO PARENT AND PURCHASER OR ITS FINANCIAL ADVISORS.
ACCORDINGLY, THE INCLUSION OF THE PROJECTIONS IN THIS OFFER SHOULD NOT BE
REGARDED AS AN INDICATION THAT PARENT OR PURCHASER OR THE COMPANY OR THEIR
RESPECTIVE FINANCIAL ADVISORS OR THEIR RESPECTIVE OFFICERS AND DIRECTORS
CONSIDER SUCH INFORMATION TO BE ACCURATE OR RELIABLE, AND NONE OF SUCH PERSONS
ASSUMES ANY RESPONSIBILITY FOR THE ACCURACY THEREFORE. THE FINANCIAL MODEL WAS
PREPARED FOR INTERNAL USE AND IS SUBJECTIVE IN MANY RESPECTS AND THUS
SUSCEPTIBLE TO VARIOUS INTERPRETATIONS AND PERIODIC REVISION BASED UPON ACTUAL
EXPERIENCE AND BUSINESS DEVELOPMENT. IN ADDITION, BECAUSE THE ESTIMATES AND
ASSUMPTIONS UNDERLYING THE FINANCIAL MODEL ARE INHERENTLY SUBJECT TO SIGNIFICANT
ECONOMIC AND COMPETITIVE UNCERTAINTIES AND CONTINGENCIES, WHICH ARE DIFFICULT OR
IMPOSSIBLE TO PREDICT ACCURATELY AND ARE BEYOND THE CONTROL OF THE COMPANY
AND/OR PARENT AND/OR PURCHASER, THERE CAN BE NO ASSURANCE THAT THE FINANCIAL
MODEL WILL BE REALIZED. ACCORDINGLY, IT IS EXPECTED THAT THERE WILL BE
DIFFERENCES BETWEEN ACTUAL AND PROJECTED RESULTS, AND ACTUAL RESULTS MAY BE
MATERIALLY HIGHER OR LOWER THAN THOSE SET FORTH BELOW.
EXIDE ELECTRONICS GROUP, INC.
SUMMARY BUSINESS PLAN FOR
COMPANY OPERATIONS
(IN MILLIONS)
<TABLE>
<CAPTION>
PROJECTED
FY-ENDED OR ESTIMATED --------------------------
ENDING 9/30 1997 1998 1999 2000
- ------------------------------------------------------------------------- --------- ------ ------ ------
<S> <C> <C> <C> <C>
Revenues................................................................. $ 578.0 $650.0 $750.0 $850.0
EBITDA................................................................... 67.7 81.4 101.0 122.7
EBIT..................................................................... 45.3 58.9 76.8 98.0
Pre-Tax Income........................................................... 19.1 35.8 54.8 77.1
Net Income(1)............................................................ 9.5 18.3 29.5 41.7
EPS(2)................................................................... $ 0.80 $ 1.62 $ 2.61 $ 3.69
Cash Flow Items
Depreciation............................................................. $ 10.8 $ 12.6 $ 13.2 $ 13.7
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
PROJECTED
FY-ENDED OR ESTIMATED --------------------------
ENDING 9/30 1997 1998 1999 2000
- ------------------------------------------------------------------------- --------- ------ ------ ------
<S> <C> <C> <C> <C>
Amortization............................................................. 11.6 9.9 11.0 11.0
Capital Expenditures..................................................... 10.6 16.0 16.0 18.0
Net Source/(Use) of Working Capital...................................... (4.9) 2.0 (10.8) (9.8)
</TABLE>
- ------------------
(1) Figures are before payment of preferred stock dividends.
(2) Project EPS based on 11.3 million fully diluted shares outstanding.
Available Information. The Company is subject to the informational
requirements of the Exchange Act and, in accordance therewith, is required to
file reports 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 and other matters, 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 Commission. Such
reports, proxy statements and other information should be available for
inspection at the public reference facilities of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the regional offices of the
Commission located at Seven World Trade Center, 13th Floor, New York, NY 10048
and Citicorp Center, 500 West Madison Street (Suite 1400), Chicago, IL 60661.
Copies of such information should be obtainable from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates. The Commission also maintains a web site at http://www.sec.gov
that contains reports, proxy statements and other information. Such reports,
proxy statements and other information concerning the Company may also be
inspected at the offices of the Nasdaq Stock Market, Reports Section, at 1753 K
Street, Washington, D.C. 20006.
Company Information. The information concerning the Company contained in
this Offer to Purchase has been provided by the Company. Although the Parent and
the Purchaser do not have any knowledge that any such information is untrue,
neither the Purchaser nor Parent takes any responsibility for the accuracy or
completeness of such information or for any failure by the Company to disclose
events that may have occurred and may affect the significance or accuracy of any
such information.
SECTION 8. CERTAIN INFORMATION CONCERNING PARENT AND THE PURCHASER
Parent is an English public limited company with its principal executive
offices located at BTR House, Carlisle Place, London, SW1P 1BX.
The Purchaser is a newly incorporated Delaware corporation and an indirect
wholly owned subsidiary of the Parent which to date has not conducted any
business other than in connection with the Offer and the Merger. The principal
executive offices of the Purchaser are located at c/o BTR Inc., Stamford Harbor
Park, 333 Ludlow Street, Stamford, Connecticut 06902.
Except as set forth in this Offer to Purchase, neither Parent, Purchaser or
any other affiliate of Parent nor, to the best knowledge of Parent or Purchaser,
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 an equity security of the Company, and no
Purchaser Entity, or, to the best knowledge of Parent, Purchaser, 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 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 Commission.
12
<PAGE>
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 Commission.
SECTION 9. BACKGROUND OF THE OFFER
On June 10, 1997, Danaher, a Delaware Corporation, began attempts to
negotiate a plan of merger with the Company. On June 18, 1997, the Chief
Executive Officer of Danaher and the Company initiated discussions of a possible
business combination and a negotiated plan of merger at an offering price of
$20.00 per Share. On June 24, 1997, a representative of Merrill Lynch, Danaher's
financial advisor, spoke to a representative of Lazard Freres & Co. LLC ('Lazard
Freres'), the Company's investment banker. The representative of Lazard Freres
said that the Company Board believed Danaher's proposed price was inadequate and
that the Company Board was not willing to furnish non-public information to
Danaher without a standstill agreement. On June 25, 1997, Danaher's Chief
Executive Officer spoke to the Company's Chief Executive Officer and said that
because a negotiated transaction would be in the best interests of Danaher and
the Company, Danaher was prepared to increase its offer to $22.00 per Share
subject to confidential due diligence and negotiations, that Danaher would agree
not to propose a transaction at a lower price for six months and that Danaher
would agree to a two month standstill. At the Company's request, Danaher said
that it would agree that if the Company and Danaher could not reach a negotiated
transaction within a two month period, Danaher would commence a tender offer at
$22.00 per share unless there had been a material adverse change in the Company,
in which case Danaher would agree to a one year standstill. On July 8, 1997, the
Company informed Danaher that the Company would not provide confidential
information to Danaher. On July 9, 1997, Danaher publicly announced the terms of
its tender offer at an offering price of $20.00 per share of Common Stock and
Preferred Stock and $6.525 per Warrant. On July 10, 1997, Danaher commenced
their offer.
In August 1997, the Company's investment banker, Lazard Freres, contacted
Parent to determine whether Parent was interested in investigating a potential
transaction with the Company. Parent determined that it was and entered into a
confidentiality and standstill agreement dated as of August 29, 1997.
On September 15, 1997, representatives of Parent met with representatives
of the Company to discuss the Company's products and business, and the potential
benefits of a combination of the Company with Parent's Control Systems business.
At that time, Parent retained Wasserstein Perella as its financial advisor.
Parent was advised by the Company's investment banker that there were other
potential bidders and that the Parent should submit an indication of what it
might be willing to pay. On September 19, 1997, Parent communicated to the
Company's investment banker a non-binding indication of interest that it was
willing to pay a price of at least $25.00 per share of Common Stock, subject to
the approval of Parent's Board and to satisfactory completion of due diligence.
Commencing the week of September 22, 1997, Parent conducted due diligence
investigations of the Company which included meetings with Company personnel,
data review, presentations, plant tours and question and answer sessions. The
due diligence investigations included personnel from Parent and from its Control
Systems business, as well as its investment banking, accounting, legal,
technology and other advisors. Parent and its representatives met with senior
and divisional management of the Company. The due diligence investigation was
substantially completed by October 1, 1997, although information continued to be
provided thereafter.
Subsequently, the Company's investment banker advised Parent that it was
requesting potential bidders to submit final bids by the close of business on
October 14, 1997. Parent communicated to the Company that, subject to obtaining
approval of Parent's Board of Directors, it was prepared to pay a price
meaningfully in excess of $25.00 per share. On October 12, 1997, Parent's Board
of Directors met and approved the acquisition of the Company. During the period
October 12 through October 15, 1997, the parties met to discuss changes that
Parent would require to the Company's preferred form of merger agreement.
On October 13, 1997, Parent communicated to the Company that it was
prepared to acquire the Company at a price of $26.50 per share of Common Stock.
Subsequently, the Company's investment banker confirmed to Parent that, in order
to prevail against other bidders in acquiring the Company, Parent needed to
increase its offer
13
<PAGE>
and to submit its final bid by 5:00 p.m. on October 14, 1997. The parties
continued to discuss documentation and Parent submitted a bid of $28.00 per
share of Common Stock just prior to the Company's Board meeting scheduled for
4:00 p.m. on October 15, 1997. During a recess in the meeting of the Company's
Board of Directors and as a result of communications from the Company's
investment banker on certain documentation issues and regarding price, Parent
increased its bid to $29.00 per share of Common Stock. Subsequently, the
Company's Board of Directors unanimously approved the Merger Agreement and (for
purposes of the Company's Rights Agreement, Section 203 of the Delaware General
Corporation Law and the acknowledgement required of the Company in order to
permit certain stockholders to enter into the Stockholder Agreement) the
Stockholder Agreement. The Company's Board of Directors also adopted resolutions
(i) stating that the Merger Agreement was in the best interest of the
shareholders, and (ii) calling for the Company to file a
Solicitation/Recommendation Statement on Schedule 14D-9 recommending that
stockholders tender their Shares pursuant to the Offer.
In the morning of October 16, 1997, the Stockholder Agreement was executed
by Parent, the Purchaser and other parties thereto. Then the Merger Agreement
was executed by Parent, the Purchaser and the Company and a press release
announcing the execution of the definitive agreements was issued by both Parent
and the Company.
SECTION 10. THE MERGER AGREEMENT; THE STOCKHOLDER AGREEMENT
The following is a summary of certain provisions of the Merger Agreement
and the Stockholder Agreement. This summary is qualified in its entirety by
reference to the Merger Agreement and the Stockholder Agreement which are
incorporated by reference and copies of which have been filed with the
Commission as exhibits to the Schedule 14D-1. The Merger Agreement and the
Stockholder Agreement may be examined and copies may be obtained at the places
set forth in Section 7 of the Offer to Purchase.
(a) The Merger Agreement
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 15, the Purchaser will
purchase all Shares validly tendered pursuant to the Offer. The Purchaser agrees
to purchase all such shares of Common Stock at a price of $29.00 per share of
Common Stock and all such Warrants at a price of $15.525 per Warrant. The Merger
Agreement provides that, without the prior written consent of the Company, the
Purchaser will not decrease the price per Share or change the form of
consideration payable in the Offer, decrease the number of Shares or Warrants
sought to be purchased in the Offer, change the conditions set forth in the
Offer, waive or reduce the Minimum Condition below 50% of the fully diluted
shares of Common Stock, impose additional conditions to the Offer or amend any
other term of the Offer in any manner adverse to the holders of any Shares;
provided, however, that if all the conditions to the Offer are then satisfied or
waived, the Parent, in order to permit the Merger to become effective without a
meeting of Shareholders in accordance with Section 253 of the DGCL, shall have
the right (i) to extend the Offer for a period or periods aggregating up to ten
business days from the then effective Expiration Date; provided, that prior to
any such extensions referred to in this clause (i), Parent and the Purchaser
shall deliver to the Company a written notice that all conditions to the
consummation of the Offer are permanently deemed to be satisfied except for a
failure of the Minimum Condition to occur or any other such conditions the
failure of which to be satisfied results from an intentional breach thereof by
the Company and (ii) thereafter to extend the Offer with the prior written
consent of the Company; and provided further that Parent may extend the Offer to
the extent required by law or regulation. If the conditions to the Offer have
not been satisfied or waived by the Parent, Parent will extend the Offer from
time to time for the shortest time periods which it reasonably believes are
necessary until the consummation of the Offer.
One-Step Transaction. As indicated above, the Merger Agreement
contemplates a two-step transaction in which, following consummation of the
Offer, the Merger occurs. As described under 'The Merger' below, the Merger will
require the affirmative vote of holders of 80% of the outstanding voting shares.
Parent and the Company intend to proceed simultaneously with an alternative to
this two-step transaction in which the Company pursues a 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 Transaction.
14
<PAGE>
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
and 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 the
Stockholder 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 Delaware law, at the Effective Time, 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 'Surviving Corporation'). At the option of the Parent, the
Company shall be merged into the Purchaser or another wholly owned subsidiary.
The Merger Agreement provides that the Parent, Purchaser and the Company shall
use their reasonable best efforts to consummate the Merger as soon as
practicable.
Under the Company's Certificate of Incorporation, in the event of a merger
with a shareholder owning 20% or more of the outstanding Common Stock the
approval of the Board of Directors of the Company and the affirmative vote of
holders of 80% of the outstanding shares are required to approve and adopt such
a merger. Thus, if the Purchaser consummates the Offer, the Merger will require
the affirmative vote of the holders of 80% of the outstanding voting shares. The
achievement of the Minimum Condition will provide the Purchaser with sufficient
voting power to approve the Merger. In the event of a merger with a shareholder
owning less than 20% of the outstanding Common Stock, the Company's Certificate
of Incorporation requires the approval of the Board of Directors of the Company
and the affirmative vote of a majority of the Company's outstanding voting
stock. If the Company and Parent chose to pursue the One-Step Transaction,
shareholders owning a majority of the Company's outstanding voting stock could
approve the cash merger at the Offer Price.
Section 203 of the DGCL prevents certain 'business combinations' with an
'interested stockholder' (generally, any person who owns or has the right to
acquire 15% or more of a corporation's outstanding voting stock) for a period of
three years following the time such person became an interested stockholder,
unless, among other things, prior to the time the interested stockholder became
such, the Board of Directors of the corporation approved either the business
combination or the transaction in which the interested stockholder became such.
The Board of Directors of the Company has unanimously approved the Offer, the
Merger and the Merger Agreement and the transactions contemplated thereby for
the purposes of Section 203 of DGCL. Unless the Merger is consummated pursuant
to the short-form merger provisions of the DGCL described below, the only
remaining required corporate action of the Company will be the approval and
adoption of the Merger Agreement and the transactions contemplated thereby by
the affirmative vote of the holders as described in the preceding paragraph.
Pursuant to the Merger Agreement, the Company will, if required by the
Company's Certificate of Incorporation and/or applicable Delaware law in order
to consummate the Merger, duly call, give notice of, convene and hold a special
meeting of its Shareholders (the 'Special Meeting') as soon as practicable
following the acceptance for payment and purchase of the Shares by the Purchaser
pursuant to the Offer for the purpose of considering and taking action upon the
Merger and the adoption of the Merger Agreement. The Merger Agreement provides
that the Company will (a) prepare and file with the Commission a Preliminary
Proxy Statement and (b) use its best efforts to (x) obtain and furnish the
information required to be included by the Commission in a definitive Proxy
Statement and (y) obtain the necessary approvals of the Merger and the Merger
Agreement from its Shareholders. The Board of Directors of the Company, subject
to the fiduciary obligations of the Board under applicable law, will include in
the Proxy Statement the recommendation of the Board that the Shareholders of the
Company vote in favor of the approval of the Merger and the Merger Agreement.
Parent agrees that it will vote, or cause to be voted, all of the Shares then
owned by Parent, the Purchaser or any of its other subsidiaries in favor of the
Merger and adoption of the Merger Agreement. If the Purchaser acquires at least
80% of the Common Stock on a fully diluted basis, the Purchaser will have
sufficient voting power to approve the Merger, even if no other Shareholder
votes in favor of the Merger.
The Merger Agreement provides that in the event that Parent, the Purchaser
or any other subsidiary of Parent acquires at least 90% of the outstanding
Common Stock on a fully diluted basis, pursuant to the Offer or otherwise,
Parent, the Purchaser and the Company will, at the request of Parent and subject
to the terms and conditions of the Merger Agreement, take all necessary and
appropriate action to cause the Merger to become
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effective as soon as practicable after such acquisition, without a meeting of
Shareholders of the Company, in accordance with Section 253 of the DGCL.
Conversion of Securities. At the Effective Time, (a) each share of Common
Stock issued and outstanding immediately prior to the Effective Time (other than
Shares held by Parent, the Purchaser, any wholly owned subsidiary of Parent 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, shall be canceled and retired and shall cease to
exist with no payment being made with respect thereto, and Shareholders who
perfect their dissenters' rights under Delaware law) shall be converted into the
right to receive in cash the Stock Price and (b) each outstanding Warrant not
purchased by the Parent in the Offer shall terminate and shall be converted into
the right to receive in cash the amount (if any) by which the Stock Price
applicable to one share of Common Stock exceeds the exercise price per share of
such Warrant. Shares held by the Parent, Purchaser, any wholly owned subsidiary
of the Parent or Purchaser, in the treasury of the Company or by any wholly
owned subsidiary of the Company, shall be canceled and retired. At the Effective
Time, each issued and outstanding share of the Purchaser will be converted into
and become the number of validly issued, fully paid and nonassessable shares of
common stock of the surviving corporation equal to the number of Shares of
Common Stock outstanding on a fully dilluted basis immediately prior to the
Effective Time.
Pursuant to the Merger Agreement, immediately prior to the earlier of (x)
the acceptance for payment and purchase of Shares by the Purchaser pursuant to
the Offer and (y) the Effective Time, (a) each outstanding option to purchase
Common Stock (an 'Option') granted under the Company's 1995 Employee Stock
Option and Restricted Stock Plan, 1995 Directors Plan, 1989 Stock Option Plan
and Non-Employee Directors Stock Option Plan (collectively, the 'Option Plans'),
whether or not exercisable or vested, shall become fully exercisable and vested,
(b) each option which is then outstanding shall be canceled and (c) in
consideration of such cancellation, and except to the extent that Parent and/or
the Purchaser and the holder of any such option otherwise agree, immediately
following consummation of the Offer, the Company shall pay to such holders of
Options an amount in respect thereof equal to the product of (x) the excess of
the Stock Price over the exercise price thereof and (y) the number of Common
Shares subject thereto; provided that the foregoing shall be subject to the
obtaining of any necessary consents of the Option holders, it being agreed that
the Company and Parent will use their reasonable best efforts to obtain any such
consents.
In addition, pursuant to the Merger Agreement, immediately prior to the
Effective Time, each outstanding right to purchase Common Shares (an 'ESPP
Option') granted under the Company's ESPP shall be canceled and in consideration
of such cancellation, and except to the extent that Parent or the Purchaser and
the holder of any such ESPP Option otherwise agree, immediately prior to the
Effective Time, the Company shall pay to such holders of ESPP Options an amount
in respect thereof equal to the product of (a) the excess of the Stock Price
over the Offering Price (as defined in the ESPP) thereof and (b) the number of
Common Shares subject thereto (such payment to be net of taxes required by law
to be withheld with respect thereto); provided that the foregoing shall be
subject to the obtaining of any necessary consents of holders of ESPP Options,
it being agreed that the Company and Parent will use their best reasonable best
efforts to obtain any such consents.
Appraisal Rights. If the Merger is consummated, each Shareholder of the
Company who has neither voted in favor of the Merger or consented thereto in
writing and who has demanded appraisal for such Shares in accordance with
Section 262 of the DGCL, if such right exists, shall be entitled to an appraisal
by the Delaware Court of Chancery of the fair value of his Shares, exclusive of
any element of value arising from the accomplishment, or expectation, of the
Merger, together with a fair rate of interest, if any, to be paid. In
determining such fair value, the Court may consider all relevant factors. The
value so determined could be more or less than the consideration to be paid in
the Offer and the Merger. If such holder fails to perfect, withdraws or
otherwise loses his right of appraisal and payment, such dissenting shares of
Common Stock, shall be treated as if they had been converted as of the Effective
Time into the right to receive the Stock Price and such dissenting Warrants
shall terminate and shall be treated as if they had been converted as of the
Effective Time into the right to receive in cash the amount (if any) that the
Stock Price exceeds the exercise price of the Warrant shall be treated as if
they had been converted as of the Effective Time into the right to receive an
amount equal to the Stock Price multiplied by the number of shares of Common
Stock into which such shares would be converted. The Company shall give the
Parent prompt notification of any dissenting Shareholders and the Parent shall
be entitled to participate in all negotiations and proceedings with respect to
such demands.
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Board of Directors. Upon payment by the Purchaser for the tendered Shares,
subject to certain limitations, the Parent will be entitled to designate such
number of directors, rounded up to the next whole number, on the Company's Board
of Directors as is equal to the product of the total number of directors on the
Company's Board multiplied by the percentage that the aggregate number of shares
of Common Stock beneficially owned by the Parent or its affiliates bears to the
total number of shares of Common Stock outstanding. The Company shall, upon
request of the Purchaser, promptly take all actions necessary to cause Parent's
designees to be so elected, including, if necessary, seeking the resignations of
one or more existing directors. If the Purchaser's designees are so elected,
prior to the Effective Time, the Board shall always have at least three members
who are neither officers, directors, stockholders or designees of the Purchaser
or any of its affiliates. The Company's obligation to appoint the Purchaser's
designees to the Board of Directors is subject to compliance with Section 14(f)
of the Exchange Act and Rule 14f-1 promulgated thereunder.
The Rights Agreement. The Company has declared a dividend of one Right for
each outstanding share of Common Stock pursuant to the Rights Agreement. The
Rights Agreement provides that in the event that a person becomes the beneficial
owner of 15% or more of the outstanding Common Stock, each holder of a Right can
receive Common Stock (or other property) of the Company having a value equal to
two times the exercise price of $80 (the 'Rights Exercise Price'). In the event
that the Company is acquired in a merger or other business combination
transaction in which the Company is not the surviving corporation or where 50%
or more of the assets or earning power is sold or transferred, each holder of a
Right can receive common stock of the acquiring company having a value equal to
two times the Rights Exercise Price. As a condition of the Offer and pursuant to
the Merger Agreement, the Company has taken all actions necessary to make the
Rights inapplicable to the Offer, the Merger and the Stockholder Agreement
effective immediately prior to the acceptance for payment of any Shares by the
Purchaser pursuant to the Offer.
Representations and Warranties. Pursuant to the Merger Agreement, the
Company has made customary representations and warranties to the Parent and the
Purchaser with respect to, among other things, its organization and
qualifications, capitalization, authority, financial statements, public filings,
litigation, compliance with law, employee benefit plans, intellectual property,
environmental matters, granting of certain approvals, opinion of financial
advisor, information in the Proxy Statement, tax status and the absence of any
material adverse effects on the Company since June 30, 1997. The Parent and the
Purchaser have made customary representations and warranties to the Company with
respect to, among other things, its organization and qualifications, authority
and financing.
Covenants. The Merger Agreement contains certain restrictive covenants as
to the conduct of Company, the Parent, the Purchaser and the Surviving Company
in contemplation of the Merger including, without limitation, access by the
Parent 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, maintenance
by the Surviving Company of employee benefit arrangements substantially similar
to existing arrangements for two years and notification of the other parties of
certain matters.
Conduct of Business of the Company. The Company agrees that, except with
the prior written consent of the Parent, during the period from execution of the
Merger Agreement to the Effective Time, the Company and its subsidiaries will
conduct operations only in the ordinary course of business consistent with past
practice and will use reasonable best 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.
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Solicitation. Pursuant to the Merger Agreement, the Company represents and
warrants to, and covenants and agrees with, Parent and Purchaser that neither
Company nor any of its Subsidiaries has any agreement, arrangement or
understanding with any potential acquiror that, directly or indirectly, would be
violated, or require any payments, by reason of the execution, delivery and/or
consummation of the Merger Agreement. The Company shall, and shall cause its
subsidiaries and use its best efforts to cause 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 (including a 'person' as defined in Section 13(d)(3) of the
Exchange Act) other than Parent or Purchaser (a 'Third Party') heretofore
conducted with respect to any Acquisition Transaction (as hereinafter defined).
The Company shall not, and shall cause its subsidiaries and use its best efforts
to cause its and their officers, directors, employees, investment bankers,
attorneys and other agents and representatives not to, directly or indirectly,
(x) 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
amalgamation, 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 (y) negotiate, explore or otherwise
communicate in any way with any Third Party with respect to any Acquisition
Transaction or enter into, approve or recommend any agreement, arrangement or
understanding requiring Company to abandon, terminate or fail to consummate the
Offer and/or the Merger or any other transaction contemplated thereby.
Notwithstanding anything to the contrary in the foregoing, the Company may,
prior to the purchase of Shares pursuant to the Offer, 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) Lazard Freres with respect to the financial terms of any
such proposed Acquisition Transaction, the Board of Directors of the Company
determines reasonably and 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'), (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 with terms no less
favorable in the aggregate to Company than those contained in the
confidentiality agreement between Parent and the Company (except that no
'standstill provisions' shall be required from any person that at the date
thereof has commenced a tender offer for Shares of the Company), but which
confidentiality agreement shall not provide for any exclusive right to negotiate
with Company or any payments by the Company and (c) Company advises Parent of
all such non-public information delivered to such Third Party concurrently with
such delivery; provided, however, that Company shall not, and shall cause its
affiliates not to, enter into a definitive agreement with respect to a Superior
Proposal unless (x) the Company concurrently terminates the Merger Agreement in
accordance with the terms thereof and pays any amounts required under Article
VIII of the Merger Agreement and (y) such agreement permits Company to terminate
it if it receives a Superior Proposal, such termination and related provisions
to be on terms no less favorable to Company, including as to fees and
reimbursement of expenses, as those contained in the Merger Agreement.
The Merger Agreement provides that the Company shall promptly (but in any
event within one day of Company becoming aware of same) advise Parent of the
receipt by Company, any of its subsidiaries or any of Company's bankers,
attorneys or other agents or representatives of any inquires or proposals
relating to an Acquisition Transaction and any actions taken pursuant to Section
6.08(a) of the Merger Agreement. The Company shall promptly (but in any event
within one day of the Company becoming aware of same) provide Parent with a copy
of any such inquiry or proposal in writing and a written statement with respect
to any such inquiries or proposals not in writing, which statement shall include
the identity of the parties making such inquiries or proposal and the terms
thereof. The Company shall, from time to time, promptly (but in any event within
one day of the Company becoming aware of same) inform Parent of the status and
content of and material developments (including the calling meetings of the
Board to take action with respect to such Acquisition
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Transaction) with respect to any discussions regarding any Acquisition
Transaction with a Third Party. For the avoidance of doubt, Company agrees that
it will not enter into any agreement with respect to a Superior Proposal unless
and until Parent 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. Pursuant to the Merger Agreement, for not less than six
years after the Effective Time, all rights to indemnification now existing in
favor of any employee, agent, officer or director of the Company and its
subsidiaries, as provided in an agreement between the Company or one of its
subsidiaries and such employee, or otherwise in effect on the date of the
Merger, shall remain in full force and effect. Parent also agrees to indemnify
all directors and officers of the Company ('Indemnified Parties') to the fullest
extent allowed under applicable law with respect to all acts and omissions
arising out of such individuals' services as officers or directors of the
Company or as trustees or fiduciaries of any plan for the benefit of employees
occurring prior to the Effective Time. If such Indemnified Party becomes
involved in any action or proceeding, without limitation, Parent agrees to pay
the Indemnified Party's reasonable legal and other expenses, provided, however,
Parent shall not, in connection with separate but substantially similar actions
arising out of the same allegations, be liable for fees and expenses of more
than one separate firm of attorneys. Parent shall be entitled to participate in
the defense of any such action or proceeding. Parent agrees to leave the current
policies for officer and director liability insurance in effect at the Effective
Time in place for not less than six years from the Effective Time.
Waiver. At any time prior to the Effective Time, the parties may (a)
extend the time for performance of any obligations or other acts of any other
party, (b) waive any inaccuracy in representations and warranties contained in
the Merger Agreement or (c) waive compliance with any of the agreements of any
other party or with any conditions to its own obligations, provided, that, the
Minimum Condition may not be waived by the Purchaser without the consent of the
Company so as to require to be validly tendered and not withdrawn prior to the
Expiration Date that number of Common Shares which represents less than 50% of
the outstanding Common Shares on a fully diluted basis on the date of purchase
(not taking into account the Rights).
Termination. The Merger Agreement provides that the Merger Agreement may
be terminated and the Merger contemplated thereby 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; or
(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) the Purchaser fails to commence the Offer as
provided in Section 1.01 of the Merger Agreement, (ii) the Purchaser shall
not have accepted for payment and paid for Shares pursuant to the Offer in
accordance with the terms thereof on or before April 30, 1998 or (iii) the
Purchaser fails to purchase validly tendered Shares in violation of the
terms of the Offer or the Merger Agreement; or
(c) by Parent or the Company if (i) the Offer is terminated or
withdrawn pursuant to its terms without any Shares being purchased
thereunder and (ii) the conditions applicable to the One-Step Transaction
the Merger Agreement shall not have been satisfied; provided, however, that
Parent may terminate the Merger Agreement pursuant to this clause (c), only
if Parent's or the Purchaser's termination or withdrawal of the Offer is
not in violation of the terms of the Merger Agreement or the Offer; or
(d) by Parent or the Company if any court or other Governmental Entity
shall have issued, enacted, entered, promulgated or enforced any order,
judgment, decree, injunction, or ruling or taken any other action
restraining, enjoining or otherwise prohibiting the Merger and such order,
judgment, decree, injunction, ruling or other action shall have become
final and nonappealable; or
(e) by the Company if, prior to the purchase of Shares pursuant to the
Offer in accordance with the terms of the Merger Agreement, (i) there shall
have occurred, on the part of Parent or Purchaser, a material breach of any
representation or warranty, covenant or agreement contained in the Merger
Agreement which is not curable or, if curable, is not cured within five
business days after written notice of such breach is given by the Company
to the party committing the breach or (ii) the Company (A) enters into a
definitive agreement with respect to a Superior Proposal and (B) pays any
termination fee and agrees to pay any other amounts required under Section
8.03(b) of the Merger Agreement; or
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(f) by Parent if, prior to the purchase of Shares pursuant to the
Offer in accordance with the terms of the Merger Agreement, (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
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, if curable, is not cured within the later of (x) five business days
after written notice of such breach is given by Parent to the Company and
(y) the satisfaction of all conditions to the Offer not related to such
breach or (ii) if the Board of Directors of the Company or committee
thereof shall have withdrawn or modified, or shall have resolved to
withdraw or modify, in a manner adverse to Parent, its approval or
recommendation of the Merger Agreement or any of the transactions
contemplated thereby (it being agreed that for all purposes of the Merger
Agreement the public disclosure of the fact that the Company has supplied a
third party with information regarding the Company shall not by itself be
deemed a withdrawal or modification in a manner adverse to Parent of the
Board's approval or recommendation of the Merger Agreement or the
transactions contemplated thereby) and the Board of Directors and such
committee shall not have fully reinstated such approval or recommendations
within two business days or shall have recommended, or shall have resolved
to recommend, an Acquisition Transaction (other than the Offer and Merger)
to the Shareholders and at least two business days shall have passed since
such recommendation (or resolution); or
(g) by Parent if it is not in material breach of its obligations
hereunder or under the Offer and no Shares shall have been purchased
pursuant to the Offer on or before April 30, 1998.
Fees and Expenses. The Merger Agreement provides that whether or not the
Merger is consummated, 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 pursuant to Section
8.01(c), 8.01(e)(ii) or 8.01(f) of the Merger Agreement then the Company shall
promptly reimburse Parent for the documented fees and expenses of Parent and the
Purchaser related to the Merger Agreement, the transactions contemplated thereby
and any related financing (subject to a maximum of $1,000,000) and in the event
the Merger Agreement is terminated pursuant to Section 8.01(e)(ii) of the Merger
Agreement then the Company shall promptly pay Parent a termination fee of
$15,000,000 by wire transfer of same day funds to an account designated by
Parent as a condition of such termination.
The Merger Agreement provides that in the event that (i) any person shall
have publicly disclosed a proposal regarding an Acquisition Transaction and (ii)
following such disclosure, either (x) April 30, 1998 occurs without the Minimum
Condition being satisfied or the requisite stockholder approval of the Merger
being obtained (other than as a result of a material breach thereof by Parent or
the Purchaser that has not been cured within the time period set forth in
Article VIII of the Merger Agreement) or (y) the Company breaches any of its
material obligations thereunder and does not cure such breach within the time
period set forth in Article VIII of the Merger Agreement or (z) if the Merger
Agreement is terminated pursuant to Section 8.01(f)(ii), 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 shall 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
$15,000,000 which amount shall be payable by wire transfer of same day funds to
an account designated by the Parent.
(b) The Stockholder Agreement
Concurrently with the execution of the Merger Agreement, Parent and the
Purchaser entered into the Stockholder Agreement with the Four Shareholders with
respect to, in the aggregate, 2,273,033 shares of Common Stock (including shares
issuable upon conversion of the Preferred Stock) owned by such Four Shareholders
representing approximately 19.9% of the shares of Common Stock outstanding on
October 16, 1997. The Four Shareholders are James A. Risher, President and Chief
Executive Officer of the Company; Conrad A. Plimpton Trust, a trust for the
benefit of Conrad A. Plimpton (Chairman of the Company's Board of Directors);
Lance L. Knox 1990 Trust, a trust for the benefit of Lance L. Knox (a member of
the Company's Board of Directors); and Fiskars Oy Ab ('Fiskars'), which is the
holder of all of the Preferred Stock and beneficial owner of approximately 16.0%
of the Common Stock. Pursuant to the Stockholder Agreement, each of
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the Four Shareholders has agreed to tender, in accordance with the terms of the
Offer all shares subject to the Stockholder Agreement, except that Fiskars need
not tender any shares of Common Stock issuable upon conversion of Preferred
Stock until Fiskars receives two business days' notice that Parent and the
Purchaser will consummate the Offer within five business days of such notice.
Each of the Four Shareholders has agreed not to withdraw his shares subject to
the Stockholder Agreement unless the Stockholder Agreement is terminated in
accordance with its terms. Each of the Four Shareholders has granted Parent and
the Purchaser an irrevocable option to purchase certain of such Four
Shareholders' shares of Common Stock at the applicable Offer Price. The option
will become exercisable following termination of the Merger Agreement pursuant
to certain provisions of the Merger Agreement.
Pursuant to the Stockholder Agreement, the Four Shareholders have agreed,
at any meeting of the Shareholders, to vote all shares subject to the foregoing
option in furtherance of the consummation of all actions contemplated by the
Merger Agreement and against any proposal that would frustrate the terms of the
Merger Agreement. The Four Shareholders have granted Parent and the Purchaser an
irrevocable proxy to vote the shares subject to the foregoing option in favor of
the Merger Agreement and the transactions contemplated thereby and against any
proposed Acquisition Transaction. Pursuant to the Stockholder Agreement, each of
the Four Shareholders has agreed, solely in its capacity as a stockholder of the
Company, that neither it nor any controlled affiliates, representatives or
agents of it would encourage, solicit, participate in or initiate discussions or
negotiations with, or provide any information to, any corporation, partnership,
person or other entity or group (other than Parent or any of its affiliates or
representatives) concerning any Acquisition Transaction. Each such Shareholder
has also agreed to immediately cease any existing activities, discussions or
negotiations with any parties conducted heretofore with respect to any
Acquisition Transaction.
Each of the Four Shareholders has agreed that, except as contemplated by
the Stockholder Agreement, it shall not (i) transfer, or consent to the transfer
of, any or all of the Shares or any interest therein, (ii) enter into any
contract, option, or other agreement or understanding with respect to any
transfer of any or all of the Shares or any interest therein, (iii) grant any
proxy, power-of-attorney or other authorization in or with respect to the
Shares, (iv) deposit the Shares into a voting trust or enter into a voting
agreement or arrangement with respect to the Shares or (v) take any other action
that would in any way restrict, limit or interfere with the performance of its
obligations under the Stockholder Agreement or the Merger Agreement.
The covenants, agreements and proxy contained in the Stockholder Agreement
will terminate upon the earlier of (a) the Effective Time, (b) one year
following the execution of the Stockholder Agreement or (c) the termination of
the Merger Agreement pursuant to certain terms.
SECTION 11. PURPOSE OF THE OFFER; PLANS FOR THE COMPANY
Purpose. The purpose of the Offer and the Merger is to enable Parent to
acquire control of, and the entire equity interest in, the Company. The Offer,
as the first step in the acquisition of the Company, is intended to facilitate
the acquisition of all the Shares. Parent will consummate, as soon as
practicable following the consummation of the Offer, the Merger. The purpose of
the Merger is to acquire all capital stock of the Company not purchased pursuant
to the Offer or otherwise. Pursuant to the Merger, each then outstanding share
of Common Stock (other than Shares held by Parent or the Purchaser, any wholly
owned subsidiary of Parent, in the treasury of the Company or by any wholly
owned subsidiary of the Company or held by Shareholders who perfect any
applicable dissenters' rights under the DGCL) will be converted into the right
to receive an amount in cash equal to the Stock Price paid by the Purchaser
pursuant to the Offer and each Warrant which has not been purchased by Parent in
the Offer will be converted into the right to receive in cash the amount (if
any) that the Stock Price exceeds the exercise price of the Warrant.
Plans for the Company. In connection with the Offer, Parent and the
Purchaser have reviewed, and will continue to review various possible business
strategies that they might consider in the event that the Purchaser acquires
control of the Company, whether pursuant to this Offer, the Merger or otherwise.
Such strategies could include, among other things, changes in the Company's
business, corporate structure, capitalization, management or dividend policy.
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SECTION 12. SOURCE AND AMOUNT OF FUNDS
The total amount of funds required by the Purchaser to purchase all of the
Securities pursuant to the Offer and to pay fees and expenses related to the
Offer and the Merger is estimated to be approximately $362 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 funds for its capital contribution from a
combination of internally generated funds and borrowings under existing credit
arrangements available to it and its subsidiaries. The Offer is not conditioned
on obtaining financing.
SECTION 13. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES; EXCHANGE ACT
REGISTRATION; MARGIN REGULATIONS
The Purchaser intends to seek to cause the Company to terminate the
registration of the Shares under the Exchange Act as soon after the completion
of the Offer as the requirements for such termination are met. If registration
of the Shares is not terminated prior to the Merger, the registration of the
Shares under the Exchange Act will be terminated following the consummation of
the Merger.
Market for the Shares. The purchase of Shares pursuant to the Offer will
reduce the number of holders of Shares and the number of Shares that might
otherwise trade publicly and could adversely affect the liquidity and market
value of the remaining Shares held by the public.
Depending upon the aggregate market value and per share price of any shares
of Common Stock not purchased pursuant to the Offer, the Common Stock may no
longer meet the standards of the National Association of Securities Dealers,
Inc. (the 'NASD') for continued inclusion in the Nasdaq Stock Market, which
require that an issuer have at least 200,000 publicly held shares with a market
value of $1,000,000 held by at least 400 stockholders or 300 stockholders
holding round lots and have net tangible assets of at least $1,000,000,
$2,000,000 or $4,000,000 depending on profitability levels during the issuer's
four most recent fiscal years. If these standards are not met, the Common Stock
might nevertheless continue to be included in the Nasdaq Stock Market with
quotations published in the Nasdaq 'additional list,' or in one of the 'local
lists.' However, if the number of holders of Common Stock falls below 300, or if
the number of shares of publicly held Common Stock falls below 100,000, or if
there are not at least two market makers for such Common Stock, NASD rules
provide that the Common Stock would no longer be 'qualified' for Nasdaq Stock
Market reporting, and the Nasdaq Stock Market would cease to provide any
quotations. Common Stock held directly or indirectly by an officer or director
of the Company, or by any beneficial owner of more than 10% of the shares of
Common Stock, ordinarily will not be considered as being publicly held for this
purpose. If, as a result of the purchase of Common Stock pursuant to the Offer
or otherwise, the Common Stock no longer meets the NASD requirements for
continued inclusion in any tier of the Nasdaq National Market or in any other
tier of the Nasdaq National Market, and the Common Stock is no longer included
in any tier of the Nasdaq Stock Market, the market for such Common Stock could
be adversely affected.
In the event the Common Stock no longer meets the requirements of the NASD
for inclusion in any tier of the Nasdaq Stock Market, quotations might still be
available from other sources. The extent of the public market for Common Stock
and availability of such quotations would, however, depend upon the number of
holders of Common Stock remaining at such time, the interest in maintaining a
market in the Common Stock on the part of securities firms, the possible
termination of registration under the Exchange Act, as described below, and
other factors.
The Warrants are not listed on any exchange or traded on the Nasdaq
National Market.
Exchange Act Registration. The Common Stock is currently registered under
the Exchange Act. Registration of the Common Stock under the Exchange Act may be
terminated upon application of the Company to the Commission if the Common Stock
is neither listed on a national securities exchange nor held by 300 or more
holders of record. Termination of registration of the Common Stock under the
Exchange Act would substantially reduce the information required to be furnished
by the Company to its Shareholders and to the Commission and would make certain
provisions of the Exchange Act no longer applicable to the Company, such as the
short-swing profit recovery provisions of Section 16(b) of the Exchange Act, the
requirement of furnishing a proxy statement pursuant to Section 14(a) of the
Exchange Act in connection with Shareholders' meetings and
22
<PAGE>
the related requirement of furnishing an annual report to Shareholders and the
requirements of Rule 13e-3 under the Exchange Act with respect to 'going
private' transactions. Furthermore, the ability of 'affiliates' of the Company
and persons holding 'restricted securities' of the Company to dispose of such
securities pursuant to Rule 144 or 144A promulgated under the Securities Act of
1933, as amended, may be impaired or eliminated. The Purchaser intends to seek
to cause the Company to apply for termination of registration of the Common
Stock under the Exchange Act as soon after the completion of the Offer as the
requirements for such termination are met.
If registration of the Common Stock is not terminated prior to the Merger,
then the Common Stock will be delisted from all stock exchanges and the
registration of the Common Stock under the Exchange Act will be terminated
following the consummation of the Merger.
The Warrants are not registered under the Exchange Act.
Margin Regulations. Shares of Common Stock 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 Common
Stock. Depending upon factors similar to those described above regarding listing
and market quotations, it is possible that, following the Offer, shares of the
Common Stock 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 Warrants are not 'margin securities.'
SECTION 14. DIVIDENDS AND DISTRIBUTIONS
The Merger Agreement provides that, prior to the Effective Time, without
the prior written consent of Parent, the Company will not (i) except for a
semi-annual dividend on the Preferred Stock, declare or pay any dividend on its
capital stock, (ii) except as explicitly permitted by the Merger Agreement,
issue, sell or pledge (or authorize or propose the issuance, sale or pledge of)
any additional shares of its capital stock or securities convertible into or
exercisable or exchangeable for shares of its capital stock or (iii) purchase or
otherwise acquire, or propose to purchase or otherwise acquire, any outstanding
Shares.
SECTION 15. CERTAIN CONDITIONS OF THE OFFER
Notwithstanding any other provisions of the Offer, the Purchaser shall not
be required to accept for payment or pay for any tendered Shares, unless there
are validly tendered and not withdrawn prior to the Expiration Date that number
of shares of Common Stock which represent at least 80% of the outstanding Common
Shares on a fully diluted basis on the date of purchase (not taking into account
the Rights). Furthermore, notwithstanding any other provisions of the Offer, the
Purchaser shall not be required to accept for payment of or pay for any tendered
Shares until expiration of all applicable waiting periods under the HSR Act and
applicable antitrust statutes in Belgium, Germany, Ireland, Italy, Mexico and
Sweden, if applicable, and may, subject to the terms of the Merger Agreement,
amend the Offer or postpone the acceptance for payment of tendered Shares if at
any time on or after October 16, 1997, and before the Expiration Date, any of
the following occur:
(a) any order, preliminary or permanent injunction, decree, judgment
or ruling in any suit, action or proceeding is entered that (i) makes
illegal or otherwise directly or indirectly restrains or prohibits the
acquisition by Parent or Purchaser of any Shares under the Offer or the
making or consummation of the Offer or the Merger, the performance by the
Company of any of its material obligations under the Merger Agreement or
the consummation of any purchase of Shares contemplated by the Merger
Agreement or related agreements, (ii) prohibits or limits the ownership or
operation by the Company, Parent or any of their respective subsidiaries of
a material portion of the business or assets of the Company and its
subsidiaries, taken as a whole, or Parent and its subsidiaries, taken as a
whole, or compels the Company or Parent to dispose of or hold separate any
material portion of the business or assets of the Company and its
subsidiaries, taken as a whole, or Parent and its subsidiaries, taken as a
whole, as a result of the Offer or the Merger, (iii) imposes material
limitations on the ability of Parent or Purchaser to acquire or hold, or
exercise full rights of ownership of, any Shares accepted for payment
pursuant to the Offer, including, without limitation, the right to vote
such Shares on all matters properly presented to the shareholders of the
23
<PAGE>
Company or (iv) prohibits Parent or any of its subsidiaries from
effectively controlling in any material respect the business or operation
of the Company and its subsidiaries, taken as a whole; or
(b) any law is enacted, entered, enforced, promulgated or deemed
applicable to the Offer or the Merger, or any other action is taken by any
governmental entity, other than the application to the Offer or the Merger
of applicable waiting periods under the HSR Act, that results, directly or
indirectly, in any of the consequences referred to in clauses (i) through
(iv) of paragraph (a) above; or
(c) any Material Adverse Effect (as defined in the Merger Agreement)
on the Company has occurred; or
(d) (i) the Board of Directors of the Company or any committee thereof
withdraws or modifies in a manner adverse to Parent or Purchaser its
approval or recommendation of the Offer, the Merger or the Merger Agreement
and does not fully reinstate such approval or recommendation within two
business days of such withdrawal or modification, or approves or recommends
any Acquisition Transaction or (ii) the Company enters into any agreement
to consummate any Acquisition Transaction; or
(e) any of the representations and warranties of the Company set forth
in the Merger Agreement that are qualified as to materiality are not true
and correct, or any such representations and warranties that are not so
qualified are not true and correct in any respect (when taken together with
all other failures of such representations and warranties to be true and
correct) that would have a Material Adverse Effect (as defined in the
Merger Agreement), on the Company, in each case at the date of the Merger
Agreement and at the scheduled expiration of the Offer (as though made as
of such date, except that those representations and warranties that address
matters only as of a particular date shall remain true and correct as of
such date) which have been not been cured within the time period specified
in Article VIII of the Merger Agreement; or
(f) the Company and the Purchaser and Parent shall have reached an
agreement that the Offer or the Merger Agreement be terminated, or the
Merger Agreement shall have been terminated in accordance with its terms;
or
(g) the Company shall have breached or failed to perform in any
material respect any of its material obligations, covenants or agreements
under the Merger Agreement; or
(h) there shall have occurred, and continued to exist, (i) any general
suspension of, or limitation on prices for, trading in securities on the
Nasdaq National Market, (ii) a declaration of a banking moratorium or any
suspension of payments in respect of banks in the United States or Great
Britain, (iii) a commencement of a war, armed hostilities or other national
or international crisis directly involving the United States or Great
Britain (other than an action involving United Nations' personnel), or (iv)
in the case of any of the foregoing clauses (i) through (iii) existing at
the time of the commencement of the Offer, a material acceleration or
worsening thereof; or
(i) it shall have been publicly disclosed, or Purchaser shall have
otherwise learned after the date of the Merger Agreement that beneficial
ownership (determined for the purposes of this paragraph as set forth in
Rule 13d-3 promulgated under the Exchange Act) of 20% or more of the then
outstanding Shares has been acquired by any person, other than Parent or
any of its affiliates.
The foregoing conditions are for the benefit of Parent and the Purchaser
and may be asserted by Parent or the Purchaser regardless of the circumstances
giving rise to any such conditions and may be waived (except that the Minimum
Condition may not be waived or amended without the consent of the Company so as
to require to be validly tendered and not withdrawn prior to the Expiration Date
that number of shares of Common Stock which represents less than 50% of the
outstanding Common Stock on a fully diluted basis on the date of purchase (not
taking into account the Rights)) by Parent or the Purchaser in whole or in part
at any time and from time to time in their reasonable discretion. The failure by
Parent or the Purchaser at any time to exercise any of the foregoing rights
shall not be deemed a waiver of any such right and each such right shall be
deemed an ongoing right which may be asserted at any time and from time to time.
24
<PAGE>
SECTION 16. CERTAIN LEGAL MATTERS
General. Except as otherwise disclosed herein, based on a review of
publicly available information filed by the Company with the Commission, neither
the Purchaser nor Parent is aware of (i) any license or regulatory 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 the Merger or (ii) any approval or
other action, by any governmental, administrative or regulatory agency or
authority, domestic, foreign or supranational, that would be required for the
acquisition or ownership of Shares by the Purchaser as contemplated herein.
Should any such approval or other action be required, the Purchaser currently
contemplates that such approval or action would 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 action, if needed, would be obtained or
would be obtained without substantial conditions or that adverse consequences
might not result to the business of the Company, the Purchaser or Parent or that
certain parts of the businesses of the Company, the Purchaser or Parent 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. See
Sections 10 and 15.
United States Antitrust Approvals. Under the HSR Act, and the rules and
regulations that have been promulgated thereunder by the Federal Trade
Commission (the 'FTC'), certain acquisition transactions may not be consummated
unless certain information has been furnished to the Antitrust Division of the
Department of Justice (the 'Antitrust Division') and the FTC and certain waiting
period requirements have been satisfied. Parent intends to file a Notification
and Report Form with respect to the Offer and the Merger Agreement promptly.
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. Parent intends to
make such filing on October 20, 1997. Accordingly, the waiting period with
respect to the Offer would expire at 11:59 p.m., New York City time, on November
4, 1997 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 Sections 10 and 15.
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 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.
Litigation. On July 29, 1997, Danaher and PQR Acquisition Corporation
('PQR') filed a verified complaint for Declaratory and Injunctive Relief against
the Company and its Directors (the 'Complaint') in the Court of Chancery of the
State of Delaware pursuant to the Company's refusal to approve a proposed plan
of merger with Danaher and PQR, a wholly owned subsidiary of Danaher (the
'Proposed Merger'). The Complaint alleges, among other things, that: (i) refusal
by the Company Board to redeem the Rights or make them inapplicable to the PQR
tender offer constitutes a violation of its fiduciary duties; (ii) certain
amendments to the
25
<PAGE>
Company's By-laws constitute a breach of the defendants' fiduciary duties; (iii)
the failure to render Section 203 of the DGCL inapplicable to the PQR tender
offer and the Proposed Merger is a breach of fiduciary duty; and (iv) the
adoption of any defensive measure by the defendants which has the effect of
impeding, thwarting, frustrating or interfering with the proposed merger or that
would prevent a future board of directors from complying with its fiduciary
duties would constitute a breach of the defendants' fiduciary duties.
PQR seeks declaratory and injunctive relief as follows: (i) an order
compelling the defendants to redeem the Rights or to amend the Rights Agreement
so as to make it inapplicable to the PQR tender offer, (ii) an order compelling
the Board to render Section 203 of the DGCL inapplicable to the proposed
purchase, (iii) an order compelling the Board to call a special meeting of its
stockholders, (iv) an order enjoining the Board from taking any action that
would impede or interfere with the offer or the exercise by the Company's
stockholders of their franchise, (v) an order invalidating the amendments to the
Company's By-Laws, (vi) an order awarding Plaintiff their costs and expenses in
the action and (vii) such other relief as the Court deems just and proper.
As of October 10, 1997, the litigation was pending and inactive while
discovery is undertaken.
Other State Laws. A number of other states have adopted laws and
regulations applicable to attempts to acquire securities of corporations which
are incorporated, or have substantial assets, Shareholders, principal executive
offices or principal places of business, or whose business operations otherwise
have substantial economic effects, in such states. In 1982, in Edgar v. MITE
Corp., the Supreme Court of the United States invalidated on constitutional
grounds the Illinois Business Takeover Statute, which, as a matter of state
securities law, made takeovers of corporations meeting certain requirements more
difficult. However, in 1987 in CTS Corp. v. Dynamics Corp. of America, the
Supreme Court held that the Indiana Control Share Acquisition Act was
constitutional. Such Act, by its terms, is applicable only to corporations that
have a substantial number of Shareholders in Indiana and are incorporated there.
Subsequently, a number of federal courts ruled that various state takeover
statutes were unconstitutional insofar as they apply to corporations
incorporated outside the state of enactment.
The Company, directly or through subsidiaries, conducts business in a
number of states throughout the United States, some of which have enacted
takeover laws. The Purchaser does not know whether any of these laws will, by
their terms, apply to the Offer and has not complied with any such laws. Should
any person seek to apply any state takeover law, the Purchaser will take such
action as then appears desirable, which may include challenging the validity or
applicability of any such statute in appropriate court proceedings. In the event
it is asserted that one or more state takeover laws is applicable to the Offer
and the Merger, and an appropriate court does not determine that it is
inapplicable or invalid as applied to the Offer, the Purchaser might be required
to file certain information with, or receive approvals from, the relevant state
authorities. In addition, if enjoined, the Purchaser might be unable to accept
for payment any 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 any Shares tendered. See Section 15.
Other Antitrust Approvals. According to the Company 10-K, the Company owns
property in a number of other foreign countries and jurisdictions. In connection
with the acquisition of the Shares pursuant to the Offer, the laws of certain of
those foreign countries and jurisdictions, including Germany, Belgium, Ireland,
Italy, Mexico and Sweden may require the filing of information with, or the
obtaining of the approval of, governmental authorities in such countries and
jurisdictions. The governments in such countries and jurisdictions might attempt
to impose additional conditions on the Company's operations conducted in such
countries and jurisdictions as a result of the acquisition of the Shares
pursuant to the Offer or the Merger. There can be no assurance that the
Purchaser will be able to cause the Company or its subsidiaries to satisfy or
comply with such laws or that compliance or non-compliance will not have adverse
consequences for the Company or any subsidiary after purchase of the Shares
pursuant to the Offer or the Merger.
SECTION 17. FEES AND EXPENSES.
Wasserstein Perella is acting as Dealer Manager in connection with the
Offer and serving as financial advisor to the Purchaser and Parent in connection
with the Merger. As compensation for such services, Parent has agreed to pay
Wasserstein Perella a fee of $500,000 upon commencement of the Offer and
$3,000,000 upon the first to occur of the consummation of the Offer or the
Merger. In addition, Parent has agreed to reimburse Wasserstein Perella for its
reasonable out-of-pocket expenses, including, without limitation, reasonable
fees and
26
<PAGE>
disbursements of its counsel, incurred in connection with the Offer and the
Proposed Merger or otherwise arising out of Wasserstein Perella's engagement,
and has also agreed to indemnify Wasserstein Perella (and certain affiliated
persons) against certain liabilities and expenses, including, without
limitation, certain liabilities under the federal securities laws. Wasserstein
Perella may from time to time in the future render various investment banking
services to Parent and its affiliates, for which it is expected it would be paid
customary fees.
MacKenzie Partners, Inc. has been retained by the Purchaser as Information
Agent in connection with the Offer. The Information Agent may contact holders of
Shares by mail, telephone, telex, telegraph and personal interview and may
request brokers, dealers and other nominee Shareholders to forward material
relating to the Offer to beneficial owners of Shares. The Purchaser will pay the
Information Agent reasonable and customary compensation for all such services in
addition to reimbursing the Information Agent for reasonable out-of-pocket
expenses in connection therewith. The Purchaser has agreed to indemnify the
Information Agent against certain liabilities and expenses in connection with
the Offer, including, without limitation, certain liabilities under the federal
securities laws.
ChaseMellon Shareholder Services, L.L.C. has been retained as the
Depositary. The Purchaser will pay the Depositary reasonable and customary
compensation for its services in connection with the Offer, will reimburse the
Depositary for its reasonable out-of-pocket expenses in connection therewith and
will indemnify the Depositary against certain liabilities and expenses in
connection therewith, including, without limitation, certain liabilities under
the federal securities laws.
Except as set forth above, neither Parent nor the Purchaser will pay any
fees or commissions to any broker, dealer or other person for soliciting tenders
of Shares pursuant to the Offer. Brokers, dealers, commercial banks and trust
companies and other nominees will, upon request, be reimbursed by Parent or the
Purchaser for customary clerical and mailing expenses incurred by them in
forwarding offering materials to their customers.
SECTION 18. MISCELLANEOUS
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares in any jurisdiction in which the making of the
Offer or the acceptance thereof would not be in compliance with the securities,
blue sky or other laws of such jurisdiction. Neither the Purchaser nor Parent is
aware of any jurisdiction in which the making of the Offer or the acceptance
thereof would not be in compliance with the laws of such jurisdiction. To the
extent the Purchaser or Parent becomes aware of any state law that would limit
the class of offerees in the Offer, the Purchaser will amend the Offer and,
depending on the timing of such amendment, if any, will extend the Offer to
provide adequate dissemination of such information to such holders of Shares
prior to the expiration of the Offer. In any jurisdiction the securities, blue
sky or other laws of which require the Offer to be made by a licensed broker or
dealer, the Offer is being made on behalf of the Purchaser by the Dealer Manager
or one or more registered brokers or dealers licensed under the laws of such
jurisdiction.
No person has been authorized to give any information or to make any
representation on behalf of the Purchaser or Parent not contained herein or in
the Letter of Transmittal and, if given or made, such information or
representation must not be relied upon as having been authorized.
The Purchaser and Parent have filed with the Commission a Tender Offer
Statement on Schedule 14D-1 pursuant to Rule 14d-3 under the Exchange Act,
together with exhibits, furnishing certain additional information with respect
to the Offer, and may file amendments thereto. Such Schedule 14D-1 and any
amendments thereto, including exhibits, may be inspected and copies may be
obtained in the manner set forth in Section 7 with respect to the Company
(except that such material will not be available at the regional Offices of the
Commission).
Dated: October 20, 1997
27
<PAGE>
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF PARENT AND PURCHASER
Parent. Set forth below are the name, business address and present
principal occupation or employment, and material occupations, positions, offices
or employment for the past five years of each director and executive officer of
Parent as of October 15, 1997. Except as otherwise noted, the business address
of each such person is BTR House, Carlisle Place, London, SW1P 1BX. Unless
indicated, each such person is a citizen of the United Kingdom and has held his
or her present position as set forth below for the past five years. Directors of
Parent are indicated by an asterisk.
<TABLE>
<CAPTION>
CITIZENSHIP, PRINCIPAL OCCUPATION OR EMPLOYMENT,
NAME 5-YEAR EMPLOYMENT HISTORY
- ------------------------------------------ ---------------------------------------------------------------------
<S> <C>
Robert Casson Brown....................... Head of Legal, BTR plc, 1989-1993. Appointed Company Secretary BTR
plc in 1993.
C. R. Burns............................... In 1990 joined Hawker, Siddeley, acquired by BTR in 1991. Appointed
Chief Executive, Aerospace & Batteries Group in 1993. Appointed a
Regional Chief Executive of BTR in 1994 and in the same year
appointed to the Board.
P. H. M. Buysse........................... Belgian. Joined Hansen Transmissions in 1987. Appointed Chief
Executive, BTR Engineering and Dunlop Overseas Group in 1991.
Appointed a Regional Chief Executive of BTR in 1994 and in the same
year appointed to the Board.
E. O. M. Eilledge......................... Joined the Board in 1995 and appointed Chairman in 1996. Formerly
Senior Partner of Ernst & Young and Chairman of Ernst & Young
International. Non-executive director of BG plc.
R. F. Faircloth........................... American. In 1974 joined Huyck Corporation, acquired by BTR in 1980.
Appointed President of Paper Group in 1983 and joined the BTR Board
in 1988. Chief Operating Officer of BTR from 1991 until executive
retirement in 1995. Non-executive director of The National Grid Group
plc.
A. Gomez.................................. French. After holding senior positions with St. Gobain SA was, for 14
years, Chairman and Chief Executive Officer of Thomson-CSF, the
French consumer, electronics and defense company. Currently
Vice-President Directeur General of SEFIMEG, a French property
company. Joined the BTR Board in 1997.
J. J. S. Marshall......................... After holding senior positions with Hanson and BAA, appointed Chief
Executive of De La Rue plc in 1989. Joined the Board in 1995.
Non-executive director of Camelot Group plc and holds other
non-executive directorships.
K. A. O'Donovan........................... Joined BTR in 1991 as Finance Director. Formerly a partner with Ernst
& Young.
S. M. Robertson........................... Former Chairman of Kleinwort Benson Group plc having joined the group
in 1963. Spent substantially all career in corporate finance,
including heading the Bank's operations in the US between 1979 and
1983. Holds other non-executive directorships including John Mowlem
and Company plc, Incheape plc and J W O'Connor and Company Inc. in
New York. Joined the BTR Board in 1997.
</TABLE>
S-1
<PAGE>
<TABLE>
<S> <C>
I. C. Strachan............................ Joined BTR and appointed to the Board in April 1995. Appointed Chief
Executive in January 1996. Formerly Deputy Chief Executive of RTZ
Corporation plc after having held senior positions with Exxon
Corporation.
J. S. Thompson............................ American. In 1975 joined Stowe Woodward, acquired by BTR in 1976.
Appointed President of BTR Inc. in 1993. Appointed a Regional Chief
Executive of BTR in 1994 and in the same year appointed to the Board.
G. J. Yardley............................. In 1951 joined Newey & Eyre, acquired by BTR in 1983. Appointed
Managing Director of Newey & Eyre in 1974. Appointed to the BTR Board
in 1988. Executive Director (Europe) from 1988 until executive
retirement in 1991. Chairman of Graham Group plc and Partco Group
plc.
</TABLE>
The Purchaser. The name and position with the Purchaser of each director
and executive officer of the Purchaser are set forth below. Except as otherwise
noted, the business address of each such person is c/o BTR Inc., Stamford Harbor
Park, 333 Ludlow Street, Stamford, Connecticut 06902. Unless otherwise
indicated, each such person is a citizen of the United Kingdom and has held his
or her present position as set forth below for the past five years. Unless
otherwise indicated, each occupation set forth opposite an individuals name
refers to employment with parent.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT;
NAME AND MATERIAL POSITIONS HELD DURING THE PAST FIVE YEARS
POSITION HELD AND BUSINESS ADDRESSES THEREOF
- ------------------------------------------ ---------------------------------------------------------------------
<S> <C>
C.R. Burns................................ In 1990 joined Hawker, Siddeley, acquired by BTR in 1991. Appointed
Chief Executive, Aerospace & Batteries Group in 1993. Appointed a
Regional Chief Executive of BTR in 1994 and in the same year
appointed to the Board. Appointed Director of BTR Acquisition
Corporation in 1997.
Robert J. C. Easton....................... Director of International Mergers and Acquisitions at Wasserstein
Perella & Company Ltd, 1990-1995. Director of Corporate Finance &
Planning at Trafalgar House plc, 1995-1996. Appointed Manager of BTR
Corporate Development in 1996. Appointed Director of BTR Acquisition
Corporation in 1997.
William J. Richardson..................... Chief Executive of BTR Batteries Group from 1992-1993. Appointed Group
Chief Executive of BTR Batteries Group in 1993. Appointed Director of BTR Acquisition
Corporation in 1997.
John B. Saunders.......................... Director of Corporate Planning and Development of Smithkline Beecham
plc from 1988-1995. Appointed Director of BTR Corporate Strategy &
Development in 1996. Appointed Director of BTR Acquisition
Corporation in 1997.
David J. Stevens.......................... Associate General Counsel & Assistant Secretary of SmithKilne Beecham
plc from 1991-1995. Group Legal Director & Company Secretary of Forte
plc from 1995-1996. Appointed General Counsel of BTR plc in 1996.
Appointed Director of BTR Acquisition Corporation in 1997.
</TABLE>
S-2
<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:
BY MAIL: BY HAND: BY OVERNIGHT COURIER:
ChaseMellon Shareholder ChaseMellon Shareholder ChaseMellon Shareholder
Services, L.L.C. Services, L.L.C. Services, L.L.C.
Post Office Box 3301 120 Broadway - 13th Floor 85 Challenger Road
South Hackensack, NJ 07606 New York, NY 10271 Mail Drop Reorg. Dept.
Attn: Reorganization Attn: Reorganization Ridgefield Park, NJ 07660
Department Department
Facsimile Transmission: (201) 329-8936
Confirmation of Fax: (201) 296-4860
Questions and requests for assistance may be directed to the Information
Agent or the Dealer Manager at their respective addresses or telephone numbers
set forth below. Additional copies of this Offer to Purchase, the Letter of
Transmittal and all other tender offer materials may be obtained from the
Information Agent as set forth below, and will be furnished promptly at the
Purchaser's expense. You may also contact your broker, dealer, commercial bank,
trust company or other nominee for assistance concerning the Offer.
The Information Agent for the Offer is:
MACKENZIE PARTNERS, INC.
156 FIFTH AVENUE
NEW YORK, NEW YORK 10010
(212) 929-5500 (CALL COLLECT)
OR
(800) 322-2885 (CALL TOLL FREE)
The Dealer Manager for the Offer is:
WASSERSTEIN PERELLA & CO., INC.
31 West 52nd Street
New York, New York 10019
(212) 969-2700 (Call Collect)
<PAGE>
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
AND
WARRANTS TO PURCHASE SHARES OF COMMON STOCK
OF
EXIDE ELECTRONICS GROUP, INC.
Pursuant to the Offer to Purchase
Dated October 20, 1997
by
BTR ACQUISITION CORPORATION
An Indirect Wholly Owned Subsidiary of
BTR PLC
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON MONDAY, NOVEMBER 17, 1997, UNLESS THE OFFER IS EXTENDED.
THE DEPOSITARY FOR THE OFFER IS:
BY MAIL: BY HAND: BY OVERNIGHT COURIER:
ChaseMellon Shareholder ChaseMellon Shareholder ChaseMellon Shareholder
Services, L.L.C. Services, L.L.C. Services, L.L.C.
Post Office Box 3301 120 Broadway - 13th Floor 85 Challenger Road
South Hackensack, NJ 07606 New York, NY 10271 Mail Drop Reorg. Dept.
Attn: Reorganization Attn: Reorganization Ridgefield Park, NJ 07660
Department Department
Facsimile Transmission: (201) 329-8936
Confirmation of Fax: (201) 296-4860
- --------------------------------------------------------------------------------
DESCRIPTION OF SHARES TENDERED
NAME(S) AND ADDRESS(ES) OF
REGISTERED HOLDER(S)
(PLEASE FILL IN, IF BLANK,
EXACTLY AS NAME(S) APPEAR ON SHARE CERTIFICATE(S)
SHARE CERTIFICATE(S) TENDERED (ATTACH ADDITIONAL LIST, IF NECESSARY)
- ------------------------------- ----------------------------------------------
SHARE TOTAL NUMBER OF NUMBER
CERTIFICATE SHARES REPRESENTED BY OF SHARES
NUMBER(S)* SHARE CERTIFICATE(S)* TENDERED**
----------- --------------------- ----------
______________________________________________
______________________________________________
______________________________________________
______________________________________________
TOTAL
SHARES:
- --------------------------------------------------------------------------------
/ / Check here if tendering Warrants.
* Need not be completed by shareholders delivering Shares by book-entry
transfer or in accordance with DTC's ATOP procedures for transfers
** 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.
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. YOU MUST SIGN THIS
LETTER OF TRANSMITTAL WHERE INDICATED BELOW AND COMPLETE THE SUBSTITUTE FORM W-9
PROVIDED BELOW.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be completed by shareholders either if
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 Depositary Trust Company ('DTC'),
or the Philadelphia Depository Trust Company ('PDTC') (each
a 'Book-Entry Transfer Facility' and collectively, the 'Book-Entry
Transfer Facilities') pursuant to the book-entry transfer procedure
described in Section 2 of the Offer to Purchase (as defined below). Holders
<PAGE>
who are participants ('Participants') in the book-entry facility system of DTC
may execute their tender through the Automated Tender Offer Program of DTC as
set forth in Section 2 of the Offer to Purchase.
Shareholders whose certificates evidencing Shares (the '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 1 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 2 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 ONE OF THE BOOK-ENTRY TRANSFER FACILITIES AND
COMPLETE THE FOLLOWING:
Name of Tendering Institution: ____________________________________________
Check Box of Applicable Book-Entry Transfer Facility:
(CHECK ONE)
/ / The Depository Trust Company
/ / Philadelphia Depository Trust Company
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.
PLEASE ENCLOSE A PHOTOCOPY OF SUCH NOTICE OF GUARANTEED DELIVERY.
Name(s) of Registered Holder(s): __________________________________________
Window Ticket Number (if any): ____________________________________________
Date of Execution of Notice of Guaranteed Delivery:________________________
Name of Institution which Guaranteed Delivery: ____________________________
<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 BTR Acquisition Corporation, a Delaware
corporation (the 'Purchaser') and an indirect wholly owned subsidiary of BTR
plc, an English public limited company ('Parent'), the above-described shares of
common stock, par value $.01 per share (the 'Common Stock'), and the warrants to
purchase shares of Common Stock at $13.475 per share of Common Stock (the
'Warrants') of Exide Electronics Group, Inc., a Delaware corporation (the
'Company'), pursuant to Purchaser's offer to purchase all outstanding Shares, at
$29.00 per share of Common Stock and $15.525 per Warrant to purchase one share
of Common Stock, in each case 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 October 20, 1997 (the 'Offer to
Purchase'), receipt of which is hereby acknowledged, and in this Letter of
Transmittal (which, as amended from time to time, together constitute the
'Offer'). The undersigned understands that 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. Unless the context indicates otherwise, as used herein,
Shares shall mean shares of Common Stock and the Warrants, and shareholders
shall mean holders of Shares. Unless the context indicates otherwise, all
references to shares of Common Stock shall include the associated Rights issued
pursuant to the Rights Agreement, dated as of November 25, 1992, as amended (the
'Rights Agreement'), between the Company and First Union National Bank of North
Carolina, as Rights Agent.
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 any 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 October 16, 1997
(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 a 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.
By executing this Letter of Transmittal, the undersigned irrevocably
appoints John B. Saunders and David J. Stevens of Parent as proxies of the
undersigned, each with full power of substitution, to the full extent of the
undersigned's rights with respect to the Shares tendered by the undersigned and
accepted for payment by the Purchaser (and any and all Distributions). All such
proxies shall be considered coupled with an interest in the tendered Shares.
This appointment will be effective if, when, and only to the extent that, the
Purchaser accepts such Shares for payment pursuant to the Offer. Upon such
acceptance for payment, all prior proxies given by the undersigned with respect
to such Shares (and such other Shares and securities) will, without further
action, be revoked, and no subsequent proxies may be given nor any subsequent
written consent executed by the undersigned (and, if given or executed, will not
be deemed to be effective) with respect thereto. The designees of the Purchaser
named above will, with respect to the Shares and other securities for which the
appointment is effective, be empowered to exercise all voting and other rights
of the undersigned as they in their sole discretion may deem proper at any
annual or special meeting of the shareholders of the Company or any adjournment
or postponement thereof, by written consent in lieu of any such meeting or
otherwise, and the Purchaser reserves the right to require that, in order for
Shares or other securities to be deemed validly tendered, immediately upon the
Purchaser's acceptance for payment of such Shares, the Purchaser must be able to
exercise full voting rights with respect to such Shares.
The 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
<PAGE>
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.
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 otherwise stated in the Offer to Purchase, this tender is irrevocable.
The undersigned understands that tenders of Shares pursuant to any one of
the procedures described in Section 2 of the Offer to Purchase and in the
instructions hereto will constitute 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, including,
without limitation, the undersigned's representation and warranty that the
undersigned owns the Shares being tendered.
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.
<PAGE>
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 ________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Zip Code)
________________________________________________________________________________
(Tax 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 ________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Zip Code)
IMPORTANT
SHAREHOLDERS: SIGN HERE
(ALSO PLEASE COMPLETE SUBSTITUTE FORM W-9 INCLUDED HEREIN)
X ______________________________________________________________________________
X ______________________________________________________________________________
Signature(s) of Shareholder(s)
Dated: ___________________________, 1997
(Must be signed by registered holder(s) exactly as name(s) appear(s) on
Share Certificates or on a security position listing or by person(s) authorized
to become registered holder(s) by certificates and documents transmitted
herewith. If signature is by 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 hereof.)
Name(s): _______________________________________________________________________
(Please Print)
Capacity (full title): _________________________________________________________
Address: _______________________________________________________________________
_______________________________________________________________________
(Zip Code)
Area Code and Telephone No.: ___________________________________________________
Tax Identification or Social Security No.: _____________________________________
(Substitute Form W-9 included herein)
GUARANTEE OF SIGNATURE(S)
(IF REQUIRED--SEE INSTRUCTIONS 1 AND 5 HEREOF)
FOR USE BY FINANCIAL INSTITUTIONS ONLY.
PLACE MEDALLION GUARANTEE IN THE SPACE BELOW.
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. All signatures on this Letter of Transmittal
must be guaranteed by a firm which is a member of a registered national
securities exchange or of the National Association of Securities Dealers, Inc.,
or by a financial institution (including most commercial banks, savings and loan
associations and brokerage houses) that is a participant in the Securities
Transfer Agents Medallion Program, the New York Stock Exchange Medallion
Signature Guarantee Program or the Stock Exchange Medallion Program (an
'Eligible Institution'), unless (i) this Letter of Transmittal is signed by the
registered holder(s) of the Shares (which term, for purposes of this document,
shall include any participant in a Book-Entry Transfer Facility whose name
appears on a security position listing as the owner of Shares) tendered hereby
and such holder has (have) completed neither the box entitled 'Special Payment
Instructions' nor the box entitled 'Special Delivery Instructions' on the
reverse hereof or (ii) 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 Share Certificates are to be forwarded herewith, if
Shares are to be delivered by book-entry transfers pursuant to the procedure set
forth in Section 2 of the Offer to Purchase, or if Shares are to be delivered
through DTC's Automated Tender Offer Program. Share Certificates evidencing all
physically tendered Shares, or a confirmation of a book-entry transfer into the
Depositary's account at a Book-Entry Transfer Facility of all Shares delivered
by book-entry transfer, together in each case with a properly completed and duly
executed Letter of Transmittal (or facsimile thereof), or an Agent's Message in
connection with a book-entry transfer or tender pursuant to ATOP procedures, 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 1 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 describe in Section 2 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 a 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, and any other documents required by this
Letter of Transmittal, must be received by the Depositary within three New York
Stock Exchange, Inc. ('NYSE') trading days after the date of execution of such
Notice of Guaranteed Delivery, all as described in Section 2 of the Offer to
Purchase.
Participants in DTC may tender their Shares in accordance with DTC's
Automated Tender Offer Program ('ATOP'), to the extent it is available to such
participants for the Shares they wish to tender. A shareholder tendering through
the ATOP must expressly acknowledge that the shareholder has received and agreed
to be bound by the Letter of Transmittal and that the Letter of Transmittal may
be enforced against such shareholder.
If the tender is not made through ATOP, Share Certificates, as well as this
Letter of Transmittal (or facsimile thereof), properly completed and duly
executed, with any required signature guarantees, and any other documents
required by this Letter of Transmittal, must be received by the Depositary at
its address set forth herein on or prior to the Expiration Date to be effective.
THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, SHARE CERTIFICATES
AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY 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
<PAGE>
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.
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 for the registered holder, 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. WAIVER OF CONDITIONS. The conditions to the Offer may be waived by the
Purchaser in whole or in part at any time and from time to time in its sole
discretion.
9. 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.
10. 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 back-up withholding, such
<PAGE>
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, and sign and date the Substitute Form W-9. If 'Applied For' is written in
Part I and the Depositary is not provided with a TIN within 60 days, the
Depositary will withhold 31% on all payments of the purchase price to such
shareholder until a TIN is provided to the Depositary.
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 ON OR PRIOR TO THE EXPIRATION DATE
(AS DEFINED IN THE OFFER TO PURCHASE).
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 payor)
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 of 31%.
Certain shareholders (including, among others, 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
(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 or (ii) the Internal Revenue Service has
notified such shareholder that such shareholder is no longer subject to 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, and sign and date the Substitute Form W-9. If 'Applied For' is
written in Part I and the Depositary is not provided with a TIN within 60 days,
the Depositary will withhold 31% of all payments of the purchase price to such
shareholder until a TIN is provided to the Depositary.
<PAGE>
ALL TENDERING SHAREHOLDERS MUST COMPLETE THE FOLLOWING:
PAYOR'S NAME: CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
SUBSTITUTE FORM W-9
DEPARTMENT OF THE TREASURY
INTERNAL REVENUE SERVICE
PAYOR'S REQUEST FOR TAXPAYER IDENTIFICATION NUMBER ('TIN')
PART I--Taxpayer Identification Number--For all accounts, enter taxpayer
identification number in the box at right. (For most individuals, this is your
social security number. If you do not have a number, see Obtaining a Number in
the enclosed Guidelines.) Certify by signing and dating below. Note: If the
account is in more than one name, see the chart in the enclosed Guidelines to
determine which number to give the payor.
PART II--For Payees exempt from backup withholding, see the enclosed Guidelines
and complete as instructed therein.
PART III--Social Security Number or Employee ID Number _________________________
(If awaiting TIN write 'Applied For')
CERTIFICATION--Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct Taxpayer Identification Number
(or I am waiting for a number to be issued to me); and
(2) I am not subject to backup withholding either because I have not been
notified by the Internal Revenue Service (the 'IRS') that I am subject to
backup withholding as a result of a failure to report all interest or
dividends, or 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 currently 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 such 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.
<PAGE>
The Information Agent for the Offer is:
MACKENZIE PARTNERS, INC.
156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (Call Collect)
or
CALL TOLL FREE (800) 322-2885
The Dealer Manager for the Offer is:
WASSERSTEIN PERELLA & CO., INC.
31 West 52nd Street
New York, New York 10019
(212) 969-2700 (Call Collect)
October 20, 1997
<PAGE>
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK
AND
WARRANTS TO PURCHASE SHARES OF COMMON STOCK
OF
EXIDE ELECTRONICS GROUP, INC.
TO
BTR ACQUISITION CORPORATION
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
BTR PLC
(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) if (i) certificates
(the 'Share Certificates') evidencing shares of common stock, par value $.01 per
share (the 'Common Stock'), and warrants to purchase shares of Common Stock at
$13.475 per share of Common Stock (the 'Warrants'), of Exide Electronics Group,
Inc., a Delaware corporation (the 'Company'), are not immediately available,
(ii) time will not permit all required documents to reach ChaseMellon
Shareholder Services, L.L.C., as Depositary (the 'Depositary'), prior to the
Expiration Date (as defined in Section 1 of the Offer to Purchase (as defined
below)) or (iii) the procedure for book-entry transfer cannot be completed on a
timely basis. This Notice of Guaranteed Delivery may be delivered by hand or
transmitted by telegram, facsimile transmission or mail to the Depositary. See
Section 2 of the Offer to Purchase. Unless the context indicates otherwise, as
used herein, Shares shall mean shares of Common Stock and the Warrants, and
Shareholders shall mean holders of Shares. Unless the context indicates
otherwise, all references to shares of Common Stock shall include the associated
Rights issued pursuant to the Rights Agreement, dated as of November 25, 1992,
as amended (the 'Rights Agreement'), between the Company and First Union
National Bank of North Carolina, as Rights Agent.
Book-entry transfer and surrender of Shares pursuant to ATOP procedures is
not available with respect to Warrants.
THE DEPOSITARY FOR THE OFFER IS:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
ADDRESSES:
BY MAIL: BY HAND: BY OVERNIGHT COURIER:
ChaseMellon ChaseMellon ChaseMellon
Shareholder Services, Shareholder Services, Shareholder Services,
L.L.C. L.L.C. L.L.C.
Post Office Box 3301 120 Broadway - 13th Floor Mail Drop Reorg. Dept.
South Hackensack, NJ 07606 New York, NY 10271 Ridgefield Park, NJ 07660
Attn: Reorganization Attn: Reorganization
Department Department
Facsimile Transmission: Confirmation of Fax:
201-329-8936 201-296-4860
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 NOTICE OF GUARANTEED DELIVERY IS NOT TO BE USED TO GUARANTEE
SIGNATURES. IF A SIGNATURE ON A LETTER OF TRANSMITTAL IS REQUIRED TO BE
GUARANTEED BY AN 'ELIGIBLE INSTITUTION' UNDER THE 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 BTR Acquisition Corporation, a Delaware
corporation (the 'Purchaser') and an indirect wholly owned subsidiary of BTR
plc, an English public limited company ('Parent'), upon the terms and subject to
the conditions set forth in the Offer to Purchase, dated October 20, 1997 (the
'Offer to Purchase'), and the related Letter of Transmittal (which, as amended
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 2 of the Offer to Purchase.
The number of each type of Share being tendered is specified below.
/ / Check here if tendering Shares of Common Stock
/ / Check here if tendering Warrants
Number of Shares (specify number of each type): Name(s) of Record Holder(s):
______________________________________________ ____________________________
______________________________________________ ____________________________
Please Print
Certificate Nos. (if available):
Addresses:
______________________________________________
____________________________
______________________________________________
____________________________
Zip Code
Check ONE box if Shares will be tendered by
book-entry transfer (including through DTC's Area Code and
ATOP): Tel. No.: _________________
/ / The Depository Trust Company Signature(s): ______________
/ / Philadelphia Depository Trust Company ____________________________
Account Number:_______________________________ Dated: _______________, 1997
2
<PAGE>
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
The undersigned, a firm that is a member firm of a national securities
exchange registered with the Securities and Exchange Commission or the National
Association of Securities Dealers, Inc., or a commercial bank or trust company
having an office or correspondent in the United States hereby guarantees
delivery to the Depositary, at one of its addresses set forth above, of Share
Certificates evidencing the Shares tendered hereby in proper form for transfer,
or confirmation of book-entry transfer of such Shares into the Depositary's
accounts at The Depository Trust Company or the Philadelphia Depository Trust
Company (pursuant to the procedures for book-entry transfer, set forth in
Section 2 of the Offer to Purchase), in each case with delivery of a properly
completed and duly executed Letter of Transmittal (or a facsimile thereto) 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, Inc. 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 Share
Certificates 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 Title
______________________________________ Name: ________________________________
Zip Code Please Print
Area Code and Tel. No.: ______________ Date: __________________________, 1997
NOTE: DO NOT SEND SHARE CERTIFICATES WITH THIS NOTICE OF GUARANTEED DELIVERY.
SHARE CERTIFICATES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.
3
<PAGE>
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
AND
ALL OUTSTANDING WARRANTS TO PURCHASE SHARES OF COMMON STOCK
OF
EXIDE ELECTRONICS GROUP, INC.
AT
$29.00 NET PER SHARE OF COMMON STOCK
AND
$15.525 NET PER WARRANT
BY
BTR ACQUISITION CORPORATION
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
BTR PLC
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON MONDAY, NOVEMBER 17, 1997, UNLESS THE OFFER IS EXTENDED.
October 20, 1997
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been appointed by BTR Acquisition Corporation, a Delaware
corporation (the 'Purchaser') and an indirect wholly owned subsidiary of BTR
plc, an English public limited company ('Parent'), to act as Dealer Manager in
connection with the Purchaser's offer to purchase all outstanding shares of
common stock, par value $.01 per share (the 'Common Stock'), and all outstanding
warrants to purchase shares of Common Stock at $13.475 per share of Common Stock
(the 'Warrants') of Exide Electronics Group, Inc., a Delaware corporation (the
'Company'), at a price of $29.00 per share of Common Stock and $15.525 per
Warrant to purchase one share of Common Stock, in each case net to the seller in
cash, without interest thereon, upon the terms and subject to the conditions set
forth in the Offer to Purchase, dated October 20, 1997 (the 'Offer to
Purchase'), and in the related Letter of Transmittal (which, as amended from
time to time, together constitute the 'Offer') enclosed herewith. Unless the
context indicates otherwise, as used herein, Shares shall mean shares of Common
Stock and the Warrants, and shareholders shall mean holders of Shares. Unless
the context indicates otherwise, all references to Shares of Common Stock shall
include the associated Rights issued pursuant to the Rights Agreement, dated as
of November 25, 1992, as amended (the 'Rights Agreement'), between the Company
and First Union National Bank of North Carolina, as Rights Agent.
THE OFFER IS BEING MADE PURSUANT TO AN AGREEMENT AND PLAN OF MERGER, DATED
AS OF OCTOBER 16, 1997, BY AND AMONG THE PARENT, THE PURCHASER AND THE COMPANY
('THE MERGER AGREEMENT'). THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY
APPROVED THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY,
INCLUDING THE OFFER AND THE MERGER, AND DETERMINED THAT THE OFFER AND MERGER ARE
FAIR TO, AND IN THE BEST INTERESTS OF, THE COMPANY AND ITS SHAREHOLDERS. THE
BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS
ACCEPT THE OFFER AND TENDER THEIR SHARES (INCLUDING WARRANTS) PURSUANT TO THE
OFFER.
<PAGE>
Also enclosed is the letter to shareholders of the Company from the
President and Chief Executive Officer of the Company accompanied by the
Company's Solicitation/Recommendation Statement on Schedule 14D-9.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (I) THERE BEING VALIDLY
TENDERED A NUMBER OF SHARES WHICH WOULD REPRESENT AT LEAST 80% OF THE SHARES OF
COMMON STOCK OUTSTANDING ON A FULLY DILUTED BASIS ON THE DATE OF PURCHASE AND
(II) ALL APPLICABLE WAITING PERIODS UNDER THE HART-SCOTT-RODINO ANTITRUST
IMPROVEMENTS ACT OF 1976, AS AMENDED, AND THE REGULATIONS THEREUNDER (THE 'HSR
ACT'), AND UNDER CERTAIN OTHER APPLICABLE FOREIGN ANTITRUST STATUTES HAVING
EXPIRED OR TERMINATED. SEE SECTION 15 OF THE OFFER TO PURCHASE. THE OFFER IS NOT
CONDITIONED ON THE RECEIPT OF FINANCING.
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.
For your information and for forwarding to your clients for whom you hold
Shares registered in your name or in the name of your nominee, or who hold
Shares registered in their own names, we are enclosing the following documents:
1. The Offer to Purchase, dated October 20, 1997;
2. The Company's Solicitation/Recommendation Statement on Schedule
14D-9;
3. The Letter of Transmittal to be used by holders of Shares in
accepting the Offer and tendering Shares;
4. The Notice of Guaranteed Delivery to be used to accept the Offer if
the certificates evidencing such Shares (the 'Share Certificates') are not
immediately available or time will not permit all required documents to
reach the Depositary (as defined in the Offer to Purchase) prior to the
Expiration Date (as defined in the Offer to Purchase) or the procedure for
book-entry transfer cannot be completed by the Expiration Date;
5. 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 nominees, with
space provided for obtaining such clients' instructions with regard to the
Offer;
6. Guidelines of the Internal Revenue Service for Certification of
Taxpayer Identification Number on Substitute Form W-9 providing information
relating to backup federal income tax withheld; and
7. A return envelope addressed to the Depositary.
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 the Shares validly tendered prior to the Expiration Date promptly after
the Expiration Date. For purposes of the Offer, the Purchaser will be deemed to
have accepted for payment, and thereby purchased, tendered Shares as, if and
when the Purchaser gives oral or written notice to the Depositary of the
Purchaser's acceptance of such Shares for payment pursuant to 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) the Share Certificates, timely
confirmation of a book-entry transfer of such Shares, if such procedure is
available, into the Depositary's account at The Depository Trust Company
('DTC'), or the Philadelphia Depository Trust Company pursuant to the procedures
set forth in Section 2 of the Offer to Purchase, or confirmation of surrender of
Shares through DTC's Automated Tender Offer Program ('ATOP'), (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 the case of a book-entry transfer or tender
pursuant to ATOP procedures and (iii) any other documents required by the Letter
of Transmittal.
2
<PAGE>
If certificates evidencing the Rights (the 'Rights Certificates') have been
distributed to holders of Common Shares, such holders are required to tender or
(if such procedure is available) make book-entry entry-transfer or surrender
through ATOP of, Rights Certificates representing a number of Rights equal to
the number of shares of Common Stock being tendered in order to effect a valid
tender of such shares of Common Stock.
The Warrants may not be tendered by book-entry transfer or ATOP. Neither
book-entry confirmations, Agent's Messages nor ATOP procedures are available
with respect to Warrants.
The Purchaser will not pay any fees or commissions to any broker or dealer
or any other person (other than the Dealer Manager, the Information Agent and
the Depositary as described in Section 17 of the Offer to Purchase) in
connection with the solicitation of tenders of Shares pursuant to the Offer.
Purchaser will, however, upon request, reimburse you for customary mailing and
handling expenses incurred by you in forwarding the enclosed materials to your
clients.
The Purchaser will pay any stock transfer taxes incident to the transfer to
it of validly tendered Shares, except as otherwise provided in Instruction 6 of
the Letter of Transmittal.
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS
PROMPTLY AS POSSIBLE. THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00
MIDNIGHT, NEW YORK CITY TIME, ON MONDAY, NOVEMBER 17, 1997 UNLESS THE OFFER IS
EXTENDED.
In order to take advantage of the Offer, a duly executed and properly
completed Letter of Transmittal (or a facsimile thereof), with any required
signature guarantees and any other required documents, should be sent to the
Depositary, and certificates evidencing the tendered Shares should be delivered
or such Shares should be tendered by book-entry transfer or in accordance with
DTC's ATOP procedures, all in accordance with the Instructions set forth in the
Letter of Transmittal and the Offer to Purchase.
If holders of Shares wish to tender Shares, but it is impracticable for
them to forward their Share Certificates or other required documents to the
Depositary prior to the Expiration Date or to comply with the procedures for
book-entry transfer or ATOP on a timely basis, a tender may be effected by
following the guaranteed delivery procedures specified under Section 2 of the
Offer to Purchase.
Any inquiries you may have with respect to the Offer should be addressed to
MacKenzie Partners, Inc., the Information Agent, or Wasserstein Perella & Co.,
Inc., the Dealer Manager, at their respective addresses and telephone numbers
set forth on the back cover page of the offer to Purchase.
Additional copies of the enclosed materials may be obtained by calling
MacKenzie Partners, Inc., the Information Agent, collect at (212) 929-5500 or
toll-free at (800) 322-2885, or from brokers, dealers, commercial banks or trust
companies.
Very truly yours,
WASSERSTEIN PERELLA & CO., INC.
31 West 52nd Street
New York, NY 10019
(212) 969-2700 (Call Collect)
NOTHING HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR ANY
OTHER PERSON AS AN AGENT OF PARENT, THE PURCHASER, THE COMPANY, THE DEPOSITARY,
THE INFORMATION AGENT OR THE DEALER MANAGER, OR ANY AFFILIATE OF ANY OF THE
FOREGOING, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY
STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE
DOCUMENTS ENCLOSED AND THE STATEMENTS CONTAINED THEREIN.
3
<PAGE>
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
AND
ALL OUTSTANDING WARRANTS TO PURCHASE SHARES OF COMMON STOCK
OF
EXIDE ELECTRONICS GROUP, INC.
AT
$29.00 NET PER SHARE OF COMMON STOCK
AND
$15.525 NET PER WARRANT
BY
BTR ACQUISITION CORPORATION
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
BTR PLC
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME ON MONDAY, NOVEMBER 17,1997, UNLESS THE OFFER IS EXTENDED.
October 20, 1997
To Our Clients:
Enclosed for your consideration are the Offer to Purchase, dated October
20, 1997 (the 'Offer to Purchase'), and the related Letter of Transmittal
(which, as amended from time to time, together constitute the 'Offer') in
connection with the Offer by BTR Acquisition Corporation, a Delaware corporation
(the 'Purchaser') and an indirect wholly owned subsidiary of BTR plc, an English
pubic limited company ('Parent'), to purchase all outstanding shares of common
stock, par value $.01 per share (the 'Common Stock'), and all outstanding
warrants to purchase shares of Common Stock at $13.475 per share of Common Stock
(the 'Warrants'), of Exide Electronics Group, Inc., a Delaware corporation (the
'Company'), at a price of $29.00 per share of Common Stock and $15.525 per
Warrant to purchase one share of Common Stock, in each case net to the seller in
cash, without interest thereon, upon the terms and subject to the conditions set
forth in the Offer to Purchase and the related Letter of Transmittal. Unless the
context indicates otherwise, Shares shall mean the shares of Common Stock and
the Warrants, and Shareholders shall mean holders of Shares. Also enclosed is
the letter to shareholders of the Company from the President and Chief Executive
Officer of the Company accompanied by the Company's Solicitation/Recommendation
Statement on Schedule 14D-9.
Shareholders whose certificates evidencing Shares (the 'Share
Certificates') are not immediately available or who cannot deliver their Share
Certificates and all other documents required by the Letter of Transmittal to
the Depositary prior to the Expiration Date (as defined in the Offer to
Purchase) or who cannot complete the procedure for delivery by book-entry
transfer to the Depositary's account at a Book-Entry Transfer Facility (as
defined in Section 2 of the Offer to Purchase) on a timely basis and who wish to
tender their Shares must do so pursuant to the guaranteed delivery procedure
described in Section 2 of the Offer to Purchase. See Instruction 2 of the Letter
of Transmittal. Delivery of documents to a Book-Entry Transfer Facility in
accordance with the Book-Entry Transfer Facility's procedures does not
constitute delivery to the Depositary.
THIS MATERIAL IS BEING SENT TO YOU AS THE BENEFICIAL OWNER OF SHARES HELD
BY US FOR YOUR ACCOUNT BUT NOT REGISTERED IN YOUR NAME. 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 BEING 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 to Purchase and the related
Letter of Transmittal.
Your attention is invited to the following:
1. The tender price is $29.00 per share of Common Stock (the 'Stock
Price') and $15.525 per Warrant to purchase one share of Common Stock, in
each case net to you in cash, without interest thereon.
<PAGE>
2. The Offer and withdrawal rights will expire at 12:00 midnight, New
York City time, on Monday, November 17, 1997, unless the Offer is extended.
3. The Offer is being made pursuant to an Agreement and Plan of
Merger, dated as of October 16, 1997 (the 'Merger Agreement'), by and among
Parent, the Purchaser and the Company. 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'). At the effective time of the Merger, (a) each outstanding Share
of Common Stock (other than Shares held by Parent or the Purchaser, or any
wholly owned subsidiary of Parent or the Purchaser, in the treasury of the
Company, or by any wholly owned subsidiary of the Company or held by
shareholders who perfect their dissenters' rights under Delaware law) will
be converted into the right to receive the Stock Price, without interest
and (b) each holder of a Warrant which has not been purchased by Parent in
the Offer shall, receive in respect of each share of Common Stock that may
have been acquired upon exercise of such Warrant an amount equal to the
amount by which the Stock Price exceeds the exercise price per share of
such Warrant.
4. The Board of Directors of the Company has unanimously approved the
Merger Agreement and the transactions contemplated thereby, including the
Offer and the Merger, and determined that the Offer and Merger are fair to,
and in the best interests of, the Company and its Shareholders. The Board
of Directors of the Company unanimously recommends that Shareholders accept
the Offer and tender their Shares (including Warrants) pursuant to the
Offer.
5. The Offer is being made for all outstanding Shares.
6. The Offer is conditioned upon, among other things, (a) there being
validly tendered a number of Shares which would represent at least 80% of
the shares of Common Stock outstanding on a fully diluted basis on the date
of purchase (the 'Minimum Condition') and (b) all applicable waiting
periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, and the regulations thereunder, and under certain other applicable
foreign antitrust statutes having expired or terminated. The parties have
also agreed that if the Minimum Condition is not achieved, they will pursue
a cash merger at the same price which would require the vote of a majority
of the Company's outstanding voting stock. See Section 15 of the Offer to
Purchase.
7. The Offer is not conditioned on the receipt of financing.
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 Offer is made solely by the Offer to Purchase and the related Letter of
Transmittal and any supplements or amendments thereto 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. Neither the Purchaser
nor Parent is aware of any jurisdiction in which the making of the Offer or the
acceptance thereof would not be in compliance with the laws of such
jurisdiction. To the extent the Purchaser or Parent becomes aware of any state
law that would limit the class of offerees in the Offer, the Purchaser will
amend the Offer and, depending on the timing of such amendment, if any, will
extend the Offer to provide adequate dissemination of such information to such
holders of Shares prior to the expiration of the Offer. In any jurisdiction the
securities, blue sky or other laws of which require the Offer to be made by a
licensed broker or dealer, the Offer is being made on behalf of the Purchaser by
Wasserstein Perella & Co., Inc. or one or more registered brokers or dealers
licensed under the laws of such jurisdiction.
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 on the instruction form contained in this
letter. 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.
If holders of Shares wish to tender Shares, but it is impracticable for
them to forward their Share Certificates or other required documents to the
Depositary prior to the Expiration Date or to comply with the procedures for
book-entry transfer on a timely basis, a tender may be effected by following the
guaranteed delivery procedures specified under Section 2 of the Offer to
Purchase.
2
<PAGE>
INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
AND
ALL OUTSTANDING WARRANTS TO PURCHASE SHARES OF COMMON STOCK
OF
EXIDE ELECTRONICS GROUP, INC.
The undersigned acknowledge(s) receipt of your letter and the enclosed
Offer to Purchase, dated October 20, 1997, and the related Letter of Transmittal
(which, as amended from time to time, together constitute the 'Offer'), in
connection with the Offer by BTR Acquisition Corporation, a Delaware corporation
(the 'Purchaser') and an indirect wholly owned subsidiary of BTR plc, an English
public limited company, to purchase all outstanding shares of common stock, par
value $.01 per share (the 'Common Stock'), and all outstanding warrants to
purchase shares of Common Stock at $13.475 per share of Common Stock (the
'Warrants'), of Exide Electronics Group, Inc., a Delaware corporation, at a
price equal to $29.00 per share of Common Stock and $15.525 per Warrant to
purchase one share of Common Stock, in each case net to the seller in cash
without interest thereon.
This will instruct you to tender to the Purchaser the number of Shares
indicated below (or, if no number is indicated below, all Shares) held by you
for the account of the undersigned, upon the terms and subject to the conditions
set forth in the Offer and the related Letter of Transmittal.
Number of Shares to be Tendered*:
___________ Shares of Common Stock and ___________ Warrants
- --------------------------------------------------------------------------------
SIGN HERE
Account
Number: ____________________________ Signature(s) ____________________________
Dated: _______________________, 1997
________________________________________________________________________________
Please type or print name(s)
________________________________________________________________________________
Please type or print address(es) here
________________________________________________________________________________
Area Code and Telephone Number
________________________________________________________________________________
Taxpayer Identification or Social Security Number(s)
- ------------------
* Unless otherwise indicated, it will be assumed that all Shares held by us for
your account are to be tendered.
3
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER.--Social Security numbers have nine digits separated by two hyphens: i.e.
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen: i.e. 00-0000000. The table below will help determine the number to
give the payer.
- ----------------------------------------------------------------
GIVE THE TAXPAYER
IDENTIFICATION
FOR THIS TYPE OF ACCOUNT: NUMBER OF--
- ----------------------------------------------------------------
1. An individual's account The individual
2. Two or more individuals (joint The actual owner of the account or,
account) if combined funds, the first
individual on the account(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)
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
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(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 your individual name. You may also enter your business name. You may
use either your social security number or your employer identification
number.
(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 do not have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card (for
individuals), or Form SS-4, Application for Employer Identification Number (for
businesses and all other entities), at the local office of the Social Security
Administration or the Internal Revenue Service (the 'IRS') and apply for a
number.
PAYEES AND PAYMENTS EXEMPT FROM BACKUP WITHHOLDING
The following is a list of payees exempt from backup withholding and for which
no information reporting is required. For interest and dividends, all listed
payees are exempt except item (9). For broker transactions, payees listed in
items (1) through (13) and a person registered under the Investment Advisers Act
of 1940 who regularly acts as a broker are exempt. Payments subject to reporting
under sections 6041 and 6041A are generally exempt from backup withholding only
if made to payees described in items (1) through (7), except a corporation that
provides medical and health care services or bills and collects payments for
such services is not exempt from backup withholding or information reporting.
Only payees described in items (2) through (6) are exempt from backup
withholding for barter exchange transactions, patronage dividends, and payments
by certain fishing boat operators.
(1) A corporation.
(2) An organization exempt from tax under section 501(a), or an IRA, or a
custodial account under section 403(b)(7).
(3) The United States or any of its agencies or instrumentalities.
(4) A state, the District of Columbia, a possession of the United States, or any
of their political subdivisions or instrumentalities.
(5) A foreign government or any of its political subdivisions, agencies or
instrumentalities.
(6) An international organization or any of its agencies or instrumentalities.
(7) A foreign central bank of issue.
(8) A dealer in securities or commodities required to register in the United
States or a possession of the United States.
(9) A futures commission merchant registered with the Commodity Futures Trading
Commission.
(10) A real estate investment trust.
(11) An entity registered at all times during the tax year under the Investment
Company Act of 1940.
(12) A common trust fund operated by a bank under section 584(a).
(13) A financial institution.
(14) A middleman known in the investment community as a nominee or listed in the
most recent publication of the American Society of Corporate Secretaries, Inc.,
Nominee List.
(15) A trust exempt from tax under section 664 or described in section 4947.
Payments of dividends and patronage dividends not generally subject to
backup withholding include the following:
o Payments to nonresident aliens subject to withholding under Section 1441 of
the Code.
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 of the Code).
o Payments described in Section 6049(b)(5) of the Code to non-resident aliens.
o Payments on tax-free covenant bonds under Section 1451 of the Code.
o Payments made by certain foreign organizations.
o Payments of mortgage interest to you.
o Payments made to an appropriate nominee.
Exempt payees described above should file substitute Form W-9 to avoid possible
erroneous backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR
TAXPAYER IDENTIFICATION NUMBER, WRITE 'EXEMPT' ON THE FACE OF THE FORM, SIGN AND
DATE THE FORM AND RETURN IT TO THE PAYER. IF YOU ARE A NON-RESIDENT ALIEN OR A
FOREIGN ENTITY NOT SUBJECT TO BACKUP WITHHOLDING, FILE WITH PAYER A COMPLETED
INTERNAL REVENUE FORM W-8 (CERTIFICATE OF FOREIGN STATUS).
Certain payments other than interest, dividends, and patronage dividends,
that are not subject to information reporting are also not subject to backup
withholding. For details, see Sections 6041, 6041A(a), 6045, and 6050A and 6050N
of the Code and the regulations promulgated thereunder.
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 the IRS. The IRS uses the numbers for
identification purposes. Payers must be given the numbers whether or not
recipients are required to file tax returns. Payers must generally withhold 31%
of taxable interest, dividend, and certain other payments to a payee who does
not furnish a taxpayer identification number to a payer. Certain penalties may
also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you fail
to furnish your correct taxpayer identification number to a payer, you are
subject to a penalty of $50 for each such failure unless your failure is due to
reasonable cause and not to willful neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Willfully falsifying
certifications or affirmations may subject you to criminal penalties including
fines and/or imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE.
<PAGE>
BTR SIGNS DEFINITIVE AGREEMENT TO ACQUIRE EXIDE ELECTRONICS, A LEADER IN
UNINTERRUPTIBLE POWER SUPPLY SYSTEMS, FOR US$29 PER SHARE IN CASH
Will Create a Global Leader In Fast-Growing Markets For Power Support
Systems For Computers, Communications and Industrial Electronics
Acquisition Expected To Be Accretive To BTR Earnings in 1998
LONDON, ENGLAND and RALEIGH, N.C. October 16, 1997 --
BTR plc (LSE: BTR), a global engineering company, and Exide Electronics Group,
Inc. (NASDAQ: XUPS), a leading supplier of uninterruptible power supply (UPS)
systems, today announced they have signed a definitive merger agreement under
which BTR will acquire all Exide Electronics shares for US$29 ((pound)17.87) per
share in cash.
The acquisition, valued at approximately US$585 million
((pound)361 million), including assumption of US$233 million ((pound)144
million) in debt, is expected to be accretive to BTR's earnings in 1998. BTR
will promptly commence a tender offer for all Exide Electronics shares. BTR has
entered into an option agreement with four Exide Electronics shareholders,
including Fiskars Oy Ab, covering 19.9% of Exide Electronics shares, to acquire
and vote those shares. The transaction is subject to customary regulatory
approvals and is expected to close before the end of the year.
The combination of Exide Electronics' power protection
products with BTR's range of industrial batteries will create an integrated
global business with a complete power support system and service capability. UPS
systems are used in computers, communications and other industrial electronics
applications to protect equipment and maintain service in the event of power
loss or distortion. The market for UPS systems is growing especially rapidly in
computer networking and telecommunications applications.
<PAGE>
"Exide Electronics is a perfect strategic fit with BTR's
existing capabilities in a very attractive business," said Ian Strachan, Chief
Executive of BTR plc. "The UPS sector has exciting growth prospects and our
Control Systems division will benefit from Exide Electronics' complementary
products, leading market positions, innovative technology and strong
relationships with computer customers. BTR will be able to achieve further
benefits by distributing Exide Electronics' products through its global network
and by increasing Exide Electronics' access to the telecommunications market. By
taking advantage of BTR's established sales and distribution network in emerging
markets in Asia and Eastern Europe, we can accelerate development of a global
maintenance and service business for the power protection market."
"The acquisition of Exide Electronics represents a major step
forward in our strategy to focus on our higher growth engineering businesses
where we enjoy leadership positions," continued Strachan. "It gives our Control
Systems division a global position and provided us with the ability to supply
our customers with integrated systems solutions for which there is increasing
demand."
James A. Risher, President and Chief Executive Officer of
Exide Electronics, said: "Joining a world-class company like BTR -- with
operations, products and services that complement our own so well -- creates
significant benefits for all involved. The process of examining strategic
alternatives pursued by the Exide Electronics Board of Directors has maximized
value for our shareholders."
The offer is conditioned on 80% of the fully diluted common
stock being tendered. The parties have agreed that if this condition is not
achieved, they will pursue a cash merger, at the same price, which
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<PAGE>
would require the vote of a majority of the outstanding Exide Electronics voting
stock.
Wasserstein Perella & Co. is acting as financial advisor to
BTR and dealer manager for the tender offer. Lazard Freres & Co. LLC is acting
as investment banker to Exide Electronics.
Exide Electronics Group, Inc. is headquartered in Raleigh,
North Carolina, and manufactures its products at facilities in the United
States, Mexico and Finland. In addition to UPS products, Exide Electronics also
supplies related software, equipment and services for computer, communications
and industrial applications. It employs approximately 3,500 people worldwide.
Sales for the 12 months ended June 30, 1997 were US$562 million and EBITA
(earnings before interest, taxes and amortization) was US$51 million.
BTR plc had total sales of (pound)9.5 billion (US$15.4
billion) in the year ended December 31, 1996. The Control Systems division,
which employs approximately 14,500 people, had annual sales of (pound)1.2
billion (US$1.9 billion) and supplies customers in the worldwide process control
industry and other markets.
<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
October 20, 1997 and the related Letter of Transmittal. 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 BTR
Acquisition Corporation by Wasserstein Perella & Co., Inc. (the "Dealer
Manager") or one or more registered brokers or dealers that are licensed under
the laws of such jurisdiction.
Notice Of Offer To Purchase For Cash
All Outstanding Shares Of Common Stock
and
All Outstanding Warrants To Purchase Common Stock
of
EXIDE ELECTRONICS GROUP, INC.
at
$29.00 Net Per Share Of Common Stock
and
$15.525 Net Per Warrant
by
BTR ACQUISITION CORPORATION
An Indirect Wholly Owned Subsidiary Of
BTR plc
BTR Acquisition Corporation, a Delaware corporation (the "Purchaser")
and an indirect wholly owned subsidiary of BTR plc, an English public limited
company ("Parent"), is offering to purchase all outstanding shares of common
stock, par value $.01 per share (the "Common Stock"), and all outstanding
warrants to purchase shares of Common Stock at $13.475 per share of Common Stock
(the "Warrants"), of Exide Electronics Group, Inc., a Delaware corporation (the
"Company"), at a price of $29.00 per share of Common Stock and $15.525 per
Warrant to purchase one share of Common Stock, in each case net to the seller in
cash, without interest thereon, upon the terms and subject to the conditions set
forth in the Offer to Purchase, dated October 20, 1997 (the "Offer to
Purchase"), and in the related Letter of Transmittal (which, as amended from
time to time, together constitute the "Offer"). Unless the context indicates
otherwise, as used herein, Shares shall mean shares of Common Stock and the
Warrants, and shareholders shall mean holders of Shares. Unless the context
indicates otherwise, all references to shares of Common Stock shall include the
associated rights (the "Rights") issued pursuant to the Rights Agreement, dated
as of November 25, 1992, as amended (the "Rights Agreement"), between the
Company and First Union National Bank of North Carolina, as Rights Agent.
-------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON MONDAY, NOVEMBER 17, 1997, UNLESS THE OFFER IS EXTENDED.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, (i) THERE BEING
VALIDLY TENDERED A NUMBER OF SHARES WHICH WOULD REPRESENT AT LEAST 80% OF THE
SHARES OF COMMON STOCK OUTSTANDING ON A FULLY DILUTED BASIS ON THE DATE OF
PURCHASE (THE "MINIMUM CONDITION") AND (ii) ALL APPLICABLE WAITING PERIODS UNDER
THE HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED, AND THE
REGULATIONS THEREUNDER (THE "HSR ACT"), AND UNDER CERTAIN OTHER APPLICABLE
FOREIGN ANTITRUST STATUTES HAVING EXPIRED OR TERMINATED. SEE SECTION 15 OF THE
OFFER TO PURCHASE. THE OFFER IS NOT CONDITIONED ON THE RECEIPT OF FINANCING.
<PAGE>
The Offer is being made pursuant to an Agreement and Plan of Merger
(the "Merger Agreement"), dated as of October 16, 1997, among the Company,
Parent and the Purchaser, pursuant to which, after the completion of the Offer,
the Purchaser will be merged with and into the Company (the "Merger") and (a)
each issued and outstanding Share of Common Stock (other than Shares in the
treasury of the Company or owned by the Company or any wholly owned subsidiary
of the Company or Parent, the Purchaser or any other subsidiary of Parent or
Shares that are held by shareholders exercising appraisal rights pursuant to
Section 262 of the Delaware General Corporation Law) shall, by virtue of the
Merger and without any action on the part of the holder thereof, be converted
into the right to receive, without interest, an amount in cash equal to the
Share price paid pursuant to the Offer and (b) each holder of a Warrant (other
than Parent, the Purchaser or any subsidiary of Parent) shall, in accordance
with the terms of the agreement pursuant to which the Warrants were issued and
without having to take any action other than surrendering such Warrant, receive
in respect of each share of Common Stock that may have been acquired upon
exercise of such Warrant an amount equal to the amount by which the price per
share of Common Stock paid pursuant to the Offer exceeds the exercise price per
share of Common Stock of such Warrant. The parties have also agreed that if the
Minimum Condition is not achieved, they will pursue a cash merger, at the same
price, which would require the vote of a majority of the Company's outstanding
voting stock.
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY DETERMINED THAT
THE OFFER AND THE MERGER ARE FAIR TO AND IN THE BEST INTERESTS OF THE COMPANY'S
AND ITS SHAREHOLDERS AND HAS UNANIMOUSLY APPROVED THE OFFER AND THE MERGER
AGREEMENT AND UNANIMOUSLY RECOMMENDS THAT THE COMPANY'S SHAREHOLDERS ACCEPT THE
OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER.
The purpose of the Offer is to enable Parent to acquire control of, and
the entire equity interest in, the Company.
For purposes of the Offer, the Purchaser will be deemed to have
accepted for payment, and thereby purchased, Shares validly tendered to the
Purchaser as, if and when the Purchaser gives oral or written notice to the
Depositary (as defined in the Offer to Purchase) of the Purchaser's acceptance
for payment of such Shares. Upon the terms and subject to the conditions of the
Offer, payment for Shares accepted for payment pursuant to the Offer will be
made by deposit of the purchase price therefor with the Depositary, which will
act as agent for validly tendering shareholders for the purpose of receiving
payments from the Purchaser and transmitting such payments to validly tendering
shareholders. Under no circumstances will interest on the purchase price for
Shares be paid by the Purchaser, regardless of any extension of the Offer or
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 Shares
into the Depositary's account at one of the Book-Entry Transfer Facilities (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, in the case of a book-entry transfer, an Agent's
Message (as defined in Section 2 of the Offer to Purchase), and (iii) any other
documents required by the Letter of Transmittal.
The Purchaser expressly reserves the right, in its sole discretion, at
any time or from time to time, to extend for any reason the period of time
during which the Offer is open, including the occurrence of any condition
specified in Section 15 of the Offer to Purchase, by giving oral or written
notice of such extension to the Depositary. During any such extension, all
Shares previously tendered and not withdrawn will remain subject to the Offer,
subject to the rights of a tendering shareholder to withdraw his Shares. Any
such extension will be followed as promptly as practicable by public
announcement thereof, such announcement to be made no later than 9:00 a.m., New
York City time, on the next business day after the previously scheduled
expiration date of the Offer.
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 Monday, November 17, 1997 (or, if the Purchaser shall have
extended the period of time for which the Offer is open, the latest time and
date at which the Offer, as so extended by the Purchaser, shall expire) and,
unless theretofore accepted for payment by the Purchaser pursuant to the Offer,
may also be withdrawn at any time after December 19, 1997. For a withdrawal to
be effective, a written, telegraphic or facsimile transmission notice of
withdrawal must be timely received by the Depositary at
2
<PAGE>
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 of such Shares, if different from that of the person who
tendered such Shares. If Share Certificates or Rights 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 or
Rights Certificates, the serial numbers shown on such Share Certificates or
Rights Certificates must be submitted to the Depositary and the signature(s) on
the notice of withdrawal must be guaranteed by an Eligible Institution (as
defined in Section 2 of the Offer to Purchase), unless such Shares or Rights
have been tendered for the account of an Eligible Institution. If Shares or
Rights have been tendered pursuant to the procedure for book-entry transfer as
set forth in Section 2 of the Offer to Purchase, any notice of withdrawal must
also specify the name and number of the account at the Book-Entry Transfer
Facility to be credited with the withdrawn Shares or Rights and otherwise comply
with such Book-Entry Transfer Facility procedures. 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 Offer to Purchase and the related Letter of Transmittal and, if
required, other relevant materials will be mailed to record holders of Shares
whose names appear on the Company's Shareholder list and will be furnished to
brokers, dealers, commercial banks, trust companies and similar persons whose
names, or the names of whose nominees, appear on the 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.
3
<PAGE>
Questions and requests for assistance may be directed to the Dealer
Manager or the Information Agent at their respective addresses and telephone
numbers as set forth below. The Purchaser will not pay any fees or commissions
to any broker or dealer or to any other person (other than the Dealer Manager
and the Information Agent) for soliciting tenders of Shares pursuant to the
Offer. Additional copies of the Offer to Purchase, the Letter of Transmittal and
all other tender offer materials may be obtained from the Information Agent or
from brokers, dealers, commercial banks and trust companies, and will be
furnished promptly at the Purchaser's expense.
The Information Agent for the Offer is:
MacKenzie Partners, Inc.
156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (Call Collect)
or
Call Toll Free (800) 322-2885
The Dealer Manager for the Offer is:
WASSERSTEIN PERELLA & CO., INC.
31 West 52nd Street
New York, New York 10019
(212) 969-2700 (Call Collect)
October 20, 1997
4
<PAGE>
STOCKHOLDER AGREEMENT
AGREEMENT, dated as of October 16, 1997, among BTR plc, an
English public limited company ("Parent"), BTR Acquisition Corporation, a
Delaware corporation and an indirect wholly owned subsidiary of Parent (the
"Purchaser"), and Fiskars OY AB, James A. Risher, Conrad A. Plimpton Trust and
Lance L. Knox 1990 Trust (each, a "Stockholder").
W I T N E S S E T H :
WHEREAS, concurrently with the execution and delivery of this
Agreement, Parent, the Purchaser and Exide Electronics Group, Inc., a Delaware
corporation (the "Company"), have entered into an Agreement and Plan of Merger
(as such agreement may hereafter be amended from time to time, the "Merger
Agreement"), pursuant to which the Purchaser will be merged with and into the
Company (the "Merger");
WHEREAS, in furtherance of the Merger, Parent and the Company
desire that as soon as practicable (and not later than five business days) after
the announcement of the execution of the Merger Agreement, the Purchaser shall
commence a cash tender offer (the "Offer") to purchase at the applicable
Securities Offer Price all outstanding shares of Common Stock and Warrants (each
as defined in Section 1 hereof), including all of the Common Stock and Warrants
beneficially owned by the Stockholder; and
WHEREAS, as an inducement and a condition to entering into the
Merger Agreement, Parent has required that the Stockholder agree, and the
Stockholder has agreed, to enter into this agreement;
NOW, THEREFORE, in consideration of the foregoing and the
mutual representations, warranties, covenants and agreements contained herein,
the parties hereto agree as follows:
1. Definitions. For purposes of this Agreement:
(a) "Beneficially Own" or "Beneficial Ownership" with respect
to any securities shall mean having "beneficial ownership" of such securities
(as determined pursuant to Rule 13d-3 under the Securities Exchange Act of 1934,
as amended (the "Exchange Act")), including pursuant to any agreement,
arrangement or understanding, whether or not in writing. Without duplicative
counting of the same securities by the same holder,
<PAGE>
-2-
securities Beneficially Owned by a Person shall include securities Beneficially
Owned by all other Persons with whom such Person would constitute a "group"
within the meaning of Section 13(d)(3) of the Exchange Act.
(b) "Common Stock" shall mean the Common Stock, par value $.01
per share, of the Company, including the associated Preferred Share Purchase
Rights issued pursuant to the Rights Agreement, dated November 25, 1992 as
amended to date, between the Company and First Union National Bank of North
Carolina, as Rights Agent.
(c) "Person" shall mean an individual, corporation,
partnership, limited liability company, joint venture, association, trust,
unincorporated organization or other entity.
(d) "Preferred Stock" shall mean the Series G Convertible
Preferred Stock, par value $.01 per share, of the Company.
(e) "Warrants" shall mean the warrants to purchase shares of
Common Stock pursuant to the Warrant Agreement, dated March 13, 1996 between the
Company and Firststar Trust Company, formerly named American Bank National
Association, as warrant agent.
(f) Capitalized terms used and not defined herein, and the
term "Acquisition Transaction" have the respective meanings ascribed to them in
the Merger Agreement.
2. Tender of Shares.
(a) In order to induce Parent and the Purchaser to enter into
the Merger Agreement, each Stockholder hereby agrees to validly tender (or cause
the record owner of such shares to validly tender), and not to withdraw,
pursuant to and in accordance with the terms of the Offer, as soon as
practicable after commencement of the Offer pursuant to Section 1.01 of the
Merger Agreement and Rule 14d-2 under the Exchange Act (but subject to Section
2(c)), the number of shares of Common Stock and the number of Warrants, each as
set forth opposite the Stockholder's name on Schedule I hereto (for each such
Stockholders, the "Specified Securities"). The Stockholder hereby acknowledges
and agrees that Parent's and the Purchaser's obligation to accept for payment
and pay for the Securities in the Offer, including the Securities Beneficially
Owned by the Stockholder, is subject to the terms and conditions of the Offer.
<PAGE>
-3-
(b) The Stockholder hereby permits Parent and the Purchaser to
publish and disclose in the Offer Documents and, if approval of the Company's
stockholders is required under applicable law, the Proxy Statement (including
all documents and schedules filed with the Securities and Exchange Commission)
its identity and ownership of the Securities and the nature of its commitments,
arrangements and understandings under this Agreement.
(c) It is understood that some of the shares of Common Stock
listed on Schedule I as Beneficially Owned by Fiskars OY AB ("Fiskars") are
shares issuable upon conversion of 1,000,000 shares of Preferred Stock
Beneficially Owned by Fiskars (representing all of its shares of Preferred
Stock) and in respect of accrued and unpaid dividends thereon. Parent and the
Purchaser agree that Fiskars need not tender any such Common Shares until
Fiskars receives two business days' notice that Parent and the Purchaser will
consummate the Offer within five business days of such notice. Fiskars will, at
or prior to that time, convert all of its Preferred Stock (and accrued and
unpaid dividends thereon) into Common Stock, and tender into the Offer Fiskars'
Specified Securities.
3. Option. In order to induce Parent and the Purchaser to
enter into the Merger Agreement, each Stockholder hereby grants to the Purchaser
an irrevocable option (a "Securities Option") to purchase the Specified
Securities listed on Schedule I (the "Option Securities") at the applicable
Securities Offer Price (the "Purchase Price") which, for purposes of each share
of the Preferred Stock, shall be equal to the Securities Offer Price for one
share of Common Stock multiplied by the number of shares (including fractional
shares) of Common Stock into which such share of Preferred Stock (including
unpaid dividends thereon) is convertible. If (i) the Merger Agreement is
terminated in accordance with Sections 8.01(c), (e)(ii), (f) or (g) thereof or
(ii) the Merger Agreement is terminated in accordance with Section 8.01(b)(ii)
thereof and (x) the Stockholder shall have breached the agreements set forth in
Section 2(a) hereof or (y) at the time of such termination, neither the Minimum
Tender Condition nor the One-Step Conditions shall have been satisfied, the
Securities Option shall, in any such case, become exercisable, in whole or in
part, upon the first to occur of any such event and remain exercisable in whole
or in part until the date which is 90 days after the date of the occurrence of
such event (the "90 Day Period"), so long as: (i) all waiting periods under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), required for the purchase of the Securities
<PAGE>
-4-
upon such exercise shall have expired or been waived and (ii) there shall not be
in effect any preliminary injunction or other order issued by any Governmental
Entity prohibiting the exercise of the Securities Option pursuant to this
Agreement; provided that if (i) all HSR Act waiting periods shall not have
expired or been waived or (ii) there shall be in effect any such injunction or
order, in each case on the expiration of the 90 Day Period, the 90 Day Period
shall be extended until 5 business days after the later of (A) the date of
expiration or waiver of all HSR Act waiting periods, and (B) the date of removal
or lifting of such injunction or order. In the event that the Purchaser wishes
to exercise the Securities Option, the Purchaser shall deliver a written notice
(the "Notice") to the Stockholder identifying the place and date (not less than
two nor more than 10 business days from the date of the Notice) for the closing
of such purchase.
4. Additional Agreements.
(a) Voting Agreement. At the request of Parent, the
Stockholder shall, at any meeting of the stockholders of the Company, however
called, or in connection with any written consent of the stockholders of the
Company, vote (or cause to be voted) all Specified Securities (other than
Warrants) (i) in favor of the Merger, the execution and delivery by the Company
of the Merger Agreement and the approval of the terms thereof and each of the
other actions contemplated by the Merger Agreement and this Agreement and any
actions required in furtherance thereof and hereof; and (ii) against any
Acquisition Transaction and against any action or agreement that would impede,
frustrate, prevent or nullify this Agreement, or result in a breach in any
respect of any covenant, representation or warranty or any other obligation or
agreement of the Company under the Merger Agreement or which would result in any
of the conditions set forth in Annex I to the Merger Agreement or set forth in
Article VII of the Merger Agreement not being fulfilled; provided, however, any
vote pursuant to the proxy granted under clause 4(c) below shall not be a
violation of this clause 4(a).
(b) No Inconsistent Arrangements. The Stockholder hereby
covenants and agrees that, except as contemplated by this Agreement and the
Merger Agreement, it shall not (i) transfer (which term shall include, without
limitation, any sale, gift, pledge or other disposition), or consent to any
transfer of, any or all of the Securities or any interest therein, (ii) enter
into any contract, option or other agreement or understanding with respect to
any transfer of any or all of the Securities or any interest therein, (iii)
grant any
<PAGE>
-5-
proxy, power-of-attorney or other authorization in or with respect to the
Securities, (iv) deposit the Securities into a voting trust or enter into a
voting agreement or arrangement with respect to the Securities or (v) take any
other action that would in any way restrict, limit or interfere with the
performance of its obligations hereunder or the transactions contemplated hereby
or by the Merger Agreement.
(c) Grant of Irrevocable Proxy; Appointment of Proxy.
(i) The Stockholder hereby irrevocably grants to, and appoints, Parent
and John Saunders and David Stevens, or either of them, in their respective
capacities as officers or directors of Parent, and any individual who shall
hereafter succeed to any such office or directorship of Parent, and each of them
individually, the Stockholder's proxy and attorney-in-fact (with full power of
substitution), for and in the name, place and stead of the Stockholder, to vote
the Specified Securities (other than Warrants), and, in the case of Fiskars to
vote the Preferred Stock convertible into such Specified Securities, or grant a
consent or approval in respect of the Specified Securities, in favor of the
various transactions contemplated by the Merger Agreement (the "Transactions")
and against any Acquisition Transaction.
(ii) The Stockholder represents that any proxies heretofore given in
respect of the Stockholder's Option Securities (other than Warrants) are not
irrevocable, and that any such proxies are hereby revoked.
(iii) The Stockholder understands and acknowledges that Parent is
entering into the Merger Agreement in reliance upon the Stockholder's execution
and delivery of this Agreement. The Stockholder hereby affirms that the
irrevocable proxy set forth in this Section 4(c) is given in connection with the
execution of the Merger Agreement, and that such irrevocable proxy is given to
secure the performance of the duties of the Stockholder under this Agreement.
The Stockholder hereby further affirms that the irrevocable proxy is coupled
with an interest and may under no circumstances be revoked. The Stockholder
hereby ratifies and confirms all that such irrevocable proxy may lawfully do or
cause to be done by virtue hereof. Such irrevocable proxy is executed and
intended to be irrevocable in accordance with the provisions of Section 212(e)
of the Delaware General Corporation Law.
<PAGE>
-6-
(d) No Solicitation. The Stockholder hereby agrees, solely in
its capacity as a stockholder of the Company, that neither the Stockholder nor
any controlled affiliates, representatives or agents of it shall (and, if the
Stockholder is a corporation, partnership, trust or other entity, the
Stockholder shall cause its officers, directors, partners, and employees,
representatives and agents, including, but not limited to, investment bankers,
attorneys and accountants, not to), directly or indirectly, encourage, solicit,
participate in or initiate discussions or negotiations with, or provide any
information to, any corporation, partnership, person or other entity or group
(other than Parent, any of its affiliates or representatives) concerning any
Acquisition Transaction. The Stockholder will immediately cease any existing
activities, discussions or negotiations with any parties conducted heretofore
with respect to any Acquisition Transaction. Any action taken by the Company or
any officer or member of the Board of Directors of the Company in accordance
with Section 6.08 of the Merger Agreement shall be deemed not to violate this
Section 4(d).
(e) Best Efforts. Subject to the terms and conditions of this
Agreement, each of the parties hereto agrees to use all reasonable best efforts
to take, or cause to be taken, all actions, and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by this Agreement
and the Merger Agreement. Each party shall promptly consult with the other and
provide any necessary information and material with respect to all filings made
by such party with any Governmental Entity in connection with this Agreement and
the Merger Agreement and the transactions contemplated hereby and thereby.
(f) Waiver of Appraisal Rights. Each Stockholder hereby waives
any rights of appraisal or rights to dissent from the Merger that it may have.
5. Representations and Warranties of the Stockholder. Each
Stockholder hereby represents and warrants to Parent and the Purchaser as
follows:
(a) Ownership of Securities. Such Stockholder is the record
and Beneficial Owner of the Specified Securities, as set forth on Schedule I,
except Parent and the Purchaser acknowledge that some of the shares of Common
Stock that are Fiskars' Specified Securities are issuable upon conversion of
Fiskars' shares of Preferred Stock (and accrued and unpaid
<PAGE>
-7-
dividends thereon). Such Stockholder has sole voting power and sole power to
issue instructions with respect to the matters set forth in Sections 2, 3 and 4
hereof, sole power of disposition, sole power to demand appraisal rights and
sole power to agree to all of the matters set forth in this Agreement, in each
case with respect to all of the Existing Securities with no limitations,
qualifications or restrictions on such rights, subject to applicable securities
laws and the terms of this Agreement and the Management Notes of which Parent is
aware.
(b) Power; Binding Agreement. Such Stockholder has the power
and authority to enter into and perform all of the Stockholder's obligations
under this Agreement. The execution, delivery and performance of this Agreement
by such Stockholder will not violate any other agreement to which such
Stockholder is a party including, without limitations, any voting agreement,
proxy arrangement, pledge agreement, shareholders agreement or voting trust.
This Agreement has been duly and validly executed and delivered by such
Stockholder and constitutes a valid and binding agreement of such Stockholder,
enforceable against such Stockholder in accordance with its terms. There is no
beneficiary or holder of a voting trust certificate or other interest of any
trust of which such Stockholder is a trustee, or any party to any other
agreement or arrangement, whose consent is required for the execution and
delivery of this Agreement or the consummation by such Stockholder of the
transactions contemplated hereby.
(c) No Conflicts. Except for filings under the HSR Act and the
Exchange Act (i) no filing with, and no permit, authorization, consent or
approval of, any Governmental Entity for the execution and delivery of this
Agreement by such Stockholder, the consummation by such Stockholder of the
transactions contemplated hereby and the compliance by such Stockholder with the
provisions hereof and (ii) none of the execution and delivery of this Agreement
by such Stockholder, the consummation by such Stockholder of the transactions
contemplated hereby or compliance by such Stockholder with any of the provisions
hereof shall (A) conflict with or result in any breach of any organizational
documents applicable to such Stockholder, (B) result in a violation or breach
of, or constitute (with or without notice or lapse of time or both) a default
(or give rise to any third party right of termination, cancellation,
modification or acceleration) under any of the terms, conditions or provisions
of any note, loan agreement, bond, mortgage, indenture, license, contract,
commitment, arrangement, understanding, agreement or other instrument or
obligation of any kind to which such Stockholder is a party or by
<PAGE>
-8-
which the Stockholder or any of its properties or assets may be bound, or (C)
violate any order, writ, injunction, decree, judgment, order, statute, rule or
regulation applicable to the Stockholder or any of its properties or assets.
(d) No Liens. Except as permitted by this Agreement, the
Specified Securities and the certificates representing such Securities are now,
and at all times during the term hereof will be, held by the Stockholder, or by
a nominee or custodian or other agent for the benefit of the Stockholder, free
and clear of all Liens, proxies, voting trusts or agreements, understandings or
arrangements or any other rights whatsoever, except for any such Liens or
proxies arising hereunder.
(e) No Finder's Fees. No broker, investment banker, financial
advisor or other person is entitled to any broker's, finder's, financial
adviser's or other similar fee or commission in connection with the transactions
contemplated hereby based upon arrangements made by or on behalf of such
Stockholder.
(f) Reliance by Parent. Such Stockholder understands and
acknowledges that Parent is entering into, and causing the Purchaser to enter
into, the Merger Agreement in reliance upon the Stockholder's execution and
delivery of this Agreement.
(g) Parent and the Purchaser acknowledge that certain
Stockholders may hold their Securities in margin accounts, and that certain
Stockholders are parties to Management Notes with the Company, and agree that
neither such state of facts violates any of the representations of such
Stockholder set forth herein, except that such certain Stockholders will remove,
without cost to Parent or the Purchaser, such Securities from any margin account
and discharge the Management Notes to the extent necessary to comply, on a
timely basis, with Section 2, 3 and 4 hereof.
6. Representations and Warranties of Parent and the Purchaser.
Each of Parent and the Purchaser hereby represents and warrants to the
Stockholder as follows:
(a) Power; Binding Agreement. Parent and the Purchaser each
has the corporate power and authority to enter into and perform all of its
obligations under this Agreement. The execution, delivery and performance of
this Agreement by each of Parent and the Purchaser will not violate any other
agreement to which either of them is a party. This Agreement has
<PAGE>
-9-
been duly and validly executed and delivered by each of Parent and the Purchaser
and constitutes a valid and binding agreement of each of Parent and the
Purchaser, enforceable against each of Parent and the Purchaser in accordance
with its terms.
(b) No Conflicts. Except for filings under the HSR Act and the
Exchange Act, (i) no filing with, and no permit, authorization, consent or
approval of, any Governmental Entity is necessary for the execution of this
Agreement by each of Parent and the Purchaser, the consummation by each of
Parent and the Purchaser of the transactions contemplated hereby and the
compliance by Parent and the Purchaser with the provisions hereof and (ii) none
of the execution and delivery of this Agreement by each of Parent and the
Purchaser, the consummation by each of Parent and the Purchaser of the
transactions contemplated hereby or compliance by each of Parent and the
Purchaser with any of the provisions hereof shall (A) conflict with or result in
any breach of any organizational documents applicable to either of Parent or the
Purchaser, (B) result in a violation or breach of, or constitute (with or
without notice or lapse of time or both) a default (or give rise to any third
party right of termination, cancellation, modification or acceleration) under
any of the terms, conditions or provisions of any note, loan agreement, bond,
mortgage, indenture, license, contract, commitment, arrangement, understanding,
agreement or other instrument or obligation of any kind to which either of
Parent or the Purchaser is a party or by which either of Parent or the Purchaser
or any of their properties or assets may be bound, or (C) violate any order,
writ, injunction, decree, judgment, order, statute, rule or regulation
applicable to either of Parent or the Purchaser or any of their properties or
assets.
7. Further Assurances. From time to time, at the other party's
request and without further consideration, each party hereto shall execute and
deliver such additional documents and take all such further lawful action as may
be necessary or desirable to consummate and make effective, in the most
expeditious manner practicable, the transactions contemplated by this Agreement.
8. Stop Transfer. The Stockholder shall not request that the
Company register the transfer (book-entry or otherwise) of any certificate or
uncertificated interest representing any of the Securities, unless such transfer
is made in compliance with this Agreement. In the event of a stock dividend or
distribution, or any change in the Common Stock or Preferred Stock by reason of
any stock dividend, split-up, recapitalization, combination, exchange of shares
or the like, the
<PAGE>
-10-
term "Securities" shall refer to and include the Securities as well as all such
stock dividends and distributions and any shares into which or for which any and
all of the Securities may be changed or exchanged.
9. Termination. The covenants, agreements and proxy contained
herein with respect to the Securities shall terminate upon the earlier of (a)
the Effective Time, (b) the first anniversary of the date hereof or (c) the
termination of the Merger Agreement pursuant to Sections 8.01(a), (b)(i) or
(iii), (d) or (e)(i) thereof.
10. Miscellaneous.
(a) Entire Agreement. This Agreement and the Merger Agreement
constitute the entire agreement between the parties with respect to the subject
matter hereof and supersede all other prior agreements and understandings, both
written and oral, between the parties with respect to the subject matter hereof.
(b) Binding Agreement. This Agreement and the obligations
hereunder shall attach to the Securities and shall be binding upon any person or
entity to which legal or beneficial ownership of the Securities shall pass,
whether by operation of law or otherwise, including, without limitation, the
Stockholder's administrators or successors. Notwithstanding any transfer of
Securities, the transferor shall remain liable for the performance of all
obligations of the transferor under this Agreement.
(c) Assignment. This Agreement shall not be assigned by
operation of law or otherwise without the prior written consent of the relevant
Stockholder or Parent and the Purchaser, as the case may be, provided that
Parent or the Purchaser may assign, in its sole discretion, its rights and
obligations hereunder to any direct or indirect wholly owned subsidiary of
Parent, but no such assignment shall relieve Parent or the Purchaser of its
obligations hereunder if such assignee does not perform such obligations.
(d) Amendments, Waivers, Etc. This Agreement may not be
amended, changed, supplemented, waived or otherwise modified or terminated,
except upon the execution and delivery of a written
agreement executed by the parties hereto.
(e) Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and
<PAGE>
-11-
shall be given by hand delivery or telecopy (with a confirmation copy sent for
next day delivery via courier service, such as Federal Express), or by any
courier service, such as Federal Express, providing proof of delivery. All
communications hereunder shall be delivered to the respective parties at the
following addresses:
If to any
Stockholder at the address set forth on Schedule II, with
copies as set forth on such Schedule II.
If to Parent
or the Purchaser:
BTR plc
BTR House
Carlisle Place
London, England SW1P 1BX
Attention: David J. Stevens,
General Counsel
Telephone No.:
Telecopy No.: 011-44-171-821-3805
011-44-171-821-3806
Copies to: BTR Incorporated
Stamford Harbor Park
333 Ludlow Street
Stamford, Connecticut 06902
Attention: Edgar P. DeVylder
Vice President, General
Counsel & Secretary
Telephone No.: (203) 352-0000
Telecopy No.: (203) 324-0503
Cahill Gordon & Reindel
80 Pine Street
New York, New York 10005
Attention: W. Leslie Duffy
Telephone No.: (212) 701-3000
Telecopy No.: (212) 269-5420
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
(f) Severability. Whenever possible, each provision or portion
of any provision of this Agreement will be inter-
<PAGE>
-12-
preted in such manner as to be effective and valid under applicable law but if
any provision or portion of any provision of this Agreement is held to be
invalid, illegal or unenforceable in any respect under any applicable law or
rule in any jurisdiction such invalidity, illegality or unenforceability will
not affect any other provision or portion of any provision in such jurisdiction,
and this Agreement will be reformed, construed and enforced in such jurisdiction
as if such invalid, illegal or unenforceable provision or portion of any
provision had never been contained herein.
(g) Specific Performance. Each of the parties hereto
recognizes and acknowledges that a breach by it of any covenants or agreements
contained in this Agreement will cause the other party to sustain damages for
which it would not have an adequate remedy at law for money damages, and
therefore in the event of any such breach the aggrieved party shall be entitled
to the remedy of specific performance of such covenants and agreements and
injunctive and other equitable relief in addition to any other remedy to which
it may be entitled, at law or in equity.
(h) Remedies Cumulative. All rights, powers and remedies
provided under this Agreement or otherwise available in respect hereof at law or
in equity shall be cumulative and not alternative, and the exercise of any
thereof by any party shall not preclude the simultaneous or later exercise of
any other such right, power or remedy by such party.
(i) No Waiver. The failure of any party hereto to exercise any
right, power or remedy provided under this Agreement or otherwise available in
respect hereof at law or in equity, or to insist upon compliance by any other
party hereto with its obligations hereunder, and any custom or practice of the
parties at variance with the terms hereof, shall not constitute a waiver by such
party of its right to exercise any such or other right, power or remedy or to
demand such compliance.
(j) No Third Party Beneficiaries. This Agreement is not
intended to be for the benefit of, and shall not be enforceable by, any person
or entity who or which is not a party hereto.
(k) Governing Law. This Agreement shall be governed and
construed in accordance with the laws of the State of Delaware, without giving
effect to the principles of conflicts of law thereof.
<PAGE>
-13-
(l) Waiver of Jury Trial. Each party hereto hereby waives any
right to a trial by jury in connection with any action, suit or proceeding
brought in connection with this Agreement.
(m) Descriptive Headings. The descriptive headings used herein
are inserted for convenience of reference only and are not intended to be part
of or to affect the meaning or interpretation of this Agreement.
(n) Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original, but all of which,
taken together, shall constitute one and the same agreement.
IN WITNESS WHEREOF, Parent, the Purchaser and the Stockholders
have caused this Agreement to be duly executed as of the day and year first
above written.
James A. Risher BTR plc
By: ____________________
_______________________ Name: _________________
Title: _________________
Conrad A. Plimpton Trust BTR ACQUISITION CORPORATION
By: ____________________
By: ___________________ Name: _________________
Title: Title: _________________
Lance L. Knox 1990 Trust FISKARS OY AB
By: ____________________
By: ___________________ Name: _________________
Title: Title: _________________
With respect to the Stockholder Agreement, dated March 13, 1996,
between the Company and Fiskars, the "Stockholder Agreement"), the Company
hereby exempts this Agreement and Fiskars from the terms of the Stockholder
Agreement, including without limitation Sections 1.2, 1.3, 3.2, 3.3, 3.4, to the
extent necessary so that the Stockholder can fully perform its obligations to
Parent and the Purchaser under this Agreement.
<PAGE>
-14-
The Company also acknowledges that the entry into this Agreement and
performance by a Stockholder of its obligations hereunder does not violate the
terms of any Management Notes.
EXIDE ELECTRONICS GROUP, INC.
By:_________________________
Name:
Title:
<PAGE>
Schedule I
<TABLE>
<CAPTION>
Common Issu- Common Issu-
able Upon able Upon
Conversion of Conversion of
Shareholder Common Preferred Unpaid Dividends Total
----------- ------ --------- ---------------- -----
<S> <C> <C> <C> <C>
James A. Risher 239,068 239,068
Conrad A. Plimpton Trust 229,069 229,069
Lance L. Knox 1990 Trust 124,282 124,282
Fiskars OY AB 613,947 1,000,00 66,667 1,680,614
---------
2,273,033
</TABLE>
<PAGE>
Schedule II
Notice Copy to:
James A. Risher Nicholas Costanza
2419 Anderson Drive Exide Electronics Group, Inc.
Raleigh, NC 27608 8609 Six Forks Road
Raleigh, NC 27615
Conrad A. Plimpton Trust Nicholas Costanza
c/o Cymric Exide Electronics Group, Inc.
8609 Six Forks Road
Costa Mesa, CA Raleigh, NC 27615
Lance L. Knox 1990 Trust Nicholas Costanza
c/o Lance L. Knox Exide Electronics Group, Inc.
3342 North Southport Avenue 8609 Six Forks Road
Chicago, IL 60657 Raleigh, NC 27615
Fiskars OY AB Ralph R. Roer
POB 235 Foley & Lardner
FIN-00101 Helsinki 777 E. Wisconsin Avenue
Finland Milwaukee, WI 53201
<PAGE>
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of October 16, 1997, by
and among BTR plc, an English public limited company ("Parent"), BTR Acquisition
Corporation, a Delaware corporation and a subsidiary of Parent (the
"Purchaser"), and Exide Electronics Group, Inc., a Delaware corporation (the
"Company").
WHEREAS, as a condition and inducement to Parent's willingness
to enter into this Agreement, Parent has requested that the Company approve, and
the Company has approved, the Parent entering into Stockholder Agreements, dated
the date hereof, with certain holders of capital stock of the Company (the
"Stockholder Agreements");
WHEREAS, the Board of Directors of the Company has approved
the foregoing agreements and the transactions contemplated thereby;
WHEREAS, the respective Boards of Directors of Parent, the
Purchaser and the Company have approved the acquisition of the Company by Parent
on the terms and subject to the conditions set forth in this Agreement;
WHEREAS, in furtherance of such acquisition, Parent proposes
to cause the Purchaser to make a tender offer (as it may be amended from time to
time as permitted under this Agreement, the "Offer") to purchase (i) all of the
shares of Common Stock, par value $.01 per share, of the Company (the "Common
Shares" or "Shares") (including the associated Preferred Share Purchase Rights
(the "Rights") issued pursuant to the Rights Agreement dated as of November 25,
1992 between the Company and First Union National Bank of North Carolina, as
Rights Agent, as amended (the "Rights Agreement")) at a price per Common Share
of $29.00 net to the Seller in cash (such price, as it may hereafter be
increased, the "Common Share Offer Price") and (ii) all of the warrants (the
"Warrants", which Warrants together with the Shares are hereinafter defined as
the "Securities") to purchase Shares pursuant to the Warrant Agreement (the
"Warrant Agreement"), dated as of March 13, 1996, by and between the Company and
Firststar Trust Company, formerly named American Bank National Association, as
warrant agent, at a price per Common Share purchasable upon exercise of such
Warrant of $15.525 net to the seller in cash (such price, as it may hereafter be
increased, the "Warrant Offer Price" and, together with the Common Share Offer
Price, the "Securities Offer Prices"), in each case, upon the terms and subject
to the conditions set forth in this Agreement;
WHEREAS, the Board of Directors of the Company (the
<PAGE>
"Board") has unanimously approved this Agreement, the Offer and the Merger (as
hereinafter defined), has determined that the Offer and the Merger are fair and
in the best interests of the Company's shareholders (the "Shareholders") and is
recommending that the Shareholders accept the Offer and tender all their Shares
and adopt and approve the Merger Agreement;
WHEREAS, the respective Boards of Directors of Parent, the
Purchaser and the Company have approved the merger of the Purchaser with and
into the Company, as set forth below (the "Merger"), in accordance with the
General Corporation Law of the State of Delaware (the "GCL") and upon the terms
and subject to the conditions set forth in this Agreement, whereby each issued
and outstanding Security not owned directly or indirectly by Parent or the
Company will be converted into the right to receive the Securities Offer Price
applicable thereto in cash;
WHEREAS, Parent, the Purchaser and the Company desire to make
certain representations, warranties, covenants and agreements in connection with
the Offer and the Merger and also to prescribe various conditions to the Offer
and the Merger.
NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants and agreements set forth
herein, Parent, the Purchaser and the Company agree as follows:
ARTICLE I
THE OFFER
SECTION 1.01 The Offer.
(a) So long as none of the events set forth in
clauses (a) through (i) of Annex I hereto (as hereinafter provided) shall have
occurred or exist, the Purchaser shall, and Parent shall cause the Purchaser to,
commence (within the meaning of Rule 14d-2(a) of the Securities Exchange Act of
1934, as amended (the "Exchange Act")) as promptly as practicable after the date
hereof, but in any event not later than October 22, 1997, the Offer for all
outstanding Securities at the Securities Offer Price applicable to such
Securities, net to the seller in cash. The initial expiration date for the Offer
shall be the twentieth business day from and after the date the Offer is
commenced, including the date of commencement as the first business day in
accordance with Rule 14d-2 under the Exchange Act (the "Initial Expiration
Date"). As promptly as practicable, the
-2-
<PAGE>
Purchaser shall file with the Securities and Exchange Commission (the "SEC") the
Purchaser's Tender Offer Statement on Schedule 14D-1 (together with any
supplements or amendments thereto, the "Offer Documents"), which shall contain
(as an exhibit thereto) the Purchaser's Offer to Purchase (the "Offer to
Purchase") which shall be mailed to the holders of Securities with respect to
the Offer. The obligation of Parent to accept for payment or pay for any
Securities tendered pursuant to the Offer will be subject only to the
satisfaction or waiver (which waiver is restricted only to the extent set forth
in the next succeeding sentence) of the conditions set forth in Annex I hereto.
Without the prior written consent of the Company, the Purchaser shall not
decrease the price per Security or change the form of consideration payable in
the Offer, decrease the number of Shares or Warrants sought to be purchased in
the Offer, change the conditions set forth in Annex I, waive or reduce the
Minimum Condition (as defined in Annex I) to lower than fifty percent of the
fully diluted Common Shares, impose additional conditions to the Offer or amend
any other term of the Offer in any manner adverse to the holders of any
Securities, provided, however, that if all of the conditions to the Offer are
then satisfied or waived, the Parent, in order to permit the Merger to become
effective without a meeting of Shareholders in accordance with Section 253 of
the GCL, shall have the right (i) to extend the Offer for a period or periods
aggregating up to ten business days from the then effective Expiration Date;
provided, that prior to any such extensions referred to in this clause (i),
Parent and the Purchaser shall deliver to the Company a written notice that all
conditions set forth on Annex I hereto are permanently deemed to be satisfied
except for a failure of the Minimum Condition to occur or any other such
conditions the failure of which to be satisfied results from an intentional
breach hereof by the Company, and (ii) thereafter to extend the Offer with the
prior written consent of the Company; and provided further that Parent may
extend the Offer to the extent required by law or regulation. Subject to the
terms of the Offer and this Agreement and the satisfaction or waiver (which
waiver is restricted only to the extent set forth in the immediately preceding
sentence) of all the conditions of the Offer set forth in Annex I hereto as of
any expiration date, Parent will accept for payment and pay for all Securities
validly tendered and not withdrawn pursuant to the Offer as soon as practicable
after such expiration date of the Offer. Subject to Section 8.01, if the
conditions set forth in Annex I hereto are not satisfied or, waived by the
Parent, as of the Initial Expiration Date (or any subsequently scheduled
expiration date), Parent will extend the Offer from time to time for the
shortest time periods which it reasonably believes are necessary until the
consummation of the Offer. Each of Parent
-3-
<PAGE>
and the Purchaser shall use its reasonable best efforts to avoid the occurrence
of any event specified in Annex I or to cure any such event that shall have
occurred.
(b) The Offer Documents will comply in all
material respects with the provisions of applicable federal securities laws and,
on the date filed with the SEC and on the date first published, sent or given to
the Shareholders, shall not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements made therein, in light of the circumstances under
which they were made, not misleading, except that no representation is made by
Parent or the Purchaser with respect to information supplied by the Company in
writing for inclusion in the Offer Documents. Each of Parent and the Purchaser,
on the one hand, and the Company, on the other hand, agrees promptly to correct
any information provided by it for use in the Offer Documents if and to the
extent that it shall have become false or misleading in any material respect and
the Purchaser further agrees to take all steps necessary to cause the Offer
Documents as so corrected to be filed with the SEC and to be disseminated to
Shareholders, in each case as and to the extent required by applicable federal
securities laws.
SECTION 1.02 Company Actions.
(a) The Company shall promptly file with the SEC
and mail to the holders of Securities a Solicitation/Recommendation Statement on
Schedule 14D-9 with respect to the Offer (together with any amendments or
supplements thereto, the "Schedule 14D-9"). The Schedule 14D-9 will set forth,
and the Company hereby represents, that the Board, at a meeting duly called and
held, has (i) determined that the Offer and the Merger are fair to and in the
best interests of the Company and its Shareholders, (ii) approved the Offer and
the Merger in accordance with Section 203 of the GCL, and (iii) resolved to
recommend acceptance of the Offer and approval and adoption of the Merger and
this Agreement by the Company's Shareholders (in accordance with the
requirements of the Company's certificate of incorporation and of applicable
law); provided, however, that such recommendation and approval may be withdrawn,
modified or amended to the extent that the Board determines reasonably and in
good faith that it is necessary under applicable law to do so in the exercise of
its fiduciary obligations after being advised with respect thereto by outside
counsel.
(b) The Schedule 14D-9 will comply in all
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material respects with the provisions of applicable federal securities laws and,
on the date filed with the SEC and on the date first published, sent or given to
the Shareholders, shall not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements made therein, in light of the circumstances under
which they were made, not misleading, except that no representation is made by
the Company with respect to information supplied by the Parent or Purchaser in
writing for inclusion in the Schedule 14D-9. Each of the Company, on the one
hand, and Parent and the Purchaser, on the other hand, agree promptly to correct
any information provided by either of them for use in the Schedule 14D-9 if and
to the extent that it shall have become false or misleading, and the Company
further agrees to take all steps necessary to cause the Schedule 14D-9 as so
corrected to be filed with the SEC and to be disseminated to the Shareholders,
in each case as and to the extent required by applicable federal securities law.
(c) In connection with the Offer, the Company
will furnish the Purchaser with such information and assistance as the Purchaser
or its agents or representatives may reasonably request in connection with
communicating the Offer to the record and beneficial holders of the Securities,
including, without limitation, its stockholders list, security position listings
and non-objecting beneficial owners list.
SECTION 1.03 Directors.
(a) Subject to compliance with applicable law,
promptly upon the payment by the Purchaser for Securities pursuant to the Offer,
and from time to time thereafter, Parent shall be entitled to designate such
number of directors, rounded up to the next whole number, on the Board as is
equal to the product of the total number of directors on the Board (determined
after giving effect to the directors elected pursuant to this sentence)
multiplied by the percentage that the aggregate number of Common Shares
beneficially owned by Parent or its affiliates bears to the total number of
Shares then outstanding, and the Company shall, upon request of Parent, promptly
take all actions necessary to cause Parent's designees to be so elected,
including, if necessary, seeking the resignations of one or more existing
directors; provided, however, that prior to the Effective Time (as defined in
Section 2.02), the Board shall always have at least three members who are
neither officers, directors, stockholders or designees of the Purchaser or any
of its affiliates ("Purchaser Insiders"). If the number of directors who are not
Purchaser Insiders is reduced below three
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for any reason prior to the Effective Time, the remaining directors who are not
Purchaser Insiders (or if there is only one director who is not a Purchaser
Insider, the remaining director who is not a Purchaser Insider) shall be
entitled to designate a person (or persons) to fill such vacancy (or vacancies)
who is not an officer, director, stockholder or designee of the Purchaser or any
of its affiliates and who shall be a director not deemed to be a Purchaser
Insider for all purposes of this Agreement.
(b) The Company's obligations to appoint
Parent's designees to the Board shall be subject to Section 14(f) of the
Exchange Act and Rule 14f-1 thereunder. The Company shall promptly take all
actions required pursuant to such Section and Rule in order to fulfill its
obligations under this Section 1.03 and shall include in the Schedule 14D-9 such
information with respect to the Company and its officers and directors as is
required under such Section and Rule in order to fulfill its obligations under
this Section 1.03. Parent will supply any information with respect to itself and
its officers, directors and affiliates required by such Section and Rule to the
Company.
(c) From and after the election or appointment
of Parent's designees pursuant to this Section 1.03 and prior to the Effective
Time, any amendment or termination of this Agreement by the Company, any
extension by the Company of the time for the performance of any of the
obligations or other acts of Parent or the Purchaser or waiver of any of the
Company's rights hereunder, or any other action taken by the Board in connection
with this Agreement, will require the concurrence of a majority of the directors
of the Company then in office who are not Purchaser Insiders.
ARTICLE II
THE MERGER
SECTION 2.01 The Merger. Upon the terms and subject to the
satisfaction or waiver of the conditions hereof, and in accordance with the
applicable provisions of this Agreement and the GCL, at the Effective Time (as
defined in Section 2.02) the Purchaser shall be merged with and into the
Company. Following the Merger, the separate corporate existence of the Purchaser
shall cease and the Company shall continue as the surviving corporation (the
"Surviving Corporation"). At the option of Parent and provided that such
amendment does not delay the Effective Time, the Merger may be structured so
that, and this
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Agreement shall thereupon be amended to provide that, the Company shall be
merged with and into the Purchaser or another direct or indirect wholly-owned
subsidiary of Parent, with the Purchaser or such other subsidiary of Parent
continuing as the Surviving Corporation; provided, however, that the Company
shall be deemed not to have breached any of its representations and warranties
herein if and to the extent such breach would have been attributable to such
election.
SECTION 2.02 Effective Time; Closing. As soon as practicable
after the satisfaction or waiver of either the Second Step Conditions or the
One-Step Conditions described in Article VII hereof, the Company shall execute
in the manner required by the GCL and deliver to the Secretary of State of the
State of Delaware a duly executed and verified certificate of merger, or, if
permitted, a certificate of ownership and merger, and the parties shall take
such other and further actions as may be required by law to make the Merger
effective. The time the Merger becomes effective in accordance with applicable
law is referred to as the "Effective Time."
SECTION 2.03 Effects of the Merger. The Merger shall have the
effects set forth in Section 259 of the GCL.
SECTION 2.04 Certificate of Incorporation and By-Laws of the
Surviving Corporation.
(a) The certificate of incorporation of the
Company (or such other subsidiary of Parent if Parent exercises its option
pursuant to the last sentence of Section 2.01 hereof), as in effect immediately
prior to the Effective Time, shall be the certificate of incorporation of the
Surviving Corporation, until thereafter amended in accordance with the
provisions thereof and hereof and applicable law.
(b) Subject to the provisions of Section 6.07 of
this Agreement, the by-laws of the Purchaser in effect at the Effective Time
shall be the by-laws of the Surviving Corporation, until thereafter amended in
accordance with the provisions thereof and hereof and applicable law.
SECTION 2.05 Directors. Subject to applicable law, the
directors of the Purchaser immediately prior to the Effective Time shall be the
initial directors of the Surviving Corporation and shall hold office until their
respective successors are duly elected and qualified, or their earlier death,
resignation or removal.
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SECTION 2.06 Officers. The officers of the Company immediately
prior to the Effective Time shall be the initial officers of the Surviving
Corporation and shall hold office until their respective successors are duly
elected and qualified, or their earlier death, resignation or removal.
SECTION 2.07 Conversion of Securities. At the Effective Time,
by virtue of the Merger and without any action on the part of the holders
thereof, (a) each Share issued and outstanding immediately prior to the
Effective Time (other than any Shares held by Parent, the Purchaser, any
wholly-owned subsidiary of Parent 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,
shall be cancelled and retired and shall cease to exist with no payment being
made with respect thereto, and other than Dissenting Shares (as defined in
Section 3.01)) shall be converted into the right to receive in cash the
Securities Offer Price applicable thereto (the "Merger Price"), and (b) in
accordance with Section 14(m) of the Warrant Agreement, (i) the Warrant
Agreement and each of the Warrants, if any, which has not been purchased by
Parent in the Offer shall terminate and (ii) each holder of a Warrant, if any,
which has not been purchased by Parent in the Offer, without having to take any
other action than the surrendering of such Warrant to the Surviving Corporation,
shall receive in respect of each Common Share that may have been acquired upon
exercise of such Warrant an amount (the "Warrant Spread Amount") equal to the
amount (if any) by which the Merger Price applicable to one Common Share exceeds
the exercise price per share of such Warrant pursuant to the Warrant Agreement,
in each case, payable to the holder thereof, without interest thereon, upon
surrender of the certificate formerly representing such Security.
SECTION 2.08 Conversion of Purchaser Common Stock. At the
Effective Time, each share of common stock, par value $.01 per share, of the
Purchaser issued and outstanding immediately prior to the Effective Time shall,
by virtue of the Merger and without any action on the part of the holder
thereof, be converted into and become the number of validly issued, fully paid
and nonassessable shares of common stock, par value $.01 per share, of the
Surviving Corporation equal to the number of shares of Common Stock outstanding
on a fully diluted basis immediately prior to the Effective Time.
SECTION 2.09 Company Option Plans.
(a) Parent and the Company shall take all
actions
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necessary so that, immediately prior to the earlier of (1) the acceptance for
payment and purchase of Securities by the Purchaser pursuant to the Offer and
(2) the Effective Time, (A) each outstanding option to purchase Common Shares
(an "Option") granted under the Company's 1995 Employee Stock Option and
Restricted Stock Plan, 1995 Directors Plan, 1989 Stock Option Plan and
Non-Employee Directors Stock Option Plan (collectively, the "Option Plans"),
whether or not then exercisable or vested, shall become fully exercisable and
vested, (B) each Option which is then outstanding shall be cancelled and (C) in
consideration of such cancellation, and except to the extent that Parent or the
Purchaser and the holder of any such Option otherwise agree, immediately
following consummation of the Offer, the Company shall pay to such holders of
Options an amount in respect thereof equal to the product of (1) the excess of
the Merger Price over the exercise price thereof and (2) the number of Common
Shares subject thereto (such payment to be net of taxes required by law to be
withheld with respect thereto); provided that the foregoing shall be subject to
the obtaining of any necessary consents of holders of Options, it being agreed
that the Company and Parent will use their reasonable best efforts to obtain any
such consents.
(b) Parent and the Company shall take all
actions necessary so that, immediately prior to the Effective Time, each
outstanding right to purchase Common Shares (an "ESPP Option") granted under the
Company's Employee Stock Purchase Plan, as amended ("ESPP"), shall be cancelled
and in consideration of such cancellation, and except to the extent that Parent
or the Purchaser and the holder of any such ESPP Option otherwise agree,
immediately prior to the Effective Time, the Company shall pay to such holders
of ESPP Options an amount in respect thereof equal to the product of (A) the
excess of the Merger Price over the Offering Price (as defined in the ESPP)
thereof and (B) the number of Common Shares subject thereto (such payment to be
net of taxes required by law to be withheld with respect thereto); provided that
the foregoing shall be subject to the obtaining of any necessary consents of
holders of ESPP Options, it being agreed that the Company and Parent will use
their reasonable best efforts to obtain any such consents and to terminate the
ESPP in connection therewith. The number of shares subject to an ESPP Option
immediately prior to the Effective Time shall be deemed to equal that number of
Common Shares that would be purchased on the last day of the then-current
Purchase Period (as defined in the ESPP) assuming that they were purchased at
the Offering Price and that the holder of such ESPP Option did not exercise his
or her right to withdraw from participation in the ESPP after the Effective
Time.
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SECTION 2.10 Shareholders' Meeting.
(a) If required by the Company's certificate of
incorporation and/or applicable law in order to consummate the Merger, the
Company, acting through the Board, shall, in accordance with applicable law:
(i) duly call, give notice of, convene
and hold a special meeting of its Shareholders (the "Special Meeting") as soon
as practicable following the acceptance for payment of and payment for
Securities by the Purchaser pursuant to the Offer for the purpose of considering
and taking action upon this Agreement;
(ii) prepare and file with the SEC a
preliminary proxy statement relating to the Merger and this Agreement and use
its best efforts (x) to obtain and furnish the information required to be
included by the SEC in the Proxy Statement (as hereinafter defined) and, after
consultation with Parent, to respond promptly to any comments made by the SEC
with respect to the preliminary proxy statement and cause a definitive proxy
statement (the "Proxy Statement") to be mailed to its Shareholders and (y) to
obtain the necessary approvals of the Merger and this Agreement by its
Shareholders; and
(iii) subject to the fiduciary obligations
of the Board under applicable law as advised by outside counsel, include in the
Proxy Statement the recommendation of the Board that Shareholders vote in favor
of the approval of the Merger and the adoption of this Agreement.
(b) Parent agrees that it will vote, or cause to
be voted, all of the Shares then owned by it, the Purchaser or any of its other
subsidiaries in favor of the approval of the Merger and the adoption of this
Agreement.
SECTION 2.11 Merger Without Meeting of Shareholders.
Notwithstanding Section 2.10, in the event that Parent, the Purchaser or any
other subsidiary of Parent shall acquire at least 90% of the outstanding shares
of each outstanding class of capital stock of the Company pursuant to the Offer,
the parties hereto agree to take all necessary and appropriate action to cause
the Merger to become effective as soon as practicable after the acceptance for
payment of and payment for Securities by the Purchaser pursuant to the Offer
without a meeting of Shareholders, in accordance with Section 253 of the GCL.
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SECTION 2.12 Earliest Consummation. Each party hereto shall
use its reasonable best efforts to consummate the Merger as soon as practicable.
If the conditions set forth in Annex I hereto are satisfied, or (subject to the
fifth sentence of Section 1.01(a)), waived, the Purchaser shall consummate the
Offer and accept for payment Securities tendered therein and thereafter
effectuate the Merger subject to the proviso in the fourth sentence of Section
1.01(a); provided, that if the conditions set forth in Annex II hereto are
satisfied prior to the satisfaction of the conditions set forth in Annex I
hereto, the parties shall consummate the Merger as promptly as practicable.
ARTICLE III
DISSENTING SHARES; PAYMENT FOR SHARES AND WARRANTS
SECTION 3.01 Dissenting Shares. Notwithstanding anything in
this Agreement to the contrary, Shares outstanding immediately prior to the
Effective Time and held by a holder who has not voted in favor of the Merger or
consented thereto in writing and who has demanded appraisal for such Shares in
accordance with Section 262 of the GCL, if such Section 262 provides for
appraisal rights for such Shares in the Merger ("Dissenting Shares"), shall not
be converted into the right to receive the Merger Price as provided in Section
2.07, unless and until such holder fails to perfect or withdraws or otherwise
loses his right to appraisal and payment under the GCL. If, after the Effective
Time, any such holder fails to perfect or withdraws or loses his right to
appraisal, such Dissenting Shares shall thereupon be treated as if they had been
converted as of the Effective Time into the right to receive the Merger Price,
if any, to which such holder is entitled, without interest or dividends thereon.
The Company shall give Parent prompt notice of any demands received by the
Company for appraisal of Shares and, prior to the Effective Time, Parent shall
have the right to participate in all negotiations and proceedings with respect
to such demands. Prior to the Effective Time, the Company shall not, except with
the prior written consent of Parent, make any payment with respect to, or settle
or offer to settle, any such demands.
SECTION 3.02 Payment for Securities.
(a) From and after the Effective Time, a bank or
trust company mutually acceptable to Parent and the Company
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(pursuant to an agreement satisfactory to Parent and the Company) shall act as
paying agent (the "Paying Agent") in effecting the payment of (i) the Merger
Price in respect of certificates (the "Share Certificates") that, prior to the
Effective Time, represented Shares entitled to payment of the Merger Price
pursuant to Section 2.07, and (ii) the applicable consideration in respect of
certificates (the "Warrant Certificates" and, together with the Share
Certificates, the "Certificates") that, prior to the Effective Time, represented
Warrants entitled to payment therefor pursuant to Section 2.07. At the Effective
Time, Parent or the Purchaser shall deposit, or cause to be deposited, in trust
with the Paying Agent the aggregate Merger Price and Warrant Spread Amount to
which holders of Securities shall be entitled at the Effective Time pursuant to
Section 2.07. The funds so deposited shall be invested by the Paying Agent as
directed by Parent in obligations of, or guaranteed by, the United States of
America, in commercial paper obligations rated A-1 or P-1 or better by Moody's
Investor Services or Standard & Poor's Corporation, respectively, or in
certificates of deposit, bank repurchase agreements or bankers, acceptances of
commercial banks with capital exceeding $100 million, in each case with
maturities not exceeding seven days. All earnings thereon shall inure to the
benefit of the Surviving Corporation.
(b) Promptly after the Effective Time, the
Paying Agent shall mail to each record holder of Certificates that immediately
prior to the Effective Time represented Securities (other than Share
Certificates representing Dissenting Shares and Certificates representing
Securities held by Parent or the Purchaser, any wholly-owned subsidiary of
Parent or the Purchaser, in the treasury of the Company or by any wholly-owned
subsidiary of the Company) a form of letter of transmittal which shall specify
that delivery shall be effected, and risk of loss and title to the Certificates
shall pass, only upon proper delivery of the Certificates to the Paying Agent
and instructions for use in surrendering such Certificates and receiving the
aggregate Merger Price or aggregate Warrant Spread Amount, as applicable, in
respect thereof. Upon the surrender of each such Certificate, the Paying Agent
shall pay the holder of such Certificate (i) in respect of Shares, the Merger
Price multiplied by the number of Shares formerly represented by such
Certificate, and (ii) in respect of Warrants, the Warrant Spread Amount
multiplied by the number of shares of Common Stock that may have been acquired
upon exercise of the Warrant formerly represented by such Certificate, in each
case in consideration therefor, and such Certificate shall forthwith be
cancelled. Until so surrendered, each such Certificate (other than Share
Certificates representing Dissenting Shares and Certificates
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representing Securities held by Parent or the Purchaser, any wholly-owned
subsidiary of Parent or the Purchaser, in the treasury of the Company or by any
wholly-owned subsidiary of the Company) shall represent solely the right to
receive the aggregate Merger Price or the aggregate Warrant Spread Amount, as
applicable, relating thereto. No interest or dividends shall be paid or accrued
on the Merger Price or the Warrant Spread Amount, as applicable. If the Merger
Price (or any portion thereof) or the Warrant Spread Amount (or any portion
thereof), as applicable, is to be delivered to any person other than the person
in whose name the Certificate formerly representing Shares or Warrants
surrendered therefor is registered, it shall be a condition to such right to
receive such Merger Price or the Warrant Spread Amount, as applicable, that the
Certificate so surrendered shall be properly endorsed or otherwise be in proper
form for transfer and that the person surrendering such Certificates shall pay
to the Paying Agent any transfer or other taxes required by reason of the
payment of the Merger Price or the Warrant Spread Amount, as applicable, to a
person other than the registered holder of the Certificate surrendered, or shall
establish to the satisfaction of the Paying Agent that such tax has been paid or
is not applicable.
(c) Promptly following the date which is 90 days
after the Effective Time, the Paying Agent shall deliver to the Surviving
Corporation all cash, Certificates and other documents in its possession
relating to the transactions described in this Agreement, and the Paying Agent's
duties shall terminate. Thereafter, each holder of a Certificate formerly
representing a Security may surrender such Certificate to the Surviving
Corporation and (subject to applicable abandoned property, escheat and similar
laws) receive in consideration therefor the aggregate Merger Price or Warrant
Spread Amount, as applicable, relating thereto, without any interest or
dividends thereon.
(d) After the Effective Time, there shall be no
transfers on the stock transfer books of the Surviving Corporation of any
Securities which were outstanding immediately prior to the Effective Time. If,
after the Effective Time, Certificates formerly representing Securities are
presented to the Surviving Corporation or the Paying Agent, they shall be
surrendered and cancelled in return for the payment of the aggregate Merger
Price or Warrant Spread Amount, as applicable, relating thereto, as provided in
this Article III, subject to applicable law in the case of Dissenting Shares.
ARTICLE IV
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REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and the
Purchaser that except (I) as specifically set forth in the SEC Reports (as
defined below) and (II) as set forth in the section of the Company Disclosure
Statement corresponding to the section of this Article IV (or any other section
of such Company Disclosure Statement so long as it is reasonably evident from
the matters disclosed on such schedule that they are or should be applicable to
another section hereof or of the Company Disclosure Statement) delivered to
Parent or the Purchaser prior to the execution hereof (the "Company Disclosure
Statement"), provided that the exception set forth in clause (I) shall not be
deemed in any way to apply to the representations and warranties covered by
Sections 4.01, 4.03, 4.04, 4.06, 4.07, 4.17 or 4.18, to the first sentence of
Section 4.13 or to the definition of Material Adverse Effect on the Company:
SECTION 4.01 Organization and Qualification; Subsidiaries. The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware. Each of the Company's subsidiaries (the
"Subsidiaries") is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation. The Company
and each of its Subsidiaries has the requisite corporate power and authority to
own, operate or lease its properties and to carry on its business as it is now
being conducted, and is duly qualified or licensed to do business, and is in
good standing, in each jurisdiction in which the nature of its business or the
properties owned, operated or leased by it makes such qualification, licensing
or good standing necessary, except where the failures to have such power or
authority, or the failures to be so qualified, licensed or in good standing,
individually, and in the aggregate, would not have a Material Adverse Effect on
the Company. The term "Material Adverse Effect on the Company", as used in this
Agreement, means any change in or effect on the business, results of operations,
assets or condition (financial or otherwise) of the Company or any of its
Subsidiaries that is materially adverse to the Company and its Subsidiaries
taken as a whole except for any change or effect resulting from general economic
or financial market conditions.
SECTION 4.02 Certificate of Incorporation and By-Laws. The
Company has heretofore made available to Parent and the Purchaser a complete and
correct copy of the certificate of incorporation and the by-laws, each as
amended to the date hereof, of the Company.
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SECTION 4.03 Capitalization. The authorized capital stock of
the Company consists of 30,000,000 Common Shares and 2,000,000 shares of
Preferred Stock, par value $.01 per share (the "Preferred Stock"). As of the
close of business on October 15, 1997, there were 1,000,000 shares of Series G
Convertible Preferred Stock, par value $.01 per share, of the Company (the
"Series G Shares") issued and outstanding (on which dividends in arrears
aggregated $1,272,049 as of such date), and the Company had no other shares of
Preferred Stock issued or outstanding. As of the close of business on October
15, 1997, there were 10,745,802 Common Shares issued, of which 322,462 were
owned by the Company or a wholly owned Subsidiary of the Company. The Company
has no shares of capital stock reserved for issuance, except that, as of October
15, 1997, there were (i) 894,502 Common Shares reserved for issuance pursuant to
Options outstanding on the date hereof pursuant to the Option Plans, (ii)
200,000 shares of Series F Preferred Stock reserved for issuance upon exercise
of the Rights, (iii) 309,283 Common Shares reserved for issuance upon exercise
of Warrants pursuant to the Warrant Agreement, (iv) 243,594 Common Shares
reserved for issuance upon exercise of ESPP rights (of which approximately
89,000 would be issued if there were an issuance as of September 30, 1997) and
(v) 1,000,000 Common Shares reserved for issuance upon conversion of the Series
G Shares. Since October 15, 1997, the Company has not issued any shares of
capital stock except pursuant to the exercise of Options, ESPP Options or
Warrants or conversion of Series G Shares, in each case, outstanding as of such
date and in accordance with their terms. All the outstanding Series G Shares and
Common Sharesare, and all Common Shares which may be issued pursuant to the
exercise of outstanding Options and Warrants and the conversion of Series G
Shares will be, when issued in accordance with the respective terms thereof,
duly authorized, validly issued, fully paid and nonassessable. There are no
bonds, debentures, notes or other indebtedness having general voting rights (or
convertible into securities having such rights) ("Voting Debt") of the Company
or any of its subsidiaries issued and outstanding. Except as set forth in this
Section 4.03, except pursuant to the Company's Employee Stock Purchase Plan and
except for the Merger, there are no existing options, warrants, calls,
subscriptions or other rights, agreements, arrangements or commitments of any
character, relating to the issued or unissued capital stock of the Company or
any of its subsidiaries, obligating the Company or any of its subsidiaries to
issue, transfer or sell or cause to be issued, transferred or sold any shares of
capital stock or Voting Debt of, or other equity interest in, the Company or any
of its subsidiaries or securities convertible into or exchangeable for such
shares or equity
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interests or obligations of the Company or any of its subsidiaries to grant,
extend or enter into any such option, warrant, call, subscription or other
right, agreement, arrangement or commitment. Except (i) as contemplated by the
Merger contemplated by this Agreement or the Rights Agreement, (ii) the Warrants
and the Series G Shares, and (iii) the Company's obligations under the Option
Plans, there are no outstanding contractual obligations of the Company or any of
its subsidiaries to repurchase, redeem or otherwise acquire any Common Shares or
the capital stock of the Company or any of its subsidiaries. Each of the
outstanding shares of capital stock of each of the Company's Significant
Subsidiaries (within the meaning of Regulation S-X under the Exchange Act) is
duly authorized, validly issued, fully paid and nonassessable, and such shares
of the Company's Significant Subsidiaries as are owned by the Company or by a
subsidiary of the Company are owned in each case free and clear of any lien,
claim, option, charge, security interest, limitation, encumbrance and
restriction of any kind (any of the foregoing being a "Lien"), except for those
which are immaterial. Section 4.03 of the Company Disclosure Statement contains
a complete list as of the date hereof of each Significant Subsidiary of the
Company and sets forth with respect to each of the Company's Significant
Subsidiaries its name and jurisdiction of organization and, with respect to each
Significant Subsidiary of the Company that is not wholly owned by the Company or
another Subsidiary, the percentage of shares of capital stock or share capital
owned by the Company or a Subsidiary.
SECTION 4.04 Authority Relative to this Agreement. The Company
has all necessary corporate power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement by the Company and the consummation by the
Company of the transactions contemplated hereby have been duly and validly
authorized and approved by the Board and no other corporate proceedings on the
part of the Company are necessary to authorize or approve this Agreement or to
consummate the transactions contemplated hereby (other than, with respect to the
Merger, the approval and adoption of the Merger and this Agreement by holders of
the Shares to the extent required by the Company's certificate of incorporation
and by applicable law). This Agreement has been duly and validly executed and
delivered by the Company and, assuming the due and valid authorization,
execution and delivery of this Agreement by Parent and the Purchaser,
constitutes a valid and binding obligation of the Company enforceable against
the Company in accordance with its terms, except that such enforceability (i)
may be limited by
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bankruptcy, insolvency, moratorium or other similar laws affecting or relating
to the enforcement of creditors' rights generally and (ii) is subject to general
principles of equity. The Board of Directors of the Company has, by a unanimous
vote at a meeting of such Board duly held on October 15, 1997, approved and
adopted this Agreement, the Offer, the Merger, the Stockholder Agreements and
the other transactions contemplated hereby and thereby, determined that the
Securities Offer Price to be received by the holders of Securities pursuant to
the Offer and the Merger is fair to the holders of the Securities and
recommended that the holders of Securities approve and adopt this Agreement, the
Merger and the other transactions contemplated hereby and tender their
Securities pursuant to the Offer.
SECTION 4.05 No Conflict; Required Filings and Consents.
(a) None of the execution and delivery of this
Agreement by the Company, the consummation by the Company of the transactions
contemplated hereby or compliance by the Company with any of the provisions
hereof will (i) conflict with or violate the certificate of incorporation or
by-laws of the Company or the comparable organizational documents of any of its
Subsidiaries, (ii) conflict with or violate any statute, ordinance, rule,
regulation, order, judgment or decree applicable to the Company or its
subsidiaries, or by which any of them or any of their respective properties or
assets may be bound or affected, or (iii) result in a violation or breach of or
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, or result in any loss of any
material benefit, or the creation of any Lien on any of the property or assets
of the Company or any of its subsidiaries (any of the foregoing referred to in
clause (ii) or this clause (iii) being a "Violation") pursuant to, any note,
bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which the Company or any of its
subsidiaries is a party or by which the Company or any of its subsidiaries or
any of their respective properties may be bound or affected, except in the case
of the foregoing clauses (ii) or (iii) for any such Violations which,
individually and in the aggregate, would not have a Material Adverse Effect on
the Company.
(b) None of the execution and delivery of this
Agreement by the Company, the consummation by the Company of the transactions
contemplated hereby or compliance by the Company with any of the provisions
hereof will require any consent,
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waiver, approval, authorization or permit of, or registration or filing with or
notification to (any of the foregoing being a "Consent"), any government or
subdivision thereof, or any administrative, governmental or regulatory
authority, agency, commission, tribunal or body, domestic, foreign or
supranational (a "Governmental Entity"), except for (i) compliance with any
applicable requirements of the Exchange Act, (ii) the filing of a certificate of
merger, or, if permitted, a certificate of ownership and merger, pursuant to the
GCL, (iii) applicable state takeover and environmental statutes, (iv) compliance
with the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the
"HSR Act") and any requirements of any foreign or supranational Antitrust Laws
(as hereinafter defined) and (v) Consents the failure of which to obtain or
make, individually and in the aggregate, would not have a Material Adverse
Effect on the Company or materially adversely affect the ability of the Company
to consummate the transactions contemplated hereby.
SECTION 4.06 SEC Reports and Financial Statements.
(a) The Company has filed with the SEC all
forms, reports, schedules, registration statements and definitive proxy
statements required to be filed by the Company with the SEC since September 30,
1996 until the date hereof (the "SEC Reports"). As of their respective dates,
the SEC Reports complied in all material respects with the requirements of the
Exchange Act or the Securities Act of 1933, as amended, and the rules and
regulations of the SEC promulgated thereunder applicable, as the case may be, to
such SEC Reports, and none of the SEC Reports contained any untrue statement of
a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements made therein, in light of the
circumstances under which they were made, not misleading.
(b) The consolidated balance sheets as of
September 30, 1996 and 1995 and the related consolidated statements of income,
common shareholders' equity and cash flows for each of the three years in the
period ended September 30, 1996 (including the related notes and schedules
thereto) of the Company contained in the Company's Form 10-K for the year ended
September 30, 1996 included in the SEC Reports present fairly, in all material
respects, the consolidated financial position and the consolidated results of
operations and cash flows of the Company and its consolidated subsidiaries as of
the dates or for the periods presented therein in conformity with United States
generally accepted accounting principles ("GAAP") applied on a consistent basis
during the periods involved except as otherwise noted therein, including the
related notes.
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(c) The consolidated balance sheets and the
related statements of income and cash flows (including in each case the related
notes thereto) of the Company contained in the Forms 10-Q for the periods ended
June 30, 1997 and March 31, 1997 and December 31, 1996 included in the SEC
Reports (collectively, the Quarterly Financial Statements) have been prepared in
accordance with the requirements for interim financial statements contained in
Regulation S-X. The Quarterly Financial Statements reflect all adjustments,
which include only normal recurring adjustments, necessary to present fairly and
do present fairly, in all material respects, the consolidated financial
position, results of operations and cash flows of the Company for all periods
presented therein in conformity with GAAP applied on a consistent basis during
the periods involved except as otherwise noted therein, including the related
notes.
(d) The Company and its Subsidiaries have no
liabilities or obligations of any nature (whether absolute, accrued, contingent,
unmatured, unaccrued, unliquidated, unasserted, conditional or otherwise) except
for liabilities or obligations (i) reflected or reserved against on the balance
sheet as at June 30, 1997 (including the notes thereto) included in the
Quarterly Financial Statements, (ii) incurred in the ordinary course of business
consistent with past practice since such date, or (iii) which, individually and
in the aggregate, would not have a Material Adverse Effect on the Company.
SECTION 4.07 Information. None of the information supplied by
the Company in writing specifically for inclusion or incorporation by reference
in (i) the Offer Documents, (ii) the Schedule 14D-9, (iii) the Proxy Statement
or (iv) any other document to be filed with the SEC or any other Governmental
Entity in connection with the transactions contemplated by this Agreement (the
"Other Filings") will, at the respective times filed with the SEC or other
Governmental Entity and, in addition, in the case of the Proxy Statement, at the
date it or any amendment or supplement is mailed to Shareholders, at the time of
the Special Meeting and at the Effective Time, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading. The Proxy Statement
will comply as to form in all material respects with the provisions of the
Exchange Act and the rules and regulations thereunder, except that no
representation is made by the Company with respect to statements made therein
based on information supplied by Parent or the Purchaser in writing specifically
for inclusion in the
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Proxy Statement.
SECTION 4.08 Litigation. As of the date hereof, there is no
suit, action or proceeding pending or, to the knowledge of the Company,
threatened against or affecting the Company or any of its subsidiaries that,
individually or in the aggregate, would have a Material Adverse Effect on the
Company, nor is there any judgment, decree, injunction or order of any
Governmental Entity or arbitrator outstanding against the Company or any of its
subsidiaries that would have, individually or in the aggregate, a Material
Adverse Effect on the Company.
SECTION 4.09 Compliance with Applicable Laws. To the best
knowledge of the Company, the Company and its subsidiaries are in compliance
with all laws, regulations and orders (except with respect to environmental
matters) of any Governmental Entity applicable to it or such subsidiaries,
except for such failures so to comply which, individually and in the aggregate,
would not have a Material Adverse Effect on the Company. To the best knowledge
of the Company, the business operations of the Company and its subsidiaries are
not being conducted in violation of any law, ordinance or regulation of any
Governmental Entity, except for possible violations which, individually or in
the aggregate, would not have a Material Adverse Effect on the Company.
SECTION 4.10 Employee Benefit Plans.
(a) Section 4.10 of the Company Disclosure Statement
includes a complete list of all material bonus, profit sharing, thrift,
compensation, stock option, restricted stock, pension, retirement, savings,
welfare, deferred compensation, employment, termination, severance, incentive,
or other employee benefit plans, programs and agreements providing benefits to
any employee or former employee of the Company and its subsidiaries sponsored or
maintained by the Company or any of its subsidiaries or to which the Company or
any of its subsidiaries contributes or is obligated to contribute (collectively,
the "Plans"). Without limiting the generality of the foregoing, the term "Plans"
includes all employee welfare benefit plans within the meaning of Section 3(1)
of the Employee Retirement Income Security Act of 1974, as amended, and the
regulations thereunder ("ERISA") and all employee pension benefit plans within
the meaning of Section 3(2) of ERISA.
(b) With respect to each Plan, the Company has
made available to Parent a true, correct and complete copy of: (i) all plan
documents, benefit schedules, trust agreements, and insurance contracts and
other funding vehicles; (ii) the most
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recent Annual Report (Form 5500 Series) and accompanying schedule, if any; (iii)
the current summary plan description, if any; (iv) the most recent annual
financial report, if any; (v) the most recent actuarial report, if any; and (vi)
the most recent determination letter from the Internal Revenue Service (the
"IRS"), if any.
(c) The Company and each of its subsidiaries has
complied, and is now in compliance, in all material respects with all provisions
of ERISA, the Code and all laws and regulations applicable to the Plans. With
respect to each Plan that is intended to be a "qualified plan" within the
meaning of Section 401(a) of the Code ("Qualified Plans"), the IRS has issued a
favorable determination letter, and to the knowledge of the Company nothing has
occurred at the date hereof that would reasonably be expected to cause the loss
of such qualification.
(d) All contributions required to be made to any
Plan by applicable law or regulation or by any plan document or other
contractual undertaking, and all premiums due or payable with respect to
insurance policies funding any Plan, for any period through the date hereof have
been timely made or paid in full or, to the extent not required to be made or
paid on or before the date hereof, have been fully reflected in the financial
statements of the Company included in the SEC Reports to the extent required
under generally accepted accounting principles.
(e) No Plan is subject to Title IV or Section
302 of ERISA or Section 412 or 4971 of the Code. There does not now exist, nor
do any circumstances exist that could result in, any liability under (i) Title
IV of ERISA, (ii) section 302 of ERISA, (iii) sections 412 and 4971 of the Code,
or (iv) the continuation coverage requirements of section 601 et seq. of ERISA
and section 4980B of the Code, that would be a liability of the Company or any
of its subsidiaries following the Closing.
(f) Except as provided in Section 2.09 hereof,
or as set forth in Section 4.10 of the Company Disclosure Statement, the
execution of, and performance of the transactions contemplated in, this
Agreement will not, either alone or upon the occurrence of subsequent events,
result in any payment (whether of severance pay or otherwise), acceleration,
forgiveness of indebtedness, vesting, distribution, increase in benefits or
obligation to fund benefits with respect to any employee or former employee of
the Company or any of its subsidiaries.
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(g) There are no pending actions, claims or
lawsuits which have been asserted, instituted or, to the knowledge of the
Company, threatened in connection with any of the Plans (other than routine
claims for benefits).
(h) The Company has terminated its Severance
Compensation Plan After Change of Control adopted in 1989 and no employee of the
Company or any of its Subsidiaries has any rights thereunder.
SECTION 4.11 Intellectual Property.
(a) Except as would not, individually and in the
aggregate, have a Material Adverse Effect on the Company, (i) the Company and
each of its Subsidiaries owns, has the right to acquire or is licensed or
otherwise has the right to use (in each case, clear of any liens or encumbrances
of any kind), all Intellectual Property (as defined below) used in or necessary
for the conduct of its business as currently conducted, including the items
listed in Section 4.11 of the Company Disclosure Statement, (ii) no claims are
pending or, to the knowledge of the Company, threatened that the Company or any
of its subsidiaries is infringing on or otherwise violating the rights of any
person with regard to any Intellectual Property and (iii) to the knowledge of
the Company, no person is infringing on or otherwise violating any right of the
Company or any of its Subsidiaries with respect to any Intellectual Property
owned by and/or licensed to the Company or its subsidiaries.
(b) For purposes of this Agreement,
"Intellectual Property" shall mean patents, copyrights, trademarks (registered
or unregistered), service marks, brand names, trade dress, trade names, the
goodwill associated with the foregoing and registrations in any jurisdiction of,
and applications in any jurisdiction to register, the foregoing; and trade
secrets and rights in any jurisdiction to limit the use or disclosure thereof by
any person.
SECTION 4.12 Environmental Matters. Except for the matters
described in the reports set forth on Section 4.12 of the Company Disclosure
Statement or except as would not reasonably be expected to have a Material
Adverse Effect on the Company, (i) to the knowledge of the Company, no real
property currently or formerly owned or operated by the Company or any current
subsidiary thereof has been contaminated with any Hazardous Substances to an
extent or in a manner or condition now requiring investigation, removal,
corrective action, or remediation, or that could be reasonably likely to result
in liability of, or
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costs to, the Company or any of its Subsidiaries, under any Environmental Law,
(ii) no judicial or administrative proceeding is pending or to the knowledge of
the Company threatened relating to liability for any off-site disposal or
contamination, (iii) there is currently no civil, criminal, or administrative
action, suit, demand, hearing, notice of violation, investigation, notice or
demand letter, or request for information pending, or to the knowledge of the
Company, threatened, under any Environmental Law against the Company or any of
its Subsidiaries, the Company and its subsidiaries have not received in writing
any claims or notices alleging liability under any Environmental Law, and the
Company has no knowledge of any circumstances that would reasonably be expected
to result in such claims (iv) the Company and each of its Subsidiaries are
currently in compliance, and within the period of applicable statutes of
limitation, have complied, with all applicable Environmental Laws, and (v) no
property or facility currently or, to the Company's knowledge as of the date
hereof, formerly owned or operated by the Company or any of its subsidiaries is
listed or proposed for listing on the National Priorities List or the
Comprehensive Environmental Response, Compensation and Liability Information
System, both promulgated under the Comprehensive Environmental Response,
Compensation & Liability Act, as amended, or on any comparable state or foreign
list established under any Environmental Law. "Environmental Law" means any
applicable (in the United States, Finland or Mexico) federal, national, state or
local law, regulation, order, decree or judicial opinion, agency requirement
having the force and effect of law and relating to noise, odor, Hazardous
Substances, pollution, human health and safety or the protection of the
environment. "Hazardous Substance" means any pollutant, contaminant or toxic or
hazardous substance or constituent that is defined or regulated by or under
authority of any Environmental Law, including without limitation any petroleum
products, asbestos or polychlorinated biphenyls, and any other substance that
can give rise to liability under any Environmental Law. The Company has
previously made available to Purchaser and Parent or its representatives copies
of all of its material environmental reports.
SECTION 4.13 Material Adverse Change.
(a) Since June 30, 1997, there has not been any
change, or any development that is reasonably likely to result in a change, in
the business, results of operations, assets or condition (financial or
otherwise) of the Company or any of its subsidiaries that is materially adverse,
or is reasonably expected to be materially adverse, to the Company and its
Subsidiaries taken as a whole, except for any change resulting
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from general economic or financial market conditions. Since June 30, 1997, the
Company and its Subsidiaries have conducted their businesses only in the
ordinary course of business consistent with past practices and there has not
been, directly or indirectly:
(i) any payment or granting by the Company or any of its
Subsidiaries of any increase in compensation to any director or
executive officer of the Company or, except in the ordinary course of
business and consistent with past practice or as required under
employment agreements in effect as of or prior to the date of this
Agreement, any employee of the Company or its Subsidiaries;
(ii) any granting by the Company or any of its Subsidiaries to
any such director, executive officer or employee of any increase in
severance or termination pay, except as required under employment,
severance or termination agreements or plans in effect as of the date
of this Agreement;
(iii) any entry by the Company or any of its Subsidiaries into
any employment, severance or termination agreement with any such
director or executive officer, or, except in the ordinary course of
business consistent with past practice, employee;
(iv) any adoption or increase in payments to or benefits under
any profit sharing, bonus, deferred compensation, savings, insurance,
pension, retirement or other employee benefit plan for or with any
employees of the Company or any of its Subsidiaries;
(v) any change in accounting methods, principles or practices
by the Company or any of its Subsidiaries materially affecting their
assets, liabilities or business, except insofar as may have been
required by change in GAAP; or
(vi) agreed to do any of the things described in the
preceding clauses (i) through (v).
SECTION 4.14 Certain Approvals. The Board has taken
appropriate action such that, assuming the accuracy of Parent's representation
in Section 5.06 of this Agreement, the provisions of Section 203 of the GCL will
not apply to any of the transactions contemplated by this Agreement and the
Stockholder Agreements.
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SECTION 4.15 Opinion of Financial Advisor. The Company has
received the written opinion of Lazard Freres & Co., LLC ("Lazard Freres") to
the effect that the Common Share Offer Price is fair to the holders of the
Common Shares from a financial point of view.
SECTION 4.16 Rights Agreement. Assuming the accuracy of
Parent's representation in Section 5.06 of this Agreement, neither the execution
nor the delivery of this Agreement nor commencement of the Offer will result in
a "Distribution Date" (as defined in the Rights Agreement). The Company has
irrevocably taken all actions necessary to make the Rights inapplicable to (a)
the Offer and the Merger effective immediately prior to the acceptance for
payment of any Securities by the Purchaser pursuant to the Offer and in
accordance with the terms of this Agreement and (b) the Stockholder Agreements
and the transactions contemplated thereby, including the Parent's exercise of
options to acquire Common Shares and the grant of the irrevocable proxies to the
Parent.
SECTION 4.17 Brokers. Except for the engagement of Lazard
Freres (a copy of whose engagement letter previously has been delivered by the
Company to the Parent), none of the Company, any of its subsidiaries, or any of
their respective officers, directors or employees has employed any broker or
finder or incurred any liability for any brokerage fees, commissions or finder's
fees in connection with the transactions contemplated by this Agreement.
SECTION 4.18 Taxes. Except to the extent that failures,
individually or in the aggregate, would not have a Material Adverse Effect on
the Company, (i) the Company has filed all Tax Returns that it was required to
file and all such Tax Returns were correct and complete in all respects, (ii)
all Taxes owed by the Company (whether or not shown on any Tax Return) have been
paid, except for Taxes as set forth on the balance sheet dated as of June 30,
1997 or which have arisen after June 30, 1997 in the ordinary course of the
Company's trade or business and (iii) there are no liens on any of the assets of
the Company that arose in connection with any failure (or alleged failure) to
pay any Tax.
ARTICLE V
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REPRESENTATIONS AND WARRANTIES
OF PARENT AND THE PURCHASER
Parent and the Purchaser represent and warrant to the Company
as follows:
SECTION 5.01 Organization and Qualification. Parent is a
corporation duly organized, validly existing and in good standing under English
law and each material subsidiary of Parent is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization. The Purchaser is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware. Parent and each of
its material subsidiaries (including the Purchaser) has the requisite corporate
power and authority to own, operate or lease its properties and to carry on its
business as it is now being conducted, and is duly qualified or licensed to do
business, and is in good standing, in each jurisdiction in which the nature of
its business or the properties owned, operated or leased by it makes such
qualification, licensing or good standing necessary, except where the failure to
have such power or authority, or the failure to be so qualified, licensed or in
good standing, would not have a Material Adverse Effect on Parent. The term
"Material Adverse Effect on Parent", as used in this Agreement, means any change
in or effect on the business, operations or financial condition of Parent or any
of its subsidiaries that would be materially adverse to Parent and its
subsidiaries taken as a whole.
SECTION 5.02 Authority Relative to this Agreement. Each of
Parent and the Purchaser has all necessary corporate power and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement by Parent and
the Purchaser and the consummation by Parent and the Purchaser of the
transactions contemplated hereby have been duly and validly authorized and
approved by the Boards of Directors of Parent and the Purchaser and by Parent as
stockholder of the Purchaser and no other corporate proceedings on the part of
Parent or the Purchaser are necessary to authorize or approve this Agreement or
to consummate the transactions contemplated hereby. This Agreement has been duly
executed and delivered by each of Parent and the Purchaser and, assuming the due
and valid authorization, execution and delivery by the Company, constitutes a
valid and binding obligation of each of Parent and the Purchaser enforceable
against each of them in accordance with its terms, except that such
enforceability (i) may be limited by bankruptcy, insolvency,
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moratorium or other similar laws affecting or relating to the enforcement of
creditors' rights generally and (ii) is subject to general principles of equity.
SECTION 5.03 No Conflict; Required Filings and Consents.
(a) None of the execution and delivery of this
Agreement by Parent or the Purchaser, the consummation by Parent or the
Purchaser of the transactions contemplated hereby or compliance by Parent or the
Purchaser with any of the provisions hereof will (i) conflict with or violate
the organizational documents of Parent or the Purchaser, (ii) conflict with or
violate any statute, ordinance, rule, regulation, order, judgment or decree
applicable to Parent or the Purchaser, or any of their subsidiaries, or by which
any of them or any of their respective properties or assets may be bound or
affected, or (iii) result in a Violation pursuant to any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which Parent or the Purchaser, or any of their
respective subsidiaries, is a party or by which any of their respective
properties or assets may be bound or affected, except in the case of the
foregoing clauses (ii) and (iii) for any such Violations which would not have a
Material Adverse Effect on Parent or materially adversely affect the ability of
Parent or the Purchaser to consummate the transactions contemplated hereby.
(b) None of the execution and delivery of this
Agreement by Parent and the Purchaser, the consummation by Parent and the
Purchaser of the transactions contemplated hereby or compliance by Parent and
the Purchaser with any of the provisions hereof will require any Consent of any
Governmental Entity, except for (i) compliance with any applicable requirements
of the Exchange Act, (ii) the filing of a certificate of merger, or, if
permitted, a certificate of ownership and merger, pursuant to the GCL, (iii)
applicable state takeover and environmental statutes, (iv) compliance with the
HSR Act and any requirements of any foreign or supranational Antitrust Laws, and
(v) Consents the failure of which to obtain or make would not have a Material
Adverse Effect on Parent or materially adversely affect the ability of Parent or
the Purchaser to consummate the transactions contemplated hereby.
SECTION 5.04 Information. None of the information supplied or
to be supplied by Parent and the Purchaser in writing specifically for inclusion
in (i) the Offer Documents, (ii) the Schedule 14D-9, (iii) the Proxy Statement
or (iv) the Other
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Filings will, at the respective times filed with the SEC or such other
Governmental Entity and, in addition, in the case of the Proxy Statement, at the
date it or any amendment or supplement is mailed to Shareholders, at the time of
the Special Meeting and at the Effective Time, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading.
SECTION 5.05 Financing. Parent or the Purchaser has available
the funds necessary to consummate the Offer and the Merger and the transactions
contemplated hereby on a timely basis.
SECTION 5.06 Parent Not an Interested Stockholder or an
Acquiring Person. As of the date of this Agreement, (a) neither Parent nor any
of its affiliates is an "Interested Stockholder" as such term is defined in
Section 203 of the GCL, or an "Acquiring Person" as such term is defined in the
Rights Agreement, and (b) neither Parent nor Purchaser beneficially owns any
Shares or Warrants.
SECTION 5.07 Brokers. None of Parent, Purchaser, or any of
their respective subsidiaries, officers, directors or employees, has employed
any broker or finder or incurred any liability for any brokerage fees,
commissions or finder's fees in connection with the transactions contemplated by
this Agreement for or with respect to which the Company is or might be liable.
ARTICLE VI
COVENANTS
SECTION 6.01 Conduct of Business of the Company. Except as
required by this Agreement or with the prior written consent of Parent, during
the period from the date of this Agreement to the Effective Time, the Company
will, and will cause each of its Subsidiaries to, conduct its operations only in
the ordinary course of business consistent with past practice and will use its
reasonable best efforts, and will cause each of its Subsidiaries to use its
reasonable best 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. Without limiting the generality of the
foregoing, and except as otherwise required
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by this Agreement or as set forth in Section 6.01 of the Company Disclosure
Statement, the Company will not, and will not permit any of its Subsidiaries to,
prior to the Effective Time, without the prior written consent of Parent:
(a) adopt any amendment to its charter or by-laws or
comparable organizational documents or the Rights Agreement (except that the
Company may, upon notice to the Parent, lower the threshhold in determining who
is an "Acquiring Person" thereunder to not less than 10%);
(b) except for issuances of capital stock of the
Company's Subsidiaries to the Company or a wholly-owned Subsidiary of the
Company, issue, reissue or sell, or authorize the issuance, reissuance or sale
of (i) additional shares of capital stock of any class, or securities
convertible into capital stock of any class, or any rights, warrants or options
to acquire any convertible securities or capital stock, other than the issuance
of Common Shares (and the related Rights), in accordance with the terms of the
instruments governing such issuance on the date hereof, pursuant to the exercise
of Options or ESPP Options outstanding on the date hereof, pursuant to the
exercise of the Warrants or pursuant to the conversion of shares of Series G
Stock outstanding on the date hereof, in each case, as contemplated by Section
4.03, or (ii) any other securities in respect of, in lieu of, or in substitution
for, Common Shares outstanding on the date hereof;
(c) declare, set aside or pay any dividend or other
distribution (whether in cash, securities or property or any combination
thereof) in respect of any class or series of its capital stock other than
between any of the Company and any of its wholly owned subsidiaries, except for,
in accordance with the terms of the instrument governing the Series G Shares on
the date hereof, a semi-annual dividend on the Series G Shares not in excess of
$0.80 per Series G Share, including, without limitation, all current and accrued
and unpaid dividends on the Series G Shares;
(d) split, combine, subdivide, reclassify or redeem,
purchase or otherwise acquire, or propose to redeem or purchase or otherwise
acquire, any shares of its capital stock, or any of its other securities;
(e) except for (A) increases in salary, wages and
benefits of non-executive officers or employees of the Company or its
Subsidiaries in the ordinary course of business consistent with past practice,
(B) increases in salary, wages and benefits
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granted to officers and employees of the Company or its subsidiaries in
conjunction with new hires, promotions or other changes in job status in the
ordinary course of business consistent with past practice, or (C) increases in
salary, wages and benefits to employees of the Company pursuant to collective
bargaining agreements entered into in the ordinary course of business consistent
with past practice, (i) increase the compensation or fringe benefits payable or
to become payable to its directors, officers or key employees (whether from the
Company or any of its subsidiaries), or (ii) pay any benefit not required by any
existing plan or arrangement (including, without limitation, the granting of
stock options, stock appreciation rights, shares of restricted stock or
performance units) or (iii) grant any severance or termination pay to (except
pursuant to existing agreements, plans or policies and as required by such
agreements, plans or polices), or (iv) enter into any employment or severance
agreement with, any director, officer or other key employee of the Company or
any of its subsidiaries or (iv) establish, adopt, enter into, or amend any
collective bargaining, bonus, profit sharing, thrift, compensation, stock
option, restricted stock, pension, retirement, savings, welfare, deferred
compensation, employment, termination, severance or other employee benefit plan,
agreement, trust, fund, policy or arrangement for the benefit or welfare of any
directors, officers or current or former employees (any of the foregoing being
an "Employee Benefit Arrangement"), except in each case to the extent required
by applicable law or regulation; provided, however, that nothing herein will be
deemed to prohibit the payment of benefits as they become payable;
(f) acquire, sell, lease or dispose of any
assets (other than inventory) or securities which are material to the Company
and its Subsidiaries, taken as a whole, or enter into any commitment to do any
of the foregoing or enter into any material commitment or transaction outside
the ordinary course of business consistent with past practice other than
transactions between a wholly owned subsidiary of the Company and the Company or
another wholly owned subsidiary of the Company;
(g) (i) incur, assume or pre-pay any long-term
debt or incur or assume any short-term debt, except that the Company and its
subsidiaries may incur, assume or pre-pay debt in the ordinary course of
business consistent with past practice under existing lines of credit and except
for a contemplated $3 million line of credit to be offered by Bank of America
with respect to the Company's operations in Brazil, (ii) assume, guarantee,
endorse or otherwise become liable or responsible (whether directly,
contingently or otherwise) for the obligations
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of any other person except in the ordinary course of business consistent with
past practice, or (iii) make any loans, advances or capital contributions to, or
investments in, any other person except in the ordinary course of business
consistent with past practice and except for loans, advances, capital
contributions or investments between any wholly owned subsidiary of the Company
(for these purposes including any foreign subsidiary wholly owned by the Company
other than a de minimus percentage of shares owned by officers and directors of
such subsidiary) and the Company or another wholly owned subsidiary of the
Company (for these purposes including any foreign subsidiary wholly owned by the
Company other than a de minimus percentage of shares owned by officers and
directors of such subsidiary); or
(h) agree in writing or otherwise to take any of
the foregoing actions.
SECTION 6.02 Access to Information. From the date hereof until
the Effective Time, the Company will, and will cause its Subsidiaries, and each
of its and their respective officers, directors, employees, counsel, advisors
and representatives (collectively, the "Company Representatives") to, provide
Parent and the Purchaser and their respective officers, employees, counsel,
advisors and representatives (collectively, the "Parent Representatives")
reasonable access (subject, however, to existing confidentiality and similar
non-disclosure obligations and the preservation of attorney client and work
product privileges), during normal business hours and upon reasonable notice, to
the offices and other facilities and to the books and records of the Company and
its Subsidiaries, as will permit Parent and the Purchaser to make inspections of
such as either of them may reasonably require (other than environmental testing)
and will cause the Company Representatives and the Company's subsidiaries to
furnish Parent, the Purchaser and the Parent Representatives to the extent
available with such other information with respect to the business and
operations of the Company and its subsidiaries as Parent and the Purchaser may
from time to time reasonably request. Unless otherwise required by law, Parent
and the Purchaser will, and will cause the Parent Representatives to, hold any
such information in confidence until such time as such information otherwise
becomes publicly available through no wrongful act of Parent, the Purchaser or
the Parent Representatives. In the event of termination of this Agreement for
any reason, Parent and the Purchaser will, and will cause the Parent
Representatives to, return to the Company all copies of written information
furnished by the Company or any of the Company Representatives to Parent or the
Purchaser or the Parent Representatives and destroy all memoranda, notes and
other
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writings prepared by Parent, the Purchaser or the Parent Representatives
based upon or including the information furnished by the Company or any of the
Company Representatives to Parent or the Purchaser or the Parent Representatives
(and Parent will certify to the Company that such destruction has occurred). In
addition, Parent will comply with the terms of the Confidentiality Agreement (as
hereinafter defined).
SECTION 6.03 Reasonable Best Efforts. Subject to the terms and
conditions herein provided and to applicable legal requirements, each of the
parties hereto agrees to use its reasonable best efforts to take, or cause to be
taken, all action, and to do, or cause to be done, in the case of the Company,
consistent with the fiduciary duties of the Company's Board of Directors (as
described in Section 6.08 hereof), and to assist and cooperate with the other
parties hereto in doing, as promptly as practicable, all things necessary,
proper or advisable under applicable laws and regulations to ensure that the
conditions set forth in Annex I and Article VII are satisfied and to consummate
and make effective the transactions contemplated by the Offer and this
Agreement.
In addition, if at any time prior to the Effective Time any
event or circumstance relating to either the Company or Parent or the Purchaser
or any of their respective subsidiaries, should be discovered by the Company or
Parent, as the case may be, and which should be set forth in an amendment to the
Offer Documents or Schedule 14D-9, the discovering party will promptly inform
the other party of such event or circumstance. If at any time after the
Effective Time any further action is necessary or desirable to carry out the
purposes of this Agreement, including the execution of additional instruments,
the proper officers and directors of each party to this Agreement shall take all
such necessary action.
SECTION 6.04 Consents.
(a) Each of the parties will use its reasonable
best efforts to obtain as promptly as practicable all Consents of any
Governmental Entity or any other person required in connection with, and waivers
of any Violations that may be caused by, the consummation of the transactions
contemplated by the Offer and this Agreement.
(b) In furtherance and not in limitation of the
foregoing, Parent shall use its reasonable best efforts to resolve such
objections, if any, as may be asserted with respect to the transactions
contemplated by this Agreement under any
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antitrust, competition or trade regulatory laws, rules or regulations of any
domestic or foreign government or governmental authority or any multinational
authority ("Antitrust Laws").
(c) Any party hereto shall promptly inform the
others of any material communication from the United States Federal Trade
Commission, the Department of Justice or any other domestic or foreign
government or governmental or multinational authority regarding any of the
transactions contemplated by this Agreement. If any party or any affiliate
thereof receives a request for additional information or documentary material
from any such government or authority with respect to the transactions
contemplated by this Agreement, then such party will endeavor in good faith to
make, or cause to be made, as soon as reasonably practicable and after
consultation with the other party, an appropriate response in compliance with
such request. Parent will advise the Company promptly in respect of any
understandings, undertakings or agreements (oral or written) which Parent
proposes to make or enter into with the Federal Trade Commission, the Department
of Justice or any other domestic or foreign government or governmental or
multinational authority in connection with the transactions contemplated by this
Agreement.
SECTION 6.05 Public Announcements. So long as this Agreement
is in effect, Parent, the Purchaser and the Company agree to use reasonable
efforts to consult with each other before issuing any press release or otherwise
making any public statement with respect to the transactions contemplated by
this Agreement.
SECTION 6.06 Employee Benefit Arrangements.
(a) Parent agrees that the Company will honor and,
from and after the Effective Time, Parent will cause the Surviving Corporation
to honor, all Employee Benefit Arrangements to which the Company or any of its
subsidiaries is presently a party; provided, however, that nothing contained in
this Section 6.06(a) shall limit or restrict the Surviving Corporation's right
on or after the Effective Time to amend, modify or terminate any Employee
Benefit Arrangement in accordance with the terms thereof and applicable law.
(b) Parent intends that the Surviving Corporation
would provide, for a period of at least two years from the Effective Time,
employees of the Company and its subsidiaries (excluding employees covered by
collective bargaining agreements) cash compensation employee benefit and
incentive compensation and similar plans and programs as would provide
compensation and
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benefits which in the aggregate are substantially similar to those provided to
such employees as of the date hereof; provided, however, that it is understood
that after the Effective Time it is not intended that any party hereto would
issue shares of capital stock of any entity pursuant to any such plan or
program; any substitute plan or program may be based on criteria other than
stock performance.
SECTION 6.07 Indemnification.
(a) Parent agrees that all rights to indemnification
now existing in favor of any employee, agent, director or officer of the Company
and its subsidiaries as provided in their respective charters or by-laws, in an
agreement between any such person and the Company or one of its Subsidiaries, or
otherwise in effect on the date hereof shall survive the Merger and shall
continue in full force and effect for a period of not less than six years from
the Effective Time; provided that in the event any claim or claims are asserted
or made within such six-year period, all rights to indemnification in respect of
any such claim or claims shall continue until final disposition of any and all
such claims. Parent also agrees to indemnify all directors and officers of the
Company ("Indemnified Parties") to the fullest extent permitted by applicable
law with respect to all acts and omissions arising out of such individuals'
services as officers or directors of the Company or any of its Subsidiaries or
as trustees or fiduciaries of any plan for the benefit of employees occurring
prior to the Effective Time including, without limitation, the transactions
contemplated by this Agreement. Without limitation of the foregoing, in the
event any such Indemnified Party is or becomes involved in any capacity in any
action, proceeding or investigation in connection with any matter, including,
without limitation, the transactions contemplated by this Agreement, occurring
prior to, and including, the Effective Time, Parent will pay as incurred such
Indemnified Party's reasonable legal and other expenses of counsel selected by
the Indemnified Party and reasonably acceptable to Parent (including the cost of
any investigation and preparation) incurred in connection therewith; provided,
however, that Parent shall not, in connection with any one such action or
proceeding or separate but substantially similar actions or proceedings 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. Parent shall be entitled to participate in the
defense of any such action or proceeding and counsel selected by the Indemnified
Party, shall, to the extent consistent with
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their professional responsibilities, cooperate with Parent and any counsel
designated by Parent. Parent shall pay all reasonable expenses, including
attorneys' fees, that may be incurred by any Indemnified Party in enforcing the
indemnity and other obligations provided for in this Section 6.07.
(b) Parent agrees that the Company and, from and
after the Effective Time, the Surviving Corporation shall cause to be maintained
in effect for not less than six years from the Effective Time the current
policies of the directors' and officers' liability insurance maintained by the
Company; provided that the Surviving Corporation may substitute therefor
policies of at least the same coverage containing terms and conditions which are
no less advantageous and provided that such substitution shall not result in any
gaps or lapses in coverage with respect to matters occurring prior to the
Effective Time; and provided, further, that the Surviving Corporation shall not
be required to pay an annual premium in excess of 300% of the last annual
premium paid by the Company prior to the date hereof and if the Surviving
Corporation is unable to obtain the insurance required by this Section 6.07(b)
it shall obtain as much comparable insurance as possible for an annual premium
equal to such maximum amount.
SECTION 6.08 No Solicitation.
(a) The Company represents and warrants to, and
covenants and agrees with, Parent and Purchaser that neither the Company nor any
of its Subsidiaries has any agreement, arrangement or understanding with any
potential acquiror that, directly or indirectly, would be violated, or require
any payments, by reason of the execution, delivery and/or consummation of this
Agreement. The Company shall, and shall cause its Subsidiaries and use its best
efforts to cause 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 (including a "person"
as defined in Section 13(d)(3) of the Exchange Act) other than Parent or
Purchaser (a "Third Party") heretofore conducted with respect to any Acquisition
Transaction (as hereinafter defined). The Company shall not, and shall cause its
Subsidiaries and use its best efforts to cause its and their officers,
directors, employees, investment bankers, attorneys and other agents and
representatives not to, directly or indirectly, (x) 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
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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 amalgamation,
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 (y) negotiate, explore or otherwise communicate in any way
with any Third Party with respect to any Acquisition Transaction or 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 hereby. Notwithstanding anything to the
contrary in the foregoing, the Company may, prior to the purchase of Shares
pursuant to the Offer, 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 the 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) Lazard Freres
with respect to the financial terms of any such proposed Acquisition
Transaction, the Board of Directors of the Company determines reasonably and 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"), (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 with terms no less favorable in the aggregate to
Company than those contained in the Confidentiality Agreement (except that no
"standstill provisions" shall be required from any person that at the date
hereof has commenced a tender offer for Securities of the Company), but which
confidentiality agreement shall not provide for any exclusive right to negotiate
with the Company or any payments by the Company and (c) the Company advises
Parent of all such non-public information delivered to such Third Party
concurrently with such delivery; provided, however, that Company shall not, and
shall cause its affiliates not to, enter into a definitive agreement with
respect to a Superior Proposal unless (x) the Company concurrently terminates
this Agreement in accordance with the terms hereof and pays any Termination Fee
required under Section 8.03(b) and
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agrees to pay any other amounts required under such Section 8.03(b), and (y)
such agreement permits the Company to terminate it if it receives a Superior
Proposal, such termination and related provisions to be on terms no less
favorable to the Company, including as to fees and reimbursement of expenses, as
those contained herein.
(b) The Company shall promptly (but in any event
within one day of the Company becoming aware of same) advise Parent of the
receipt by the Company, any of its subsidiaries or any of the Company's bankers,
attorneys or other agents or representatives of any inquiries or proposals
relating to an Acquisition Transaction and any actions taken pursuant to Section
6.08(a). The Company shall promptly (but in any event within one day of the
Company becoming aware of same) provide Parent with a copy of any such inquiry
or proposal in writing and a written statement with respect to any such
inquiries or proposals not in writing, which statement shall include the
identity of the parties making such inquiries or proposal and the material terms
thereof. The Company shall, from time to time, promptly (but in any event within
one day of the Company becoming aware of same) inform Parent of the status and
content of and material developments (including the calling of meetings of the
Board to take action with respect to such Acquisition Transaction) with respect
to any discussions regarding any Acquisition Transaction with a Third Party. For
the avoidance of doubt, the Company agrees that it will not enter into any
agreement with respect to a Superior Proposal unless and until Parent 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.
SECTION 6.09 Notification of Certain Matters. Parent and the
Company shall promptly notify each other of (a) the occurrence or non-occurrence
of any fact or event which would be reasonably likely (i) to cause any
representation or warranty contained in this Agreement to be untrue or
inaccurate in any material respect at any time from the date hereof to the
Effective Time or (ii) to cause any material covenant, condition or agreement
hereunder not to be complied with or satisfied in all material respects and (b)
any failure of the Company or Parent, as the case may be, to comply with or
satisfy any covenant, condition or agreement to be complied with or satisfied by
it hereunder in any material respect; provided, however, that no such
notification shall affect the representations or warranties of any party or the
conditions to the obligations of any party hereunder.
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SECTION 6.10 State Takeover Laws. The Company shall, upon the
request of the Purchaser, take all reasonable steps to assist in any challenge
by the Purchaser to the validity or applicability to the transactions
contemplated by this Agreement, including the Offer and the Merger and by the
Stockholder Agreements of any state takeover law.
ARTICLE VII
CONDITIONS TO CONSUMMATION OF THE MERGER
SECTION 7.01 Conditions to Each Party's Obligation to Effect
the Merger If the Offer Shall Have Been Consummated. The respective obligations
of Parent, the Purchaser and the Company to consummate the Merger if the Offer
shall have been consummated are subject to the satisfaction or waiver in writing
by each party hereto, at or before the Effective Time, of each of the following
conditions (the "Second Step Conditions") (and shall not be subject to the
One-Step Conditions (as defined herein)):
(a) Shareholder Approval. The Shareholders shall
have duly approved the transactions contemplated by this Agreement, to the
extent required pursuant to the requirements of the Company's certificate of
incorporation and applicable law.
(b) Purchase of Securities. The Purchaser shall
have accepted for payment and paid for Securities pursuant to the Offer in
accordance with the terms hereof; provided, that this condition shall be deemed
to have been satisfied with respect to Parent and the Purchaser if the Purchaser
fails to accept for payment or pay for Securities pursuant to the Offer in
violation of the terms of the Offer.
(c) Injunctions; Illegality. The consummation of
the Merger shall not be restrained, enjoined or prohibited by any order,
judgment, decree, injunction or ruling of a court of competent jurisdiction or
any Governmental Entity and there shall not have been any statute, rule or
regulation enacted, promulgated or deemed applicable to the Merger by any
Governmental Entity which prevents the consummation of the Merger.
SECTION 7.02 Conditions to Each Party's Obligation to Effect
the Merger If the Offer Shall Not Have Been Consummated. The respective
obligations of the parties to consummate the Merger if the Offer shall not have
been consummated are subject to the satisfaction, or waiver in writing by the
party specified
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below, at or before the Effective Time, of each of the following conditions set
forth in paragraphs (a), (b) and (c) of this Section 7.02 (the "One-Step
Conditions") (and shall not be subject to the Second Step Conditions):
(a) Conditions to Each Party's Obligations. The respective
obligations of Parent, the Purchaser and the Company to consummate the Merger if
the Offer shall not have been consummated are subject to the satisfactions, or
waiver in writing by each party hereto, at or before the Effective Time, of each
of the following conditions:
(i) Shareholder Approval. The Shareholders shall have
duly approved the transactions contemplated by this Agreement, pursuant to the
requirements of the Company's certificate of incorporation and applicable law.
(ii) Injunctions; Illegality. The consummation of the Merger
shall not be restrained, enjoined or prohibited by any order, judgment, decree,
injunction or ruling of a court of competent jurisdiction or any Governmental
Entity and there shall not have been any statute, rule or regulation enacted,
promulgated or deemed applicable to the Merger by any Governmental Entity which
prevents the consummation of the Merger.
(iii) Antitrust. The expiration or termination of all
applicable waiting periods relating to the Merger under the HSR Act and
applicable antitrust laws of Belgium, Ireland, Italy, Germany, Mexico and
Sweden, if applicable, shall have occurred.
(b) Additional Conditions to Parent and the
Purchaser's Obligation to Effect the Merger if the Offer shall not have been
Consummated. The obligation of Parent and Purchaser to effect the Merger prior
to consummation of the Offer is also subject to the satisfaction, or waiver in
writing by Parent and the Purchaser, at or before the Effective Time of each of
the additional conditions set forth in Annex II hereto.
(c) Additional Conditions to the Company's
Obligation to Effect the Merger if the Offer shall not have been Consummated.
The obligation of the Company to effect the Merger prior to consummation of the
Offer is also subject to the satisfaction, or waiver in writing by the Company,
at or before the Effective Time of each of the additional conditions set forth
in Annex III hereto.
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ARTICLE VIII
TERMINATION; AMENDMENTS; WAIVER
SECTION 8.01 Termination. This Agreement may be terminated and
the Merger contemplated hereby 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; or
(b) by the Company if the Company is not in material
breach of any of its representations, warranties, covenants or agreements
contained in this Agreement and if (i) the Purchaser fails to commence the Offer
as provided in Section 1.01 hereof, (ii) the Purchaser shall not have accepted
for payment and paid for Securities pursuant to the Offer in accordance with the
terms thereof on or before April 30, 1998 or (iii) the Purchaser fails to
purchase validly tendered Securities in violation of the terms of the Offer or
this Agreement; or
(c) by Parent or the Company if (i) the Offer is
terminated or withdrawn pursuant to its terms without any Securities being
purchased thereunder and (ii) the One-Step Conditions shall not have been
satisfied; provided, however, that Parent may terminate this Agreement pursuant
to this Section 8.01(c) only if Parent's or the Purchaser's termination or
withdrawal of the Offer is not in violation of the terms of this Agreement or
the Offer; or
(d) by Parent or the Company if any court or other
Governmental Entity shall have issued, enacted, entered, promulgated or enforced
any order, judgment, decree, injunction, or ruling or taken any other action
restraining, enjoining or otherwise prohibiting the Merger and such order,
judgment, decree, injunction, ruling or other action shall have become final and
nonappealable; or
(e) by the Company if, prior to the purchase of
Securities pursuant to the Offer in accordance with the terms of this Agreement,
(i) there shall have occurred, on the part of Parent or Purchaser, a material
breach of any representation or warranty, covenant or agreement contained in
this Agreement which is not curable or, if curable, is not cured within five
business days after written notice of such breach is given by the Company to the
party committing the breach or (ii) the Company (A) enters into a definitive
agreement with respect to a Superior Proposal
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and (B) pays any Termination Fee and agrees to pay any other amounts
required under Section 8.03(b); or
(f) by Parent if, prior to the purchase of
Securities pursuant to the Offer in accordance with the terms of this Agreement,
(i) there shall have occurred, on the part of the Company, a breach of any
representation, warranty, covenant or agreement contained in this Agreement
which 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, if
curable, is not cured within the later of (x) 5 business days after written
notice of such breach is given by Parent to the Company and (y) the satisfaction
of all conditions to the Offer not related to such breach or (ii) if the Board
of Directors of the Company or committee thereof shall have withdrawn or
modified (or shall have resolved to withdraw or modify) in a manner adverse to
Parent, its approval or recommendation of this Agreement or any of the
transactions contemplated hereby (it being agreed that, for all purposes of this
agreement, including Annex I hereto, the public disclosure of the fact that the
Company has supplied a third party with information regarding the Company shall
not by itself be deemed a withdrawal or modification in a manner adverse to
Parent of the Board's approval or recommendation of this Agreement or the
transactions contemplated hereby) and the Board of Directors and such committee
shall not have fully reinstated such approval or recommendations within two
business days or shall have recommended (or resolved to recommend) an
Acquisition Transaction (other than the Offer and Merger) to the Shareholders
and at least two business days shall have passed since such recommendation (or
resolution); or
(g) by Parent if it is not in material breach of its
obligations hereunder or under the Offer and no Securities shall have been
purchased pursuant to the Offer on or before April 30, 1998.
SECTION 8.02 Effect of Termination. In the event of the
termination of this Agreement pursuant to Section 8.01, this Agreement shall
forthwith become void and have no effect, without any liability on the part of
any party or its directors, officers or stockholders, other than the provisions
of this Section 8.02, Section 8.03 and the last sentence of Section 6.02, which
shall survive any such termination. Nothing contained in this Section 8.02 shall
relieve any party from liability for any breach of this Agreement or the
Confidentiality Agreement.
SECTION 8.03 Fees and Expenses.
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(a) Whether or not the Merger is consummated,
all costs and expenses incurred in connection with the Offer, this Agreement and
the transactions contemplated by this Agreement shall be paid by the party
incurring such expenses.
(b) In the event this Agreement is terminated
pursuant to Section 8.01(c), 8.01(e)(ii) or 8.01(f), then the Company shall
promptly reimburse Parent for the documented fees and expenses of Parent and the
Purchaser related to this Agreement, the transactions contemplated hereby and
any related financing (subject to a maximum of $1.0 million) and in the event
this Agreement is terminated pursuant to 8.01(e)(ii), then the Company shall
promptly pay Parent a Termination Fee of $15.0 million by wire transfer of same
day funds to an account designated by the Parent as a condition of such
termination.
(c) In the event that (i) any person shall have
publicly disclosed a proposal regarding an Acquisition Transaction and (ii)
following such disclosure, either (x) April 30, 1998 occurs without the Minimum
Condition being satisfied or the requisite stockholder approval of the Merger
being obtained (other than as a result of a material breach hereof by Parent or
the Purchaser that has not been cured within the time period set forth in
Article VIII of this Agreement) or (y) the Company breaches any of its material
obligations hereunder and does not cure such breach within the time period set
forth in Article VIII of this Agreement or (z) the Agreement is terminated
pursuant to Section 8.01(f)(ii), 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 shall 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
$15.0 million which amount shall be payable by wire transfer of same day funds
to an account designated by the Parent.
(d) The Company acknowledges that the agreements
contained in Section 8.03(b) and (c) are an integral part of the transactions
contemplated in this Agreement, and that, without these agreements, Parent and
Purchaser would not enter into this Agreement; accordingly, if the Company fails
to promptly pay the amount due pursuant to Section 8.03(b) and (c), and, in
order to obtain such payment, Parent or Purchaser commences a suit that results
in a judgment against the Company for the fee and
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expenses set forth in Section 8.03(b) and (c), the Company shall pay to Parent
its costs and expenses (including reasonable attorneys' fees) in connection with
such suit. No termination of this Agreement pursuant to Article VIII or
otherwise shall prejudice the ability of a non-breaching party from seeking
damages from any other party for any breach of this Agreement, including,
without limitation, reasonable attorneys' fees and the right to pursue any
remedy at law or in equity.
SECTION 8.04 Amendment. Subject to Section 1.03(c), this
Agreement may be amended by the Company, Parent and the Purchaser at any time
before or after any approval of this Agreement by the Shareholders but, after
any such approval, no amendment shall be made which decreases the Merger Price
or the Warrant Spread Amount or which adversely affects the rights of the
Shareholders hereunder without the approval of such Shareholders. This Agreement
may not be amended except by an instrument in writing signed on behalf of all
the parties.
SECTION 8.05 Extension; Waiver. Subject to Section 1.03(c), at
any time prior to the Effective Time, the parties hereto may (i) extend the time
for the performance of any of the obligations or other acts of any other party
hereto, (ii) waive any inaccuracies in the representations and warranties
contained herein by any other party or in any document, certificate or writing
delivered pursuant hereto by any other party or (iii) waive compliance with any
of the agreements of any other party or with any conditions to its own
obligations; provided, that, the Minimum Condition may not be waived by the
Purchaser, without the consent of the Company, so as to require to be validly
tendered and not withdrawn prior to the Expiration Date that number of Common
Shares which represents less than 50% of the outstanding Common Shares on a
fully diluted basis on the date of purchase (not taking into account the
Rights), it being understood that the other conditions set forth in Annexes I
and II may be waived by Purchaser without the consent of the Company. Any
agreement on the part of any party to any such extension or waiver shall be
valid only if set forth in an instrument in writing signed on behalf of such
party.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01 Non-Survival of Representations and Warranties.
The representations and warranties made in this Agreement shall not survive
beyond the Effective Time. For the
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avoidance of doubt and notwithstanding the foregoing, the agreements set forth
in Section 3.02 and Section 6.07 shall survive the Effective Time indefinitely
(except to the extent a shorter period of time is explicitly specified therein).
SECTION 9.02 Entire Agreement; Assignment.
(a) This Agreement (including the documents and the
instruments referred to herein) and the letter agreement, by and between Parent
and the Company, dated August 29, 1997 (the "Confidentiality Agreement"),
constitute the entire agreement and supersede all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof and thereof.
(b) Neither this Agreement nor any of the rights,
interests or obligations hereunder will be assigned by any of the parties hereto
(whether by operation of law or otherwise) without the prior written consent of
the other party. Subject to the preceding sentence, this Agreement will be
binding upon, inure to the benefit of and be enforceable by the parties and
their respective successors and assigns.
SECTION 9.03 Validity. The invalidity or unenforceability of
any provision of this Agreement shall not affect the validity or enforceability
of any other provision of this Agreement, each of which shall remain in full
force and effect.
SECTION 9.04 Notices. All notices, requests, claims, demands
and other communications hereunder shall be in writing and shall be deemed to
have been duly given when delivered in person, by overnight courier or facsimile
to the respective parties as follows:
If to Parent or the Purchaser:
BTR plc
BTR House
Carlisle Place
London, SW 1P 1BX
Attention: David J. Stevens, Esq.
General Counsel
Fax: 011 44 171 821-3806
with copies to:
BTR Incorporated
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<PAGE>
Stamford Harbor Park
333 Ludlow Street
Stamford, Connecticut 06902
Attention: Edgar P. DeVylder, Esq.
Vice President, General
Counsel and Secretary
Fax: 203-324-0503
and
Cahill Gordon & Reindel
80 Pine Street
New York, New York 10005
Attention: W. Leslie Duffy, Esq.
Fax: 212-269-5420
If to the Company:
Exide Electronics Group, Inc.
8609 Six Forks Road
Raleigh, North Carolina 27615
Attention: Nicholas J. Costanza, Esq.
Vice President, Chief
Administrative Officer and
General Counsel
Fax: 919-870-3079
with a copy to:
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Attention: David M. Silk, Esq.
Fax: 212-403-2000
or to such other address as the person to whom notice is given may have
previously furnished to the other in writing in the manner set forth above
(provided that notice of any change of address shall be effective only upon
receipt thereof).
SECTION 9.05 Governing Law; Jurisdiction. (a) This Agreement
shall be governed by and construed in accordance with the laws of the State of
Delaware, regardless of the laws that might otherwise govern under applicable
principles of conflicts of laws thereof.
(b) In addition, each of the parties hereto (a)
consents to submit itself to the personal jurisdiction of any
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<PAGE>
federal court located in the State of Delaware or any Delaware state court in
the event any dispute arises out of this Agreement or any of the transactions
contemplated by this Agreement, (b) agrees that it will not attempt to deny or
defeat such personal jurisdiction by motion or other request for leave from any
such court and (c) agrees that it will not bring any action relating to this
Agreement or any of the transactions contemplated hereby in any court other than
a federal or state court sitting in the State of Delaware. Each of Parent and
the Purchaser hereby irrevocably designates The Corporation Trust Company in
Delaware as its authorized agent, respectively, to accept and acknowledge on its
behalf service of any process which may be served in any suit, action or
proceeding in Delaware. Each of Parent and the Purchaser hereby irrevocably (i)
consents and agrees to process being served in any suit, action or proceeding
brought in the federal court located in the State of Delaware or any Delaware
state court by serving a copy thereof upon the agent designated in the preceding
sentence and (ii) agrees that such service of process shall be deemed in every
respect effective service of process upon it in any such suit, action or
proceeding and shall, to the fullest extent permitted by law, be taken and be
held to be valid personal service upon and personal delivery to Parent and
Purchaser, as the case may be.
SECTION 9.06 Waiver of Jury Trial. EACH PARTY ACKNOWLEDGES AND
AGREES THAT ANY CONTROVERSY OR DISPUTE THAT MAY ARISE UNDER THIS AGREEMENT IS
LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES AND THEREFORE EACH SUCH PARTY
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH
PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY
OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER
PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER, (ii) EACH SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF
THIS WAIVER, (iii) EACH SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (iv) EACH
SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS,
THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.06.
SECTION 9.07 Descriptive Headings. The descriptive headings
herein are inserted for convenience of reference only and are not intended to be
part of or to affect the meaning or interpretation of this Agreement.
SECTION 9.08 Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall be
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<PAGE>
deemed to be an original, but all of which shall constitute one and the same
agreement.
SECTION 9.09 Parties in Interest. This Agreement shall be
binding upon and inure solely to the benefit of each party hereto, and, except
with respect to Sections 1.03(c), 2.09 and 6.07, nothing in this Agreement,
express or implied, is intended to confer upon any other person any rights or
remedies of any nature whatsoever under or by reason of this Agreement.
SECTION 9.10 Certain Definitions. As used in this Agreement:
(a) the term "affiliate", as applied to any person,
shall mean any other person directly or indirectly controlling, controlled by,
or under common control with, that person. For the purposes of this definition,
"control" (including, with correlative meanings, the terms "controlling,"
"controlled by" and "under common control with"), as applied to any person,
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of that person, whether through the
ownership of voting securities, by contract or otherwise;
(b) the term "person" shall include individuals,
corporations, partnerships, trusts, other entities and groups (which term shall
include a "group" as such term is defined in Section 13(d)(3) of the Exchange
Act); and
(c) the term "subsidiary" or "subsidiaries" means,
with respect to Parent, the Company or any other person, any corporation,
partnership, joint venture or other legal entity of which Parent, the Company or
such other person, as the case may be (either alone or through or together with
any other subsidiary), owns, directly or indirectly, stock or other equity
interests the holders of which are generally entitled to more than 50% of the
vote for the election of the board of directors or other governing body of such
corporation or other legal entity.
(d) the term "Tax" means any federal, state, local,
or foreign income, gross receipts, license, payroll, employment, excise,
severance, stamp, occupation, premium, windfall profits, environmental
(including taxes under Code '59A), customs duties, capital stock, franchise,
profits, withholding, social security (or similar), unemployment, disability,
real property, personal property, sales, use, transfer, registration, value
added, alternative or add-on
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<PAGE>
minimum, estimated, or other tax of any kind whatsoever, including any interest,
penalty, or addition thereto.
(e) the term "Tax Return" means any return,
declaration, report, claim for refund, or information return or statement
relating to Taxes, including any schedule or attachment thereto, and including
any amendment thereof.
SECTION 9.11 Specific Performance. The parties hereto agree
that irreparable damage would occur in the event that any of the provisions of
this Agreement were not performed in accordance with their specific terms or
were otherwise breached. It is accordingly agreed that the parties shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement
and to enforce specifically the terms and provisions hereof in any court of the
United States or any state having jurisdiction, this being in addition to any
other remedy to which they are entitled at law or in equity.
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<PAGE>
IN WITNESS WHEREOF, each of the parties has caused this
Agreement to be executed on its behalf by its respective officer thereunto duly
authorized, all as of the day and year first above written.
BTR PLC
By:
-------------------------------
Name:
Title:
BTR ACQUISITION CORPORATION
By:
-------------------------------
Name:
Title:
EXIDE ELECTRONICS GROUP, INC.
By:
-------------------------------
Name:
Title:
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<PAGE>
Annex I
Conditions to the Offer.
Notwithstanding any other provisions of the Offer, the
Purchaser shall not be required to accept for payment or pay for any tendered
Securities, unless there are validly tendered and not withdrawn prior to the
expiration date for the Offer (the "Expiration Date") that number of Common
Shares which represent at least 80% of the outstanding Common Shares on a fully
diluted basis on the date of purchase (not taking into account the Rights) (the
"Minimum Condition"). Furthermore, notwithstanding any other provisions of the
Offer, the Purchaser shall not be required to accept for payment or pay for any
tendered Securities until expiration of all applicable waiting periods under the
HSR Act and applicable antitrust statutes in Belgium, Germany, Ireland, Italy,
Mexico and Sweden, if applicable, and may, subject to the terms of the Merger
Agreement, amend the Offer or postpone the acceptance for payment of tendered
Securities if at any time on or after October 16, 1997 and before the expiration
of the Offer, any of the following events (each, an "Event") shall occur:
(a) any order, preliminary or permanent injunction,
decree, judgment or ruling in any suit, action or proceeding is entered
that (i) makes illegal or otherwise directly or indirectly restrains or
prohibits the acquisition by Parent or Purchaser of any Shares under
the Offer or the making or consummation of the Offer or the Merger, the
performance by the Company of any of its material obligations under the
Merger Agreement or the consummation of any purchase of Shares
contemplated by the Merger Agreement or related agreements, (ii)
prohibits or limits the ownership or operation by the Company, Parent
or any of their respective subsidiaries of a material portion of the
business or assets of the Company and its subsidiaries, taken as a
whole, or Parent and its subsidiaries, taken as a whole, or compels the
Company or Parent to dispose of or hold separate any material portion
of the business or assets of the Company and its subsidiaries, taken as
a whole, or Parent and its subsidiaries, taken as a whole, as a result
of the Offer or the Merger, (iii) imposes material limitations on the
ability of Parent or Purchaser to acquire or hold, or exercise full
rights of ownership of, any Shares accepted for payment pursuant to the
Offer, including, without limitation, the right to vote such Shares on
all matters properly presented to the shareholders of the Company or
(iv) prohibits Parent or any of its subsidiaries from effectively
controlling in any material respect the business or operation of the
Company and its subsidiaries, taken as a
<PAGE>
whole; or
(b) any Law is enacted, entered, enforced,
promulgated or deemed applicable to the Offer or the Merger, or any
other action is taken by any governmental entity, other than the
application to the Offer or the Merger of applicable waiting periods
under the HSR Act, that results, directly or indirectly, in any of the
consequences referred to in clauses (i) through (iv) or paragraph (a)
above; or
(c) any Material Adverse Effect on the Company (as
defined in the Merger Agreement) has occurred; or
(d) (i) the Board of Directors of the Company or any
committee thereof withdraws or modifies in a manner adverse to Parent
or Purchaser its approval or recommendation of the Offer, the Merger or
the Merger Agreement and does not fully reinstate such approval or
recommendation within two business days of such withdrawal or
modification, or approves or recommends any Acquisition Proposal or
(ii) the Company enters into any agreement to consummate any
Acquisition Proposal or (iii) the One-Step Conditions have been
satisfied or waived; or
(e) any of the representations and warranties of the
Company set forth in the Merger Agreement that are qualified as to
Material Adverse Effect (as defined in the Merger Agreement) are not
true and correct, or any such representations and warranties that are
not so qualified are not true and correct in any respect (when taken
together with all other failures of such representations and warranties
to be true and correct) that would have a Material Adverse Effect on
the Company, in each case at the date of the Merger Agreement or at the
scheduled expiration of the Offer (as though made as of such date,
except that those representations and warranties that address matters
only as of a particular date shall remain true and correct as of such
date) which have been not been cured within the time period specified
in Article VIII of the Merger Agreement; or
(f) the Company and the Purchaser and Parent shall
have reached an agreement that the Offer or the Merger Agreement be
terminated, or the Merger Agreement shall have been terminated in
accordance with its terms; or
(g) the Company shall have breached or failed to
perform in any material respect any of its material obligations,
covenants or agreements under the Merger
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<PAGE>
Agreement; or
(h) there shall have occurred, and continued to
exist, (i) any general suspension of, or limitation on prices for,
trading in securities on the Nasdaq National Market, (ii) a declaration
of a banking moratorium or any suspension of payments in respect of
banks in the United States or Great Britain, (iii) a commencement of a
war, armed hostilities or other national or international crisis
directly involving the United States or Great Britain (other than an
action involving United Nations' personnel or support of United
Nations' personnel) or (iv) in the case of any of the foregoing clauses
(i) through (iii) existing at the time of the commencement of the
Offer, a material acceleration or worsening thereof; or
(i) it shall have been publicly disclosed, or
Purchaser shall have otherwise learned after the date of the Merger
Agreement that beneficial ownership (determined for the purposes of
this paragraph as set forth in Rule 13d-3 promulgated under the
Exchange Act) of 20% or more of the then outstanding Shares has been
acquired by any person, other than Parent or any of its affiliates.
The foregoing conditions are for the benefit of Parent and the
Purchaser and may be asserted by Parent or the Purchaser regardless of the
circumstances giving rise to any such conditions and may be waived (except that
the Minimum Condition may not be waived or amended without the consent of the
Company so as to require to be validly tendered and not withdrawn prior to the
Expiration Date that number of Common Shares which represents less than 50% of
the outstanding Common Shares on a fully diluted basis on the date of purchase
(not taking into account the Rights)) by Parent or the Purchaser in whole or in
part at any time and from time to time in their reasonable discretion. The
failure by Parent or the Purchaser at any time to exercise any of the foregoing
rights shall not be deemed a waiver of any such right and each such right shall
be deemed an ongoing right which may be asserted at any time and from time to
time.
The capitalized terms used in this Annex I shall have the
meanings set forth in the Agreement to which it is annexed, except that the term
"Merger Agreement" shall be deemed to refer to the Agreement to which this Annex
I is appended.
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<PAGE>
Annex II
Parent and Purchaser's One-Step Conditions
(a) Order; Injunction. There shall not be entered and
in effect any order, preliminary or permanent injunction, decree,
judgment or ruling in any suit, action or proceeding that (i) prohibits
or limits the ownership or operation by the Company, Parent or any of
their respective subsidiaries of a material portion of the business or
assets of the Company and its subsidiaries, taken as a whole, or Parent
and its subsidiaries, taken as a whole, or compels the Company or
Parent to dispose of or hold separate any material portion of the
business or assets of the Company and its subsidiaries, taken as a
whole, or Parent and its subsidiaries, taken as a whole, as a result of
the Merger, (ii) imposes material limitations on the ability of Parent
or Purchaser to acquire or hold, or exercise full rights of ownership
of, the Company's common stock, including, without limitation, the
right to vote such common stock on all matters properly presented to
the Shareholders of the Company, or (iii) prohibits Parent or any of
its subsidiaries from effectively controlling in any material respect
the business or operation of the Company and its subsidiaries, taken as
a whole.
(b) Law. There shall have been no Law enacted,
entered, enforced, promulgated or deemed applicable to the Merger, or
any other action taken by any governmental entity, other than the
application to the Merger of applicable waiting periods under the HSR
Act and under applicable antitrust statutes in Belgium, Geramny,
Ireland, Italy, Mexico and Sweden, if applicable, that results,
directly or indirectly, in any of the consequences referred to in
clauses (i) through (iii) of paragraph (a) above, which remains in
effect at the Effective Time.
(c) Material Adverse Effect. No Material
Adverse Effect on the Company (as defined in the Merger Agreement)
shall have occurred and be in effect at the Effective Time.
(d) Representations and Warranties. None of the
representations and warranties of the Company set forth in the Merger
Agreement that are qualified as to Material Adverse Effect (as defined
in the Merger Agreement) shall not be true and correct, and no such
representations and warranties that are not so qualified shall not be
true and correct in any respect (when taken together with all other
failures of such representations and warranties to be true and correct)
that would have a Material Adverse Effect on
<PAGE>
the Company, in each case at the date of the Merger Agreement or as of
the Effective Time (as though made as of such date, except that those
representations and warranties that address matters only as of a
particular date shall remain true and correct as of such date) which
have been not been cured within the time period specified in Article
VIII of the Merger Agreement.
(e) Breach of Covenants. The Company shall not be in
breach of or failing to perform in any material respect any of its
material obligations, covenants or agreements under the Merger
Agreement.
(f) Economic Conditions. There shall not have
occurred, and continued to exist, (i) any general suspension of, or
limitation on prices for, trading in securities on the Nasdaq National
Market, (ii) a declaration of a banking moratorium or any suspension of
payments in respect of banks in the United States or Great Britain,
(iii) a commencement of a war, armed hostilities or other national or
international crisis directly involving the United States or Great
Britain (other than an action involving United Nations' personnel or
support of United Nations' personnel) or (iv) in the case of any of the
foregoing clauses (i) through (iii) existing at the time of the
commencement of the Offer, a material acceleration or worsening
thereof.
<PAGE>
Annex III
Company's One-Step Conditions
(a) Representations and Warranties. None of the
representations and warranties of Parent or the Purchaser set forth in
the Merger Agreement that are qualified as to Material Adverse Effect
(as defined in the Merger Agreement) shall not be true and correct, and
no such representations and warranties that are not so qualified shall
not be true and correct in any respect (when taken together with all
other failures of such representations and warranties to be true and
correct) that would have a Material Adverse Effect on Parent, in each
case at the date of the Merger Agreement or as of the Effective Time
(as though made as of such date, except that those representations and
warranties that address matters only as of a particular date shall
remain true and correct as of such date).
(b) Breach of Covenants. Neither Parent nor the
Purchaser shall be in breach of or failing to perform in any material
respect any of its respective material obligations, covenants or
agreements under the Merger Agreement.
