<PAGE> 1
Rule 424B3
Reg. No. 333-48700
e2E CORPORATION
7245 NW Evergreen Parkway
Hillsboro OR 97124
___________
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON DECEMBER 14, 2000
To the Shareholders of e2E Corporation:
A special meeting of the shareholders of e2E Corporation will be held
at the offices of Greene & Markley, P.C., located at 1515 S.W. Fifth Avenue,
Suite 600, Portland, Oregon, on Thursday, December 14, 2000, at 10:00 a.m.,
local time, to consider and act upon a proposal to approve an Agreement and Plan
of Merger dated as of September 29, 2000 among Plexus Corp., Casey Jones Corp.
and e2E. Pursuant to the Agreement and Plan of Merger (a) Casey Jones Corp. will
be merged into e2E and e2E will become a wholly-owned subsidiary of Plexus, and
(b) holders of e2E common stock will receive shares of Plexus common stock based
upon the exchange rate described in the accompanying prospectus supplement.
With respect to the proposal to approve the Agreement and Plan of
Merger, e2E shareholders have a right to dissent and obtain payment in cash for
their shares by complying with the terms and procedures of Sections 60.561 to
60.594 of the Oregon Business Corporation Act, a copy of which is included as
Appendix B to the accompanying prospectus supplement.
The record date for the special meeting is the close of business on
November 6, 2000. Only e2E shareholders of record at that time are entitled to
notice of and to vote at the special meeting or any adjournment or postponement
thereof. To approve the merger, the holders of a majority of the outstanding
shares of e2E common stock must vote in favor of the Agreement and Plan of
Merger.
The accompanying prospectus supplement and prospectus contain more
detailed information regarding the merger and the Agreement and Plan of Merger.
A copy of the Agreement and Plan of Merger is included as Appendix A to the
prospectus supplement. The prospectus supplement also constitutes e2E's proxy
statement for the special meeting.
YOUR VOTE IS IMPORTANT. IF YOU ARE AN e2E EMPLOYEE WHO RECEIVED SHARES
UNDER e2E'S RESTRICTED STOCK PLANS, YOU HAVE ALREADY GIVEN THE BOARD OF
DIRECTORS A PROXY TO VOTE YOUR SHARES TO APPROVE THE AGREEMENT AND PLAN OF
MERGER. THE PROXY WAS GIVEN IN YOUR EMPLOYMENT AGREEMENT AND WAS A CONDITION TO
YOUR RECEIPT OF SHARES. IF YOU ARE A NON-EMPLOYEE SHAREHOLDER, EVEN IF YOU
EXPECT TO ATTEND THE SPECIAL MEETING, PLEASE COMPLETE, SIGN AND DATE THE
ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED POSTAGE-PAID ENVELOPE. IF
NO INSTRUCTIONS ARE INDICATED ON YOUR PROXY, YOUR SHARES WILL BE VOTED "FOR" THE
AGREEMENT AND PLAN OF MERGER. IF YOU DO NOT RETURN YOUR PROXY OR VOTE IN PERSON,
THE EFFECT IS A VOTE AGAINST THE AGREEMENT AND PLAN OF MERGER. WHETHER YOU ARE
AN EMPLOYEE SHAREHOLDER OR A NON-EMPLOYEE SHAREHOLDER, YOU CAN REVOKE YOUR PROXY
AT ANY TIME BEFORE IT IS EXERCISED BY GIVING WRITTEN NOTICE TO THE SECRETARY OF
e2E, FILING ANOTHER PROXY, OR ATTENDING THE SPECIAL MEETING AND VOTING IN
PERSON. DO NOT SEND ANY STOCK CERTIFICATES WITH THE PROXY CARD.
THE e2E BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR"
THE AGREEMENT AND PLAN OF MERGER.
BY ORDER OF THE BOARD OF DIRECTORS
Charles R. Markley, Secretary
November 8, 2000
<PAGE> 2
PROSPECTUS SUPPLEMENT
OF
PLEXUS CORP.
______________________
This prospectus supplement is being furnished to you as a shareholder
of e2E Corporation in connection with the proposed acquisition of e2E by Plexus
Corp. It also constitutes e2E's special meeting proxy statement. If you are a
non-employee shareholder of e2E, the e2E board of directors is soliciting your
proxy for a special meeting of shareholders of e2E on December 14, 2000 to
approve that transaction. If you are an employee shareholder who received shares
under e2E's restricted stock plans, you have already given the board of
directors a proxy to vote your shares to approve the proposed transaction. The
proxy was given in your employment agreement and was a condition to your receipt
of shares. You may revoke that proxy as we describe in this prospectus
supplement. The holders of at least a majority of e2E's outstanding shares must
vote in favor of the Agreement and Plan of Merger for it to be approved.
In the merger, e2E shareholders will become Plexus shareholders, and
e2E will become wholly-owned by Plexus. If the merger is completed, you will
receive approximately $8.97 in value of shares of Plexus common stock for each
share of e2E common stock that you own. The exact exchange rate for that
conversion and the dollar value of shares that you will receive will vary
depending upon the average price of Plexus common stock during a defined period
ending before the merger and the number of e2E shares outstanding or subject to
option. Your consideration may also be reduced by up to 15% under indemnity and
escrow provisions. You may call e2E's president, Matt Bergeron, at (503)
531-2050 for a current calculation of the exchange rate. A copy of the merger
agreement is attached as Appendix A.
You should read this prospectus supplement together with the prospectus
of Plexus dated November 8, 2000. This prospectus supplement and the prospectus
are filed as part of a registration statement with the Securities and Exchange
Commission, relating to the shares of Plexus common stock. Plexus anticipates
that a total of between 411,000 and 256,875 shares of Plexus common stock will
be issued in the merger, assuming a Plexus stock value as determined under the
merger agreement between $50.00 and $80.00.
Plexus common stock is quoted under the symbol "PLXS" on the Nasdaq
Stock Market. e2E common stock is not quoted on any established market. On
September 29, 2000, the last trading day before the announcement of the merger
agreement, Nasdaq reported that the last sale price of Plexus common stock was
$70.50 per share; the last transaction in e2E common stock of which e2E
management is aware was $1.67 per share. On November 6, 2000, a recent trading
day before the date of this prospectus supplement, the last sale prices of
Plexus common stock common stock was $58.00 per share.
YOU SHOULD CAREFULLY CONSIDER ALL OF THE INFORMATION THAT YOU RECEIVE
IN THIS TRANSACTION. FOR SOME OF THE IMPORTANT FACTORS WHICH YOU SHOULD CONSIDER
IN EVALUATING PLEXUS COMMON STOCK AND THE PROPOSED TRANSACTION, PLEASE SEE "RISK
FACTORS" ON PAGE S-13 OF THIS PROSPECTUS SUPPLEMENT, AND "RISK FACTORS"
BEGINNING ON PAGE 4 OF THE PROSPECTUS.
This prospectus supplement is dated November 8, 2000. It is first being
mailed to e2E shareholders on or about November 13, 2000.
_______________
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES. THEY ALSO HAVE NOT
DETERMINED IF THE PROSPECTUS OR THIS PROSPECTUS SUPPLEMENT ARE TRUTHFUL OR
COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
S-1
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
PROSPECTUS SUPPLEMENT
SUMMARY .......................................................................................................S-4
RISK FACTORS...................................................................................................S-13
THE SPECIAL MEETING............................................................................................S-15
THE MERGER AND THE MERGER AGREEMENT............................................................................S-17
DISSENTERS' RIGHTS OF APPRAISAL................................................................................S-29
BUSINESS OF PLEXUS.............................................................................................S-31
OTHER INFORMATION ABOUT PLEXUS WHICH YOU CAN OBTAIN............................................................S-32
SELECTED FINANCIAL DATA OF e2E.................................................................................S-34
BUSINESS OF e2E................................................................................................S-35
OWNERSHIP OF AND MARKET FOR e2E COMMON STOCK...................................................................S-36
COMPARISON OF SHAREHOLDER RIGHTS...............................................................................S-37
LEGAL OPINIONS.................................................................................................S-40
EXPERTS ......................................................................................................S-40
INDEX TO FINANCIAL STATEMENTS..................................................................................S-41
Agreement and Plan of Merger....................................................................................A-1
Sections 60.561 Through 60.594 of the
Oregon Business Corporation Act........................................................................B-1
PROSPECTUS
SUMMARY .........................................................................................................3
FORWARD-LOOKING STATEMENTS AND CAUTIONARY FACTORS ................................................................4
RISK FACTORS......................................................................................................4
RECENT DEVELOPMENTS..............................................................................................12
PLEXUS MARKET INFORMATION........................................................................................14
PLEXUS SUMMARY FINANCIAL DATA....................................................................................15
PLEXUS CORP......................................................................................................16
OTHER INFORMATION ABOUT PLEXUS WHICH YOU CAN OBTAIN..............................................................24
INFORMATION ABOUT PLEXUS COMMON STOCK............................................................................25
PLAN OF DISTRIBUTION.............................................................................................28
LEGAL OPINIONS...................................................................................................29
EXPERTS ........................................................................................................29
PROCEDURE FOR SUBMITTING SHAREHOLDER PROPOSALS...................................................................29
</TABLE>
__________________
THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS INCORPORATE BY REFERENCE
ADDITIONAL INFORMATION ABOUT PLEXUS. PLEASE SEE "OTHER INFORMATION ABOUT PLEXUS
WHICH YOU CAN OBTAIN" ON PAGE S-32 OF THIS PROSPECTUS SUPPLEMENT. PLEXUS WILL
PROVIDE YOU THIS INFORMATION WITHOUT CHARGE IF YOU MAKE A REQUEST TO:
PLEXUS CORP.
ATTENTION: CORPORATE SECRETARY
55 JEWELERS PARK DRIVE
P.O. BOX 156
NEENAH WI 54956
(920) 722-3451
S-2
<PAGE> 4
TO HELP ASSURE THAT YOU RECEIVE THIS INFORMATION BEFORE THE e2E
SHAREHOLDER MEETING, YOU SHOULD REQUEST THE INFORMATION NOT LATER THAN DECEMBER
7, 2000.
__________________
NEITHER PLEXUS NOR e2E HAS AUTHORIZED ANYONE TO GIVE YOU ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS EXCEPT FOR THOSE IN THIS PROSPECTUS
SUPPLEMENT. THAT IS TRUE WHETHER THE STATEMENTS ARE IN CONNECTION WITH THE
SOLICITATIONS OF PROXIES OR THE OFFERING OF SECURITIES. YOU SHOULD NOT RELY UPON
ANY OTHER INFORMATION OR REPRESENTATIONS EVEN IF SOMEONE PROVIDES YOU WITH THEM,
BECAUSE THEY ARE NOT AUTHORIZED BY PLEXUS, e2E OR ANYONE ELSE. PLEXUS AND e2E DO
NOT IMPLY OR REPRESENT BY DELIVERING THIS PROSPECTUS SUPPLEMENT THAT PLEXUS, e2E
OR THEIR BUSINESSES ARE UNCHANGED AFTER ITS DATE OR THAT THE INFORMATION HEREIN
IS CORRECT AS OF ANY TIME AFTER ITS DATE.
Plexus has provided all information contained in the prospectus and
this prospectus supplement about Plexus and its subsidiary Casey Jones Corp. e2E
has provided all information in this prospectus supplement about e2E.
S-3
<PAGE> 5
SUMMARY
This section is a summary of important information in this prospectus
supplement, and includes summaries of information which we believe is material.
To understand the merger fully and for a more complete description of the legal
terms of the merger, you should read carefully this entire document and the
documents to which we have referred you. See "Other Information About Plexus
Which You Can Obtain" on page S-32 of this prospectus supplement. We have
included page references to direct you to a more complete description of some of
the topics presented in this summary.
Unless we state otherwise, all data "per share" of Plexus common stock,
and all information regarding the shares, have been restated for Plexus' 2-for-1
stock splits in 1997 and 2000, and for the 1999 acquisition of SeaMED
Corporation, for which Plexus "pooled" financial statements and restated its
historical financial statements.
THE PARTIES
PLEXUS CORP.
55 JEWELERS PARK DRIVE
NEENAH, WISCONSIN 54956
(920) 722-3451
Plexus provides product realization services to original equipment
manufacturers, or OEMs, in the networking/telecommunications, medical,
industrial, computer and transportation industries. We provide advanced
electronics design, manufacturing and testing services to our customers and
focus on complex, high-end products. We offer our customers the ability to
outsource all stages of product realization, including: development and design,
materials procurement and management, prototyping and new product introduction,
testing, manufacturing and after-market support. For many customers, we serve
both a design and production function, allowing those customers to concentrate
on concept development, distribution and marketing, while accelerating their
time to market, reducing their investment in manufacturing capacity and
optimizing total product cost.
We believe that our broad service offerings with respect to the design
and realization of complex, high-end products within the electronics
manufacturing services, or EMS, industry provide us with significant competitive
advantages. Through a staff of over 350 product development engineers, we offer
a complete menu of engineering services, including digital and analog design,
mechanical and industrial design, embedded software design, printed circuit
board design, test equipment and software development, product verification and
new product introduction services. Our manufacturing services include printed
circuit board assembly, product configuration, testing, final product and system
box build and after-market support. Throughout the production process, we offer
logistics services, such as materials procurement, inventory management,
packaging and distribution.
For further information, you should see "Business of Plexus" on page
S-31 of this prospectus supplement, "Plexus Corp." beginning on page 16 of the
prospectus and "Other Information About Plexus Which You Can Obtain" on page
S-32 of this prospectus supplement.
Casey Jones Corp. is a corporation wholly-owned by Plexus. Plexus
formed Casey Jones to conduct the e2E merger, and Casey Jones has no other
business or operations.
S-4
<PAGE> 6
e2E CORPORATION
e2E CORPORATION
7245 NW EVERGREEN PARKWAY, SUITE 110
HILLSBORO, OREGON 97124
(503) 531-2050
e2E Corporation designs and engineers electronic interconnect products
for original equipment manufacturers and contract manufacturers in the
electronics industry. e2E offers its schematic capture, design optimization and
verification services from its design centers, at the customer site, or
collaboratively over a virtual private network.
For further information, you should see "Business of e2E" beginning on
page S-35 of this prospectus supplement and "Selected Financial Data of e2E" on
page S-34.
SUMMARY OF THE MERGER (page S-17)
THE MERGER AGREEMENT IS ATTACHED AT THE BACK OF THIS PROSPECTUS
SUPPLEMENT AS APPENDIX A. WE ENCOURAGE YOU TO READ THE MERGER AGREEMENT, BECAUSE
IT IS THE LEGAL DOCUMENT THAT GOVERNS THE MERGER.
In the proposed merger, a subsidiary of Plexus will merge into e2E, and
e2E will become a wholly-owned subsidiary of Plexus. Unless you properly
exercise dissenters' rights, you will receive shares of Plexus common stock in
exchange for your shares of e2E common stock.
EFFECTIVE TIME OF THE MERGER
Plexus and e2E hope to complete the merger shortly after the special
meeting, if regulatory approvals and other required matters are completed by
that time.
WHAT YOU WILL RECEIVE IN THE MERGER (page S-17)
If the merger is completed, and assuming no change in the number of
e2E's outstanding shares, your e2E shares will be converted into the number of
Plexus shares obtained by dividing $8.97 by the average trading price of Plexus
common stock over a 10 day trading period before closing. For example, you would
receive between 0.179 and 0.112 shares of Plexus common stock for each share of
e2E common stock that you own, if the average closing price of Plexus stock is
between $50.00 and $80.00 during the period described in the next paragraph.
This assumes that the number of e2E shares outstanding or subject to option
stays the same prior to the merger. It also assumes that no indemnity payments
are due Plexus.
The exact number of shares you receive in exchange for each e2E share
will depend upon the average closing price of Plexus common stock over the ten
trading days ending three days before the merger is effective, which should be
shortly after the day of the shareholder meeting. Our examples assume that there
is no change in the number of shares of e2E common stock outstanding or subject
to option prior to the merger. There is no minimum number of shares issuable to
you, although the value of the number of shares issued per share of e2E common
stock would be $8.9728 assuming no change in the number of e2E shares
outstanding or subject to option. Since the dollar value is fixed, as the
average Plexus stock price rises, former e2E shareholders would receive a
decreasing percentage of Plexus shares after the merger; conversely, if Plexus'
stock price declines, former e2E shareholders would receive a larger percentage.
These amounts are subject to reduction if e2E shareholders are required to
indemnify Plexus under the merger agreement.
S-5
<PAGE> 7
The following table shows the number of shares of Plexus stock which
you will receive, and the approximate market value of that stock, for each share
of e2E stock. We chose these examples based on the $43.38 to $81.00 trading
range of Plexus stock in the period beginning three months prior to the
announcement of the merger. We assume that there is no change in the number of
e2E shares outstanding or subject to option. We also show examples below and
above that range to illustrate that while the value in the determination period
of the shares which you will receive will remain constant, even though the
number of shares may increase or decrease. The dollar value amounts are based
upon the Plexus average closing prices used to determine the exchange rate.
<TABLE>
<CAPTION>
Average Plexus Exchange Dollar value of
stock price Rate per e2E share an e2E share
------------------- ------------------ ---------------
<S> <C> <C>
$35.00 0.256 $8.9728
$40.00 0.224 $8.9728
$45.00 0.199 $8.9728
$50.00 0.179 $8.9728
$55.00 0.163 $8.9728
$60.00 0.150 $8.9728
$65.00 0.138 $8.9728
$70.00 0.128 $8.9728
$75.00 0.120 $8.9728
$80.00 0.112 $8.9728
$85.00 0.106 $8.9728
$90.00 0.100 $8.9728
$95.00 0.094 $8.9728
</TABLE>
The ultimate consideration which e2E shareholders would retain could be
reduced by up to 15% under the merger agreement provisions providing indemnity
to Plexus, and the related escrow agreement. See "Escrow and Indemnity" below.
Plexus will not issue any fractional shares. Instead, you will receive
cash for any fractional share of Plexus common stock owed to you, based on the
average price of Plexus common stock described above.
Any e2E shareholder who elects and follows the requirements for
statutory dissenters' rights under Oregon law will receive the consideration
under that procedure instead of the consideration discussed above. See
"Dissenters' Rights of Appraisal" at page S-29.
ESCROW AND INDEMNITY (page S-18)
The merger agreement provides for indemnification of Plexus by e2E's
shareholders under certain circumstances. These circumstances include breaches
of e2E's representations and warranties or obligations under the merger
agreement, and other matters specified in the merger agreement. Of the
consideration you will receive in the merger, 15% will be paid to the escrow
agent, under an escrow agreement, to support the indemnity. The provisions of
the indemnity obligations and the escrow agreement may reduce the consideration
which you retain by up to 15%.
The escrow agent will be West Coast Trust Company, Incorporated.
Matthew Bergeron, Steven Smith and William Thale will be the e2E shareholders'
representatives on matters relative to the indemnity and the escrow. Their
decisions will bind other e2E shareholders.
S-6
<PAGE> 8
TAX-FREE REORGANIZATION TREATMENT (page S-27)
Neither e2E nor its shareholders will recognize gain or loss for U.S.
federal income tax purposes as a result of the merger, except for any taxes
payable by e2E shareholders on their receipt of cash instead of fractional
Plexus shares or for shares held by persons exercising dissenters' rights. e2E
has received a legal opinion from its counsel regarding these tax consequences.
THE TAX OPINION CONTAINS EXCEPTIONS AND QUALIFICATIONS BECAUSE TAX
MATTERS ARE COMPLICATED, AND THE TAX CONSEQUENCES TO YOU OF THE MERGER WILL
DEPEND ON THE FACTS OF YOUR OWN SITUATION. WE URGE YOU TO CONTACT YOUR OWN TAX
ADVISOR TO UNDERSTAND FULLY HOW THE MERGER WILL AFFECT YOU, INCLUDING HOW ANY
STATE, LOCAL OR FOREIGN TAX LAWS MAY APPLY TO YOU.
DISSENTERS' RIGHTS (page S-29)
Under Oregon law, e2E shareholders who give proper and timely notice to
e2E and who do not vote in favor of the merger agreement have the right to
receive in cash the "fair value" of their e2E shares instead of receiving Plexus
shares. A copy of Sections 60.561 to 60.594 of the Oregon Business Corporation
Act, which governs dissenters' rights in Oregon, is attached to this prospectus
supplement as Appendix B.
Plexus may terminate the merger agreement if holders of more than 3% of
e2E shares exercise their dissenters' rights.
OLD AND NEW STOCK CERTIFICATES
Please do not send in your stock certificates with the enclosed proxy.
After we complete the merger, we will send you written instructions that
describe how to exchange your e2E stock certificates for Plexus stock
certificates. If you hold uncertificated shares of e2E common stock, you will
not need to take any further action to receive your Plexus stock. Some of the
Plexus shares you receive will be paid to the escrow agent rather than sent to
you.
PERCENTAGE OWNERSHIP INTEREST BY e2E SHAREHOLDERS AFTER THE MERGER
Assuming an exchange rate of 0.138 Plexus shares for each e2E share,
and assuming no further exercises of Plexus stock options, after the merger
there will be approximately 40.3 million shares of Plexus common stock
outstanding. Of those shares, the former e2E shareholders will own approximately
0.8%.
INTERESTS OF e2E'S EXECUTIVE OFFICERS AND DIRECTORS IN THE MERGER
(page S-22)
When considering the recommendation by the e2E Board to vote "FOR" the
merger agreement, you should be aware that the directors and executive officers
of e2E have interests in the merger other than solely as e2E shareholders. As a
condition to the merger, two e2E executive officers will be required by Plexus
to enter into employment agreements, for a one year period, at their current
salaries. These interests may conflict with the interests of shareholders of e2E
generally. These persons also comprise the e2E board.
The two executive officers, and another e2E key employee who will be a
Plexus employee, will act as the e2E shareholders' representatives under the
escrow agreement. Their interests may differ from those of other e2E
shareholders, because of their employment arrangements or for other reasons.
S-7
<PAGE> 9
MANAGEMENT AND OPERATIONS OF e2E AFTER THE MERGER (page S-22)
In the merger, e2E will become a company which is wholly-owned by
Plexus. Initially, the management and employees of e2E as a subsidiary of Plexus
will be the same as those before the merger, although some changes may be made
to reflect the merger.
CONDITIONS TO THE MERGER (pages S-23 and S-24)
The merger will be completed only if various conditions are met. These
conditions include, among others, that:
- the e2E shareholders approve the merger;
- the parties perform their obligations under the merger
agreement;
- the representations and warranties of the parties continue to
be accurate;
- the merger qualifies for pooling accounting; and
- the parties receive the tax opinion discussed above.
The parties may waive conditions unless they are legally prohibited
from doing so. e2E shareholder approval may not be legally waived. The merger is
not subject to any further governmental approvals.
TERMINATION, AMENDMENT OR WAIVER OF THE MERGER AGREEMENT (page S-24)
Even if the e2E shareholders approve the merger agreement, Plexus and
e2E can agree at any time to terminate the merger agreement without completing
the merger. The merger agreement can also be terminated by either party under
specified circumstances. Once shareholders approve the merger agreement,
however, no amendment may be made to the merger agreement without further
shareholder approval if the amendment would reduce the exchange rate or
otherwise materially adversely affect the rights of e2E shareholders.
ACCOUNTING TREATMENT (page S-28)
Plexus expects to account for the merger as a pooling of interests,
which means that it will treat the two companies as if they had always been
combined for accounting and financial reporting purposes. It is a condition to
Plexus' obligation to complete the merger that it receive a letter from its
accountants that the merger qualifies for pooling-of-interests accounting
treatment.
BOARD RECOMMENDATION TO e2E SHAREHOLDERS
The e2E board of directors believes that the merger is in the best
interests of e2E and its shareholders. THE e2E BOARD UNANIMOUSLY RECOMMENDS THAT
YOU VOTE TO APPROVE THE MERGER AGREEMENT. Some e2E directors and officers have
interests in this transaction other than as e2E shareholders. For a description,
you should see "The Merger and the Merger Agreement -- Interests of Officers and
Directors in the Merger."
e2E SPECIAL MEETING (page S-15)
The special meeting will be held at the offices of Green & Markley,
P.C., located at 1515 S.W. Fifth Avenue, Suite 600, Portland, Oregon, on
Thursday, December 14, 2000 at 10:00 a.m. At the special meeting, e2E
shareholders such as you will consider and vote on a proposal to approve the
merger agreement.
RECORD DATE
You can vote at the special meeting only if you owned shares of e2E
common stock at the close of business on November 6, 2000, which was the record
date.
S-8
<PAGE> 10
VOTE REQUIRED TO APPROVE THE MERGER
The merger agreement requires the approval of the holders of a majority
of the outstanding shares of e2E common stock. If you do not return your proxy
or vote in person, it will have the effect of a vote against the merger
agreement. Plexus shareholders do not need to vote to approve the merger.
VOTING POWER, VOTING BY MANAGEMENT
On the record date, 2,290,250 shares of e2E common stock were
outstanding.
e2E's two directors and executive officers, who collectively
beneficially own 299,500 shares, or approximately 13.1% of e2E's outstanding
shares, have executed voting agreements in which they have agreed to vote the
e2E shares owned by them "FOR" the merger agreement. Robert Praegitzer, an
individual who beneficially owns 1,000,000 shares, or approximately 43.7% of
e2E's outstanding shares, has also executed a voting agreement in which he has
agreed to vote the e2E shares owned by him "FOR" the merger agreement. Approval
and adoption of the merger agreement by e2E's shareholders is therefore assured.
Because there are other conditions to the closing that have not been fulfilled,
however, closing of the merger is not assured.
In addition, e2E employees who were issued restricted stock granted a
proxy to e2E's board of directors to vote their shares in a merger or
reorganization. The board intends to vote an additional 802,750 shares, or
approximately 35.1% of the outstanding shares, subject to the proxy in favor of
the merger agreement unless those proxies are revoked. To revoke a proxy, you
must execute a new proxy bearing a later date or attend the meeting and vote in
person.
REVOKING PROXIES
You can revoke a proxy previously given by you by giving written notice
to the Secretary of e2E, by filing another proxy, or by attending the special
meeting and voting in person.
COMPARISON OF SHAREHOLDER RIGHTS (page S-37)
The rights of e2E shareholders are governed by Oregon law and the
articles of incorporation and bylaws of e2E. When the merger is completed, e2E
shareholders will become shareholders of Plexus, and their rights will be
governed by Wisconsin law and the articles of incorporation and bylaws of
Plexus. The rights of e2E shareholders and Plexus shareholders differ in certain
respects.
RISK FACTORS (page 43)
YOU SHOULD SEE "RISK FACTORS" FOR SOME FACTORS WHICH YOU SHOULD
CONSIDER IN DECIDING HOW TO VOTE ON THE MERGER AGREEMENT.
DO YOU HAVE QUESTIONS?
If you have any questions about the merger, including the calculation
of the number of Plexus shares you will receive in the merger, please call Matt
Bergeron, e2E's president, at (503) 531-2050. The exchange rate calculation will
be based on current information, so it may change until immediately prior to
closing.
S-9
<PAGE> 11
COMPARATIVE MARKET PRICES
The following table shows trading information for Plexus common stock
and e2E common stock on September 29, 2000 and November 6, 2000. September 29,
2000 was the last trading date before the parties announced the merger. November
6, 2000 is a recent date before this prospectus supplement was finalized. To
prepare this table, we have assumed that the average Plexus stock prices on the
dates presented were the same as the closing prices on those dates, and used the
appropriate exchange rate. See "Ownership of and Market for e2E Common Stock" on
page S-36 of this prospectus supplement and "Plexus Market Information" on page
14 of the prospectus.
<TABLE>
<CAPTION>
Equivalent
Plexus e2E value for each
Date common stock common stock(1) e2E share
---- ------------ ------------ ---------
<S> <C> <C> <C>
September 29, 2000 $70.50 $1.67 $8.97
November 6, 2000 $58.00 $1.67 $8.97
</TABLE>
------------------
(1) The most recent sales price of e2E stock known to e2E management. There
is no trading market for e2E common stock. See "Ownership of and Market
for e2E Common Stock."
Because the exchange rate varies according to average Plexus stock
price, you may receive more or fewer shares of Plexus common stock for each
share of e2E common stock.
COMPARATIVE PER SHARE DATA OF PLEXUS AND e2E
We have summarized in the table on the next page selected per share
information about Plexus and e2E. We present the information both historically,
and on a pro forma and adjusted basis to reflect the merger. Because earnings
and book value per share are affected by the variable exchange rate in the
merger, the table illustrates the effects on the per share data using three
different exchange rates as follows:
<TABLE>
<CAPTION>
Plexus shares When the rate
per e2E share would apply
<S> <C>
0.179 If Plexus' average price was $50.00
0.138 If Plexus' average price was $65.00
0.112 If Plexus' average price was $80.00
</TABLE>
In all of these cases, we assume no change in the number of e2E shares
outstanding or subject to option. Because the exchange rate is variable, the
actual final exchange rate may be higher or lower, which would affect both
Plexus' pro forma calculations and e2E per share equivalents.
The data in the table should be read together with the financial
information and the financial statements of Plexus and e2E incorporated by
reference or included elsewhere in this prospectus supplement. We provide the
pro forma combined per common share data as an illustration only. The data do
not necessarily indicate the combined financial position or combined results of
operations that would have been reported if the merger had occurred when
indicated, nor are they a forecast of the combined financial position or
combined results of operations for any future period. No pro forma adjustments
have been included herein which reflect potential effects of cost savings or
synergies which may be obtained by combining Plexus and e2E operations or the
costs of combining the companies
S-10
<PAGE> 12
and operations. The pro forma and equivalent data also assume no reduction due
to the indemnity and escrow provisions.
<TABLE>
<CAPTION>
Nine months ended
June 30, Years ended September 30,
---------------------------- -------------------------------------------
2000 1999 1999 1998 1997
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
EARNINGS PER SHARE (DILUTED):
Plexus:
Historical(1)................... $0.73 $0.45 $0.55 $0.63 $0.54
Pro forma, assuming(2):
0.179 exchange rate......... $0.72 $0.45 $0.55 $0.63 $0.54
0.138 exchange rate......... $0.72 $0.45 $0.55 $0.63 $0.54
0.112 exchange rate......... $0.72 $0.45 $0.55 $0.63 $0.54
e2E(2):
Historical...................... ($0.13) - - - -
Equivalent, assuming:
0.179 exchange rate......... $0.13 $0.08 $0.10 $0.11 $0.10
0.138 exchange rate......... $0.10 $0.06 $0.08 $0.09 $0.07
0.112 exchange rate......... $0.08 $0.05 $0.06 $0.07 $0.06
PERIOD END BOOK VALUE PER SHARE(3):
Plexus:
Historical...................... $5.11 - $4.17 - -
Pro forma, assuming:
0.179 exchange rate......... $5.11 - $4.17 - -
0.138 exchange rate......... $5.12 - $4.17 - -
0.112 exchange rate......... $5.13 - $4.17 - -
e2E:
Historical...................... $0.84 - - - -
Equivalent, assuming:
0.179 exchange rate......... $0.91 - $0.75 - -
0.138 exchange rate......... $0.71 - $0.58 - -
0.112 exchange rate......... $0.57 - $0.47 - -
</TABLE>
(1) See "Selected Financial Data" on page 15 of the prospectus regarding
acquisition-related changes which affected 1999 and 2000 earnings.
(2) e2E began operations on January 13, 2000. e2E information is given only
for the period ended June 30, 2000. (That period excludes certain
pre-operational expenses.) Plexus pro forma data prior to January 13,
2000 is not adjusted since e2E did not have operations prior to that
date. e2E earnings are before income taxes because its tax rate for
2000 is not yet determined.
(3) This data is presented only at December 31, 1999 (Plexus only) and June
30, 2000. January 13, 2000 was the date e2E commenced operations, and
no information is therefore available at December 31, 1999.
S-11
<PAGE> 13
Neither Plexus nor e2E has paid cash dividends on common stock;
therefore, the table does not include dividend information.
The unaudited pro forma condensed combined statements of income for all
periods presented give effect to the merger as if it had occurred on October 1,
1999. e2E has a fiscal year that ends on December 31. For purposes of the pro
forma statements of income, we have used e2E's net loss for the period ended
June 30, 2000, which includes certain pre-operational expenses.
The e2E equivalent share information is computed at each of the three
assumed exchange rates by multiplying the Plexus pro forma information by the
assumed exchange rate. The pro forma book value information assumes that the
merger was completed on June 30, 2000 and September 30, 1999.
S-12
<PAGE> 14
RISK FACTORS
You should carefully consider all of the matters which we discuss in
this prospectus supplement, and in the prospectus, when you determine how to
vote on the merger. In particular, you should consider the following factors, as
well as those set forth under "Risk Factors" on page 4 of the prospectus.
RISKS ABOUT THE MERGER
THE EXCHANGE RATE IN THE MERGER IS VARIABLE, AND YOU MAY NOT RECEIVE ANY
PARTICULAR NUMBER OF PLEXUS SHARES
The exchange rate in the merger is variable. It may not be determined
until after the special meeting of shareholders. The number of shares of Plexus
common stock which you will receive will be higher or lower depending upon the
average price of Plexus common stock before the merger. There is no minimum
number of shares that you will receive.
INDEMNITY AND ESCROW PROVISIONS MAY REDUCE THE CONSIDERATION YOU RECEIVE BY UP
TO 15%.
Under the merger agreement, the shareholders of e2E indemnify Plexus
for certain matters. Indemnity by the e2E shareholders is proportionate to their
ownership of e2E common stock. The indemnity may be up to 15% of the Plexus
shares received by the e2E shareholders. These shares are being placed in escrow
to facilitate operations of the indemnity.
Three persons will be the representatives of the e2E shareholders on
matters relating to the indemnity provisions and the escrow arrangements. Their
decisions and actions will bind all e2E shareholders, even if other shareholders
disagree with them. All three representatives are current e2E officers and all
of them are expected to be e2E employees when e2E is a subsidiary of Plexus;
therefore, they may have interests that conflict with those of other e2E
shareholders.
PLEXUS MAY NOT BE ABLE TO INTEGRATE e2E OPERATIONS AS EXPECTED.
In determining that the merger is in the best interests of the parties,
both companies considered the cost savings, operating efficiencies and other
synergies that may result from the merger. The consolidation of functions, and
the integration of departments, systems and procedures present significant
management challenges. Plexus cannot assure that it will successfully accomplish
those actions as rapidly as currently expected. Also, Plexus cannot assure the
extent to which it will achieve cost savings and efficiencies in the merger, or
in any other transaction or expansion.
SOME e2E DIRECTORS AND OFFICERS, AND THE REPRESENTATIVES UNDER THE ESCROW
ARRANGEMENTS, HAVE AN INTEREST IN THE MERGER OTHER THAN AS SHAREHOLDERS.
Some e2E directors and officers have interests in the merger other than
as e2E shareholders. The merger agreement requires that two persons who are
directors and executive officers of e2E sign employment contracts after Plexus
acquires e2E. The merger agreement also requires that five other key e2E
employees sign employment contracts after Plexus acquires e2E. Also, the three
persons acting as representatives under the escrow agreement may have a conflict
due to their employment arrangements with e2E, which will be a subsidiary of
Plexus. All three representatives will have employment contracts. See "The
Merger and the Merger Agreement -- Interests of Officers and Directors in the
Merger."
S-13
<PAGE> 15
RISKS ABOUT PLEXUS
Please see "Risk Factors" on page 4 of the prospectus.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This prospectus and any prospectus supplement, including the documents
incorporated by reference, may contain statements that constitute
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. Prospective investors are cautioned that any such
forward-looking statements are not guarantees of future performance and involve
known and unknown risks, uncertainties and other factors which may cause the
actual results, performance or achievements to differ materially from the future
results, performance or achievements expressed or implied in the forward-
looking statements. The words "anticipate," "believe," "estimate," "expect,"
"project," "objective" and similar expressions are intended to identify
forward-looking statements. In addition to the assumptions and other factors
referred to specifically in connection with those statements, factors that could
cause our actual results to differ materially from those contemplated in the
forward- looking statements include factors described under the caption "Risk
Factors" or similar cautionary captions in the documents incorporated herein by
reference.
S-14
<PAGE> 16
THE SPECIAL MEETING
This prospectus supplement is being furnished to the e2E shareholders
in connection with the solicitation of proxies by the e2E Board from the holders
of e2E common stock for use at the special meeting. It also constitutes e2E's
proxy statement for the special meeting.
Date, Time and Place. The special meeting will be held at 10:00 a.m.,
local time, on December 14, 2000, at the offices of Green & Markley, P.C.,
located at 1515 S.W. Fifth Avenue, Suite 600, Portland, Oregon.
Purpose. At the special meeting, e2E shareholders will consider and
vote on a proposal to approve the merger agreement.
The e2E Board is not aware, as of the date of the mailing of this
prospectus supplement, of any other matters which may properly come before the
special meeting. If any other matters properly come before the special meeting,
or any adjournment or postponement thereof, it is the intention of the persons
named in the proxy to vote such proxies in accordance with their best judgment
on such matters. Under Oregon law, at the special meeting, shareholders can only
consider the matters included in the notice of the special meeting.
Recommendation of e2E's Board of Directors. The e2E board has
determined that the merger is in the best interests of e2E and its shareholders
and has approved the merger agreement. THE e2E BOARD UNANIMOUSLY RECOMMENDS THAT
THE e2E SHAREHOLDERS VOTE IN FAVOR OF APPROVAL OF THE MERGER AGREEMENT AT THE
SPECIAL MEETING. See "The Merger and the Merger Agreement -- e2E's Reasons for
the Merger."
Record Date; Voting Rights. Only holders of record of e2E common stock
at the close of business on the record date, November 6, 2000, are entitled to
receive notice of and to vote at the special meeting. On that date, there were
2,290,250 shares of e2E common stock outstanding and entitled to vote. Each
share entitles the registered holder to one vote.
Quorum. A majority of the outstanding shares of e2E common stock
entitled to vote must be represented in person or by proxy at the special
meeting in order to constitute a quorum for the transaction of business. Shares
of e2E common stock represented by proxies that are marked "abstain" will be
counted as shares present for purposes of determining the presence of a quorum.
If a quorum is not present at the special meeting, it is expected that the
meeting will be adjourned or postponed to solicit additional proxies.
Proxies; Revocation. A proxy card is enclosed for use by non-employee
e2E shareholders. The board of directors of e2E requests that non-employee
shareholders SIGN AND RETURN THE PROXY CARD IN THE ACCOMPANYING ENVELOPE. No
postage is required if mailed within the United States. IF YOU HAVE QUESTIONS OR
REQUESTS FOR ASSISTANCE IN COMPLETING AND SUBMITTING PROXY CARDS, PLEASE CONTACT
e2E'E PRESIDENT.
Employee shareholders who received restricted shares under e2E's
restricted stock plans have already given the e2E board of directors a proxy to
vote their shares. The proxy was given in each employee's employment agreement
and was a condition to receiving shares.
All properly executed proxies that are not revoked will be voted at the
special meeting as instructed on those proxies. Proxies containing no
instructions will be voted in favor of the merger agreement. A non-employee
shareholder who executes and returns a proxy, and all employee shareholders who
previously granted a proxy to the board of directors, may revoke it at any time
before it is voted, but only by executing and returning a proxy bearing a later
date, by giving written notice of revocation to the corporate secretary of e2E,
or by attending the special meeting and voting in person. Mere attendance at the
special meeting will not in and of itself have the effect of revoking the proxy.
Abstentions will be treated as shares present in determining whether e2E has a
quorum for the
S-15
<PAGE> 17
special meeting, but abstentions will have the same effect as a vote against
approval of the merger agreement. If a broker or other record holder or nominee
indicates on a proxy that it does not have direction or authority to vote
certain shares, those shares will be considered present at the special meeting
for purposes of determining a quorum but will have the same effect as a vote
against approval of the merger agreement.
The persons designated in the enclosed proxy card will have discretion
to vote on any matters incident to the conduct of the special meeting. If e2E
proposes to adjourn the special meeting, the persons named in the proxy will
vote all shares, other than those that have been voted against approval of the
merger agreement, in favor of adjournment. At any subsequent reconvening of the
special meeting, all proxies will be voted in the same manner as they would have
been voted at the initial convening, except for any proxies that have
effectively been revoked or withdrawn before the reconvened meeting.
SHAREHOLDERS SHOULD NOT SEND THEIR STOCK CERTIFICATES WITH THEIR PROXY
CARDS. After the effective date of the merger, shareholders will receive
instructions and a letter of transmittal for the submission of their stock
certificates.
Solicitation of Proxies. In addition to soliciting proxies by mail,
e2E's directors, officers, and employees may, if they do not receive extra
compensation for doing so, solicit proxies personally or by telephone or fax.
Such persons may be reimbursed for out-of-pocket expenses that they incur.
Required Vote. Approval of the merger agreement will require the
affirmative vote of holders of a majority of the outstanding shares of e2E
common stock entitled to vote thereon at the special meeting, or 1,145,126
shares.
Share Ownership of Management and Other Significant Holders. e2E's two
directors and executive officers, who beneficially own a total of 299,500
shares, representing 13.1% of the outstanding shares, have signed agreements
with Plexus which require them to vote "For" the merger agreement. Robert
Praegitzer, an individual who beneficially owns 1,000,000 or 43.7% of e2E's
outstanding shares, has also executed a voting agreement in which he has agreed
to vote his e2E shares "For" the merger agreement. See "Ownership of e2E Common
Stock."
In addition, e2E employees who were issued restricted stock granted a
proxy to e2E's board of directors to vote their shares in a merger or
reorganization. The board intends to vote an additional 802,750 shares, or
approximately 35.1% of the outstanding shares, subject to the proxy in favor of
the merger agreement unless those proxies are revoked.
S-16
<PAGE> 18
THE MERGER AND THE MERGER AGREEMENT
The description of the merger and the merger agreement contained in
this prospectus supplement describes the material terms of the merger agreement;
however, it does not purport to be complete. It is qualified in its entirety by
reference to the merger agreement, which is incorporated by reference into this
prospectus supplement. A copy of the merger agreement is attached as Appendix A.
GENERAL
In the merger, and as described in the merger agreement, e2E will
become a corporation wholly-owned by Plexus. Outstanding shares of e2E common
stock will be converted into shares of Plexus common stock. Cash will be paid in
lieu of any fractional share of Plexus common stock. The merger will become
effective shortly after the day of the shareholder meeting. See "Exchange Rate,"
"Escrow and Indemnity" and "Conversion of Shares in the Merger" below.
The merger will be structured as the merger of Casey Jones Corp., a
wholly-owned subsidiary of Plexus, with and into e2E, with e2E surviving as a
wholly-owned subsidiary of Plexus. As a result of the merger, the separate
corporate existence of Casey Jones will cease and e2E will succeed to all the
rights and be responsible for all the obligations of Casey Jones. Plexus formed
Casey Jones specifically to conduct this transaction. Casey Jones has no
business or operations other than the conduct of the merger.
EXCHANGE RATE
Each share of e2E common stock will be converted into Plexus common
stock under a formula in the merger agreement. The total value for all e2E
shares under the merger agreement is $20,550,000. The number of shares you
receive will depend upon the average closing price of Plexus common stock over
the ten trading days ending three days before the merger is effective, and the
total number of e2E shares outstanding or (if any) subject to option. Share
amounts will be rounded to 3 digits. There is no minimum number of shares
issuable, although the value of the number of shares issued per share of e2E
common stock would be $8.9728, assuming no change in the 2,290,250 e2E shares
outstanding or subject to option. This is subject to reduction if Plexus is
indemnified under the merger agreement; see "Escrow and Indemnity" below. Even
though the economic value is fixed, as the average Plexus stock price rises,
former e2E shareholders would receive a decreasing percent of the shares of the
combined company. Conversely, if Plexus' stock price declines, former e2E
shareholders would receive an increasing percentage.
e2E shareholders will receive cash instead of fractions of Plexus
shares. The amount will be determined by using the same average price for Plexus
common stock as used for the exchange rate. See "Conversion of Shares in the
Merger" below. All shares of Plexus common stock will be issued along with
Plexus preferred stock purchase rights issued under the Plexus Shareholder
Rights Plan, as provided in that plan. See "Comparison of Shareholder Rights --
Shareholder Rights Plan."
The following table shows the number of shares of Plexus stock which
you will receive, and the approximate market value of that stock, for each share
of e2E stock. We chose these examples based on the $43.38 to $81.00 trading
range of Plexus stock in the period beginning three months prior to the
announcement of the merger. We assume that there is no change in the number of
e2E shares outstanding or subject to option, which currently is 2,290,250
shares. We also show examples below and above that range to illustrate that
while the number of shares may increase or decrease, their value will remain
constant. The dollar value amounts are based upon the Plexus average closing
prices used to determine the exchange rate.
S-17
<PAGE> 19
<TABLE>
<CAPTION>
Average Plexus Exchange Dollar value of
stock price rate per e2E share each e2E share
-------------- ------------------ ---------------
<S> <C> <C>
$35.00 0.256 $8.9728
$40.00 0.224 $8.9728
$45.00 0.199 $8.9728
$50.00 0.179 $8.9728
$55.00 0.163 $8.9728
$60.00 0.150 $8.9728
$65.00 0.138 $8.9728
$70.00 0.128 $8.9728
$75.00 0.120 $8.9728
$80.00 0.112 $8.9728
$85.00 0.106 $8.9728
$90.00 0.100 $8.9728
$95.00 0.094 $8.9728
</TABLE>
The consideration which e2E shareholders ultimately would retain could
be reduced by up to 15% under the merger agreement provisions providing
indemnity to Plexus, and the related escrow agreement. See "Escrow and
Indemnity" below.
Any e2E shareholder who exercises statutory dissenters' rights under
Oregon law, and strictly complies with the law's requirements, will receive the
consideration determined under that procedure instead of the consideration
discussed above. See "Dissenters' Rights of Appraisal".
ESCROW AND INDEMNITY
Under the merger agreement, the shareholders of e2E indemnify Plexus
for certain matters. Indemnity by the e2E shareholders is proportionate to their
ownership of e2E common stock. In no event, however, may the indemnity exceed
15% of the Plexus shares received by the e2E shareholders, either individually
or as a group. These shares are being placed in escrow to facilitate operation
of the indemnity provisions.
Scope of Indemnity. The maximum liability of any e2E shareholder to
Plexus for indemnity will be 15% of the shares which the shareholder receives in
the merger. Of these shares, 5% of the shares received are only available for
defined "special indemnity matters," and the 10% escrow balance is available for
any covered indemnity matter.
The general matters for which e2E shareholders indemnify Plexus are:
- breaches of e2E's representations and warranties in the merger
agreement;
- failures of e2E to comply with its obligations under the
merger agreement;
- the "special indemnity matters"; and
- related litigation.
The "special indemnity matters" may be summarized as:
- unrecorded e2E liabilities for vacation pay and other employee
personal time;
- unrecorded e2E liabilities for past terminations of employee
benefit plans;
- undisclosed product and service warranty claims for services
prior to the merger in excess of the stated reserve;
- uncollectible e2E accounts receivable at closing in excess of
e2E's reserve;
S-18
<PAGE> 20
- e2E severance benefits resulting from the merger itself;
- certain liabilities of Tyco in excess of disclosed amounts;
- failure of e2E to obtain appropriate transfer of intellectual
property rights;
- failure of e2E to have maintained necessary software
intellectual property rights; and o merger transaction
expenses of e2E in excess of $815,000.
The e2E shareholder indemnification obligations expire on the earlier
of the first anniversary of the merger or the day on which Plexus' fiscal year
2001 audit is completed. Plexus has a September 30 fiscal year and in past
years, its audit has generally been completed in mid-November. After these
times, any shares continuing to be held in escrow which are not subject to an
indemnity claim will be paid to the appropriate e2E shareholders. However, to
the extent there are indemnity claims, the shares paid to satisfy that indemnity
claim will reduce the number of shares received by e2E shareholders in the
merger.
Under the indemnity provisions, payments must be made from the escrow
agreement in Plexus common stock. Plexus common stock that is returned to Plexus
will be valued at the same price the stock was valued for purposes of the merger
agreement. Therefore, as the price of Plexus common stock increases, more shares
of Plexus common stock may be needed to repay an indemnity obligation than it
would be if the current market value were used.
Escrow Arrangements. Because of the relatively large number of e2E
shareholders, the merger agreement provides for an escrow agreement to
facilitate these indemnity provisions. Under the merger agreement and the escrow
agreement, you will be paid directly 85% of the consideration payable to you in
the merger. However, the Plexus shares representing the remaining 15% will be
delivered to West Coast Trust Company, Incorporated, Portland, Oregon, as escrow
agent. The escrow agent will hold these shares under the escrow agreement to
support the indemnity agreement until the indemnity period expires.
If there are any indemnity claims by Plexus, payment will be made by
transfer of the Plexus shares held in escrow, proportionately from each of the
shareholders. To the extent that claims are not made against these shares prior
to the expiration of the indemnity period, shares will be released from escrow
and distributed proportionately to the former e2E shareholders. The indemnity
obligations will then end.
While the Plexus shares are held in escrow, former e2E shareholders
will continue to be the owner of the shares held unless they are paid to Plexus
under the indemnification provisions. e2E shareholders will have the power to
vote the shares held in escrow and would receive any dividends paid by Plexus
(which it has no intention to do). Also, e2E shareholders will retain the
ability to sell the shares which they hold in escrow. However, the proceeds of
any sale would need to remain in escrow during the escrow period, and the
shareholder would need to pay the escrow agent any fees which the escrow agent
charges in connection with such a sale. Other than those fees, Plexus will pay
the fees of the escrow agent.
Representatives. By approval of the merger agreement, the e2E
shareholders will appoint Matthew J. Bergeron, Steven M. Smith and William J.
Thale as their representatives with respect to the escrow agreement and
indemnity under the merger agreement. The actions and decisions of a majority of
the representatives will be binding on all of the e2E shareholders.
Shareholders should note that, as a condition to closing, Plexus
requires that Messrs. Bergeron, Smith and Thale must enter into employment
agreements with e2E going forward. See " Interests of Officers and Directors in
the Merger" below. All of the representatives may be Plexus employees during the
period in which they will act as representatives.
S-19
<PAGE> 21
BACKGROUND OF THE MERGER
The terms of the merger agreement are the result of arm's-length
negotiations between representatives of e2E and Plexus. The following is a brief
discussion of the background of these negotiations, the merger, and related
transactions.
Since the formation of e2E in January 2000, through April 2000, the e2E
board of directors had discussions with a number of institutional investors,
including William Blair & Company, about investing in e2E. During the same time
period, several companies made uninvited inquiries to e2E's officers regarding
the possibility of an acquisition or strategic merger. After weighing the cost
and level of interest of institutional investors, in April 2000 the board of
directors determined that it would pursue the possibility of a sale or merger of
e2E. Following discussions with representatives from Blair, e2E engaged Blair to
assist it in finding a strategic acquirer.
The initial contacts between e2E and Plexus began on May 22, 2000 with
a discussion between the chief financial officer of Plexus and Blair, as
representative of e2E. Conversations continued between representatives of the
companies later in May and into June, culminating in a conference call between
representatives of Plexus and e2E on June 15, 2000.
Based upon positive feedback from the conference call, Plexus requested
a visit to e2E. A representative of Plexus visited e2E's Nashua facility on June
21, 2000. Results were considered positive. Discussions between representatives
began on possible synergies, potential deal values and other financial aspects.
While continuing with discussions, the parties agreed to have key
representatives meet at e2E in Hillsboro, Oregon on July 11, 2000.
Officers of e2E and Plexus met in Hillsboro on July 11, 2000. Based
upon the discussions and information exchanged at that meeting, they decided to
proceed with the exploration of a transaction. Plexus provided e2E with a due
diligence list, as well as a term sheet indicating a value at which it thought
it would be interested in proceeding with a deal, provided its investigation
proved satisfactory.
While interaction with Plexus was on-going, e2E continued discussions
with other parties who also expressed an interest in acquiring e2E. In June and
early July, e2E received preliminary offers from two different parties to
purchase e2E for cash, but at a substantially lower valuation of e2E than that
which was considered by Plexus.
On July 14, 2000, e2E's board held a special meeting to discuss the
various potential offers and communications from interested parties. The board
determined that Plexus was the best candidate based on the proposed valuation
range, their commitment to integrate e2E's employees and the compatibility of
the two companies' corporate cultures. After further negotiations, a term sheet,
which included exclusivity provisions, was signed on July 15, 2000.
In the period after the execution, Plexus' diligence proceeded. A
number of issues were identified by Plexus, which were resolved or discussed by
the parties. Plexus also reviewed various developments and financial
information. e2E retained KPMG LLP to provide a balance sheet audit as of June
30, 2000 and accountants for both parties considered "pooling accounting" rules
as they might apply to a transaction. By the end of August, Plexus confirmed
that it remained interested in proceeding as provided in the term sheet, but
also further indicated that additional diligence needed to be completed.
Plexus' counsel circulated a draft of a merger agreement on August 25,
2000. Counsel for Plexus and e2E, and other representatives of the companies,
negotiated the provisions of the agreement during the month of September. During
this time, Plexus' investigation of e2E continued, and Plexus provided further
information
S-20
<PAGE> 22
about itself to e2E representatives. Also during September, e2E's pending
litigation with Tyco was settled, which Plexus believed was an important matter
to have resolved prior to execution of a definitive agreement.
The parties continued negotiating a merger agreement and resolved open
issues. The merger agreement was finalized and signed late in the afternoon of
Friday, September 29, 2000. The execution of the merger agreement was announced
by Plexus and e2E before the beginning of the business day on Monday, October 2,
2000.
e2E'S REASONS FOR THE MERGER
The e2E board:
- approved and adopted the merger agreement;
- determined that the merger is fair to, and in the best
interests of, e2E and its shareholders; and
- unanimously recommends that holders of shares of e2E common
stock vote FOR approval of the merger agreement.
In reaching its conclusions, the e2E board considered many factors.
Material factors, which were the primary ones which the board considered, were:
- Synergies between e2E and Plexus are expected to add
significant shareholder value; o Increased sales opportunities
and expense reductions resulting form the merger are expected
to increase shareholder value;
- The consideration to be received by e2E's shareholders in the
merger was significantly greater than preliminary proposals
from other parties that had expressed interest in acquiring
e2E;
- The net present value of $8.97 is greater than estimates of
future e2E share value; and o Plexus' size and the diversity
of its operations significantly reduce e2E entity specific
risk for e2E shareholders.
Blair acted as an advisor to e2E and, as such, participated in
conversations with both e2E and Plexus representatives throughout the process.
Further, Blair performed analytical and business strategy review to facilitate
negotiations between the parties. Blair did not render a formal fairness
opinion, but did advise the board about the financial aspects of Plexus' offer.
The discussion of the information and factors considered by the e2E
board is not intended to be exhaustive. In view of the variety of factors
considered in connection with its evaluation of the merger, the e2E board did
not find it practicable to and did not quantify or otherwise assign relative
weights to the specific factors considered in reaching its determination. In
addition, individual members of the e2E board may have given different weights
to different factors. For a discussion of the interests of certain members of
e2E's management and e2E's board in the merger, see "Interests of Officers and
Directors in the Merger."
THE e2E BOARD UNANIMOUSLY RECOMMENDS THAT THE HOLDERS OF e2E COMMON
STOCK VOTE "FOR" APPROVAL OF THE MERGER AGREEMENT.
PLEXUS' REASONS FOR THE MERGER
From Plexus' perspective the merger would:
- Expand Plexus' engineering capabilities, particularly in
circuit board design, which is becoming an increasingly
important part of product design and development;
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- Provide Plexus with an experienced management team and
talented engineers and designers; and
- Increase Plexus' revenue and customer base.
The Plexus board has unanimously approved the merger agreement.
INTERESTS OF OFFICERS AND DIRECTORS IN THE MERGER
In considering the recommendation of the merger by the e2E board, the
shareholders of e2E should be aware that some directors and executive officers
of e2E have certain interests in the completion of the merger other than solely
as holders of e2E common stock. Material conflicting interests are described
below.
Employment Agreements. Under the merger agreement, it is a condition to
Plexus' obligation to complete the merger that e2E executive officers and
directors, Matthew J. Bergeron and William J. Thale enter into employment
agreements with e2E. The initial annual salaries to be paid under each of these
employment agreements, and the lengths of such agreements, are as follows:
<TABLE>
<CAPTION>
Name Salary Length
---- ------ ------
<S> <C> <C>
Matthew J. Bergeron $125,000 1 year
William J. Thale $100,000 1 year
</TABLE>
The agreements will govern the conduct of these executive officers' employment
after the merger and include provisions which would continue salary for the
terms of the agreement in the event the person is terminated without cause, or
resigns with good reason as defined in the agreements. The agreements also
include restrictions on competition with e2E after the termination of
employment.
The merger agreement also contemplates that five other key e2E
employees will receive continuing employment agreements and execute similar
noncompetition agreements. These include Steven M. Smith, who will act as a
representative under the escrow agreement.
Representatives under the Escrow Agreement. Messrs. Bergeron, Smith and
Thale will act as representatives of the e2E shareholders under the escrow
agreement in matters relating to the indemnification of Plexus. Their personal
interests, including their employment by Plexus, may differ from those of other
e2E shareholders; however, their decisions regarding indemnity and escrow
matters will bind the e2E shareholders.
EMPLOYEE PLANS
Provisions of e2E's founder share plan and incentive stock plan provide
that all shares awarded under those plans will vest, and cease being subject to
restriction, upon a change in control in e2E. The merger will be such a change
in control.
Going forward, Plexus will have the ability to substitute its employee
benefit plans for current plans of e2E and decide whether or how any such
changes will be made.
MANAGEMENT AND OPERATIONS OF e2E AFTER THE MERGER
When the merger is effective, e2E will become a wholly-owned subsidiary
of Plexus. The directors and officers of Casey Jones Corp. immediately prior to
the merger, who are officers of Plexus, will be the directors and officers of
the surviving corporation. In addition, Plexus will appoint other persons to be
officers of e2E following
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the merger; Plexus expects that these will include current e2E officers. Because
e2E will be a corporation wholly- owned by Plexus, Plexus will have the power to
change directors and officers as it believes appropriate.
The parties expect that the merger will become effective shortly after
the special meeting. The merger will be legally completed by the filing of
articles of merger with the Secretary of State of Oregon. The filing of the
articles of merger will occur as soon as practicable following the satisfaction
or waiver of the conditions set forth in the merger agreement. See "Conditions
to the Merger" below.
CONDUCT OF BUSINESS PENDING THE MERGER
In the merger agreement, e2E has agreed, pending consummation of the
merger, unless otherwise consented to in writing by Plexus, that it will, among
other things:
- carry on its business in the regular course;
- not do any act or omit to do any act which will cause a
material breach of any identified contracts to which e2E is a
party;
- not change compensation or benefits, except for ordinary
raises;
- not incur any indebtedness;
- use reasonable best efforts to preserve its business
organization intact, to retain the services of its present
officers and key employees and to preserve the goodwill of
suppliers, customers, creditors and others having business
relationships with it; and
- not issue any additional shares of stock except for a
specified number of grants to new employees, or grant any
options, or declare or pay any dividend.
REPRESENTATIONS, WARRANTIES AND COVENANTS
The merger agreement contains various customary representations and
warranties by Plexus and e2E for a transaction of this kind. They include, among
other things:
- the organization, existence, and corporate power and
authority, and capitalization of each of the companies;
- the absence of conflicts with and violations of law and
various documents, contracts and agreements;
- the absence of any development materially adverse to the
companies;
- the absence of adverse material litigation;
- accuracy of the financial statements of e2E and of the Plexus
reports filed with the Securities and Exchange Commission;
- the accuracy and completeness of the statements of fact made
in the merger agreement;
- matters relating to customer retention by e2E;
- e2E's title to its assets;
- the existence, performance and legal effect of certain
contracts to which e2E is a party;
- no violations of law by either party;
- the filing of tax returns, payment of taxes and other tax
matters with respect to e2E;
- labor and employee benefit matters, with respect to e2E; and
- compliance with applicable environmental and tax laws, with
respect to e2E.
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In addition to the covenants described under "Conduct of Business
Pending the Merger," the merger agreement contains various other customary
covenants, including, among other things, access to information, each party's
efforts to cause its representations and warranties to be true and correct on
the closing date; and each party's agreement to use its reasonable best efforts
to cause the merger to qualify for pooling-of-interests accounting treatment and
as a tax-free reorganization.
All representations, warranties and covenants of the parties, other
than the covenants in specified sections which relate to continuing matters,
terminate upon the merger.
CONDITIONS TO THE MERGER
The respective obligations of Plexus and e2E to complete the merger are
subject to various conditions prior to the merger. The conditions include the
following:
- the performance of and compliance by the parties with their
obligations under the merger agreement;
- the absence of any litigation in which the merger is
restrained or enjoined;
- the accuracy of the representations and warranties of the
parties made in the merger agreement;
- from the date of the merger agreement to the merger, there
shall not have occurred any material adverse change of Plexus
or e2E;
- the approval of the merger agreement by the shareholders of
e2E, as a condition to Plexus' obligations;
- the receipt of the tax opinion that has been delivered by
e2E's counsel;
- as a condition to the obligations of Plexus, the receipt of a
pooling-of-interests letter from PricewaterhouseCoopers LLP;
- obtaining certain third party consents and confirmations; and
- holders of no more than 3% of e2E shares elect dissenters'
rights.
The parties may waive conditions to their obligations unless they are
legally prohibited from doing so. e2E shareholder approval and regulatory
approvals may not be legally waived. Plexus and e2E do not believe there are any
remaining governmental approvals required, as the parties have determined that
the pre-clearance provisions of the federal Hart-Scott-Rodino Anti-trust
Improvements Act do not apply to the merger.
NO SOLICITATION
The merger agreement required e2E to immediately terminate any
discussions with any other parties with respect to any acquisition transactions
with other parties.
THE MERGER AGREEMENT FURTHER RESTRICTS THE CIRCUMSTANCES UNDER WHICH
e2E MAY PROVIDE INFORMATION TO OTHER PARTIES. e2E HAS AGREED NOT TO SOLICIT
OTHER OFFERS.
TERMINATION; AMENDMENT; WAIVER
The merger agreement may be terminated prior to the closing, before or
after approval by e2E's shareholders, as follows:
- by mutual written agreement of Plexus and e2E;
- by either Plexus or e2E if a court prohibits th merger or if
the merger has not occurred on or before March 31, 2001.
However, the right to terminate at that date is not available
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<PAGE> 26
to any party whose failure to fulfill any obligation has
caused in the failure to merge before that date;
- by Plexus if:
- e2E materially breaches its representations and
warranties in the merger agreement, if not cured;
- e2E fails to perform its agreements an covenants in
the merger agreement; or
- e2E shareholders do not approve the merger; and
- by e2E if:
- Plexus materially breaches its representations and
warranties in the merger agreement, if not cured; or
- Plexus fails to perform its agreements and covenants
in the merger agreement.
The merger agreement may be amended by the parties at any time before
or after approval of the merger agreement by the e2E shareholders. However,
after such approval, no amendment may be made without their approval if it
reduces the exchange rate or materially adversely affects the rights of the e2E
shareholders.
The parties may waive any of their conditions to closing, unless they
may not be waived under law.
FEES AND EXPENSES
Except for the printing expenses for this prospectus supplement and the
registration statement, and the filing fee relating thereto, which will be paid
by Plexus, Plexus and e2E will each pay its own costs and expenses in connection
with the merger agreement and the transactions contemplated thereby.
CONVERSION OF SHARES IN THE MERGER
At the effective time of merger, by virtue of the merger and without
any action on the part of any party:
- each share of common stock of Casey Jones will be converted
into one share of e2E common stock; and
- each share of e2E common stock issued and outstanding, other
than dissenting shares, will be converted into shares of
Plexus common stock at the exchange rate described above, on
the terms and conditions set forth in the merger agreement.
However, cash will be paid in lieu of any fractional share of
Plexus common stock.
In all cases, if any e2E shareholders exercise and comply with statutory
dissenters' rights, the rights of those shareholders will be determined under
Oregon statutes. See "Dissenters' Rights of Appraisal."
After the merger, all shares of e2E common stock will no longer be
outstanding and will automatically be cancelled and will cease to exist. Each
holder of a certificate representing shares of e2E common stock prior to the
merger will cease to have any rights other than the right to receive the shares
of Plexus common stock into which the shares of e2E common stock have been
converted, and cash in lieu of any fractional share of Plexus common stock. See
"Exchange of e2E Certificates; No Fractional Shares."
If there is a reclassification, stock split or stock dividend with
respect to outstanding Plexus common stock or outstanding e2E common stock prior
to the merger, an appropriate and proportionate adjustment, if any, will be made
to the exchange rate.
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<PAGE> 27
EXCHANGE OF e2E CERTIFICATES; NO FRACTIONAL SHARES
Plexus has designated Firstar Bank Milwaukee, N.A. to act as exchange
agent under the merger agreement. As of the merger, Plexus will deposit with the
exchange agent certificates representing the shares of Plexus common stock
issuable pursuant to the merger agreement in exchange for outstanding shares of
e2E common stock.
Promptly after the merger, the exchange agent will mail to each e2E
shareholder of record a letter of transmittal and instructions for the surrender
of the e2E stock certificate in exchange for certificates representing shares of
Plexus common stock. Holders of uncertificated e2E shares will receive Plexus
certificates from the exchange agent without further action on their part. As
described below, 15% of the consideration will be delivered to the escrow agent
pursuant to the escrow agreement rather than being paid directly to e2E
shareholders.
PLEASE NOTE THAT e2E SHAREHOLDERS SHOULD NOT SUBMIT THEIR e2E
CERTIFICATES FOR EXCHANGE UNTIL SUCH LETTER OF TRANSMITTAL AND INSTRUCTIONS ARE
RECEIVED.
Upon surrender of an e2E certificate for cancellation to the exchange
agent, together with an executed letter of transmittal and such other documents
as the exchange agent may require, the holder of such e2E certificate will be
entitled to receive in exchange:
- a payment on behalf of the shareholder of 15% of the shares to
be received by that shareholder to the escrow agent under the
escrow agreement; and
- a certificate representing the 85% balance of whole shares of
Plexus common stock into which the shares of e2E common stock
have been converted in the merger, plus cash in lieu of any
fractional share of Plexus common stock to which such holder
would otherwise be entitled as more fully described below.
The e2E certificates so surrendered will be cancelled. e2E shareholders
who own uncertificated shares will automatically receive certificates and have
shares deposited into escrow, provided that they have an effective IRS Form W-9
on file with e2E.
When the merger is effective, the stock transfer books of e2E will be
closed and there will be no further registration of transfers of shares of e2E
common stock on the records of e2E. If there is a transfer of ownership of
shares of e2E common stock which is not registered in the transfer records of
e2E, consideration will be delivered to the transferee if the e2E certificate
which represented such shares of e2E common stock is presented to the exchange
agent with appropriate transfer documents.
No fractional shares of Plexus common stock will be issued in the
merger. All fractional share interests of a holder of more than one e2E
certificate at the effective time of merger will be aggregated to maximize the
number of whole shares of Plexus common stock to be issued and minimize the
fractional interests to be paid in cash. If a fractional share interest still
results, each holder of a fractional share interest will be paid an amount in
cash equal to the price of Plexus common stock used for computing the exchange
rate.
Any portion of the merger consideration not held in escrow which
remains undistributed to the e2E shareholders six months after the merger will
be delivered to Plexus upon demand. Any e2E shareholders who have not previously
surrendered their e2E certificates shall thereafter look to Plexus for payment.
Plexus may deduct and withhold from the consideration payable to any
e2E shareholder any amount that Plexus is required to deduct and withhold with
respect to the making of such payment under the Internal Revenue Code, or any
provision of state, local or foreign tax law. Those withheld amounts will be
treated as having been paid to the e2E shareholder with respect to whom Plexus
made the deduction or withholding.
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<PAGE> 28
FEDERAL INCOME TAX CONSEQUENCES; TAX OPINION
The following is a discussion of material United States federal income
tax considerations in connection with the merger. This discussion summarizes
principal United States federal income tax consequences of the merger that
generally are applicable to holders of e2E Common Stock, but it is not a
complete analysis of all of the potential tax effects relevant to the merger.
This discussion does not deal with all federal income tax considerations that
may be relevant to certain e2E shareholders in light of their particular
circumstances, or to shareholders subject to special rules under United States
federal income tax law, including dealers in securities, shareholders who do not
hold their shares of e2E common stock as capital assets, foreign persons,
tax-exempt entities, or persons who are subject to the alternative minimum tax
provisions of the Internal Revenue Code. Furthermore, it does not address e2E
shareholders who acquired their shares in connection with stock options or stock
purchase plans or in other compensatory transactions.
Some e2E shareholders have acquired shares in connection with
performance of services for e2E, such as restricted stock grants received in
compensatory transactions. If, at the time of the receipt of those shares, the
shares were subject to a "substantial risk of forfeiture" as that phrase is used
in Section 83 of the Code, and if the service provider did not elect to include
the value of the shares in income at the time of receipt, the service provider
will have ordinary compensation income when those shares first become
substantially vested for United States federal income tax purposes. The amount
of the income will equal the excess of the fair market value of the shares at
the time of vesting over the amount, if any, paid for the shares by the service
provider. e2E generally will be entitled to a compensation deduction in that
amount and generally will be required to withhold tax at that time for United
States federal income tax purposes. Whether shares were subject to a
"substantial risk of forfeiture" at the time a grant is dependent upon all of
the facts and circumstances at the time of grant. Shareholders who received
shares in connection with performance of services should consult their own tax
advisors about the issue. The following discussion also does not address the tax
consequences of the merger under foreign, state, or local tax laws.
e2E SHAREHOLDERS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS AS TO THE
CONSEQUENCES OF THE MERGER, INCLUDING THE APPLICABLE FEDERAL, STATE, LOCAL AND
FOREIGN TAX CONSEQUENCES TO THEM.
Stoel Rives LLP, counsel to e2E, has provided its opinion that the
merger will qualify as a reorganization within the meaning of Section 368 of the
Code, and that each of e2E, Plexus and Casey Jones Corp. will be a party to such
reorganization for United States federal income tax purposes. Neither e2E nor
Plexus will request a ruling from the Internal Revenue Service with regard to
any of the United States federal income tax consequences of the merger. The tax
opinion is based on and subject to certain assumptions and limitations as well
as factual representations received from e2E and Plexus, as discussed below. An
opinion of counsel represents only counsel's best legal judgment and has no
binding effect or official status of any kind. No assurances are given that
contrary positions will not be taken by the IRS or a court considering the
issues.
Subject to the assumptions, limitations, and qualifications described
in the tax opinion and in this discussion, it is the opinion of Stoel Rives LLP
that the material United States federal income tax consequences of the merger
can be summarized as follows:
- e2E, Plexus, and Casey Jones will not recognize gain or loss
solely as a result of Plexus' issuance of Plexus common stock
to the e2E shareholders in the merger solely in exchange for
their shares of e2E common stock and the transfer by operation
of law of Casey Jones' assets and liabilities to e2E pursuant
to the merger;
- e2E's shareholders who hold their e2E common stock as a
capital asset will not recognize gain or loss upon their
receipt in the merger of solely Plexus common stock in
exchange for their shares of e2E common stock, except to the
extent of cash received in lieu of a fractional share of
Plexus common stock;
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- The aggregate tax basis of Plexus common stock received in the
merger, including any fractional share interest in Plexus
common stock for which cash is received, will be the same as
the aggregate tax basis of the e2E common stock surrendered in
exchange for the Plexus common stock;
- The holding period of each share of Plexus common stock
received by an e2E shareholder in the merger will include the
period during which such e2E shareholder held his or her e2E
common stock surrendered in exchange therefor in the merger;
and
- An e2E shareholder who receives cash in lieu of a fractional
share of Plexus common stock will recognize gain or loss equal
to the difference, if any, between such shareholder's tax
basis in such fractional share and the amount of cash received
in exchange therefor.
LIMITATIONS ON TAX OPINION AND DISCUSSION
As noted earlier, the tax opinion is subject to certain assumptions,
relating to, among other things, the truth and accuracy of certain
representations made by e2E and Plexus and the consummation of the merger in
accordance with the terms of the merger agreement and applicable state law.
Furthermore, the tax opinion will not bind the IRS and, therefore, the IRS is
not precluded from asserting a contrary position. The tax opinion and this
discussion are based on currently existing provisions of the Code, existing and
proposed Treasury regulations, and current administrative rulings and
pronouncements and court decisions. There can be no assurance that future
legislative, judicial, or administrative changes or interpretations will not
adversely affect the accuracy of the tax opinion or of the statements and
conclusions set forth herein. Any such changes or interpretations could be
applied retroactively and could affect the tax consequences of the merger.
RESALE OF PLEXUS COMMON STOCK
All shares of Plexus common stock received by e2E shareholders in the
merger will be freely transferable, except that shares of Plexus common stock
received by persons who are deemed to be "affiliates," as the term is defined
under the Securities Act, of Plexus or e2E prior to the merger may be resold by
them only in transactions permitted by the resale provisions of Rule 145 under
the Securities Act or as otherwise permitted under the Securities Act. Persons
who may be deemed to be affiliates of Plexus or e2E generally include
individuals or entities that control, are controlled by, or are under common
control with, the party and may include certain officers and directors of such
party as well as principal shareholders of such party. Affiliates of both
parties have previously been notified of their status.
The merger agreement requires each of Plexus and e2E to use reasonable
best efforts to cause each of its affiliates to sign a written affiliates letter
acknowledging that they will not sell, transfer or otherwise dispose of, or
reduce any risk relative to, any securities of Plexus or e2E during the period
beginning 30 days prior to the merger and continuing until such time as results
covering at least 30 days of post-merger operations of Plexus have been
published or sell, assign or transfer any of the shares of Plexus common stock
received pursuant to the merger except as permitted by the Securities Act and
the rules and regulations promulgated by the SEC thereunder. It is a condition
to the obligation of Plexus to complete the merger that Plexus shall have
received an affiliate letter from each person who is an affiliate of either
Plexus or e2E.
This prospectus supplement does not cover resales of Plexus common
stock received by any person who may be deemed to be an affiliate of e2E or
Plexus. See also "Escrow and Indemnity" above relating to the sale of shares
held in escrow.
ACCOUNTING TREATMENT
The merger is expected to be accounted for as a pooling-of-interests in
accordance with generally accepted accounting principles. Under this accounting
method, the historical financial information of the acquiring company
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generally is restated to reflect the combined financial position and operations
of both companies. However, because of the relatively small size of e2E as
compared to Plexus, Plexus' historical financial statements will not be
restated, and the acquisition will be reflected only on a going-forward basis.
The combined financial position and operations will be adjusted to conform the
accounting practices of Plexus. It is a condition to the consummation of the
merger that Plexus receive letters from PricewaterhouseCoopers LLP and KPMG to
the effect that the merger qualifies for pooling-of-interests accounting
treatment if consummated in accordance with the merger agreement.
DISSENTERS' RIGHTS OF APPRAISAL
The management and board of directors of e2E believe that the merger is
in the best interest of, and represents a fair value to, the shareholders.
Shareholders who are entitled to vote on the merger and who object to its terms,
however, may be entitled to certain rights under the Oregon Revised Statutes
("ORS"), provided that they comply with the conditions of Sections 60.561 to
60.594 of the ORS. Shareholders who vote for the merger will be waiving their
rights to dissent from the merger.
SECTIONS 60.561 TO 60.594 OF THE ORS ARE REPRINTED IN THEIR ENTIRETY AS
APPENDIX B TO THIS PROSPECTUS SUPPLEMENT. THE FOLLOWING DISCUSSION IS NOT A
COMPLETE STATEMENT OF THE LAW RELATING TO DISSENTERS' RIGHTS AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO APPENDIX B. YOU SHOULD REVIEW THE DISCUSSION AND
APPENDIX B CAREFULLY. IF YOU WISH TO EXERCISE STATUTORY DISSENTERS' RIGHTS OR
WISH TO PRESERVE THE RIGHT TO DO SO. YOU MUST COMPLY WITH THE PROCEDURES SET
FORTH IN SECTIONS 60.561 TO 60.594 OF THE ORS. FAILURE TO COMPLY WITH THOSE
PROCEDURES WILL RESULT IN THE LOSS OF DISSENTERS' RIGHTS.
The following discussion is a brief summary of the procedures you must
follow to perfect dissenters' rights under the ORS.
Generally, ORS provides that shareholders of a corporation that merges
with another corporation who are entitled to dissent from the merger and who
have perfected their dissenters' rights may require purchase of their shares for
cash based on the fair value of those shares in lieu of retaining their shares
of e2E's common stock. The fair value will be determined as of the day prior to
the closing of the Merger, and this determination will exclude any appreciation
or depreciation in anticipation of the Merger.
A holder of e2E's common stock who properly follows the procedure for
exercising dissenters' rights for his or her shares pursuant to Section 60.564
of the ORS (as summarized below) may be entitled to receive in cash the "fair
value" of his or her shares in lieu of retaining those shares of e2E's common
stock. The "fair value" of a dissenting shareholder's shares will be the value
of those shares the day prior to the closing date of the merger, excluding any
appreciation or depreciation in anticipation of the merger, unless exclusion
would be inequitable. The "fair value" could be more than, equal to or less than
the market value of the shares of Plexus stock to be received in exchange for
e2E's common stock on the date immediately prior to the closing date of the
merger. In the event the dissenting shareholder and e2E cannot agree on the
"fair value" of the dissenter's common stock, "fair value" will ultimately be
determined by a court in an appraisal proceeding.
To properly exercise dissenters' rights with respect to the merger and
to be entitled to payment under Section 60.564 of the ORS, a holder of e2E's
common stock must, among other things:
- prior to the special meeting, deliver to e2E written notice of
the shareholder's intent to demand payment for his or her
shares if the merger is effected;
- not vote his or her shares in favor of the merger; and
- upon receipt of a dissenters' notice from e2E (as described
below), timely deliver a demand for payment, certifying that
the shareholder acquired beneficial ownership before the date
of the first
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announcement to the news media or to shareholders of the terms
of the merger, and timely deposit the shareholder's
certificates in accordance with the terms of the dissenters'
notice.
Thus, any holder of e2E's common stock who wishes to dissent and who
executes and returns a proxy on one of the accompanying forms must specify that
the holder's shares are to be voted against the merger or that the proxy holder
should abstain from voting the holder's shares in favor of the merger. A vote
against the merger is a proper exercise of dissenters' rights. If the
shareholder returns a proxy without voting instructions or with instructions to
vote in favor of the merger, the holder's shares will automatically be voted in
favor of the merger, and the shareholder will lose any dissenters' rights.
Within 10 days after the closing of the merger, e2E will send a written
dissenters' notice to each holder of e2E's common stock who satisfied the
requirements above, indicating where the payment demand must be sent and where
and when share certificates must be deposited. This notice will inform holders
of uncertificated shares to what extent transfer of the shares will be
restricted after the payment demand is received. In addition, the notice will
include, among other things, a form of payment demand that includes the date of
the first announcement to the news media or to shareholders of the terms of the
Merger and requires the person asserting dissenters' rights to certify whether
or not the person acquired beneficial ownership of the shares before that date
and will set the date by which e2E must receive the payment demand, which date
may not be less than 30 or more than 60 days after the dissenters' notice is
delivered.
A beneficial shareholder may assert dissenters' rights as to shares
held on the beneficial shareholder's behalf only if:
- the beneficial shareholder submits to e2E the record
shareholder's written consent to the dissent not later than
the time the beneficial shareholder asserts dissenters'
rights; and
- the beneficial shareholder does so with respect to all shares
of which the shareholder is the beneficial shareholder or over
which the shareholder has power to direct the vote.
After the closing of the merger, or upon receipt of a payment demand,
e2E will pay each dissenter who complied with the ORS the amount that e2E
estimates to be the fair value of the shareholder's shares, plus accrued
interest. The payment must be accompanied by, among other things:
- e2E's balance sheet as of the end of a fiscal year ended not
more than 16 months before the date of payment, an income
statement for that year, a statement of changes in
shareholders' equity for that year, and the latest available
interim financial statements, if any;
- a statement of e2E's estimate of the fair value of the shares
- a statement of how the interest was calculated;
- a statement of the dissenter's right to demand payment under
ORS 60.587; and
- a copy of the dissenters' right provisions of the ORS. If e2E
does not take the proposed action within 60 days after the
date set for demanding payment and depositing share
certificates, e2E will return the deposited certificates and
release the transfer restrictions on the uncertificated
shares.
With respect to shares acquired after the date of the first
announcement to the news media or to shareholders of the terms of the merger,
e2E may elect to withhold payment of the fair value of dissenters' shares plus
accrued interest and, in that event, e2E will estimate after the closing date of
the merger the fair value of the shares, plus accrued interest, and, will offer
to pay this amount to each dissenter who agrees to accept it in full
satisfaction of the dissenter's demand.
S-30
<PAGE> 32
A dissenter may notify e2E in writing of the dissenter's own estimate of
the fair value of the dissenter's shares and the amount of interest due and
demand payment of the dissenter's estimate, less any payment made, or, with
respect to after-acquired shares for which e2E elected to withhold payment,
reject e2E's offer of the fair value determined for the shares and demand
payment of the dissenter's estimate of the fair value of the dissenter's shares
and interest due, if:
- The dissenter believes that the amount paid or offered is less than
the fair value of the dissenter's shares or that the interest due is
incorrectly calculated;
- e2E fails to make payment within 60 days after the date set for
demanding payment; or
- The merger is not effected, and e2E does not return the deposited
certificates or release the transfer restrictions imposed on
uncertificated shares within 60 days after the date set for demanding
payment.
A dissenter will be deemed to have waived the right to demand payment
unless the dissenter notifies e2E of his or her demand in writing within 30 days
after e2E makes or offers payment for the dissenter's shares.
If a demand for payment remains unsettled, e2E will commence a proceeding
in the District Court of Multnomah County, Oregon, within 60 days after
receiving the payment demand and petition the court to determine the fair value
of the shares and accrued interest. If e2E does not commence the proceeding
within the 60-day period, it will pay each dissenter whose demand remains
unsettled the amount demanded. e2E will make all dissenters, whose demands
remain unsettled, whether or not residents of the State of Oregon, parties to
the proceeding as in an action against their shares, and all parties must be
served with a copy of the petition. e2E may join as a party to the proceeding
any shareholder who claims to be a dissenter but who has not, in e2E's opinion,
complied with the provisions of the ORS for exercising dissenters' rights. If
the court determines that the shareholder has not complied, the shareholder will
be dismissed as a party. Each dissenter made a party to the proceeding will be
entitled to judgment for (i) the amount, if any, by which the court finds the
fair value of the shares, plus interest, exceeds the amount paid by e2E or (ii)
the fair value, plus accrued interest, of the dissenter's after-acquired shares
for which e2E elected to withhold payment.
BUSINESS OF PLEXUS
Plexus provides product realization services to original equipment
manufacturers, or OEMs, in the networking/telecommunications, medical,
industrial, computer and transportation industries. We provide advanced
electronics design, manufacturing and testing services to our customers and
focus on complex, high-end products. We offer our customers the ability to
outsource all stages of product realization, including: development and design,
materials procurement and management, prototyping and new product introduction,
testing, manufacturing and after-market support. For many customers, we serve
both a design and production function, allowing those customers to concentrate
on concept development, distribution and marketing, while accelerating their
time to market, reducing their investment in manufacturing capacity and
optimizing total product cost.
We believe that our broad service offerings with respect to the design and
realization of complex, high-end products within the electronics manufacturing
services, or EMS, industry provide us with significant competitive advantages.
Through a staff of over 350 product development engineers, we offer a complete
menu of engineering services, including digital and analog design, mechanical
and industrial design, embedded software design, printed circuit board design,
test equipment and software development, product verification and new product
introduction services. Our manufacturing services include printed circuit board
assembly, product configuration, testing, final product and system box build and
after-market support. Throughout the production process, we offer logistics
services, such as materials procurement, inventory management, packaging and
distribution.
S-31
<PAGE> 33
For more information about Plexus, you should see "Plexus Corp." beginning
on page 16 in the prospectus. Plexus provides more information, including its
audited financial statements, in reports filed with the Commission which are
incorporated by reference. Documents which are incorporated by reference are
considered to be part of the prospectus even though they are not included with
it. You may obtain copies of those reports from the Commission or by asking
Plexus. See "Other Information About Plexus Which You Can Obtain" for
information on how to do that.
CASEY JONES CORP.
Casey Jones, a wholly-owned subsidiary of Plexus, is an Oregon corporation
which was incorporated by Plexus for the purpose of consummating the merger.
Casey Jones has and will have no operations except as contemplated by the merger
agreement. Upon the merger, Casey Jones will be merged into e2E, which will be
the surviving corporation. Each share of common stock of Casey Jones issued and
outstanding at the merger will be converted into one share of e2E common stock.
As a result, immediately following the merger, Casey Jones will cease to exist
and e2E will be a wholly-owned subsidiary of Plexus.
OTHER INFORMATION ABOUT PLEXUS WHICH YOU CAN OBTAIN
Plexus is a public company, and must provide information to the public
under the Securities Exchange Act of 1934. Therefore, Plexus files reports,
proxy statements and other information with the Securities and Exchange
Commission. You may inspect and copy these materials at the Commission's public
reference facilities, which are located at:
- Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549,
- 7 World Trade Center, New York, New York 10048, and
- Citicorp Center, 500 West Madison Street, Chicago, Illinois 60661.
You may also obtain copies of these documents by writing to the Commission's
Public Reference Section, Washington, D.C. 20549; in that case, you will be
charged for the copies at the rates which the Commission sets. You may also
obtain copies from the Commission's Web site (http://www.sec.gov). Because
Plexus common stock is traded on the Nasdaq Stock Market, you can inspect
material filed by it at the offices of the National Association of Securities
Dealers, Inc., 1735 K Street N.W., Washington, D.C. 20006.
Plexus has filed a registration statement on Form S-4 under the Securities
Act with the Commission which covers the shares of common stock described in
this prospectus supplement. The registration statement has information in
addition to the information in this prospectus supplement. You may obtain that
additional information at the addresses above. This prospectus supplement, and
the documents which this prospectus supplement incorporates by reference,
describe certain contracts or other documents. These descriptions are only
summaries, and are not necessarily complete. If you wish further information
rather than this summary, you should review a copy of the document if Plexus has
filed it as an exhibit to the registration statement. When Plexus has filed a
document as an exhibit, a complete reading of the document will provide you more
information than a summary. Plexus is not responsible if you fail to read the
full document.
This prospectus supplement "incorporates by reference" the filings named
below. That means that the contents of those documents are considered to be part
of this prospectus supplement even though they are not actually included with
it. Plexus or e2E will provide you with a copy of any of those documents without
charge if you are an e2E record shareholder, or if you are a beneficial owner of
securities which are held in street name. They will not necessarily provide
exhibits unless those exhibits are specifically incorporated by reference in the
document. You can obtain copies of the documents by writing to Plexus, 55
Jewelers Park Drive, Neenah,
S-32
<PAGE> 34
Wisconsin 54956, Attn: Corporate Secretary, or by calling Plexus' corporate
secretary at 920/722-3451. You should request the information by December 7,
2000 to help assure that you receive it before the special meeting.
This prospectus supplement incorporates by reference the following
documents. Each of them has been filed by Plexus with the Commission as required
by the Exchange Act:
- Form 10-K for the year ended September 30, 1999;
- Forms 10-Q for the quarters ended December 31, 1999, March 31, 2000
and June 30, 2000;
- Current Reports on Form 8-K dated April 28, 2000,
May 23, 2000 (as twice amended), July 14, 2000, September 19, 2000 and
October 13, 2000;
- The description of Plexus common stock on Form 8-A, as amended; and
- The description of Plexus' preferred stock purchase rights on Form 8-A
dated August 13, 1998.
This prospectus supplement also incorporates all reports and definitive proxy or
information statements filed by Plexus under Section 13(a), 13(c), 14 or 15(d)
of the Exchange Act after the date of this prospectus supplement. They will be
incorporated by reference into this prospectus supplement from the date on which
Plexus files such documents.
S-33
<PAGE> 35
SELECTED FINANCIAL DATA OF e2E
e2E has not yet completed its first fiscal year. We present below
selected financial data of e2E as of September 30, 2000 and for the nine months
ended September 30, 2000. The data are unaudited. Data are in thousands, except
per share data.
<TABLE>
<CAPTION>
As of, or for the
nine months
ended,
September 30,
2000
----------------
<S> <C>
OPERATING STATEMENT DATA:
Net sales...................... $11,480
Cost of sales.................. 7,713
----------------
Gross profit................... 3,767
----------------
Operating expenses:
Selling and administrative... 3,484
Amortization................. 188
---------------
Total operating expenses... 3,672
---------------
Operating income .............. 95
Interest expense............. (161)
Miscellaneous................ 3
---------------
Loss before income taxes....... (63)
Income taxes 60
---------------
Net loss $(123)
========
Net loss per share............. $(0.05)
========
Weighted average shares 2,249
outstanding..............
BALANCE SHEET DATA:
Working capital................ $(973)
Total assets................... 7,658
Long-term debt................. 164
Stockholders' equity........... 2,178
Stockholders' equity per share. $0.97
</TABLE>
S-34
<PAGE> 36
BUSINESS OF e2E
e2E Corporation, an Oregon corporation based in Hillsboro, Oregon, designs
and engineers printed circuits and backplane assemblies, which are used to
interconnect microprocessors, integrated circuits and other components that are
essential to the functioning of electronic products. e2E provides engineering
and design services, in addition to other value added services, to original
equipment manufacturers ("OEMs") and contract manufacturers.
e2E's service engagements can be broadly classified into the following
three categories: program work, spot or overflow work, and staffing work.
- In program work, an OEM typically engages e2E to work collaboratively
during the development of a product or group of products. This type of
work accounts for approximately 65% of e2E's business.
- In spot or overflow work, an OEM engages e2E to help the internal
design group with an overload of designs that need to be finished in a
short period of time. This type of work accounts for approximately 30%
of e2E's business.
- In staffing work, e2E provides supplemental design talent. This type
of work accounts for approximately 5% of e2E's business.
e2E has seven offices or design centers in the United States, as well as offices
in Scotland and Israel.
S-35
<PAGE> 37
OWNERSHIP OF AND MARKET FOR E2E COMMON STOCK
OWNERSHIP
The following table provides information about the beneficial ownership
of shares of e2E common stock at _________, 2000 by its directors, officers,
directors and executive officers as a group, and other persons who beneficially
own more than 5% of e2E's outstanding common stock.
<TABLE>
<CAPTION>
Directors, officers and e2E common stock
------------------------------------------
5% shareholders Number of shares Percent of class
------------------------ ---------------- ----------------
<S> <C> <C>
Matthew J. Bergeron 207,500 9.06%
William J. Thale 92,000 4.02%
All directors and officers 1,102,250 48.13%
as a group (2 persons) (1)
Robert Praegitzer 1,000,000 43.66%
------------------
</TABLE>
(1) Includes 802,750 shares not otherwise beneficially owned by Messrs.
Bergeron or Thale which were issued under restricted stock plans for which
the board of directors holds proxies. Proxies as to those shares may be
revoked by the employees who granted them.
Messrs. Bergeron, Praegitzer and Thale have each signed agreements with
Plexus which require them to vote to approve the merger agreement.
MARKET
There is no trading market for e2E stock. e2E management is not aware of
any arms-length transactions involving third party sales of e2E common stock
since e2E's inception.
Shares of e2E common stock were issued in connection with the formation of
e2E for $1.67 per share. Since the formation of e2E, restricted stock has been
issued to e2E employees and directors under e2E restricted stock plans. All
sales of e2E stock by e2E under these plans since its formation have been for
$1.67 per share. This price was determined by e2E's management, with the advice
of Adams Harkness & Hill, e2E's financial advisor.
S-36
<PAGE> 38
COMPARISON OF SHAREHOLDER RIGHTS
Upon consummation of the merger, the shareholders of e2E will become
shareholders of Plexus. The rights of the Plexus shareholders are governed by
Wisconsin law and the Plexus restated articles of incorporation and bylaws. The
rights of the e2E shareholders presently are governed by Oregon law and the e2E
restated articles of incorporation and bylaws. These rights differ in certain
respects and the material differences are summarized below. Please also see
"Information about Plexus Common Stock" on page 25 of the prospectus.
VOTING RIGHTS
Holders of both Plexus common stock and e2E common stock are entitled to
one vote per share on all matters submitted to a shareholder vote, except that
the voting power of shares of Plexus common stock may be limited by the control
share voting restrictions described below under "Anti-Takeover Laws -
Wisconsin."
STATUTORY SHAREHOLDER LIABILITY
Wisconsin law imposes personal liability on shareholders of Wisconsin
corporations for debts owed to employees for services performed, but not
exceeding six months service in any one case. While the relevant statute limits
this liability to the par value of the shares held (which is $.01 per share for
Plexus common stock), this limitation has been interpreted by a Wisconsin trial
court to mean the consideration paid to the corporation for such shares. This
decision was affirmed by a split decision of the Wisconsin Supreme Court without
a written opinion and with one justice abstaining. There is no comparable
provision under Oregon law.
BOARD OF DIRECTORS
Election. Under Wisconsin law, Plexus directors are elected by a plurality
of votes cast by shareholders at a meeting of shareholders at which a quorum is
in attendance. The same procedures apply to the election of e2E directors under
Oregon law. Neither the Plexus nor the e2E shareholders may cumulate votes in
the election of directors.
Classification. The Plexus and e2E boards of directors are not classified,
and the directors of both of them are elected annually for one-year terms.
Removal. Shareholders of both Plexus and e2E are entitled under relevant
state law to remove directors, with or without cause, by a plurality of the
votes cast at a duly-called meeting (special meeting in the case of e2E) where a
quorum is present. However, a director of Plexus who was elected by a group of
shareholders entitled to vote as a class may be removed only by the shareholders
of that group.
Vacancies. Vacancies on the Plexus board of directors may be filled by the
board (by a majority of all remaining directors, if less than a quorum) or by
shareholders. If the vacant office was held by a director elected by a group of
shareholders entitled to vote as a class, only the shareholders of that voting
group may vote to fill the vacancy, if it is filled by shareholders, and only
the remaining directors elected by that voting group may vote to fill the
vacancy if it is filled by directors. Vacancies on the e2E board may be filled
by a majority of the remaining board members or by shareholders.
Nomination. Shareholders of Plexus and e2E are entitled to nominate persons
for director, but in Plexus' case only by giving timely advance written notice
of such nomination to the relevant company which includes, among other things,
certain specified information about the nominee. e2E does not have a comparable
requirement.
Liability of Directors. Under Wisconsin law, the Plexus directors are
liable to the corporation for breach of fiduciary duty only if such breach
constitutes certain types of willful misconduct and violations of criminal law.
S-37
<PAGE> 39
Except in the case of this type of breach, a Wisconsin corporation must
indemnify directors against damages and costs incurred in connection with any
proceeding where the director was a party because of being a director. Plexus
bylaws have provisions giving effect to these requirements. The e2E articles
provide a similar limitation of liability and mandatory indemnification for
directors.
SPECIAL MEETINGS OF SHAREHOLDERS
Under Wisconsin law, a special meeting of shareholders may be called by the
board of directors, a person authorized to do so in the articles or bylaws, or
shareholders holding at least 10% of the voting power of all shares entitled to
vote on any issue proposed to be considered at the meeting. The Plexus bylaws
authorize the Chairman of the board and the President to call special meetings
of shareholders. Similar requirements apply to e2E.
PREFERRED STOCK
Plexus has 5,000,000 authorized but unissued shares of preferred stock.
These shares may be issued in one or more series with such voting, dividend,
liquidation and other rights as may be specified by the relevant board of
directors at the time the shares are issued. Plexus has designated 1,000,000 of
its preferred shares as Series A Junior Participating Preferred Stock. These
shares are reserved for issuance pursuant to the rights granted under the Plexus
shareholder rights agreement. See "Shareholder Rights Plan" below for a
discussion of the shareholder rights agreement. Plexus does not have any shares
of preferred stock outstanding.
e2E's articles of incorporation do not provide for preferred stock.
AMENDMENT OF THE ARTICLES OF INCORPORATION
Under Wisconsin law, the Plexus articles may be amended by shareholders by
the affirmative vote of a majority of the votes cast by each group of
shareholders entitled to vote on such amendment as a group, a quorum being in
attendance.
Under Oregon law, an amendment to the e2E articles must be recommended to
the shareholders by the board of directors. After recommendation, the amendment
must be approved by a majority of all the votes entitled to be cast by each
voting group entitled to vote thereon, unless another proportion is specified by
the articles, by the board of directors as a condition to its recommendation, or
by other provisions of Oregon law.
APPROVAL OF FUNDAMENTAL TRANSACTIONS
Mergers and Share Exchanges. Under Wisconsin law, a plan of merger or share
exchange involving Plexus generally must be approved by each voting group of
shareholders entitled to vote separately on the plan by a majority of all the
votes entitled to be cast on the plan by that voting group. However, certain
transactions subject to the Wisconsin anti-takeover laws require a greater vote.
See "Anti-Takeover Laws," below. In addition, certain mergers in which Plexus is
the surviving corporation and which do not affect the articles or the rights of
existing shareholders do not require shareholder approval.
Because this merger is between a subsidiary of Plexus and e2E, no approval
of the merger by Plexus shareholders is required.
Under Oregon law, a plan of merger or share exchange involving e2E
generally must be approved by a majority of all the votes entitled to be cast by
shareholders on the plan by each shareholder voting group entitled to vote
separately on the plan. However, certain mergers in which e2E is the surviving
corporation and which do not affect the articles or the rights of existing
shareholders do not require shareholder approval.
S-38
<PAGE> 40
Sale of Assets; Dissolution. Under Wisconsin law, Plexus may sell or
otherwise dispose of substantially all its property outside the ordinary course
of business or dissolve only if the transaction is approved by the board of
directors and a majority of all the votes entitled to be cast by each group of
shareholders entitled to vote as a group.
Under Oregon law, e2E may sell or otherwise dispose of substantially all of
its property outside of the ordinary course of business or dissolve only if the
board of directors recommends the proposed transaction to the shareholders and
the shareholders approve the transaction by the vote of a majority of the votes
entitled to be cast.
DISSENTERS' RIGHTS
Plexus shareholders may dissent from a proposed merger or share exchange
and receive the fair value of their shares only where the transaction involves a
significant shareholder. A significant shareholder is defined for this purpose
to mean generally a person or group who directly or indirectly owns 10% or more
of the Plexus voting stock, or is an affiliate of Plexus and directly or
indirectly owned 10% or more of such voting stock within the last two years.
Plexus shareholders are not entitled to dissenters' rights in this merger or in
any other transaction.
The e2E shareholders are entitled under Oregon law to exercise dissenters'
rights in certain transactions, including any merger, share exchange, sale or
exchange of substantially all assets outside of the ordinary course, any
amendment to the articles that impacts shareholders in a proscribed way, and
other corporate action taken pursuant to a shareholder vote to the extent the
articles of incorporation, bylaws, or a resolution of the board of directors
provides that voting or non-voting shareholders are entitled to dissent and
obtain payment for their shares]. These rights apply to this merger and are
discussed above under "Dissenters' Rights of Appraisal."
SHAREHOLDER RIGHTS PLAN
Plexus has in effect a shareholder rights plan, under which it issues
rights which attach to each share of common stock. e2E has no equivalent plans.
The rights generally entitle a holder to purchase common stock from the issuer
at one-half its value ten days after any person or group acquires 15% or more of
the outstanding common stock of the issuer or commences or announces an intent
to commence a tender or exchange offer that would result in such stock
ownership. The rights held by such person or group are rendered void under the
plans. If following the time the rights become exercisable the issuer enters
into a merger or other business combination with a person or group owning
generally 15% or more of the issuer's common stock, the rights generally entitle
the holders (but not any such person or group) to purchase stock of such person
or group, or an affiliate thereof, at one-half its value. The rights may be
redeemed for a nominal amount at any time prior to the time they become
exercisable.
The rights issued under these shareholder rights plans may make any merger
or other acquisition of Plexus prohibitively expensive unless it is approved by
the board of directors, because the rights allow shareholders to purchase the
voting securities of Plexus or a potential acquiror, at a fraction of their fair
market value.
ANTI-TAKEOVER LAWS
Wisconsin
The Wisconsin Business Corporation Law has special provisions relating to
changes in control of public companies, such as Plexus, which are incorporated
in the state. These laws regulate a broad range of business combinations and
similar transactions involving a resident domestic corporation. Situations
covered by these statutes include:
- business combinations with significant shareholders;
- reduction of voting power for those who acquire more than 20% of a
corporation's outstanding shares;
S-39
<PAGE> 41
- supermajority voting requirements in the case of certain business
combinations which do meet "fair price" standards; and
- restrictions on certain defensive actions in the face of a takeover
offer.
While these provisions are generally designed to protect shareholders of
covered corporations in the event of a proposal to acquire a company, they may
have the effect of inhibiting offers which otherwise could be in the best
interests of shareholders. For further, more detailed information about these
provisions, please see "Information about Plexus Common Stock - Statutory
Provisions Applicable to Common Stock" beginning on page 26 of the prospectus.
Oregon
Oregon also has statutory provisions that may have the effect of
discouraging or delaying the takeover of a corporation. Oregon's statutes
contain a provision that prohibits certain business combinations between a
corporation and an "interested shareholders" during the three-year period after
the interested shareholder achieved a specified level of ownership. An
"interested shareholder" is one who owns 15% or more of a corporation's voting
securities. While this provision applies to e2E generally, it does not apply to
the proposed merger transaction.
Oregon also has a control share statute that a company may opt out of in
its articles or bylaws. The statute provides that "control shares" of a
corporation acquired in a control share acquisition have no voting rights except
as granted by the other shareholders of the corporation. "Control shares" are
shares which, when added to shares then owned or controlled by a shareholder,
increase the shareholder's voting power above specified thresholds. e2E's bylaws
provide that the control share provisions of the Oregon statute do not apply to
e2E.
LEGAL OPINIONS
The legality of the Plexus common stock to be issued in the merger has been
passed upon on behalf of Plexus by Quarles & Brady LLP, Milwaukee, Wisconsin. At
November 6, 2000, one partner of Quarles & Brady LLP providing services in
connection with the merger owned 1,000 shares of Plexus common stock.
Certain federal income tax matters relating to the merger have been passed
upon on by Stoel Rives, LLP, Portland, Oregon.
EXPERTS
Plexus' consolidated financial statements and the related financial
statement schedules incorporated in this prospectus by reference from its Annual
Report on Form 10-K for the fiscal year ended September 30, 1999 have been
audited by PricewaterhouseCoopers LLP, independent accountants, as stated in
their reports, which are incorporated herein by reference, and have been so
incorporated in reliance upon the reports of such firm given upon their
authority as experts in accounting and auditing.
The financial statements of SeaMED Corporation, a company acquired by
Plexus in 1999, for its fiscal years ended June 30, 1998 and 1997 (not presented
separately herein), which are referred to in the report of
PricewaterhouseCoopers on the Plexus financial statements, have been audited by
Ernst & Young LLP, independent auditors, as set forth in their report included
in our annual report on Form 10-K for the fiscal year ended September 30, 1999
and incorporated herein by reference. The reference to the SeaMED financial
statements was made in reliance upon such report given on authority of such firm
as experts in accounting and auditing.
S-40
<PAGE> 42
The financial statements of Contract Electronics Manufacturing Services
Operations of Elamex, S.A. de C.V. as of and for the year ended December 31,
1999, incorporated in this prospectus by reference from the Current Report on
Form 8-K/A of Plexus dated May 23, 2000, have been audited by Deloitte & Touche
LLP, independent auditors, as stated in their report, which is incorporated
herein by reference, and have been so incorporated in reliance upon the report
of such firm given upon their authority as experts in accounting and auditing.
INDEX TO FINANCIAL STATEMENTS
PLEXUS CORP.
Plexus' historical financial statements and other financial information are
incorporated by reference in this prospectus supplement from Plexus' filings
with the Securities and Exchange Commission. See "Other Information About Plexus
Which You Can Obtain." See also "Recent Developments" on page 12 of this
prospectus for selected summary updated financial information of Plexus.
E2E CORPORATION
e2E commenced operations in January 2000, and has not yet completed its
first fiscal year. Because of e2E's relative size as compared to Plexus,
financial statements of e2E are not required to be included in this prospectus
supplement. However, see "Selected Financial Data of e2E" on page S-34 of the
prospectus supplement for certain summary unaudited financial data of e2E.
S-41
<PAGE> 43
APPENDIX A
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
PLEXUS CORP.
AND
E2E CORPORATION
AND
CASEY JONES CORP.
DATED AS OF SEPTEMBER 29, 2000
<PAGE> 44
<TABLE>
<S> <C>
RECITALS........................................................................................................A-1
ARTICLE I
DEFINITIONS............................................................................................A-1
Acquisition............................................................................................A-1
Affiliates.............................................................................................A-1
Affiliate Letter.......................................................................................A-1
Agreement..............................................................................................A-1
Articles of Merger.....................................................................................A-2
Buildings..............................................................................................A-2
Closing................................................................................................A-2
Closing Date...........................................................................................A-2
Code...................................................................................................A-2
Confidentiality Agreement..............................................................................A-2
Disclosure Schedule....................................................................................A-2
Employment Agreement...................................................................................A-2
Equipment..............................................................................................A-2
ERISA..................................................................................................A-2
Escrow Agent...........................................................................................A-2
Escrow Agreement.......................................................................................A-2
Exchange Act...........................................................................................A-2
Facilities.............................................................................................A-3
HSR Act................................................................................................A-3
Intangible Assets......................................................................................A-3
Knowledge of Parent....................................................................................A-3
Knowledge of Target....................................................................................A-3
Law....................................................................................................A-3
Leases.................................................................................................A-3
Lien...................................................................................................A-3
Merger.................................................................................................A-3
Noncompetition Agreements..............................................................................A-3
OBCA...................................................................................................A-3
Opinion of Parent Counsel..............................................................................A-3
Opinion of Target Counsel..............................................................................A-3
Parent.................................................................................................A-3
Parent Common Stock....................................................................................A-3
Parent Companies.......................................................................................A-3
Parent Material Adverse Effect.........................................................................A-4
Parent Stock Value.....................................................................................A-4
Permits................................................................................................A-4
Person.................................................................................................A-4
Predecessor Operations.................................................................................A-4
Product Matters........................................................................................A-4
Professional Employees.................................................................................A-4
Proxy Statement........................................................................................A-4
Real Estate............................................................................................A-4
Registration Statement.................................................................................A-4
SEC....................................................................................................A-4
Securities Act.........................................................................................A-4
Shareholders...........................................................................................A-4
Significant Holders....................................................................................A-5
Special Meeting........................................................................................A-5
Subsidiary.............................................................................................A-5
Target.................................................................................................A-5
Target Common Stock....................................................................................A-5
</TABLE>
A-i
<PAGE> 45
<TABLE>
<S> <C>
Target Debt............................................................................................A-5
Target Material Adverse Effect.........................................................................A-6
Target Purchase Plans..................................................................................A-6
Target Subsidiaries....................................................................................A-6
Tyco...................................................................................................A-6
Voting Agreement.......................................................................................A-6
Other Terms............................................................................................A-6
ARTICLE II THE MERGER....................................................................................A-7
2.1 The Merger....................................................................................A-7
2.2 Effective Time................................................................................A-7
2.3 Articles of Incorporation of Surviving Corporation............................................A-7
2.4 Bylaws of Surviving Corporation...............................................................A-7
2.5 Directors and Officers of Surviving Corporation...............................................A-7
2.6 Conversion of Target Common Stock.............................................................A-7
2.7 Conversion of Acquisition Common Stock........................................................A-8
2.8 Exchange of Target Certificates...............................................................A-8
2.9 Stock Transfer Books.........................................................................A-10
2.10 Reorganization; Pooling......................................................................A-10
2.11 Dissenting Shares............................................................................A-10
2.12 Voting Agreements............................................................................A-10
2.13 Target Purchase Plans........................................................................A-10
2.14 Appointment of Representatives...............................................................A-10
ARTICLE III OTHER AGREEMENTS.............................................................................A-11
3.1 Confidentiality..............................................................................A-11
3.2 Proxy Statement and Registration Statement...................................................A-11
3.3 Approval of Target Shareholders..............................................................A-11
3.4 HSR Act......................................................................................A-11
3.5 Access.......................................................................................A-11
3.6 Disclosure Schedule..........................................................................A-11
3.7 Conditions to Merger.........................................................................A-12
3.8 Deliveries of Information; Consultation......................................................A-12
3.9 Affiliates...................................................................................A-12
3.10 Other Transactions...........................................................................A-13
3.11 NASDAQ Listing...............................................................................A-13
3.12 Public Announcements.........................................................................A-13
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF TARGET.....................................................A-13
4.1 Organization; Business.......................................................................A-13
4.2 Capitalization...............................................................................A-14
4.3 Authorization; Enforceability................................................................A-14
4.4 No Violation or Conflict.....................................................................A-14
4.5 Title to Assets; Accounts....................................................................A-14
4.6 Litigation; Product Matters..................................................................A-15
4.7 Financial Statements; Books and Records; Accounting Matters..................................A-15
4.8 Absence of Certain Changes...................................................................A-15
4.9 Existing Contracts...........................................................................A-16
4.10 Appraisals...................................................................................A-16
4.11 Insurance Policies...........................................................................A-16
4.12 Employee Benefit Plans.......................................................................A-17
4.13 No Violation of Law; Permits.................................................................A-18
4.14 Brokers; Expenses of Transaction.............................................................A-18
4.15 Taxes........................................................................................A-18
</TABLE>
A-ii
<PAGE> 46
<TABLE>
<S> <C>
4.16 Governmental Approvals.......................................................................A-19
4.17 No Pending Other Transactions................................................................A-19
4.18 Labor Matters................................................................................A-19
4.19 Professional Employee Matters................................................................A-19
4.20 Vote Required................................................................................A-19
4.21 Physical Assets..............................................................................A-19
4.22 Environmental Protection.....................................................................A-20
4.23 [Unused].....................................................................................A-21
4.24 Customers....................................................................................A-21
4.25 Real Estate..................................................................................A-21
4.26 Accounts.....................................................................................A-22
4.27 Unemployment Compensation....................................................................A-22
4.28 Intangible Assets............................................................................A-22
4.29 Information Supplied.........................................................................A-22
4.30 Disclosure...................................................................................A-22
ARTICLE V REPRESENTATIONS AND WARRANTIES OF PARENT AND ACQUISITION.....................................A-22
5.1 Organization.................................................................................A-22
5.2 Capitalization...............................................................................A-23
5.3 Authorization; Enforceability................................................................A-23
5.4 No Violation or Conflict.....................................................................A-23
5.5 Litigation...................................................................................A-23
5.6 Parent SEC Reports...........................................................................A-23
5.7 Brokers......................................................................................A-24
5.8 Governmental Approvals.......................................................................A-24
5.9 Disclosure...................................................................................A-24
5.10 Information Supplied.........................................................................A-24
5.11 Accounting Matters...........................................................................A-24
5.12 Absence of Certain Changes...................................................................A-24
ARTICLE VI CONDUCT OF BUSINESS BY TARGET PENDING THE MERGER.............................................A-25
6.1 Carry on in Regular Course...................................................................A-25
6.2 Use of Assets................................................................................A-25
6.3 Existing Contracts...........................................................................A-25
6.4 Employment Matters...........................................................................A-25
6.5 Indebtedness.................................................................................A-25
6.6 Preservation of Relationships................................................................A-25
6.7 Compliance with Laws.........................................................................A-25
6.8 Taxes........................................................................................A-25
6.9 Amendments...................................................................................A-25
6.10 Dividends; Redemptions; Issuance of Stock....................................................A-25
6.11 No Dispositions or Acquisitions..............................................................A-26
ARTICLE VII CONDITIONS PRECEDENT TO THE OBLIGATIONS OF PARENT AND
ACQUISITION..................................................................................A-26
7.1 Compliance with Agreement....................................................................A-26
7.2 No Litigation................................................................................A-26
7.3 Representations and Warranties of Target.....................................................A-26
7.4 No Target Material Adverse Effect............................................................A-26
7.5 Approval of Target Shareholders; Articles of Merger..........................................A-26
7.6 Closing Certificates.........................................................................A-26
7.7 Governmental Approvals.......................................................................A-26
7.8 Pooling Opinion..............................................................................A-27
7.9 [Unused].....................................................................................A-27
</TABLE>
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<PAGE> 47
<TABLE>
<S> <C>
7.10 Employment, Escrow and Noncompetition Agreements.............................................A-27
7.11 Leases; Consents.............................................................................A-27
7.12 Opinions.....................................................................................A-27
7.13 Affiliates...................................................................................A-27
7.14 Tyco.........................................................................................A-27
7.15 Professional Employees.......................................................................A-27
7.16 Dissenters...................................................................................A-27
ARTICLE VIII CONDITIONS PRECEDENT TO THE OBLIGATIONS OF TARGET............................................A-27
8.1 Compliance with Agreement....................................................................A-27
8.2 No Litigation................................................................................A-28
8.3 Representations and Warranties of Parent and Acquisition.....................................A-28
8.4 No Parent Material Adverse Effect............................................................A-28
8.5 Articles of Merger...........................................................................A-28
8.6 Closing Certificate..........................................................................A-28
8.7 Governmental Approvals.......................................................................A-28
8.8 Employment, Escrow and Noncompetition Agreements.............................................A-28
8.9 Opinions.....................................................................................A-28
ARTICLE IX TERMINATION; MISCELLANEOUS...................................................................A-29
9.1 Termination..................................................................................A-29
9.2 Rights on Termination; Waiver................................................................A-29
9.3 Indemnity by Shareholders....................................................................A-30
9.4 Survival of Representations, Warranties and Covenants........................................A-31
9.5 Entire Agreement; Amendment..................................................................A-31
9.6 Expenses.....................................................................................A-31
9.7 Governing Law................................................................................A-31
9.8 Assignment...................................................................................A-31
9.9 Notices......................................................................................A-32
9.10 Counterparts; Headings.......................................................................A-32
9.11 Interpretation...............................................................................A-32
9.12 Severability.................................................................................A-32
9.13 Specific Performance.........................................................................A-32
9.14 No Reliance..................................................................................A-33
9.15 Exhibits and Disclosure Schedule.............................................................A-33
9.16 Further Assurances...........................................................................A-33
</TABLE>
EXHIBITS:
1. Form of Affiliate Letter
2. Form of Employment Agreement
3. Form of Escrow Agreement
4. Form of Noncompetition Agreements
5. Opinion of Parent's Counsel
6. Opinion of Target's Counsel
7. Form of Voting Agreement
A-iv
<PAGE> 48
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER is made as of the 29th day of
September, 2000 by and among PLEXUS CORP., E2E CORPORATION and CASEY JONES CORP.
RECITALS
WHEREAS, the respective Boards of Directors of Parent, Target and
Acquisition have: (a) determined that the merger of Acquisition with and into
Target pursuant to, and subject to all of the terms and conditions of, this
Agreement is advisable, fair and in the best interests of Parent, Target and
Acquisition and their respective shareholders; and (b) approved the Merger, this
Agreement and the transactions contemplated by this Agreement; and
WHEREAS, the Board of Directors of Target has directed that this
Agreement and the transactions described in this Agreement be submitted for
approval at the Special Meeting; and
WHEREAS, the Board of Directors of Parent has directed the issuance of
Parent Common Stock pursuant to this Agreement; and
WHEREAS, Parent, Target and Acquisition desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger; and
WHEREAS, Parent, Target and Acquisition intend, by executing this
Agreement, to adopt a plan of reorganization within the meaning of Section 368
of the Code and to cause the Merger to qualify as a reorganization under the
provisions of Sections 368(a) of the Code; and
WHEREAS, for financial accounting purposes, Parent, Target and
Acquisition intend that the Merger be accounted for as a pooling of interests.
NOW, THEREFORE, in consideration of the Recitals and of the mutual
covenants, conditions and agreements set forth herein and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, it is hereby agreed that:
ARTICLE I
DEFINITIONS
When used in this Agreement, the following terms shall have the
meanings specified:
Acquisition. "Acquisition" shall mean Casey Jones Corp., an Oregon
corporation and a wholly-owned Subsidiary of Parent.
Affiliates. "Affiliates" shall mean all Persons who are affiliates of
Target for purposes of Rule 145 under the Securities Act or Accounting Series
Releases 130 and 135 of the SEC, or both.
Affiliate Letter. "Affiliate Letter" shall mean a letter from each
Affiliate of Target in substantially the form of Exhibit 1 attached to this
Agreement.
Agreement. "Agreement" shall mean this Agreement and Plan of Merger,
together with the Exhibits attached hereto and together with the Disclosure
Schedule, as the same may be amended from time to time in accordance with the
terms hereof.
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Articles of Merger. "Articles of Merger" shall mean Articles of Merger
in a form approved for filing in accordance with the Oregon Secretary of State.
Buildings. "Buildings" shall mean all buildings, fixtures, structures
and improvements leased or owned by Target and located on the Real Estate.
Closing. "Closing" shall mean the conference to be held at 10:00 A.M.,
Central Time, on the Closing Date at the offices of Quarles & Brady LLP, 411
East Wisconsin Avenue, Milwaukee, Wisconsin 53202, or such other time and place
as the parties may mutually agree to in writing, at which the transactions
contemplated by this Agreement shall be consummated.
Closing Date. "Closing Date" shall mean:
(a) that date which is two (2) business days after satisfaction
or waiver of all of the conditions set forth in Article VII and Article VIII of
this Agreement; or
(b) such other date as the parties may mutually agree to in
writing.
Code. "Code" shall mean the Internal Revenue Code of 1986, as amended,
and the regulations promulgated thereunder, as the same may be in effect from
time to time.
Confidentiality Agreement. "Confidentiality Agreement" shall mean the
letter agreement between Parent and Target dated on or about July 26, 2000.
Disclosure Schedule. "Disclosure Schedule" shall mean the Disclosure
Schedule dated the date of this Agreement delivered by Target to Parent
contemporaneously with the execution and delivery of this Agreement and as the
same may be amended from time to time after the date of this Agreement and prior
to the Closing Date in accordance with the terms of this Agreement.
Employment Agreement. "Employment Agreement" shall mean the form of
employment agreement between Target and each of Matthew Bergeron, William Thale,
Dan Baumgartner, Scott Davis, Steve Smith, Lou Primmer and Lauren Primmer, in
the form attached as Exhibit 2 hereto.
Equipment. "Equipment" shall mean all machinery, equipment, boilers,
furniture, fixtures, motor vehicles, furnishings, parts, tools, office equipment
and supplies, computers and other items of tangible personal property owned or
used by Target.
ERISA. "ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as the same may be in effect from time to time.
Escrow Account. "Escrow Account" shall mean the escrow account
established pursuant to the Escrow Agreement into which shares of Parent Common
Stock will be deposited in the manner described in Section 2.8(b)(v) and 2.8(f)
hereof.
Escrow Agent. "Escrow Agent" shall mean West Coast Trust Company,
Incorporated, Portland, Oregon, a national bank.
Escrow Agreement. "Escrow Agreement" shall mean the Escrow Agreement
among the Parent, the Target, the Representatives and the Escrow Agent providing
for the escrow of a portion of the shares of Parent Common Stock issuable
hereunder, in the form of Exhibit 3 attached hereto.
Exchange Act. "Exchange Act" shall mean the Securities Exchange Act of
1934, as the same may be in effect from time to time.
A-2
<PAGE> 50
Facilities. "Facilities" shall mean the facilities of Target at the
locations specified on the Disclosure Schedule, including the Real Estate and
Buildings at those sites.
HSR Act. "HSR Act" shall mean the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as the same may be in effect from time to time.
Intangible Assets. "Intangible Assets" shall mean any United States and
foreign patents, patent applications, trade names, trademarks, service marks,
trademark registrations, service mark registrations, trademark applications,
service mark applications, registered copyrights, copyright applications, know
how and proprietary software.
Knowledge of Parent. "Knowledge of Parent" shall mean, for purposes of
this Agreement, when any fact or matter is stated to be "to the Knowledge of
Parent" or words of similar import, the actual knowledge of the existence or
nonexistence of such fact or matter, after reasonable inquiry, by any of the
executive officers of Parent.
Knowledge of Target. "Knowledge of Target" shall mean, for purposes of
this Agreement, when any fact or matter is stated to be " to the Knowledge of
Target" or words of similar import, the actual knowledge of the existence or
nonexistence of such fact or matter, after reasonable inquiry, by any of the
Significant Holders or the other executive officers or directors of Target.
Law. "Law" shall mean any federal, state, local or other law, rule,
regulation or governmental requirement of any kind, and the rules, regulations
and orders promulgated thereunder by any regulatory agencies.
Leases. "Leases" shall mean the leases of the Facilities by Target, all
of which are identified on the Disclosure Schedule.
Lien. "Lien" shall mean, with respect to any asset: (a) any mortgage,
pledge, lien, covenant, lease or security interest; and (b) the interest of a
vendor or lessor under any conditional sale agreement, financing lease or other
title retention agreement relating to such asset.
Merger. "Merger" shall mean the merger of Acquisition with and into
Target pursuant to this Agreement and the OBCA.
Noncompetition Agreements. "Noncompetition Agreements" shall mean the
Noncompetition Agreements among each of the Significant Holders and each of the
Employees signing Employment Agreements on the one hand, and Parent and Target
on the other hand, each in the form of Exhibit 4 attached hereto.
OBCA. "OBCA" shall mean the Oregon Business Corporation Act, as the
same shall be in effect from time to time.
Opinion of Parent Counsel. "Opinion of Parent Counsel" shall mean the
opinion of Quarles & Brady LLP, counsel to Parent and Acquisition, including in
substance the provisions set forth on Exhibit 5 attached hereto.
Opinion of Target Counsel. "Opinion of Target Counsel" shall mean the
opinion of Stoel Rives LLP counsel to Target, including in substance the
provisions set forth on Exhibit 6 attached hereto.
Parent. "Parent" shall mean Parent Corp., a Wisconsin corporation.
Parent Common Stock. "Parent Common Stock" shall mean shares of Common
Stock, $.01 par value, of Parent.
Parent Companies. "Parent Companies" shall mean Parent and all
Subsidiaries of Parent.
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<PAGE> 51
Parent Material Adverse Effect. "Parent Material Adverse Effect" shall
mean any event, condition or fact which is, or reasonably may be expected to be,
materially adverse to the financial condition, properties, business, results of
operations or prospects of the Parent Companies taken as a whole, other than
events, conditions or facts arising out of general economic conditions unrelated
to the business in which any of the Parent Companies are engaged.
Parent Stock Value. "Parent Stock Value" shall mean the average closing
bid price of Parent Common Stock on the NASDAQ Stock Market on each of the ten
trading days ending three business days prior to the Closing. Such average shall
be rounded to the nearest one-thousandth.
Permits. "Permits" shall mean all permits, licenses, approvals,
qualifications, governmental authorizations, registrations and franchises which
Target has or holds, all of which are listed and briefly described on the
Disclosure Schedule.
Person. "Person" shall mean a natural person, corporation, trust,
partnership, limited liability company, governmental entity, agency or branch or
department thereof, or any other legal entity.
Predecessor Operations. "Predecessor Operations" shall mean the
engineering and design operations and business of Tyco, prior to the acquisition
of those operations by Target in January 2000.
Product Matters. "Product Matters" shall mean any and all liabilities
or damages or obligations of any kind relating to or arising out of services
rendered by Target or, to the Knowledge of Target, the Predecessor Operations,
whenever the dates of sale or delivery of such services or related deliverables
(provided that such dates are prior to the Effective Time) or the dates of
occurrence of any event which gives rise to such liabilities or obligations,
based on: (a) death, disease or injury to Person or property; and (b) express or
implied warranties, credit, refund, re-work or replacements or customer
concessions.
Professional Employees. "Professional Employees" shall mean the
engineers and designers who are employed by Target.
Proxy Statement. "Proxy Statement" shall mean the proxy
statement/prospectus of Target and Parent to be filed with the SEC as part of
the Registration Statement and to be distributed to the Target shareholders in
connection with the Target Special Meeting and the approval of the Merger by the
Shareholders, which shall also constitute the prospectus of Parent.
Real Estate. "Real Estate" shall mean the parcels of real property used
by Target, all of which are identified in the Disclosure Schedule.
Registration Statement. "Registration Statement" shall mean a
registration statement on Form S-4 to be filed under the Securities Act by
Parent in connection with the Merger for purposes of registering the shares of
Parent Common Stock to be issued in the Merger pursuant to Article II of this
Agreement.
Representatives. "Representatives" shall mean Matthew Bergeron, Steven
Smith and William Thale, who shall act as representatives of the Shareholders
under the Escrow Agreement.
SEC. "SEC" shall mean the Securities and Exchange Commission.
Securities Act. "Securities Act" shall mean the Securities Act of 1933,
as the same may be in effect from time to time.
Shareholders. "Shareholders" shall mean all Persons owning shares of
Target Common Stock on the relevant date.
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<PAGE> 52
Significant Holders. "Significant Holders" shall mean Matthew Bergeron,
Robert Praegitzer and William Thale.
Special Indemnity Matters. "Special Indemnity Matters" shall mean the
following:
(a) Liability for vacation pay, sick pay, holiday pay and similar
claims for or by Target employees ("Personal Time"):
(i) at June 30, 2000 in excess of the accrual therefor on the
Target Financial Statements; or
(ii) incurred after June 30, 2000 through Closing and not accrued
in accordance with Target's Personal Time policies set forth
in the Disclosure Schedule;
(b) Unrecorded liabilities of Target for terminations of Employee
Benefits Plans prior to the Closing;
(c) Product and service warranty claims against Target relating to
products delivered or services rendered prior to the Effective Time in excess of
$42,000, other than the Product Matters set forth in the Disclosure Schedule;
(d) Uncollectible accounts receivable of Target at Closing in excess
the reserve therefor on the Target Financial Statements;
(e) Severance benefits paid by Target as a result of separation from
service in connection with, or deemed to have occurred as a result of the change
in control in, the Merger (excluding those resulting from post-Merger
transactions);
(f) Liabilities of Target to Tyco arising prior to the Closing in
excess of the liabilities included in Target Debt, other than liabilities in the
ordinary course of business;
(g) Failure of Target to have obtained appropriate transfers of
intellectual property rights from Professional Employees;
(h) Failure of Target to maintain all required software or other
intellectual property licenses (excluding failures resulting from the Merger or
from post-merger transactions); and
(i) Target transaction expenses in excess of the amount in Section 4.14
hereof.
Special Meeting. "Special Meeting" shall mean a special meeting of the
Target Shareholders for the purpose of approving the Merger, this Agreement and
the transactions contemplated by this Agreement and for such other purposes as
may be necessary or desirable.
Subsidiary. "Subsidiary" shall mean any corporation, at least a
majority of the outstanding capital stock of which (of any class or classes,
however designated, having ordinary voting power for the election of at least a
majority of the board of directors of such corporation) shall at the time be
owned by the relevant Person directly or through one or more corporations which
are themselves Subsidiaries.
Target. "Target" shall mean Espresso Corporation, an Oregon
corporation.
Target Common Stock. "Target Common Stock" shall mean all of the issued
and outstanding shares of common stock, without a stated par value, of Target.
Target Debt. "Target Debt" shall mean the outstanding amount of any
debt or other obligations of Target to Bank of America N.A.; plus any other
interest-bearing debt of Target to others.
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<PAGE> 53
Target Material Adverse Effect. "Target Material Adverse Effect" shall
mean any event, condition or fact which is, or reasonably may be expected to be,
materially adverse to the financial condition, properties, business, results of
operations or prospects of Target or the Target Subsidiaries taken as a whole,
other than events, conditions or facts arising out of general economic
conditions unrelated to the business in which Target and the Target Subsidiaries
are engaged.
Target Purchase Plans. "Target Purchase Plans" shall mean the Target's
Incentive Stock Plan effective December 28, 1999 and the Target's Founders'
Stock Plan effective December 28, 1999.
Target Subsidiaries. "Target Subsidiaries" shall mean those
Subsidiaries of Target identified on the Disclosure Schedule.
Tyco. "Tyco" shall mean Praegitzer Industries Scotland (B.V.I.), Inc.
and Tyco Printed Circuit Group LP, together with their affiliates.
Voting Agreement. "Voting Agreement" shall mean the Voting Agreement of
each of the Significant Holders, for the benefit of Parent, in the form of
Exhibit 7 attached to this Agreement.
Other Terms. The following terms shall have the meanings specified in
the following noted Sections of this Agreement:
<TABLE>
<CAPTION>
TERM SECTION
---- -------
<S> <C>
CERCLA 4.24
Effective Time 2.2
Employee Benefit Plans 4.12
Environmental Claim 4.22
Environmental Laws 4.22
Environmental Permits 4.22
Exchange Agent 2.8
Exchange Fund 2.8
Exchange Rate 2.6
Existing Contracts 4.9
Existing Liens 4.5
Existing Litigation 4.6
Existing Plans 4.12
Hazardous Material 4.22
Indebtedness 4.9
Indemnified Parties 3.14
Other Proposal 3.10
Other Transaction 3.10
Parent SEC Reports 5.6
Release 4.22
Surviving Corporation 2.1
Target Certificates 2.8
Target Financial Statements 4.7
</TABLE>
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<PAGE> 54
ARTICLE II
THE MERGER
2.1 The Merger. At the Effective Time and upon and subject to the terms
and conditions of this Agreement, Acquisition will be merged with and into
Target, which shall be the surviving corporation in the Merger (the "Surviving
Corporation") and shall continue to be governed by the Laws of the State of
Oregon, and the separate existence of Acquisition shall thereupon cease. The
Merger shall be pursuant to the provisions of, and shall be with the effects
provided in, the OBCA.
2.2 Effective Time. Subject to the terms and conditions of this
Agreement, on the Closing Date, Acquisition and Target will cause the Articles
of Merger to be executed, delivered and filed as provided in the OBCA. The
Merger shall become effective at the time of the filing of the Articles of
Merger with the Oregon Secretary of State or at such later time as Parent and
Target may agree and as may be set forth in the Articles of Merger. The date and
time on which the Merger shall become effective is referred to in this Agreement
as the "Effective Time".
2.3 Articles of Incorporation of Surviving Corporation. The Articles of
Incorporation of Target as in effect immediately prior to the Effective Time
shall be the Articles of Incorporation of the Surviving Corporation until
amended in accordance with Law.
2.4 Bylaws of Surviving Corporation. The Bylaws of Target as in effect
immediately prior to the Effective Time shall be the Bylaws of the Surviving
Corporation until amended in accordance with Law.
2.5 Directors and Officers of Surviving Corporation. The duly qualified
and acting directors and officers of Acquisition immediately prior to the
Effective Time shall be the directors and officers of the Surviving Corporation,
to hold office as provided in the Bylaws of the Surviving Corporation.
2.6 Conversion of Target Common Stock.
(a) Conversion. At the Effective Time, by virtue of the
Merger and without any action on the part of Acquisition, Target, Parent or the
holders of Target Common Stock:
(i) Each share of Target Common Stock issued and
outstanding at the Effective Time, except as provided in subsection (ii) below,
shall be converted into shares of Parent Common Stock on the terms and
conditions set forth in this Agreement subject to the provisions of Section
2.8(e) of this Agreement concerning cash being paid for fractional shares at the
rate of the stated number of shares of Parent Common Stock for each share of
Target Common Stock, determined by the following equation (the "Exchange Rate"):
(A) $20,550,000 (Twenty million five
hundred fifty thousand dollars); divided by
(B) the result of the calculation (I)
the number of outstanding shares of Target Common Stock plus (II) the number of
shares of Target Common Stock issuable under options, subscriptions or other
outstanding rights to purchase Target Common Stock; further divided by
(C) the Parent Stock Value.
(ii) Any shares of Target Common Stock that are
owned by Target at the Effective Time shall be canceled and retired and cease
to exist and no Parent Common Stock or other consideration shall be issued or
delivered in exchange therefor. Any shares of Target Common Stock as to which
the holders have perfected dissenters' rights under the OBCA shall be treated
as provided in Section 2.11 of this Agreement.
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<PAGE> 55
(b) Adjustment. In the event that, prior to the Effective
Time, there is a reclassification, stock split or stock dividend with respect to
outstanding Parent Common Stock or outstanding Target Common Stock, appropriate
and proportionate adjustment, if any, shall be made to the Exchange Ratio.
(c) Escrow. A portion of the consideration is payable to the
Escrow Agent under the Escrow Agreement, and therefore the ultimate
consideration to be retained by the Target Shareholders after payment from the
Escrow Agreement is subject to reduction as a result of the indemnity provisions
of Section 9.3 of this Agreement and the operation of the Escrow Agreement.
2.7 Conversion of Acquisition Common Stock. At the Effective Time, and
without any action on the part of the holders of common stock of Acquisition,
each share of common stock of Acquisition issued and outstanding at the
Effective Time shall be converted into one (1) share of Target Common Stock.
2.8 Exchange of Target Certificates.
(a) Exchange Agent. As of the Effective Time, Parent shall
deposit, or shall cause to be deposited, with the corporate trust department of
Firstar Bank NA, Milwaukee, Wisconsin, or such other bank or trust company
designated by Parent and approved by Target, which approval shall not be
unreasonably withheld (the "Exchange Agent"), for the benefit of the holders of
shares of Target Common Stock, for exchange in accordance with this Article II
of this Agreement through the Exchange Agent, certificates representing the
shares of Parent Common Stock (such certificates for shares of Parent Common
Stock, together with any dividends or distributions with respect thereto and
together with any cash for fractional share interests made pursuant to Section
2.8(e) of this Agreement, being hereinafter referred to as the "Exchange Fund")
issuable pursuant to Section 2.6 of this Agreement in exchange for outstanding
shares of Target Common Stock.
(b) Exchange Procedures.
(i) At or promptly after the Effective Time,
Parent shall (x) cause the Exchange Agent to mail to each holder of record of a
certificate or certificates which immediately prior to the Effective Time
represented outstanding shares of Target Common Stock (the "Target
Certificates"): (A) a letter of transmittal which shall be in such form and have
such provisions as Parent may reasonably specify; and (B) instructions to effect
the surrender of the Target Certificates in exchange for certificates
representing shares of Parent Common Stock; (y) direct the Exchange Agent to
issue certificates representing that number of whole shares of Parent Common
Stock to which each holder of uncertificated shares of Target Common Stock (as
reflected on the books and records of Target's transfer agent) who has
previously filed with Target or the Exchange Agent a Form W-9 is entitled
pursuant to the provisions of this Article II of this Agreement, without any
action on the part of such holders, plus any cash in lieu of any fractional
share interest in accordance with Section 2.8(e) of this Agreement, subject to
the provisions of Section 2.8(b)(v) of this Agreement; and (z) provide each
holder of uncertificated shares who has not previously filed a Form W-9 with a
Form W-9 relating to the exchange. Upon delivery of any such executed Form W-9,
the Exchange Agent shall provide certificates for Parent Common Stock as
provided in Section 2.8(b)(i)(y) hereof.
(ii) Upon surrender of a Target Certificate for
cancellation to the Exchange Agent together with such letter of transmittal,
duly executed, and with such other documents as the Exchange Agent may
reasonably require, the holder of such Target Certificate shall be entitled to
receive, and Parent shall cause the Exchange Agent to promptly deliver in
exchange therefor, a certificate representing that number of whole shares of
Parent Common Stock to which such holder is entitled in respect of such Target
Certificate pursuant to the provisions of this Article II of this Agreement,
plus any cash in lieu of any fractional share interest in accordance with
Section 2.8(e) of this Agreement, and the Target Certificate so surrendered
shall forthwith be canceled, subject to the provisions of Section 2.8(b)(v) of
this Agreement. Provided, however, that fractional share interests of any one
holder shall be aggregated to maximize the number of whole shares of Parent
Common Stock to be issued and minimize the fractional interests to be paid in
cash as provided in Section 2.8(e) of this Agreement.
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(iii) In the event of a transfer of ownership of
shares of Target Common Stock which is not registered in the transfer records of
Target, a certificate representing the proper number of shares of Parent Common
Stock, and any cash in lieu of any fractional share interests in accordance with
Section 2.8(e) of this Agreement, shall be delivered to the transferee if the
Target Certificate which represented such shares of Target Common Stock is
presented to the Exchange Agent, accompanied by all documents required to
evidence and effect such transfer and by evidence that any applicable stock
transfer taxes have been paid.
(iv) Until surrendered as contemplated by this
Section 2.8 of this Agreement, each Target Certificate shall be deemed at all
times after the Effective Time to represent only the right to receive upon
surrender a certificate representing shares of Parent Common Stock and cash in
lieu of any fractional share interest as contemplated by Section 2.8(e) of this
Agreement, or in respect of dissenting shares, the consideration determined
pursuant to Section 2.11 of this Agreement.
(v) For purposes of making delivery of shares and
certificates therefor under this Agreement, the Exchange Agent shall: (A)
deliver to the Escrow Agent certificates for that whole number of shares of
Parent Common Stock representing as close as possible to 15% of the Parent
Common Stock issuable to each Shareholder pursuant to this Agreement; and (B)
deliver to each Shareholder a certificate for the remaining shares of Parent
Common Stock to which such Shareholder is entitled plus any cash payable in lieu
of any fractional share interest. The deliveries to the Escrow Agent and the
Shareholders required under this section shall satisfy all obligations to
deliver such consideration to the Shareholders under this Agreement.
(c) Distributions with Respect to Unexchanged Shares. No
dividends or other distributions declared or made after the Effective Time with
respect to Parent Common Stock with a record date after the Effective Time shall
be paid to the holder of any unsurrendered Target Certificate with respect to
the shares of Parent Common Stock represented thereby, and no cash payment in
lieu of a fractional share shall be paid to any such holder pursuant to Section
2.8(e) of this Agreement, until the holder of such Target Certificate has
surrendered such Target Certificate to the Exchange Agent. Subject to the effect
of any applicable Law, following the surrender of any such Target Certificate,
there shall be paid to the holder of the certificate representing whole shares
of Parent Common Stock issued in exchange for the surrendered Target
Certificates, without interest: (i) promptly, the amount of any cash payable
with respect to a fractional share interest to which such holder is entitled
pursuant to Section 2.8(e) of this Agreement and the amount of dividends or
other distributions with a record date after the Effective Time theretofore paid
with respect to such whole shares of Parent Common Stock; and (ii) at the
appropriate payment date, the amount of dividends or other distributions with a
record date after the Effective Time but prior to surrender and a payment date
occurring after surrender payable with respect to such whole shares of Parent
Common Stock.
(d) No Further Rights in Target Common Stock. All shares of
Parent Common Stock issued upon conversion of the Target Common Stock in
accordance with the terms of this Agreement (and any cash paid pursuant to
Section 2.8(e) of this Agreement) shall be deemed to have been issued (and paid)
in full satisfaction of all rights pertaining to the Target Common Stock.
(e) No Fractional Shares. No fractional shares of Parent
Common Stock shall be issued in the Merger. All fractional share interests of a
holder of more than one Target Certificate at the Effective Time shall be
aggregated. If a fractional share interest results after such aggregation, each
holder of a fractional share interest shall be paid an amount in cash equal to
the product obtained by multiplying such fractional share interest by the Parent
Stock Value. Promptly after the determination of the amount of cash, if any, to
be paid to holders of fractional share interests, the Exchange Agent shall
notify Parent and Parent shall deliver such amounts to such holders subject to
and in accordance with the terms of Section 2.8(c) of this Agreement.
(f) The aggregate shares of Parent Common Stock described in
Section 2.2(b)(v) shall be deposited into the Escrow Account and held by the
Escrow Agent as described in the Escrow Agreement for purposes of satisfaction
of indemnification obligations under Section 9.3 hereof. The value of Parent
Common Stock for purposes of such indemnification obligation settlements shall
be the Parent Stock Value. Upon the earlier to occur of the date that the first
audit of Parent's financial statements following the Closing is completed or the
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one-year anniversary date of the Closing Date, the shares held by the Escrow
Agent, less an appropriate number of holdback shares to cover specific
unresolved claims, shall be delivered to the Shareholders.
(g) Termination of Exchange Fund. Any portion of the Exchange
Fund which remains undistributed to the Target Shareholders after six (6) months
after the Effective Time shall be delivered to Parent, upon demand, and any
Target Shareholders who have not theretofore complied with this Article II of
this Agreement shall thereafter look only to Parent for payment of their claim
for shares of Parent Common Stock, any cash in lieu of fractional share
interests and any dividends or distributions with respect to Parent Common
Stock.
(h) No Liability. Neither the Exchange Agent nor any party to
this Agreement shall be liable to any Target Shareholder for any shares of
Target Common Stock or Parent Common Stock (or dividends or distributions with
respect thereto) or cash delivered to a public official pursuant to any
abandoned property, escheat or similar Law.
(i) Withholding Rights. Parent shall be entitled to deduct and
withhold from the consideration otherwise payable pursuant to this Agreement to
any Target Shareholder such amounts as Parent is required to deduct and withhold
with respect to the making of such payment under the Code, or any provision of
state, local or foreign tax Law. To the extent that amounts are so withheld by
Parent, such withheld amounts shall be treated for all purposes of this
Agreement as having been paid to the Target Shareholder in respect of which such
deduction and withholding was made by Parent.
2.9 Stock Transfer Books. At the Effective Time, the stock transfer
books of Target shall be closed and there shall be no further registration of
transfers of shares of Target Common Stock thereafter on the records of Target.
From and after the Effective Time, the holders of Target Certificates
outstanding immediately prior to the Effective Time shall cease to have any
rights with respect to such shares of Target Common Stock except as otherwise
provided in this Agreement or by Law.
2.10 Reorganization; Pooling. The parties intend that this Agreement be
a plan of reorganization within the meaning of Section 368 of the Code and that
the Merger be a tax-free reorganization under Section 368 of the Code and that
the Merger qualify for pooling of interests accounting treatment.
2.11 Dissenting Shares. Any shares of Target Common Stock as to which
dissenters' rights are perfected under the OBCA shall be treated in accordance
therewith, notwithstanding any other provision of this Agreement.
2.12 Voting Agreements. Each of the Significant Holders (a) has
heretofore delivered to Parent a duly executed Voting Agreement, and (b) shall
comply with the terms thereof.
2.13 Target Purchase Plans. At the Effective Time, each outstanding
share of Target Common Stock under the Target Purchase Plans, whether vested or
unvested or restricted or unrestricted, shall be deemed to constitute such
number of shares of Parent Common Stock as one share of Target Common Stock is
converted into hereunder. Parent will maintain Target's accounting and tax
treatment for share issuances under the Target Purchase Plans unless other
accounting or tax treatment is required by GAAP or the Code.
2.14 Appointment of Representatives. The Representatives are hereby
appointed, with power of substitution, as representatives of the Shareholders
for purposes of this Agreement and the Escrow Agreement. Shareholder approval of
this Agreement shall include confirmation of the authority of the
Representatives. Parent, Acquisition and Target may rely upon the acts of the
Representatives for all purposes permitted hereunder and under the Escrow
Agreement.
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ARTICLE III
OTHER AGREEMENTS
3.1 Confidentiality. Target and Parent agree that the provisions of the
Confidentiality Agreement shall remain in full force and effect; provided that
at the Effective Time, the Confidentiality Agreement shall be deemed to have
terminated without further action by the parties.
3.2 Proxy Statement and Registration Statement. Parent and Target will
prepare and file with the SEC the Registration Statement and the Proxy Statement
as soon as reasonably practicable after the date of this Agreement. Parent and
Target shall use reasonable best efforts to cause the Registration Statement to
be declared effective under the Securities Act as promptly as practicable after
such filing. Parent and Target shall also take such action as may be reasonably
required to cause the shares of Parent Common Stock issuable pursuant to the
Merger to be registered or to obtain an exemption from registration or
qualification under applicable state "blue sky" or securities Laws; provided,
however, that Parent shall not be required to qualify as a foreign corporation
or to file any general consent to service of process under the Laws of any
jurisdiction or to comply with any other requirements deemed by Parent to be
unduly burdensome. Each party to this Agreement will furnish to the other
parties all information concerning itself as each such other party or its
counsel may reasonably request and which is required or customary for inclusion
in the Proxy Statement and the Registration Statement.
3.3 Approval of Target Shareholders. Target shall, as soon as
reasonably practicable: (i) take all steps necessary duly to call, give notice
of, convene and hold the Special Meeting; (ii) distribute the Proxy Statement to
the Shareholders in accordance with applicable federal and state Law and its
Articles of Incorporation and Bylaws; (iii) recommend to the Shareholders the
approval of this Agreement and the transactions contemplated by this Agreement
and such other matters as may be submitted to the Shareholders in connection
with this Agreement; and (iv) cooperate and consult with Parent with respect to
each of the foregoing matters. The Target Special Meeting shall be held on such
date as is mutually determined by Target and Parent.
3.4 HSR Act. Each party shall: (a) file or cause to be filed with the
Federal Trade Commission and the Department of Justice any notifications
required to be filed under the HSR Act; and (b) use reasonable best efforts to
make such filings promptly and to respond promptly to any request for additional
information made by either of such agencies.
3.5 Access.
(a) Access to Target. Upon reasonable notice, Target shall
afford to the officers, employees, investment bankers, agents, accountants,
attorneys and representatives of Parent full access to all of its books,
records, financial information, facilities, key personnel and other documents
and materials; provided that such access shall be upon reasonable notice and
during normal business hours of Target.
(b) Access to Parent Companies. Upon reasonable notice, Parent
shall, and shall cause the other Parent Companies to, afford to the officers,
employees, investment bankers, agents, accountants, attorneys and
representatives of Target full access to all of its books, records, financial
information, facilities, key personnel and other documents and materials;
provided that such access shall be upon reasonable notice and during normal
business hours of the Parent Companies.
3.6 Disclosure Schedule. Contemporaneously with the execution and
delivery of this Agreement, Target is delivering to Parent the Disclosure
Schedule. The Disclosure Schedule is deemed to constitute an integral part of
this Agreement and to modify the representations, warranties, covenants or
agreements of Target contained in this Agreement to the extent that such
representations warranties, covenants or agreements expressly refer to the
Disclosure Schedule.
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3.7 Conditions to Merger. Each party to this Agreement shall use
reasonable best efforts to: (a) to the extent within its control, cause all of
its representations and warranties contained in this Agreement to be true and
correct in all respects on the Closing Date with the same force and effect as if
such representations and warranties had been made on the Closing Date; (b) take
all reasonable actions necessary to comply promptly with all legal requirements
which may be imposed on it with respect to the Merger (including making all
filings and requests in connection with approvals of or filings with any
governmental entity as described in Sections 7.7 and 8.7 of this Agreement and
furnishing all information required in connection therewith); (c) promptly
cooperate with and furnish information to the other parties in connection with
any such requirements imposed upon any of them in connection with the Merger;
(d) contest any legal proceedings or other actions seeking to restrain, enjoin
or frustrate the Merger; (e) execute any additional documents or instruments and
take any additional actions reasonably necessary or appropriate to consummate
the transactions contemplated by this Agreement; and (f) take all reasonable
actions necessary to obtain (and cooperate with the other parties in obtaining)
any consent, authorization, order or approval of, or any exemption by, any
governmental entity or other public or private Person, required to be obtained
or made by the parties to this Agreement in connection with the Merger or the
taking of any action contemplated thereby or by this Agreement.
3.8 Deliveries of Information; Consultation. From time to time prior to
the Effective Time:
(a) Deliveries by Target. Target shall furnish promptly to
Parent: (i) the monthly financial statements of Target (as prepared by Target in
accordance with its normal accounting procedures) promptly after such financial
statements are available; (ii) a summary of any action taken by the Board of
Directors, or any committee thereof, of Target; and (iii) all other information
concerning the business and properties of Target as Parent may reasonably
request.
(b) Deliveries by Parent. Parent shall promptly furnish to
Target: (i) a copy of each report, schedule and other document filed by Parent
with the SEC pursuant to the requirements of federal securities Laws promptly
after such documents are available; (ii) the quarterly consolidated financial
statements of the Parent Companies (as prepared by Parent in accordance with its
normal accounting procedures) promptly after such financial statements are
available; and (iii) all other information concerning the business and
properties of any of the Parent Companies as Target may reasonably request.
(c) Consultation. Target shall confer and consult with
representatives of the Parent Companies on a regular basis to report on
operational matters and the general status of ongoing business operations of
Target.
(d) Litigation. Each party to this Agreement shall provide
prompt notice to the other parties of any known litigation, arbitration,
proceeding, governmental investigation, citation or action of any kind which may
be commenced, threatened or proposed by any Person concerning the legality,
validity or propriety of the transactions contemplated by this Agreement. If any
such litigation is commenced against any party to this Agreement, the parties
shall cooperate in all respects in connection with such litigation and Parent
shall have the right to assume the defense thereof at its cost and expense and,
if Parent does assume such defense, it shall confer regularly with Target and
shall not settle any such litigation without the prior consent of Target, which
consent shall not be unreasonably withheld.
3.9 Affiliates. Within 30 days after the date of this Agreement, Target
shall identify in a letter to Parent all Persons who are and, to its knowledge
who will be at the Closing Date, Affiliates of Target. Target shall advise its
Affiliates of the resale restrictions imposed by applicable securities Laws and
required to cause the Merger to qualify for pooling-of-interests accounting
treatment, and shall use its best efforts to obtain from its Affiliates an
executed Affiliate Letter and shall obtain an executed Affiliate Letter from any
Person who becomes an Affiliate of that Person after the date of this Agreement
and on or prior to the Effective Time.
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3.10 Other Transactions.
(a) Definitions. As used in this Agreement, the following
terms shall have the meanings specified:
(i) "Other Transaction" shall mean any of the
following, other than the Merger as contemplated by this Agreement: (A) a
merger, consolidation, share exchange, exchange of securities, reorganization,
business combination or other similar transaction involving the Target; (B) a
sale, lease, transfer or other disposition of all or a significant portion of
the total assets of Target in a single transaction or series of related
transactions; (C) a sale of, or tender offer or exchange offer for, or
acquisition by any Person or group of beneficial owners of, 15% or more of the
outstanding shares of capital stock of Target in a single transaction or series
of related transactions; or (D) a public announcement of a proposal, plan,
intention or agreement to do any of the foregoing.
(ii) "Other Proposal" shall mean any request for
information, expression of interest, inquiry, proposal or offer relating in any
manner to an Other Transaction.
(b) Termination of Discussions. Target shall immediately cease
and cause to be terminated all existing discussions and negotiations, if any,
with any parties conducted prior to the date of this Agreement with respect to
any Other Transaction, except that Target may notify such other parties that the
discussions and negotiations are terminated.
(c) Non Solicitation. Target shall not, and shall not permit
its officers, directors, employees, Shareholders, agents or other
representatives of any of Target or a Target Subsidiary (including, without
limitation, any investment banker, attorney or accountant retained or engaged by
Target) to solicit, initiate, facilitate, encourage, negotiate with respect to,
provide information with respect to, engage in, discuss or agree to, any Other
Proposal or any Other Transaction.
3.11 NASDAQ Listing. Parent shall use its reasonable best efforts to
provide appropriate notice to cause the shares of Parent Common Stock to be
issued or reserved for issuance pursuant to this Agreement to qualify for
quotation on the NASDAQ Stock Market.
3.12 Public Announcements. Subject to Parent's disclosure obligations
imposed by Law or by the rules and regulations of the NASDAQ Stock Market,
Target, Acquisition and Parent will cooperate with each other in the development
and distribution of all news releases and other public information disclosures
with respect to this Agreement or any of the transactions contemplated hereby
and, except as may be required by Law, shall not issue any public announcement
or statement with respect thereto prior to consultation with the other parties.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF TARGET
Target hereby represents and warrants to Parent and Acquisition that,
except as set forth in the Disclosure Schedule under a caption referring to the
appropriate section(s):
4.1 Organization; Business.
(a) Organization. Target is a corporation duly and validly
organized and existing under the Laws of the State of Oregon. Target is
qualified to do business as a foreign corporation and is in good standing in all
other jurisdictions where the ownership or leasing of property or the conduct of
its business requires qualification as a foreign corporation by it, except where
the failure to so qualify would not have a Target Material Adverse Effect.
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(b) Subsidiaries. Target has no subsidiaries other than the
Target Subsidiaries which are listed in the Disclosure Schedule. Each of the
Target Subsidiaries is a corporation duly and validly organized and existing and
in good standing under the laws of its jurisdiction of incorporation. Target
owns the entire equity interest in each of the Target Subsidiaries.
(c) Corporate Power and Authority; Permits. Each of Target and
the Target Subsidiaries has: (a) full corporate power and authority necessary to
carry on its business as it is now conducted and to own, lease and operate its
assets and properties; and (b) all material franchises, permits, licenses,
approvals, authorizations and registrations necessary to carry on its business
as it is now conducted and to own, lease and operate its assets and properties,
except where the absence of any such franchises, permits, licenses, approvals,
authorizations or registrations would not have a Target Material Adverse Effect.
(d) Properties. Target or Target Subsidiary owns or has the
right to use all property, real or personal, tangible or intangible which are
utilized in its business as it is now being conducted.
4.2 Capitalization.
(a) Capitalization of Target. The entire authorized capital
stock of Target consists of 25,000,000 shares of Common Stock, without a stated
par value, of which 2,296,550 shares are issued and outstanding. The outstanding
shares include an aggregate of 964,550 shares under the Target Purchase Plans.
No shares of any other class are outstanding. Target has reserved 13,450 shares
of Common Stock for issuance to new employees under the Target Purchase Plans.
The Shareholders, and the number of shares of Target Common Stock owned by each,
is accurately set forth on the Disclosure Schedule.
(b) Outstanding Capital Stock; No Subsidiaries. All of the
outstanding capital stock of Target is duly authorized, validly issued, fully
paid and nonassessable. There are no options, warrants, subscriptions,
conversion rights or other rights to subscribe for or purchase, or other
contracts with respect to, any capital stock of Target or any Target Subsidiary.
4.3 Authorization; Enforceability. The execution, delivery and
performance of this Agreement by Target and all of the documents and instruments
required by this Agreement to be executed and delivered by Target are within the
corporate power of Target and: (a) have been duly authorized by the Board of
Directors of Target; and (b) upon the approval of the Target Shareholders, shall
be duly authorized by all necessary corporate action by Target. This Agreement
is, and the other documents and instruments required by this Agreement to be
executed and delivered by Target will be, when executed and delivered by Target,
the valid and binding obligations of Target, enforceable against Target in
accordance with their respective terms, except as the enforcement thereof may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar Laws generally affecting the rights of creditors and subject to general
equity principles.
4.4 No Violation or Conflict. Subject to the receipt of the approvals
and consents described in Section 8.7 of this Agreement or as set forth in the
Disclosure Schedule, the execution, delivery and performance of this Agreement
by Target do not and will not conflict with, violate or give rise to a
burdensome condition or a third party's right adverse to the Target under: (a)
any Law or the Articles of Incorporation or Bylaws of Target or any Target
Subsidiary; or (b) any Existing Contract, except where such conflict or
violation would not have a Target Material Adverse Effect.
4.5 Title to Assets; Accounts. Target owns good and valid title to the
assets and properties which it owns or purports to own, free and clear of any
and all Liens affecting material assets and properties of Target, except those
Liens identified on the Disclosure Schedule as "Existing Liens" and Liens for
taxes not yet due and payable and such other Liens or minor imperfections of
title, if any, which do not materially detract from the value or interfere with
the present use of the affected asset or which individually or in the aggregate
would not have a Target Material Adverse Effect. All bank, investment and other
financial accounts of Target are identified on the Disclosure Schedule, together
with a complete listing of the persons with authority to act on Target's behalf
with respect to such accounts.
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4.6 Litigation; Product Matters. Except for the litigation
identified on the Disclosure Schedule as "Existing Litigation": (a) there is no
litigation, arbitration, proceeding, governmental investigation, citation or
action of any kind pending or, to the Knowledge of Target, proposed or
threatened, or resolved (i) since January 1, 2000, against or relating to Target
or any Target Subsidiary involving an amount in excess of $50,000 or (ii) since
July 1, 1996, against Target, any Target Subsidiary or, to the Knowledge of
Target, the Predecessor Operations involving product liability claims, whether
or not insured; (b) there are no actions, suits or proceedings pending or, to
the Knowledge of Target, proposed or threatened, against Target or any Target
Subsidiary by any Person which question the legality, validity or propriety of
the transactions contemplated by this Agreement. All Product Matters are listed
and briefly described on the Disclosure Schedule.
4.7 Financial Statements; Books and Records; Accounting Matters.
(a) Financial Statements. The audited consolidated balance
sheet at June 30, 2000 and the unaudited interim financial statements of Target
for the eight month period ended August 31, 2000, copies of which have been
provided to Parent (the "Target Financial Statements"), have been, and future
Target financial statements will be prepared in accordance with generally
accepted accounting principles applied on a consistent basis (except as may be
indicated therein or in the notes thereto and except with respect to unaudited
interim statements) and fairly present the financial position of Target as of
the dates thereof and the results of its operations and changes in cash flows
for the periods then ended, subject, in the case of the unaudited interim
financial statements, to normal year-end and audit adjustments and any other
adjustments described therein.
(b) Accounting Records. The accounting books and records of
Target; (i) are in all material respects correct and complete; (ii) are current
in a manner consistent with past practice; and (iii) have recorded therein all
the properties and assets and liabilities of Target.
(c) Contingent and Undisclosed Liabilities. Except pursuant to
the deposit and collection of checks in the ordinary course of business or as
specifically disclosed in the Target Financial Statements, the Target has not
guaranteed or become a surety or is not otherwise similarly contingently liable
for the obligation of any other person. To Target's Knowledge, after due
inquiry, there are no material claims of any nature which are not disclosed
pursuant to this Agreement, including but not limited to Product Matters,
whether existing or inchoate.
(d) Pooling. Neither Target nor, to the Knowledge of Target,
any of the Affiliates of Target, has taken or agreed to take or will take any
action that would prevent the Merger being accounted for as a pooling of
interests for financial accounting purposes in accordance with generally
accepted accounting principles and the rules, regulations and interpretations of
the SEC.
(e) Target Debt. The amount of Target Debt at the date hereof
does not, and at Closing will not, exceed $3.1 million. No payments or amounts
are due from Target to Tyco other than payments in the ordinary course of the
Target's business.
4.8 Absence of Certain Changes. Except as set forth on the Disclosure
Schedule since June 30, 2000, there has not been any:
(a) Target Material Adverse Effect;
(b) transactions by Target outside the ordinary course of
business, except for the transactions contemplated by this Agreement; or
(c) declaration or payment or setting aside the payment of any
dividend or any distribution in respect of the capital stock of Target (except
for regular quarterly cash dividends on outstanding shares of Target Common
Stock which have been publicly announced by Target) or any direct or indirect
redemption, purchase or other acquisition of any such stock by Target, other
than the return of unvested or restricted stock under the Target Purchase Plans.
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4.9 Existing Contracts. The contracts identified on the Disclosure
Schedule by reference to this section ("Existing Contracts") are the only
contracts or agreements, written or oral, (including any amendments,
supplements, waivers or other modifications thereto) to which Target or a Target
Subsidiary is a party or by which Target or a Target Subsidiary is bound and
which constitute:
(a) a lease of, or agreement to purchase or sell, any capital
assets involving an annual amount in excess of $100,000;
(b) any union labor contracts;
(c) any management, consulting, employment, personal service,
agency or other contracts or contracts providing for employment or rendition of
services and which: (i) are in writing; or (ii) create other than an at will
employment relationship; or (iii) provide for any commission, bonus, profit
sharing, incentive, retirement, consulting or additional compensation other than
pursuant to the Existing Plans;
(d) an agreement for the storage, transportation, treatment or
disposal of any hazardous waste or hazardous by-product;
(e) any agreements or notes evidencing any Indebtedness; as
used in this Agreement, the term "Indebtedness" shall mean any liability or
obligation of Target or a Target Subsidiary, whether primary or secondary or
absolute or contingent: (i) for borrowed money; or (ii) evidenced by notes,
bonds, debentures or similar instruments; or (iii) secured by Liens on any
assets of Target or a Target Subsidiary.
(f) an agreement by Target or a Target Subsidiary which
currently restricts its ability to compete in any business or in any
geographical area;
(g) an agreement restricting the right of Target or a Target
Subsidiary to use or disclose any information in its possession, other than
confidentiality agreements relating to potential acquisitions by Target;
(h) any agreement or arrangement with any Affiliate of Target;
(i) a partnership, joint venture or similar arrangement;
(j) a license or other right in intellectual property (other
than licenses for off-the-shelf software);
(k) any lease of real estate, or buildings or portions
thereof; or
(l) any other agreement which: (i) involves an annual amount
in excess of $100,000; or (ii) is not in the ordinary course of business.
Target has performed in all material respects each material term,
covenant and condition of each Existing Contract which is to be performed by it
at or before the date hereof. Each of the Existing Contracts is in full force
and effect and constitutes the legal and binding obligation of Target and, to
the Knowledge of Target, of the other parties thereto.
4.10 Appraisals. All appraisals of the Facilities, or any of the assets
of Target, a Target Subsidiary or the Predecessor Operations, within the prior
five years and which are in the possession of Target, a Target subsidiary or the
Shareholders, or their agents, are described in the Disclosure Schedule. Target
has provided Parent with true and complete copies of each of those appraisals.
4.11 Insurance Policies. Target currently maintains valid insurance as
is reasonably prudent for Target, Target Subsidiaries and its businesses. All
insurance policies of Target are listed, and the coverage thereof briefly
described, in the Disclosure Schedule. No property damage, personal injury or
liability claims have been made, or
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are pending, against Target that are not covered by insurance. Within the past
two (2) years, no insurance company has canceled any insurance (of any type)
maintained by Target or, to the Knowledge of Target, maintained by the
Predecessor Operations.
4.12 Employee Benefit Plans.
(a) Definition. As used in this Agreement, the term "Employee
Benefit Plans" shall mean any pension plan, profit sharing plan, bonus plan,
incentive compensation plan, stock ownership plan, stock purchase plan, stock
option plan, stock appreciation plan, employee welfare plan, retirement plan,
deferred compensation plan, fringe benefit program, insurance plan, severance
plan, disability plan, health care plan, sick leave plan, death benefit plan,
defined contribution plan, or any other plan or program to provide retirement
income, fringe benefits or other benefits to former or current employees of
Target or a Target Subsidiary.
(b) Existing Plans. Except for the Employee Benefit Plans of
Target identified on the Disclosure Schedule (the "Existing Plans"), Target and
the Target Subsidiaries do not maintain, nor are they bound by, any Employee
Benefit Plan. All of the Existing Plans are, to the extent applicable, in
compliance in all material respects with ERISA, the Code and all other
applicable Laws. All of the Existing Plans which are intended to meet the
requirements of Section 401(a) or 403(a) of the Code have been determined to be
"qualified" within the meaning of the Code, and, to the Knowledge of Target,
there are no facts which would adversely affect the qualified status of any of
such Existing Plans. Each Existing Plan has been administered in all material
respects in accordance with its terms and is in compliance in all material
respects with all applicable Laws. Any Employee Benefit Plan that is not an
Existing Plan that has been terminated was done so in compliance in all material
respects with all applicable Laws, and, to the Knowledge of Target, there is no
basis for further liability or obligation of Target pursuant to any past
Employee Benefit Plan.
(c) Certain Matters. With respect to each Existing Plan which
is subject to either Title IV of ERISA or Section 412 of the Code, there is no
amount of unfunded benefit liabilities as defined in Section 4001(a)(18) of
ERISA, there has occurred no failure to meet the minimum funding standards of
Section 412 of the Code, there is no "accumulated funding deficiency" within the
meaning of Section 412 of the Code, no such Existing Plan has terminated or has
filed a Notice of Intent to terminate, the Pension Benefit Guaranty Corporation
has not instituted proceedings to terminate any such Existing Plan and there is
no outstanding liability under Section 4062 of ERISA.
(d) Prohibited Transactions; Reportable Events. To the
Knowledge of Target, no prohibited transaction within the meaning of Section
4975 of the Code or Section 406 of ERISA or reportable event as described in
Section 4043 of ERISA has occurred with respect to any of the Existing Plans.
(e) Multiemployer Plans. Target is not contributing to, nor
has Target contributed to since September 2, 1974, any "multiemployer plan" as
defined in Section 4001(a)(3) of ERISA.
(f) Claims. There are no pending, or to the Knowledge of
Target, threatened claims with respect to any of the Existing Plans, other than
claims for benefits arising in the ordinary course of business.
(g) Welfare Benefits. Except as set forth on the Disclosure
Schedule, neither Target nor any Existing Plan provides or has any obligation to
provide (or contribute to the cost of) post-retirement (or post-termination of
service) welfare benefits with respect to current or former employees of Target,
including without limitation post-retirement medical, dental, life insurance,
severance or any similar benefit, whether provided on an insured or self-insured
basis.
(h) Welfare Plans. Except as otherwise provided in this
Agreement, each Existing Plan that is an "employee welfare benefit plan" as
defined in ERISA may be amended or terminated at any time after the Effective
Time without liability to Target.
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(i) COBRA. With respect to each Existing Plan, Target has
complied in all material respects with the applicable health care continuation
and notice provisions of the Consolidation Omnibus Budget Reconciliation Act of
1985 and the proposed regulations thereunder, and the applicable requirements of
the Family and Medical Leave Act of 1993 and the regulations thereunder.
(j) The Merger. The Merger and the consummation of the
transactions contemplated by this Agreement will not entitle any current or
former employee of Target or a Target Subsidiary to severance benefits or any
other payment, except as set forth in the Disclosure Schedule, or accelerate the
time of paying or vesting any benefit or right, or increase the amount of
compensation due any such employee.
(k) Copies. Correct and complete copies of all Existing Plans,
together with recent summary plan descriptions, have been delivered by Target to
Parent.
4.13 No Violation of Law; Permits. Neither Target nor any Target
Subsidiary nor any of the assets of Target nor the business of Target violate or
conflict in any material respect with any Law. All material Permits or other
governmental authorizations maintained or required to be maintained for the
conduct of Target's business are set forth in the Disclosure Schedule.
4.14 Brokers; Expenses of Transaction. Except for fees to William
Blair & Company, not exceeding $480,000 and fees to Adams, Harkness & Hill not
exceeding $50,000, Target has not incurred any brokers', finders' or any similar
fee in connection with the transactions contemplated by this Agreement or with
respect to any Other Proposal. Target's expenses relating to the transactions
contemplated by this Agreement or any Other Proposal, including without
limitation, brokers', finders' or similar fees, and legal and accounting fees,
shall not exceed $815,000, including the above fees.
4.15 Taxes.
(a) Tax Returns. Each of Target and the Target Subsidiaries
has timely and properly filed all federal, state, local and foreign tax returns
(including but not limited to income, business, franchise, sales, payroll,
employee withholding and social security and unemployment) which were required
to be filed. Target has paid or made adequate provision, in reserves reflected
in the Target Financial Statements in accordance with generally accepted
accounting principles, for the payment of all taxes (including interest and
penalties) and withholding amounts owed by it or assessable against it. No
material tax deficiencies have been proposed or assessed against Target or any
Target Subsidiaries and there is no basis in fact for the assessment of any
material tax or penalty tax against Target or any Target Subsidiaries. No issue
has been raised in any prior tax audit (except for allocations of income among
states) which, by application of the same or similar principles, could
reasonably be expected upon a future tax audit to result in a proposed material
deficiency for any period.
(b) Extensions. Neither Target nor any Target Subsidiaries has
consented to any extension of the statute of limitation with respect to any open
tax returns.
(c) Tax Liens. There are no tax Liens upon any property or
assets of Target or any Target Subsidiary except for Liens for current taxes not
yet due and payable.
(d) Delivery of Tax Returns. Target has made available, and
will deliver upon request, to Parent correct and complete copies of all tax
returns and reports of Target or any Target Subsidiary filed for all periods not
barred by the applicable statute of limitations. No examination or audit of any
tax return or report for any period not barred by the applicable statute of
limitations has occurred, no such examination is in progress and, to the
Knowledge of Target, no such examination or audit is planned.
(e) Employment Taxes. Target and the Target Subsidiaries have
properly withheld and timely paid all withholding and employment taxes which
they were required to withhold and pay relating to salaries, compensation and
other amounts heretofore paid to its employees or other Persons. All Forms W-2
and 1099 required to be filed with respect thereto have been timely and properly
filed.
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(f) Tax Sharing Agreements. Target is not a party to any
agreement relating to allocating or sharing any taxes.
(g) Excess Parachute Payments. Target is not a party to any
contract that could result, on account of the Merger, separately or in the
aggregate, in the payment of any "excess parachute payments" within the meaning
of Section 280G of the Code.
(h) Liabilities of Other Persons. Target has no liability for
taxes of any kind of any Person other than Target under any contract or under
Treasury Regulations Section 1.1502-6 (or any similar provision of Law) as a
transferee or successor or otherwise.
4.16 Governmental Approvals. No permission, approval,
determination, consent or waiver by, or any declaration, filing or registration
with, any governmental or regulatory authority is required in connection with
the execution, delivery and performance of this Agreement by Target and the
consummation of the Merger, except for: (a) the approvals described in Section
8.8 of this Agreement; and (b) the filing of the Articles of Merger as described
in this Agreement.
4.17 No Pending Other Transactions. Except for this Agreement,
Target is not a party to or bound by any agreement, undertaking or commitment
with respect to an Other Transaction.
4.18 Labor Matters.
(a) Employee Claims. Except as set forth in the Disclosure
Schedule, there are no pending and unresolved material claims by any Person
against Target or any Target Subsidiary arising out of any statute, ordinance or
regulation relating to discrimination against employees or employee practices or
occupational or safety and health standards. There is no pending or, to the
Knowledge of Target, threatened, labor dispute, strike or work stoppage.
(b) NLRB Matters. There is not now pending or, to the
Knowledge of Target, threatened, any material charge or complaint against Target
by or before the National Labor Relations Board (or similar agency in other
countries) or any representative thereof, or any comparable state agency or
authority. To the Knowledge of Target, no union organizing activities are in
process or contemplated and no petitions have been filed for union organization
or representation of employees of Target not presently organized, and to the
Knowledge of Target, Target has not committed any unfair labor practices which
have not heretofore been corrected and fully remedied.
4.19 Professional Employee Matters.
(a) Each of the Professional Employees has signed an
enforceable agreement with Target under which each such Professional Employee
(i) agrees to maintain the confidentiality of Target and Target customer
information; and (ii) has conveyed to Target any and all intellectual property
rights such Professional Employee may have with respect to creations, inventions
and other works and work product created or developed by such employee while in
the employ of Target or the Target.
(b) At September 20, 2000, Target had not less than 100
Professional Employees. The names and positions of the Professional Employees at
September 20, 2000 are set forth in the Disclosure Schedule.
4.20 Vote Required. The affirmative vote of the holders of a
majority of the outstanding shares of Target Common Stock is the only vote of
the holders of any class or series of capital stock or other securities of
Target entitled to vote necessary to approve the Merger, this Agreement and the
transactions contemplated by this Agreement.
4.21 Physical Assets. Except as set forth in the Disclosure
Schedule, the Buildings and the Equipment are in good condition and repair,
ordinary wear and tear excepted, and suitable for their intended purpose; the
use of such assets conforms, in all material respects, with all applicable Law.
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4.22 Environmental Protection.
(a) Definitions. As used in this Agreement:
(i) "Environmental Claim" shall mean any and all
administrative, regulatory or judicial actions, suits, demands, demand letters,
directives, claims, Liens, investigations, proceedings or notices of
noncompliance or violation (written or oral) by any Person alleging potential
liability (including, without limitation, potential liability for enforcement,
investigatory costs, cleanup costs, governmental response costs, removal costs,
remedial costs, natural resources damages, property damages, personal injuries,
or penalties) arising out of, based on or resulting from: (A) the presence, or
release into the environment, of any Hazardous Materials at any location,
whether or not owned by Target; or (B) circumstances forming the basis of any
violation or alleged violation, of any Environmental Law; or (C) any and all
claims by any Person seeking damages, contribution, indemnification, cost,
recovery, compensation or injunctive relief resulting from the presence or
Release of any Hazardous Materials.
(ii) "Environmental Laws" shall mean all federal,
state, local or foreign statute, Law, rule, ordinance, code, enforceable policy,
rule of common law and regulations relating to pollution or protection of human
health or the environment (including, without limitation, ambient air, surface
water, ground water, land surface or subsurface strata), including, without
limitation, Laws and regulations relating to Releases or threatened Releases of
Hazardous Materials, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Materials.
(iii) "Hazardous Materials" shall mean: (A) any
petroleum or petroleum products, radioactive materials, asbestos in any form
that is or could become friable, urea formaldehyde foam insulation, and
transformers or other equipment that contain dielectric fluid containing levels
of polychlorinated biphenyls (PCBs) and radon gas; and (B) any chemicals,
materials or substances which are now defined as or included in the definition
of "hazardous substances," "hazardous wastes," "hazardous materials," "extremely
hazardous wastes," "restricted hazardous wastes," "toxic substances," "toxic
pollutants," or words of similar import, under any Environmental Law; and (C)
any other chemical, material, substance or waste, exposure to which is now
prohibited, limited or regulated by any governmental authority.
(iv) "Release" shall mean any release, spill,
emission, leaking, injection, deposit, disposal, discharge, dispersal, leaching
or migration into the atmosphere, soil, surface water, groundwater or property
which would be likely to result in an Environmental Claim.
(b) Environmental Laws. Each of Target and the Target
Subsidiaries (i) is in compliance in all material respects with all applicable
Environmental Laws; and (ii) has not received any written communication from a
governmental authority that alleges that it is not in compliance with applicable
Environmental Laws.
(c) Environmental Permits. Each of Target and the Target
Subsidiaries has obtained all material environmental, health and safety permits
and governmental authorizations (collectively, the "Environmental Permits")
necessary for its operations, and all such permits are in good standing and it
is in material compliance with all terms and conditions of the Environmental
Permits..
(d) Environmental Claims. There is no Environmental Claim
pending or, to the Knowledge of Target, threatened, against Target or any Target
Subsidiary or against any Person whose liability for any Environmental Claim
Target has or may have retained or assumed either contractually or by operation
of Law, or against any real or personal property or operations which Target or
any Target Subsidiary owns, leases or manages.
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(e) Hazardous Materials. To the Knowledge of Target,
there have been no Releases of any Hazardous Material by Target or by any Person
on real property owned, used, leased or operated by Target or any Target
Subsidiary.
(f) Owned Properties. To the Knowledge of Target, no real
property at any time owned, operated, used or controlled by Target or any Target
Subsidiary is currently listed on the National Priorities List promulgated under
the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended ("CERCLA"), or on any comparable state list, and Target has not
received any written notice from any Person of potential or actual liability or
a request for information from any Person under or relating to CERCLA or any
comparable state or local Law.
(g) Off-Site Properties. To the Knowledge of Target, no
off-site location at which Target or any Target Subsidiary has disposed or
arranged for the disposal of any waste is listed on the National Priorities List
or on any comparable state list and neither Target nor any Target Subsidiary has
not received any written notice from any Person with respect to any off-site
location, of potential or actual liability or a written request for information
from any Person under or relating to CERCLA or any comparable state or local
Law.
(h) Reports. The Disclosure Schedule sets forth each
third party report or investigation concerning the status under, or compliance
with, Environmental Laws relating to the Facilities, the Target's business or
the Predecessor Business within the past 10 years and that are in the possession
of Target or any Target Subsidiary, or held on their behalf by their counsel or
other representatives. Parent has been provided true and complete copies of all
such reports cited in the Disclosure Schedule.
4.23 [Unused].
4.24 Customers. Since December 31, 1999, except as set forth in the
Disclosure Schedule, Target has not experienced any loss of customer
relationships with any customers which, individually or in the aggregate,
represented more than 5% of the Predecessor Operations' net sales in its fiscal
year ended December 31, 1999, nor has Target received any notice from any such
customers of their intent to terminate their business with Target. Except as set
forth in the Disclosure Schedule, to the Knowledge of Target, there are no
factors, financial or otherwise, which would inhibit the ability of any customer
of Target which represented 5% or more of the net sales of Target during the
year ended December 31, 1999 to continue to do business with Target or to comply
with such customer's obligations under any agreement with Target.
4.25 Real Estate. The Disclosure Schedule includes the street
address of the Real Estate, and Target or a Target Subsidiary is in quiet
possession of the Facilities under its Leases. Neither Target nor any Target
Subsidiary owns, and has never owned, any real estate, buildings or portions
thereof. To the Knowledge of Target, the Real Estate: (a) is not subject to any
leases or tenancies of any kind other than the Leases; (b) is not in the
possession of any adverse possessors; (c) has direct access to and from a public
road or street which is sufficient for the current operation of the business
conducted therein; (d) is used in a manner which is consistent with applicable
Law; (e) is, and has been since the date of possession thereof by Target or a
Target Subsidiary, in the peaceful possession of Target or a Target Subsidiary;
(f) is served by all water, sewer, electrical, telephone, drainage and other
utilities as is currently required for the current operations of the Facilities;
(g) is not located in an area designated as a flood plain or wetland; (h) is not
currently subject to any special assessment; (i) is not subject to any zoning,
ordinance, decrees or other similar laws or regulations which would restrict or
prohibit Target or a Target subsidiary or Parent from continuing the operations
presently conducted thereon by Target or a Target Subsidiary; (j) is not subject
to any interest of any person under a contract, option or other agreement other
than the Lease; and (k) is not subject to any presently pending condemnation
proceedings, nor, to Target's knowledge, are any such proceedings threatened.
The Real Estate and the use thereof conforms in all material respects with all
applicable ordinances, regulations and building, zoning and other Laws. Target
has not received any written information or written notice of any increase in
the assessed value of the Real Estate from any tax assessing authority which
would increase the estimated real estate taxes for the Real Estate or notice of
any written assessment affecting the Real Estate.
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4.26 Accounts. All accounts and notes receivable of Target and the
Target Subsidiaries have arisen from bona fide transactions by Target in the
ordinary course of business and, to the extent not previously collected, are
fully collectible, subject to reserves as set forth in the Target Financial
Statements. None of such receivables is or will be at the Effective Time subject
to any counterclaim or set off.
4.27 Unemployment Compensation. Target and the Target Subsidiaries have
made all required payments to its unemployment compensation reserve accounts
related to the Employees with the appropriate governmental departments. Except
as set forth in the Disclosure Schedule, all such unemployment compensation
accounts have positive balances and there are no former employees of Target
receiving unemployment compensation benefits which are being currently charged
against any of such accounts.
4.28 Intangible Assets. All Intangible Assets owned, licensed or used
by Target or a Target Subsidiary, other than shrink-wrap licenses, are listed on
the Disclosure Schedule. Except as set forth in the Disclosure Schedule, Target
or a Target Subsidiary owns the entire right, title and interest in and to each
of those Intangible Assets. Except as set forth in the Disclosure Schedule: (i)
there are no claims, demands or proceedings instituted or pending or threatened
by any Person contesting or challenging the right of Target or a Target
Subsidiary to use any of the Intangible Assets; (ii) none of the Intangible
Assets is invalid or unenforceable; (iii) there are no patents, copyrights or
other intellectual property rights owned by a Person which Target or a Target
Subsidiary is using relating to the Facility or the Purchased Assets without
license to do so; and (iv) Target or a Target Subsidiary owns or possesses
adequate licenses or other rights to use all patents, trademarks, trade names,
copyrights or other intellectual property rights necessary to conduct its
business as now conducted.
4.29 Information Supplied. None of the information supplied or to be
supplied by Target for inclusion or incorporation by reference in: (a) the
Registration Statement will, at the time the Registration Statement is filed
with the SEC and at the time it becomes effective under the Securities Act,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading; and (b) the Proxy Statement will, at the date mailed to the
Target Shareholders and at the time of the Target Special Meeting, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they are made, not misleading.
4.30 Disclosure. No statement of fact by Target contained in this
Agreement or in the Disclosure Schedule contains or will contain any untrue
statement of a material fact or omits or will omit to state a material fact
necessary in order to make the statements herein or therein contained, in the
light of the circumstances under which they were made, not misleading as of the
date to which it speaks.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF
PARENT AND ACQUISITION
Parent and Acquisition hereby represent and warrant to Target that:
5.1 Organization.
(a) Organization. Each of the Parent Companies and Acquisition
is a corporation duly and validly organized and existing under the Laws of its
respective jurisdiction of incorporation and is qualified to do business as a
foreign corporation and is in good standing in all other jurisdictions where the
ownership or leasing of property or the conduct of its business requires
qualification as a foreign corporation, except where the failure to so qualify
would not have a Parent Material Adverse Effect.
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(b) Corporate Power and Authority. Each of the Parent
Companies and Acquisition has: (a) full corporate power and authority necessary
to carry on its business as it is now conducted and to own, lease and operate
its assets and properties; and (b) all material franchises, permits, licenses,
approvals, authorizations and registrations necessary to carry on its business
as it is now conducted and to own, lease and operate its assets and properties,
except where the absence of any such franchises, permits, licenses, approvals,
authorizations or registrations would not have a Parent Material Adverse Effect.
5.2 Capitalization.
(a) Capitalization of Parent. The entire authorized capital
stock of Parent consists of: (i) 60,000,000 shares of Common Stock, $.01 par
value, of which 37,027,070 shares were issued and outstanding on September 15,
2000; and (ii) 5,000,000 shares of Preferred Stock, $.01 par value, none of
which are issued and outstanding. The Parent Company has issued, in tandem with
each share of Parent Common Stock, Preferred Stock Purchase Rights, as described
in Parent's Current Report on Form 8-K dated as of August 13, 1998.
(b) Authorization. All of the outstanding shares of Parent
Common Stock are, and the shares of Parent Common Stock to be issued pursuant to
this Agreement will be when issued: (i) duly authorized, validly issued and
fully paid; and (ii) nonassessable, except as provided in Section 180.0622(2)(b)
of the Wisconsin Business Corporation Law, as judicially interpreted, which
provides that shareholders of Wisconsin corporations may be assessable for
certain unpaid claims for services by employees.
5.3 Authorization; Enforceability. The execution, delivery and
performance of this Agreement by Parent and Acquisition and all of the documents
and instruments required by this Agreement to be executed and delivered by
Parent and Acquisition are within the corporate power of Parent and Acquisition
and: (a) have been duly authorized by the Boards of Directors of Parent and
Acquisition; and (b) have been duly authorized by all necessary corporate action
by Parent and Acquisition. This Agreement is, and the other documents and
instruments required by this Agreement to be executed and delivered by Parent
and Acquisition will be, when executed and delivered by Parent and Acquisition,
the valid and binding obligations of Parent and Acquisition, enforceable against
Parent and Acquisition in accordance with their respective terms, except as the
enforcement thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar Laws generally affecting the rights of
creditors and subject to general equity principles.
5.4 No Violation or Conflict. Subject to the receipt of the approvals
and consents described in Section 7.7 of this Agreement, the execution, delivery
and performance of this Agreement by Parent and Acquisition do not and will not
conflict with or violate: (a) any Law or the Articles of Incorporation or Bylaws
of any of the Parent Companies or the Articles of Incorporation or Bylaws of
Acquisition; or (b) any material contract or agreement to which any of the
Parent Companies or Acquisition is a party or by which any of them is bound,
except where such conflict or violation would not have a Parent Material Adverse
Effect.
5.5 Litigation. (a) Except as disclosed in the Parent SEC Reports filed
prior to the date of this Agreement, there is no litigation, arbitration,
proceeding, governmental investigation, citation or action of any kind pending
or, to the Knowledge of Parent, proposed or threatened against or relating to
any of the Parent Companies which, if adversely determined against any of the
Parent Companies, individually or in the aggregate, would or would be reasonably
likely to result in a Parent Material Adverse Effect. (b) There are no actions,
suits or proceedings pending or, to the Knowledge of Parent, proposed or
threatened, against any of the Parent Companies by any Person which question the
legality, validity or propriety of the transactions contemplated by this
Agreement.
5.6 Parent SEC Reports.
(a) Definition. As used in this Agreement, "Parent SEC
Reports" shall mean all reports, registration statements, definitive proxy
statements, prospectuses and amendments thereto filed by Parent with the SEC
since September 30, 1999 or filed by Parent with the SEC after the date of this
Agreement and prior to the Effective Time.
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(b) Parent SEC Reports. The Parent SEC Reports: (i) complied
or will comply, as the case may be, in all material respects with the then
applicable requirements of the Exchange Act and the Securities Act, as the case
may be, and the rules and regulations of the SEC issued thereunder; and (ii) did
not or will not, as the case may be, contain as of their respective filing dates
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.
(c) Financial Statements. The audited consolidated financial
statements and unaudited consolidated interim financial statements of Parent
included in the Parent SEC Reports have been or will be, as the case may be,
prepared in accordance with generally accepted accounting principles applied on
a consistent basis (except as may be indicated therein or in the notes thereto
and except with respect to unaudited statements as permitted by Form 10-Q of the
SEC) and fairly present the consolidated financial position of the Parent
Companies as of the dates thereof and the consolidated results of their
operations and changes in financial position for the periods then ended,
subject, in the case of the unaudited consolidated interim financial statements,
to normal year-end and audit adjustments and any other adjustments described
therein.
5.7 Brokers. Neither Parent nor Acquisition has incurred any
brokers', finders' or any similar fee in connection with the transactions
contemplated by this Agreement.
5.8 Governmental Approvals. No permission, approval,
determination, consent or waiver by, or any declaration, filing or registration
with, any governmental or regulatory authority is required in connection with
the execution, delivery and performance of this Agreement by Parent and
Acquisition and the consummation of the Merger, except for: (a) the approvals
described in Section 7.7 of this Agreement; and (b) the filing of the Articles
of Merger as described in this Agreement.
5.9 Disclosure. No statement of fact by Parent or Acquisition
contained in this Agreement contains or will contain any untrue statement of a
material fact or omits or will omit to state a material fact necessary in order
to make the statements herein, in the light of the circumstances under which
they were made, not misleading as of the date to which it speaks.
5.10 Information Supplied. None of the information supplied or to
be supplied by Parent for inclusion or incorporation by reference in the
Registration Statement will, at the time the Registration Statement is filed
with the SEC and at the time it becomes effective under the Securities Act,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading. The Registration Statement, including the Proxy Statement
insofar as it constitutes the prospectus of Parent, will comply as to form in
all material respects with the provisions of the Securities Act and the rules
and regulations thereunder.
5.11 Accounting Matters. Neither Parent nor, to the Knowledge of
Parent, any of the Affiliates of Parent, has taken or agreed to take or will
take any action that would prevent the Merger being accounted for as a pooling
of interests for financial accounting purposes in accordance with generally
accepted accounting principles and the rules, regulations and interpretations of
the SEC.
5.12 Absence of Certain Changes. Since September 30, 1999, there
has not been any Parent Material Adverse Change, except as disclosed in Parent
SEC Reports filed prior to the date hereof.
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ARTICLE VI
CONDUCT OF BUSINESS BY TARGET
PENDING THE MERGER
Except with the written consent of Parent, from and after the date of
this Agreement and until the Effective Time, Target shall:
6.1 Carry on in Regular Course. Diligently carry on its business in the
regular course and substantially in the same manner as heretofore and shall not
make or institute any unusual or novel methods of purchase, sale, lease,
management, accounting or operation.
6.2 Use of Assets. Use, operate, maintain and repair all of its assets
and properties in a normal business manner.
6.3 Existing Contracts. Not do any act or omit to do any act, or permit
any act or omission to act, which will cause a material breach of any of the
Existing Contracts, nor enter into any contract or agreement which would be
required to be disclosed as an Existing Contract.
6.4 Employment Matters. Not: (a) except as described in the Disclosure
Schedule or as consistent with its normal business practices consistent with
past practice, grant any increase in the rate of pay of any of its employees,
directors or officers; (b) institute or amend any Employee Benefit Plan except,
with prior notice to Parent, to the extent necessary to avoid disqualification
of any Existing Plan intended to qualify under Section 401(a) of the Code; or
(c) except as described in the Disclosure Schedule, enter into or modify any
written employment agreement, arrangement or benefit with any Person.
6.5 Indebtedness. Not create, incur or assume any Indebtedness except
for Indebtedness incurred in the ordinary course of business by Target
consistent with past practice.
6.6 Preservation of Relationships. Use reasonable best efforts to
preserve its business organization intact, to retain the services of its present
officers and key employees and to preserve the goodwill of suppliers, customers,
creditors and others having business relationships with it.
6.7 Compliance with Laws. Comply in all material respects with all
applicable Laws.
6.8 Taxes. Timely and properly file all federal, state, local and
foreign tax returns which are required to be filed, and shall pay or make
provision for the payment of all taxes owed by it.
6.9 Amendments. Not amend its Articles of Incorporation or Bylaws, or
any Existing Contract.
6.10 Dividends; Redemptions; Issuance of Stock. Not:
(a) (i) issue any additional shares of stock of any class
(except for the reserved shares disclosed in Section 4.2(a)), or (ii) grant any
warrants, options or other rights to subscribe for or acquire any additional
shares of stock of any class;
(b) declare or pay any dividend or make any capital or surplus
distributions of any nature; or
(c) directly or indirectly redeem purchase or otherwise
acquire, recapitalize or reclassify any of its capital stock or liquidate in
whole or in part, other than the return of unvested or restricted stock under
the Target Purchase Plans.
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6.11 No Dispositions or Acquisitions. Not: (a) sell, lease, license,
encumber or otherwise dispose of, or agree to sell, lease, license, encumber or
otherwise dispose of any of its assets, except in the ordinary course of
business consistent with past practice; or (b) acquire, or publicly propose to
acquire or agree to acquire, by merger or consolidation with, or by purchase or
otherwise, an equity interest in any Person, or purchase or lease assets of any
Person except in the ordinary course of business consistent with past practice.
ARTICLE VII
CONDITIONS PRECEDENT TO THE OBLIGATIONS
OF PARENT AND ACQUISITION
Each and every obligation of Parent and Acquisition to be performed on
the Closing Date shall be subject to the satisfaction prior to or at the Closing
of the following express conditions precedent:
7.1 Compliance with Agreement. Target shall have performed and
complied: (a) in all respects with all of its obligations under Sections 6.10
and 6.11 this Agreement which are to be performed or complied with by it prior
to or on the Closing Date; and (b) in all respects with all of its other
obligations under this Agreement which are to be performed or complied with by
it prior to or on the Closing Date, except where the failure to perform or
comply, individually or in the aggregate, would not or would not be reasonably
likely to result in a Target Material Adverse Effect.
7.2 No Litigation. No suit, action or other proceeding shall be pending
before any court in which the consummation of the transactions contemplated by
this Agreement is restrained or enjoined.
7.3 Representations and Warranties of Target The representations and
warranties made by Target in this Agreement shall be true and correct in all
respects when made and as of the Closing Date with the same force and effect as
though said representations and warranties had been made on the Closing Date,
except where the effect of any breaches of the representations and warranties of
Target made in this Agreement, individually or in the aggregate, would not or
would not be reasonably likely to result in a Target Material Adverse Effect.
7.4 No Target Material Adverse Effect. During the period from the date
of this Agreement to the Closing Date there shall not have occurred, and be
continuing on the Closing Date, any Target Material Adverse Effect. (For
purposes of this Section, "Target Material Adverse Effect" shall not include
effects on "prospects" resulting from general industry, market or economic
conditions.)
7.5 Approval of Target Shareholders; Articles of Merger. This
Agreement, the Merger and the transactions contemplated by this Agreement shall
have received the requisite approval and authorization of the Target
Shareholders. The Articles of Merger shall have been executed and delivered by
Target.
7.6 Closing Certificates. Target shall have delivered to Parent (a) a
certificate signed on behalf of Target by the Chief Executive Officer and Chief
Financial Officer of Target, dated the Closing Date, to the effect that, to the
best of such officers' Knowledge, the conditions set forth in Sections 7.1 and
7.3 of this Agreement have been satisfied.; and (b) secretaries' certificate as
to such Target corporate matters in connection with the Merger as Parent may
reasonably request.
7.7 Governmental Approvals.
(a) Registration Statement. The Registration Statement shall
have been declared effective under the Securities Act and shall not be the
subject of any stop order or proceedings to effect a stop order. The Parent
Common Stock issuable pursuant to the Merger shall have been registered or shall
be exempt from registration or qualification under applicable state "blue sky"
or securities Laws.
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(b) HSR Act. All necessary requirements of the HSR Act shall have
been complied with and any "waiting periods" applicable to the Merger and to the
transactions described in this Agreement which are imposed by the HSR Act shall
have expired prior to the Closing Date or shall have been terminated by the
appropriate agency.
7.8 Pooling Opinion. Parent shall have received an opinion from
PricewaterhouseCoopers LLP to the effect that the Merger qualifies for
pooling-of-interests accounting treatment if consummated in accordance with this
Agreement, and such related pooling opinions from Target's accountants as may be
required or reasonably requested by Parent in connection therewith.
7.9 [Unused].
7.10 Employment, Escrow and Noncompetition Agreements. Each of the
other parties provided therein shall have executed and delivered an Employment
Agreement, an Escrow Agreement and a Noncompetition Agreement.
7.11 Leases; Consents. The landlords under the Leases shall have
delivered estoppel certificates relating to Target's continuing possession of
the Facilities thereunder. Parent shall have received reasonable assurance of
Tyco's ability to transfer Flexible Access Licensing Agreement (FALA-98PRAE1231)
to Target as contemplated by Target's settlement agreement with Tyco. Target
shall have obtained the consent to the merger required from each of the other
parties to any material agreement of Target which is, or is required to be,
disclosed pursuant to Section 4.4 hereof.
7.12 Opinions. Parent and Target shall have received the opinion of
Target's counsel, or other party reasonably qualified to give such an opinion,
to the effect that transactions contemplated by this Agreement will constitute a
tax-free reorganization under Section 368 of the Code. Parent shall have
received the Opinion of Target's counsel.
7.13 Affiliates. All amounts due from any of the Affiliates to Target,
other than employment-related expense advances in the ordinary course of
business, shall have been paid in full. Parent shall have received an Affiliate
Letter from each Person who is an Affiliate of Target.
7.14 Tyco. No payments shall be due from Tyco to Target or from Target
to Tyco, other than payments in the ordinary course of Target's business.
7.15 Professional Employees. As of the earlier of the Closing Date or
November 30, 2000, since the date hereof, not more than a total of 8 of the
Professional Employees on September 20 shall have left the employ of Target or
stated their intention to do so. Each of the Professional Employees shall have
executed a confidentiality and inventions agreement with Target in substantially
similar form and substance, and acceptable to Parent.
7.16 Dissenters. The holders of not more than 3% of the outstanding
shares of Target shall have exercised dissenters' rights of appraisal under the
OBCA.
ARTICLE VIII
CONDITIONS PRECEDENT TO THE
OBLIGATIONS OF TARGET
Each and every obligation of Target to be performed on the Closing Date
shall be subject to the satisfaction prior to or at the Closing of the following
express conditions precedent:
8.1 Compliance with Agreement. Parent and Acquisition shall have
performed and complied in all respects with all of their obligations under this
Agreement which are to be performed or complied with by them
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prior to or on the Closing Date, except where the failure to perform or comply,
individually or in the aggregate, would not or would not be reasonably likely to
result in a Parent Material Adverse Effect.
8.2 No Litigation. No suit, action or other proceeding shall be pending
before any court in which the consummation of the transactions contemplated by
this Agreement is restrained or enjoined.
8.3 Representations and Warranties of Parent and Acquisition. The
representations and warranties made by Parent and Acquisition in this Agreement
shall be true and correct in all respects when made and as of the Closing Date
with the same force and effect as though such representations and warranties had
been made on the Closing Date, except where the effect of any breaches of the
representations and warranties of Parent and Acquisition made in this Agreement,
individually or in the aggregate, would not or would not be reasonably likely to
result in a Parent Material Adverse Effect.
8.4 No Parent Material Adverse Effect. During the period from the date
of this Agreement to the Closing Date there shall not have occurred, and be
continuing on the Closing Date, any Parent Material Adverse Effect. (For
purposes of this Section, "Parent Material Adverse Effect" shall not include
effects on "prospects" resulting from general industry, market or economic
conditions.)
8.5 Articles of Merger. The Articles of Merger shall have been executed
and delivered by Acquisition.
8.6 Closing Certificate. Parent shall have delivered to Target (a) a
certificate signed on behalf of Parent by the Chief Executive Officer and Chief
Financial Officer of Parent, dated the Closing Date, to the effect that, to the
best of such officers' knowledge, the conditions set forth in Sections 8.1 and
8.3 of this Agreement have been satisfied; and (b) secretaries' certificates of
Parent and Acquisition as to such corporate matters in connection with the
Merger as Target may reasonably request.
8.7 Governmental Approvals.
(a) Registration Statement. The Registration Statement shall have
been declared effective under the Securities Act and shall not be the subject of
any stop order or proceedings to effect a stop order. The Parent Common Stock
issuable pursuant to the Merger shall have been registered or shall be exempt
from registration or qualification under applicable state "blue sky" or
securities Laws.
(b) HSR Act. All necessary requirements of the HSR Act shall have
been complied with and any "waiting periods" applicable to the Merger and to the
transactions described in this Agreement which are imposed by the HSR Act shall
have expired prior to the Closing Date or shall have been terminated by the
appropriate agency.
8.8 Employment, Escrow and Noncompetition Agreements. Each of the other
parties provided therein shall have executed and delivered an Employment
Agreement, an Escrow Agreement and a Noncompetition Agreement.
8.9 Opinions. The Shareholders shall have received the opinion of
Target's counsel, or other party reasonably qualified to give such an opinion,
to the effect that transactions contemplated by this Agreement will constitute a
tax-free reorganization under Section 368 of the Code. Target shall have
received the Opinion of Parent's Counsel.
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ARTICLE IX
TERMINATION; MISCELLANEOUS
9.1 Termination. This Agreement may be terminated and the transactions
contemplated by this Agreement may be abandoned at any time prior to the Closing
(whether before or after approval of this Agreement by the Shareholders), as
follows:
(a) by mutual written agreement of Parent and Target, duly
authorized by the Boards of Directors of Parent and Target;
(b) by either Parent or Target by written notice to the other
party if: (i) any court of competent jurisdiction shall have issued an order,
judgment or decree permanently restraining, enjoining or otherwise prohibiting
the Merger and such order, judgment or decree shall have become final and
nonappealable; or (ii) if the Effective Time has not occurred on or before March
31, 2001, provided, however, that the right to terminate this Agreement under
this Section 9.1(b)(ii) of this Agreement shall not be available to any party
whose failure to fulfill any obligation under this Agreement has been the cause
of, or resulted in, the failure of the Effective Time to occur on or before that
date;
(c) by Parent by written notice to Target if: (i) there exists one
or more breaches of the representations and warranties of Target made in this
Agreement as of the date of this Agreement which breaches, individually or in
the aggregate, would or would be reasonably likely to result in a Target
Material Adverse Effect and such breaches shall not have been remedied within 20
calendar days after receipt by Target of written notice from Parent specifying
the nature of such breaches and requesting that they be remedied; (ii) Target
shall have failed to perform and comply in all respects with its agreements and
covenants contained in Sections 6.10 and 6.11 of this Agreement; (iii) Target
shall have failed to perform and comply in all respects with all of its other
agreements and covenants contained in this Agreement and such failures to
perform or comply, individually or in the aggregate, would or would be
reasonably likely to result in a Target Material Adverse Effect and such
failures to perform or comply shall not have been remedied within 20 calendar
days after receipt by Target of written notice from Parent specifying the nature
of such failures to perform or comply and requesting that they be remedied; or
(iv) Target shall have convened the Target Special Meeting to vote upon the
Merger and the transactions described in this Agreement and the requisite vote
of the Shareholders for such proposal is not received.
(d) by Target by written notice to Parent if: (i) there exists one
or more breaches of the representations and warranties of Parent made in this
Agreement as of the date of this Agreement which breaches, individually or in
the aggregate, would or would be reasonably likely to result in a Parent
Material Adverse Effect and such breaches shall not have been remedied within 20
calendar days after receipt by Parent of written notice from Target specifying
the nature of such breaches and requesting that they be remedied; or (ii) Parent
shall have failed to perform and comply in all respects with all of its
agreements and covenants contained in this Agreement and such failures to
perform or comply, individually or in the aggregate, would or would be
reasonably likely to result in a Parent Material Adverse Effect and such
failures to perform or comply shall not have been remedied within 20 calendar
days after receipt by Parent of written notice from Target specifying the nature
of such failures to perform or comply and requesting that they be remedied.
9.2 Rights on Termination; Waiver. If this Agreement is terminated
pursuant to Section 9.1 of this Agreement, all further obligations of the
parties under or pursuant to this Agreement shall terminate without further
liability of any party (including its directors, officers, employees, agents,
legal, accounting or financial advisors or other representatives) to the others,
provided that: (a) the obligations of Parent, Acquisition and Target contained
in Sections 3.1, 9.2 and 9.6 of this Agreement shall survive any such
termination; and (b) each party to this Agreement shall retain any and all
remedies which it may have for breach of contract provided by Law based on
another party's willful failure to comply with the terms of this Agreement. If
any of the conditions set forth in Article VII of this Agreement have not been
satisfied, Parent may nevertheless elect to proceed with the consummation of the
transactions contemplated by this Agreement and if any of the conditions set
forth in
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Article VIII of this Agreement have not been satisfied, Target may nevertheless
elect to proceed with the consummation of the transactions contemplated by this
Agreement. Any such election to proceed shall be evidenced by a certificate
containing such waiver and, if appropriate, waiving any claims to
indemnification resulting from the other party's failure to satisfy such closing
condition signed on behalf of the waiving party by an officer of that party.
9.3 Indemnity by Shareholders.
(a) Shareholders hereby indemnify and hold Parent harmless
from and against and agrees to promptly defend Parent and Target from and
reimburse Parent for, any and all losses, damages, costs, expenses, liabilities,
obligations and claims of any kind (including, without limitation, reasonable
attorneys' fees and other reasonable legal costs and expenses) which Parent and
Target, may at any time suffer or incur, or become subject to, as a result of or
in connection with:
(i) any breach or inaccuracy of any of the
representations and warranties made by Target in or pursuant to this Agreement;
(ii) any failure by Target to carry out, perform, satisfy
and discharge any of its covenants, agreements, undertakings or obligations in
this Agreement or under any of the documents and materials executed or to be
executed by Target pursuant to this Agreement;
(iii) the Special Indemnity Matters; and
(iv) any suit, action or other proceeding brought by any
Person arising out of, or in any way related to, any of the matters referred to
in Sections 9.3(a)(i), (ii) or (iii) of this Agreement.
(b) Parent shall promptly notify the Representatives of any
claim, demand, action, or proceeding for which indemnification will be sought
under this Section 9.3 of this Agreement and, if such claim, demand, action, or
proceeding is a third party claim, demand, action, or proceeding, and (except as
set forth below) if the parties agree that the Escrow Account (or applicable
portion thereof) will be sufficient to fully satisfy the claim, the
Representatives shall have the right (and with the use of the Escrow Account) to
assume the defense thereof using counsel reasonably acceptable to Parent. The
assumption of that defense by the Representatives shall constitute an admission
that, subject to the limitations of this Section 9.3, such third party claim
demand, action, or proceeding is an indemnifiable claim by Parent. If either (i)
the subject matter of a claim relates to the ongoing business of Parent or
Target (as opposed to the mere payment of money damages) and if, were the claim
to be adversely decided against Target or Parent, its ongoing business would be
materially adversely affected (whether or not the Escrow Account had fully
satisfied the amount of such claim), or (ii) it reasonably appears to Parent,
either at the time it or Target is made a defendant in or party to a claim or at
any time thereafter, that the Escrow Account will not be sufficient for the full
potential liability under such claim, then Target and Parent alone shall be
entitled to contest and defend such claim (and, while the Representatives may
participate in the contest and defense of such claim at the Representatives'
sole cost and expense, Target and Parent shall have full authority to determine
all actions with respect thereto, subject to the necessity of obtaining the
other party's consent with respect to any settlements). Each party defending a
claim shall keep the other party informed of the progress of the claim including
complying with all reasonable requests for copies of documents related to the
claim and the opportunity, from time to time, to consult with counsel defending
the claim. In connection with any such third party claim, demand, action, or
proceeding, the parties shall cooperate with each other and provide each other
with access to relevant books and records in their possession. No such third
party claim, demand, action, or proceeding shall be settled without the prior
written consent of the Representatives, which consent shall not be unreasonably
withheld or delayed in either case. If a firm written offer is made by the third
party to settle or resolve any such third party claim, demand, action or
proceeding and the Representatives propose to accept such settlement and Target
refuses to consent to such settlement, then: (i) the Representatives shall be
excused from, and Target shall be solely responsible for, all further defense of
such third party claim, demand, action or proceeding; (ii) the maximum
reimbursement amount relating to such third party claim, demand, action or
proceeding shall be the amount of the proposed settlement if the amount
thereafter recovered from Target or Parent on such third party claim, demand,
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action or proceeding is greater than the amount of the proposed settlement; and
(iii) Parent shall pay all attorneys' fees and legal costs and expenses incurred
after rejection of such settlement, but if the amount thereafter recovered by
such third party from Parent or Target is less than the amount of the proposed
settlement, Parent shall also be entitled to reimbursement from the Escrow
Account for such attorneys' fees and legal costs and expenses up to a maximum
amount equal to the difference between the amount recovered by such third party
and the amount of the proposed settlement.
(c) After the Closing, Parent's sole recourse for claims under
Section 9.3(a) shall be limited to, and satisfied solely from, the Escrow
Account, thereby limiting Parent's recourse for all matters in both time and
amount. Any damages payable to Parent hereunder shall be paid by delivery from
the Escrow Account of the equivalent value of Parent Stock (or proceeds
therefrom) using the Parent Stock Value.
(d) No amount shall be payable to Parent after the Closing for
any Damages unless and until the aggregate of such claims for indemnity under
this Section 9.3 exceeds One Hundred Thousand Dollars ($100,000), in which case
Parent shall be entitled to recover only such excess amount.
(e) Except in respect of the Special Indemnity Matters,
indemnity claims under this Section 9.3 shall be limited to 10% of the total
consideration issued under Section 2.8 of this Agreement. Parent shall allocate
the excess of 10% available for indemnity among the various Special Indemnity
Matters by notice to the Representatives prior to or at Closing.
(f) Parent expressly acknowledges and agrees that, absent
fraud, upon the Closing, the indemnification provisions of this Section 9.3
shall be the sole and exclusive remedy and right of indemnity for any claims of
Parent arising out of this Agreement.
9.4 Survival of Representations, Warranties and Covenants. All
representations, warranties and covenants of the parties contained in this
Agreement shall survive the Effective Time, to the extent provided in Section
9.3 hereof and the Escrow Agreement.
9.5 Entire Agreement; Amendment. This Agreement and the documents
referred to in this Agreement and required to be delivered pursuant to this
Agreement constitute the entire agreement among the parties pertaining to the
subject matter of this Agreement, and supersede all prior and contemporaneous
agreements, understandings, negotiations and discussions of the parties, whether
oral or written, other than the Confidentiality Agreement and the Voting
Agreements, and there are no warranties, representations or other agreements
between the parties in connection with the subject matter of this Agreement,
except as specifically set forth in, or contemplated by, this Agreement and in
the Confidentiality Agreements. This Agreement may be amended by the parties at
any time before or after approval of this Agreement by the Shareholders, except
that after such approval, no amendment shall be made without the further
approval of the Shareholders if any such amendment: (a) changes the Exchange
Rate; or (b) materially adversely affects the rights of the Shareholders. No
amendment, supplement, modification, waiver or termination of this Agreement
shall be binding unless executed in writing by Parent, Target and Acquisition.
No waiver of any of the provisions of this Agreement shall be deemed or shall
constitute a waiver of any other provision of this Agreement, whether or not
similar, nor shall such waiver constitute a continuing waiver unless otherwise
expressly provided.
9.6 Expenses. All costs and expenses incurred in connection with this
Agreement and the transactions contemplated by this Agreement shall be paid by
the party incurring such expenses, except that Parent shall pay the filing fee
relating to the filing required by the HSR Act and the costs of printing this
proxy statement/prospectus under the Registration Statement.
9.7 Governing Law. This Agreement shall be construed and interpreted
according to the Laws of the State of Wisconsin.
9.8 Assignment. Prior to the Effective Time, this Agreement shall not
be assigned by any party to this Agreement except with the prior written consent
of the other parties to this Agreement.
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9.9 Notices. All communications or notices required or permitted by
this Agreement shall be in writing and shall be deemed to have been given at the
earlier of the date when actually delivered to an officer of a party by personal
delivery or telephonic facsimile transmission (receipt electronically confirmed)
or when deposited in the United States mail, certified or registered mail,
postage prepaid, return receipt requested, and addressed as follows, unless and
until any of such parties notifies the others in accordance with this Section of
a change of address:
If to Parent or Acquisition: Parent Corp.
Attention: Joseph D. Kaufman
55 Jewelers Park Drive
P.O. Box 156
Neenah WI 54956
Fax No.: 920/751-3234
with a copy to: Quarles & Brady LLP
Attention: Kenneth V. Hallett
411 E. Wisconsin Avenue
Milwaukee, WI 53202-4497
Fax No: 414/271-3552
If to Target: Target Corporation
Attention: Matthew Bergeron
Suite 100
7245 NW Evergreen Parkway
Hillsboro, OR 97124
Fax No: 503/531-2051
with a copy to: Stoel Rives LLP
Attention: Robert Moorman
900 SW Fifth Avenue, Suite 2600
Portland, OR 97204
Fax No: 503/220-2480
9.10 Counterparts; Headings. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but such counterparts
shall together constitute but one and the same Agreement. The Table of Contents
and Article and Section headings in this Agreement are inserted for convenience
of reference only and shall not constitute a part hereof.
9.11 Interpretation. Unless the context requires otherwise, all words
used in this Agreement in the singular number shall extend to and include the
plural, all words in the plural number shall extend to and include the singular,
and all words in any gender shall extend to and include all genders. The
language used in this Agreement shall be deemed to be language chosen by the
parties to this Agreement to express their mutual intent. In the event an
ambiguity or question of intent or interpretation arises concerning the language
of this Agreement, this Agreement shall be construed as if drafted jointly by
the parties to this Agreement and no presumption or burden of proof will arise
favoring or disfavoring any party to this Agreement by virtue of the authorship
of any of the provisions of this Agreement.
9.12 Severability. If any provision, clause, or part of this Agreement,
or the application thereof under certain circumstances, is held invalid, the
remainder of this Agreement, or the application of such provision, clause or
part under other circumstances, shall not be affected thereby unless such
invalidity materially impairs the ability of the parties to consummate the
transactions contemplated by this Agreement.
9.13 Specific Performance. The parties agree that the assets and
business of Target as a going concern and the Parent Common Stock constitute
unique property. There is no adequate remedy at Law for the damage
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which any party might sustain for failure of the other parties to consummate the
Merger and the transactions contemplated by this Agreement, and accordingly,
each party shall be entitled, at its option, to the remedy of specific
performance to enforce the Merger pursuant to this Agreement.
9.14 No Reliance. Except for the parties to this Agreement, and any
assignees permitted by Section 9.8 of this Agreement: (a) no Person is entitled
to rely on any of the representations, warranties and agreements of the parties
contained in this Agreement; and (b) the parties assume no liability to any
Person because of any reliance on the representations, warranties and agreements
of the parties contained in this Agreement.
9.15 Exhibits and Disclosure Schedule. All capitalized terms used in
any Exhibit to this Agreement or in the Disclosure Schedule shall have the
definitions specified in this Agreement.
9.16 Further Assurances. If, at any time after the Effective Time, any
further action is necessary or desirable to carry out the purposes of this
Agreement and to vest the Surviving Corporation with full right, title and
possession to all assets, properties, rights, privileges, powers and franchises
of either Acquisition or Target, the officers of the Surviving Corporation are
fully authorized to take any such action in the name of Acquisition or Target.
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IN WITNESS WHEREOF, the parties have caused this Agreement and
Plan of Merger to be duly executed as of the day and year first above written.
PLEXUS CORP.
By___________________________________
John L. Nussbaum, President and
Chief Operating Officer
E2E CORPORATION
By____________________________________
Matthew Bergeron, President and CEO
CASEY JONES CORP.
By____________________________________
John L. Nussbaum, President
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APPENDIX B
SECTIONS 60.561 THROUGH 60.594 OF THE
OREGON BUSINESS CORPORATION ACT
60.561. NOTICE OF DISSENTERS' RIGHTS.
(1) If proposed corporate action creating dissenters' rights under ORS 60.554
is submitted to a vote at a shareholders' meeting, the meeting notice must state
that shareholders are or may be entitled to assert dissenters' rights under ORS
60.551 to 60.594 and be accompanied by a copy of ORS 60.551 to 60.594.
(2) If corporate action creating dissenters' rights under ORS 60.554 is taken
without a vote of shareholders, the corporation shall notify in writing all
shareholders entitled to assert dissenters' rights that the action was taken and
send the shareholders entitled to assert dissenters' rights the dissenters'
notice described in ORS 60.567.
60.564. NOTICE OF INTENT TO DEMAND PAYMENT.
(1) If proposed corporate action creating dissenters' rights under ORS 60.554
is submitted to a vote at a shareholders' meeting, a shareholder who wishes to
assert dissenters' rights shall deliver to the corporation before the vote is
taken written notice of the shareholder's intent to demand payment for the
shareholder's shares if the proposed action is effectuated and shall not vote
such shares in favor of the proposed action.
(2) A shareholder who does not satisfy the requirements of subsection (1) of
this section is not entitled to payment for the shareholder's shares under this
chapter.
60.567. DISSENTERS' NOTICE.
(1) If proposed corporate action creating dissenters' rights under ORS 60.554
is authorized at a shareholders' meeting, the corporation shall deliver a
written dissenters' notice to all shareholders who satisfied the requirements of
ORS 60.564.
(2) The dissenters' notice shall be sent no later than 10 days after the
corporate action was taken, and shall:
(a) State where the payment demand shall be sent and where and when
certificates for certificated shares shall be deposited;
(b) Inform holders of uncertificated shares to what extent transfer of
the shares will be restricted after the payment demand is received;
(c) Supply a form for demanding payment that includes the date of the
first announcement of the terms of the proposed corporate action to
news media or to shareholders and requires that the person asserting
dissenters' rights certify whether or not the person acquired
beneficial ownership of the shares before that date;
(d) Set a date by which the corporation must receive the payment
demand. This date may not be fewer than 30 nor more than 60 days after
the date the subsection (1) of this section notice is delivered; and
(e) Be accompanied by a copy of ORS 60.551 to 60.594.
60.571. DUTY TO DEMAND PAYMENT.
(1) A shareholder sent a dissenters' notice described in ORS 60.567 must
demand payment, certify whether the shareholder acquired beneficial ownership of
the shares before the date required to be set forth in the dissenters' notice
pursuant to ORS 60.567 (2)(c), and deposit the shareholder's certificates in
accordance with the terms of the notice.
(2) The shareholder who demands payment and deposits the shareholder's shares
under subsection (1) of this section retains all other rights of a shareholder
until these rights are canceled or modified by the taking of the proposed
corporate action.
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(3) A shareholder who does not demand payment or deposit the shareholder's
share certificates where required, each by the date set in the dissenters'
notice, is not entitled to payment for the shareholder's shares under this
chapter.
60.574. SHARE RESTRICTIONS.
(1) The corporation may restrict the transfer of uncertificated shares from
the date the demand for their payment is received until the proposed corporate
action is taken or the restrictions released under ORS 60.581.
(2) The person for whom dissenters' rights are asserted as to uncertificated
shares retains all other rights of a shareholder until these rights are canceled
or modified by the taking of the proposed corporate action.
60.577. PAYMENT.
(1) Except as provided in ORS 60.584, as soon as the proposed corporate action
is taken, or upon receipt of a payment demand, the corporation shall pay each
dissenter who complied with ORS 60.571, the amount the corporation estimates to
be the fair value of the shareholder's shares, plus accrued interest.
(2) The payment must be accompanied by:
(a) The corporation's balance sheet as of the end of a fiscal year
ending not more than 16 months before the date of payment, an income
statement for that year and the latest available interim financial
statements, if any;
(b) A statement of the corporation's estimate of the fair value of the
shares;
(c) An explanation of how the interest was calculated;
(d) A statement of the dissenter's right to demand payment under ORS
60.587; and
(e) A copy of ORS 60.551 to 60.594.
60.581. FAILURE TO TAKE ACTION.
(1) If the corporation does not take the proposed action within 60 days after
the date set for demanding payment and depositing share certificates, the
corporation shall return the deposited certificates and release the transfer
restrictions imposed on uncertificated shares.
(2) If after returning deposited certificates and releasing transfer
restrictions, the corporation takes the proposed action, it must send a new
dissenters' notice under ORS 60.567 and repeat the payment demand procedure.
60.584. AFTER-ACQUIRED SHARES.
(1) A corporation may elect to withhold payment required by ORS 60.577 from a
dissenter unless the dissenter was the beneficial owner of the shares before the
date set forth in the dissenters' notice as the date of the first announcement
to news media or to shareholders of the terms of the proposed corporate action.
(2) To the extent the corporation elects to withhold payment under subsection
(1) of this section, after taking the proposed corporate action, it shall
estimate the fair value of the shares plus accrued interest and shall pay this
amount to each dissenter who agrees to accept it in full satisfaction of such
demand. The corporation shall send with its offer a statement of its estimate of
the fair value of the shares an explanation of how the interest was calculated
and a statement of the dissenter's right to demand payment under ORS 60.587.
60.587. PROCEDURE IF SHAREHOLDER DISSATISFIED WITH PAYMENT OR OFFER.
(1) A dissenter may notify the corporation in writing of the dissenter's own
estimate of the fair value of the dissenter's shares and amount of interest due,
and demand payment of the dissenter's estimate, less any payment under ORS
60.577 or reject the corporation's offer under ORS 60.584 and demand payment of
the dissenter's estimate of the fair value of the dissenter's shares and
interest due, if:
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(a) The dissenter believes that the amount paid under ORS 60.577 or
offered under ORS 60.584 is less than the fair value of the dissenter's
shares or that the interest due is incorrectly calculated;
(b) The corporation fails to make payment under ORS 60.577 within 60
days after the date set for demanding payment; or
(c) The corporation, having failed to take the proposed action, does
not return the deposited certificates or release the transfer
restrictions imposed on uncertificated shares within 60 days after the
date set for demanding payment.
(2) A dissenter waives the right to demand payment under this section unless
the dissenter notifies the corporation of the dissenter's demand in writing
under subsection (1) of this section within 30 days after the corporation made
or offered payment for the dissenter's shares.
60.591. COURT ACTION.
(1) If a demand for payment under ORS 60.587 remains unsettled, the
corporation shall commence a proceeding within 60 days after receiving the
payment demand under ORS 60.587 and petition the court under subsection (2) of
this section to determine the fair value of the shares and accrued interest. If
the corporation does not commence the proceeding within the 60-day period, it
shall pay each dissenter whose demand remains unsettled the amount demanded.
(2) The corporation shall commence the proceeding in the circuit court of the
county where a corporation's principal office is located, or if the principal
office is not in this state, where the corporation's registered office is
located. If the corporation is a foreign corporation without a registered office
in this state, it shall commence the proceeding in the county in this state
where the registered office of the domestic corporation merged with or whose
shares were acquired by the foreign corporation was located.
(3) The corporation shall make all dissenters, whether or not residents of
this state, whose demands remain unsettled parties to the proceeding as in an
action against their shares. All parties must be served with a copy of the
petition. Nonresidents may be served by registered or certified mail or by
publication as provided by law.
(4) The jurisdiction of the circuit court in which the proceeding is commenced
under subsection (2) of this section is plenary and exclusive. The court may
appoint one or more persons as appraisers to receive evidence and recommend
decision on the question of fair value. The appraisers have the powers described
in the court order appointing them, or in any amendment to the order. The
dissenters are entitled to the same discovery rights as parties in other civil
proceedings.
(5) Each dissenter made a party to the proceeding is entitled to judgment for:
(a) The amount, if any, by which the court finds the fair value of the
dissenter's shares, plus interest, exceeds the amount paid by the
corporation; or
(b) The fair value, plus accrued interest, of the dissenter's
after-acquired shares for which the corporation elected to withhold
payment under ORS 60.584.
60.594. COURT COSTS AND COUNSEL FEES.
(1) The court in an appraisal proceeding commenced under ORS 60.591 shall
determine all costs of the proceeding, including the reasonable compensation and
expenses of appraisers appointed by the court. The court shall assess the costs
against the corporation, except that the court may assess costs against all or
some of the dissenters, in amounts the court finds equitable, to the extent the
court finds the dissenters acted arbitrarily, vexatiously, or not in good faith
in demanding payment under ORS 60.587.
(2) The court may also assess the fees and expenses of counsel and experts of
the respective parties in amounts the court finds equitable:
(a) Against the corporation and in favor of any or all dissenters if
the court finds the corporation did not substantially comply with the
requirements of ORS 60.561 to 60.587; or
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(b) Against either the corporation or a dissenter, in favor of any
other party, if the court finds that the party against whom the fees
and expenses are assessed acted arbitrarily, vexatiously or not in good
faith with respect to the rights provided by this chapter.
(3) If the court finds that the services of counsel for any dissenter were of
substantial benefit to other dissenters similarly situated, and that the fees
for those services should not be assessed against the corporation, the court may
award to counsel reasonable fees to be paid out of the amount awarded the
dissenters who were benefitted.
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APPENDIX B
SECTIONS 60.561 THROUGH 60.594 OF THE
OREGON BUSINESS CORPORATION ACT
60.561. NOTICE OF DISSENTERS' RIGHTS.
(1) If proposed corporate action creating dissenters' rights under ORS 60.554 is
submitted to a vote at a shareholders' meeting, the meeting notice must state
that shareholders are or may be entitled to assert dissenters' rights under ORS
60.551 to 60.594 and be accompanied by a copy of ORS 60.551 to 60.594.
(2) If corporate action creating dissenters' rights under ORS 60.554 is taken
without a vote of shareholders, the corporation shall notify in writing all
shareholders entitled to assert dissenters' rights that the action was taken and
send the shareholders entitled to assert dissenters' rights the dissenters'
notice described in ORS 60.567.
60.564. NOTICE OF INTENT TO DEMAND PAYMENT.
(1) If proposed corporate action creating dissenters' rights under ORS 60.554 is
submitted to a vote at a shareholders' meeting, a shareholder who wishes to
assert dissenters' rights shall deliver to the corporation before the vote is
taken written notice of the shareholder's intent to demand payment for the
shareholder's shares if the proposed action is effectuated and shall not vote
such shares in favor of the proposed action.
(2) A shareholder who does not satisfy the requirements of subsection (1) of
this section is not entitled to payment for the shareholder's shares under this
chapter.
60.567. DISSENTERS' NOTICE.
(1) If proposed corporate action creating dissenters' rights under ORS 60.554 is
authorized at a shareholders' meeting, the corporation shall deliver a written
dissenters' notice to all shareholders who satisfied the requirements of ORS
60.564.
(2) The dissenters' notice shall be sent no later than 10 days after the
corporate action was taken, and shall:
(a) State where the payment demand shall be sent and where and when
certificates for certificated shares shall be deposited;
(b) Inform holders of uncertificated shares to what extent transfer of the
shares will be restricted after the payment demand is received;
(c) Supply a form for demanding payment that includes the date of the first
announcement of the terms of the proposed corporate action to news media or
to shareholders and requires that the person asserting dissenters' rights
certify whether or not the person acquired beneficial ownership of the
shares before that date;
(d) Set a date by which the corporation must receive the payment demand.
This date may not be fewer than 30 nor more than 60 days after the date the
subsection (1) of this section notice is delivered; and
(e) Be accompanied by a copy of ORS 60.551 to 60.594.
60.571. DUTY TO DEMAND PAYMENT.
(1) A shareholder sent a dissenters' notice described in ORS 60.567 must demand
payment, certify whether the shareholder acquired beneficial ownership of the
shares before the date required to be set forth in the dissenters' notice
pursuant to ORS 60.567 (2)(c), and deposit the shareholder's certificates in
accordance with the terms of the notice.
(2) The shareholder who demands payment and deposits the shareholder's shares
under subsection (1) of this section retains all other rights of a shareholder
until these rights are canceled or modified by the taking of the proposed
corporate action.
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(3) A shareholder who does not demand payment or deposit the shareholder's share
certificates where required, each by the date set in the dissenters' notice, is
not entitled to payment for the shareholder's shares under this chapter.
60.574. SHARE RESTRICTIONS.
(1) The corporation may restrict the transfer of uncertificated shares from the
date the demand for their payment is received until the proposed corporate
action is taken or the restrictions released under ORS 60.581.
(2) The person for whom dissenters' rights are asserted as to uncertificated
shares retains all other rights of a shareholder until these rights are canceled
or modified by the taking of the proposed corporate action.
60.577. PAYMENT.
(1) Except as provided in ORS 60.584, as soon as the proposed corporate action
is taken, or upon receipt of a payment demand, the corporation shall pay each
dissenter who complied with ORS 60.571, the amount the corporation estimates to
be the fair value of the shareholder's shares, plus accrued interest.
(2) The payment must be accompanied by:
(a) The corporation's balance sheet as of the end of a fiscal year ending
not more than 16 months before the date of payment, an income statement for
that year and the latest available interim financial statements, if any;
(b) A statement of the corporation's estimate of the fair value of the
shares;
(c) An explanation of how the interest was calculated;
(d) A statement of the dissenter's right to demand payment under ORS
60.587; and
(e) A copy of ORS 60.551 to 60.594.
60.581. FAILURE TO TAKE ACTION.
(1) If the corporation does not take the proposed action within 60 days after
the date set for demanding payment and depositing share certificates, the
corporation shall return the deposited certificates and release the transfer
restrictions imposed on uncertificated shares.
(2) If after returning deposited certificates and releasing transfer
restrictions, the corporation takes the proposed action, it must send a new
dissenters' notice under ORS 60.567 and repeat the payment demand procedure.
60.584. AFTER-ACQUIRED SHARES.
(1) A corporation may elect to withhold payment required by ORS 60.577 from a
dissenter unless the dissenter was the beneficial owner of the shares before the
date set forth in the dissenters' notice as the date of the first announcement
to news media or to shareholders of the terms of the proposed corporate action.
(2) To the extent the corporation elects to withhold payment under subsection
(1) of this section, after taking the proposed corporate action, it shall
estimate the fair value of the shares plus accrued interest and shall pay this
amount to each dissenter who agrees to accept it in full satisfaction of such
demand. The corporation shall send with its offer a statement of its estimate of
the fair value of the shares an explanation of how the interest was calculated
and a statement of the dissenter's right to demand payment under ORS 60.587.
60.587. PROCEDURE IF SHAREHOLDER DISSATISFIED WITH PAYMENT OR OFFER.
(1) A dissenter may notify the corporation in writing of the dissenter's own
estimate of the fair value of the dissenter's shares and amount of interest due,
and demand payment of the dissenter's estimate, less any payment under ORS
60.577 or reject the corporation's offer under ORS 60.584 and demand payment of
the dissenter's estimate of the fair value of the dissenter's shares and
interest due, if:
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(a) The dissenter believes that the amount paid under OR 60.577 or offered
under ORS 60.584 is less than the fair value of the dissenter's shares or
that the interest due is incorrectly calculated;
(b) The corporation fails to make payment under ORS 60.577 within 60 days
after the date set for demanding payment; or
(c) The corporation, having failed to take the proposed action, does not
return the deposited certificates or release the transfer restrictions
imposed on uncertificated shares within 60 days after the date set for
demanding payment.
(2) A dissenter waives the right to demand payment under this section unless the
dissenter notifies the corporation of the dissenter's demand in writing under
subsection (1) of this section within 30 days after the corporation made or
offered payment for the dissenter's shares.
60.591. COURT ACTION.
(1) If a demand for payment under ORS 60.587 remains unsettled, the corporation
shall commence a proceeding within 60 days after receiving the payment demand
under ORS 60.587 and petition the court under subsection (2) of this section to
determine the fair value of the shares and accrued interest. If the corporation
does not commence the proceeding within the 60-day period, it shall pay each
dissenter whose demand remains unsettled the amount demanded.
(2) The corporation shall commence the proceeding in the circuit court of the
county where a corporation's principal office is located, or if the principal
office is not in this state, where the corporation's registered office is
located. If the corporation is a foreign corporation without a registered office
in this state, it shall commence the proceeding in the county in this state
where the registered office of the domestic corporation merged with or whose
shares were acquired by the foreign corporation was located.
(3) The corporation shall make all dissenters, whether or not residents of this
state, whose demands remain unsettled parties to the proceeding as in an action
against their shares. All parties must be served with a copy of the petition.
Nonresidents may be served by registered or certified mail or by publication as
provided by law.
(4) The jurisdiction of the circuit court in which the proceeding is commenced
under subsection (2) of this section is plenary and exclusive. The court may
appoint one or more persons as appraisers to receive evidence and recommend
decision on the question of fair value. The appraisers have the powers described
in the court order appointing them, or in any amendment to the order. The
dissenters are entitled to the same discovery rights as parties in other civil
proceedings.
(5) Each dissenter made a party to the proceeding is entitled to judgment for:
(a) The amount, if any, by which the court finds the fair value of the
dissenter's shares, plus interest, exceeds the amount paid by the
corporation; or
(b) The fair value, plus accrued interest, of the dissenter's
after-acquired shares for which the corporation elected to withhold payment
under ORS 60.584.
60.594. COURT COSTS AND COUNSEL FEES.
(1) The court in an appraisal proceeding commenced under ORS 60.591 shall
determine all costs of the proceeding, including the reasonable compensation and
expenses of appraisers appointed by the court. The court shall assess the costs
against the corporation, except that the court may assess costs against all or
some of the dissenters, in amounts the court finds equitable, to the extent the
court finds the dissenters acted arbitrarily, vexatiously, or not in good faith
in demanding payment under ORS 60.587.
(2) The court may also assess the fees and expenses of counsel and experts of
the respective parties in amounts the court finds equitable:
(a) Against the corporation and in favor of any or all dissenters if the
court finds the corporation did not substantially comply with the
requirements of ORS 60.561 to 60.587; or
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(b) Against either the corporation or a dissenter, in favor of any other
party, if the court finds that the party against whom the fees and expenses
are assessed acted arbitrarily, vexatiously or not in good faith with
respect to the rights provided by this chapter.
(3) If the court finds that the services of counsel for any dissenter were of
substantial benefit to other dissenters similarly situated, and that the fees
for those services should not be assessed against the corporation, the court may
award to counsel reasonable fees to be paid out of the amount awarded the
dissenters who were benefitted.
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PROSPECTUS
2,000,000 SHARES
PLEXUS CORP.
COMMON STOCK
This prospectus covers the offer and sale of up to a total of 2,000,000
shares of common stock of Plexus Corp. Plexus may issue these shares of its
common stock over time in acquisitions of other businesses or their stock. The
acquisitions would be in business combination transactions such as purchases of
stock, mergers or share exchanges.
The terms under which Plexus will issue these shares will vary from
transaction to transaction. Plexus expects to set those terms in negotiations
with representatives of the businesses to be acquired, such as their boards of
directors, officers or controlling shareholders. The prices may be related to
market prices at the time an agreement is executed, when an acquisition is
completed, or some other time chosen by the parties. The parties also may choose
to average the prices over a period of time. On November 6, 2000, Plexus common
stock's last reported sales price on the Nasdaq Stock Market was $58.00 per
share. The Nasdaq Stock Market is Plexus' trading market.
Plexus will use this prospectus only with security holders of companies it
has agreed to acquire. Under some circumstances, securities laws may not require
Plexus to provide additional information beyond this prospectus. Please see
"Plan of Distribution." In other circumstances, Plexus will include a supplement
with this prospectus.
YOU SHOULD CAREFULLY CONSIDER ALL OF THE INFORMATION THAT YOU RECEIVE IN
THIS TRANSACTION. FOR SOME OF THE IMPORTANT FACTORS WHICH YOU SHOULD CONSIDER IN
EVALUATING PLEXUS' COMMON STOCK AND ANY TRANSACTION WITH PLEXUS, PLEASE SEE
"RISK FACTORS" BEGINNING ON PAGE 4.
This prospectus is dated November 8, 2000.
-------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES. THEY ALSO HAVE NOT
DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
PLEXUS HAS NOT AUTHORIZED ANYONE TO GIVE YOU ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS EXCEPT FOR THOSE IN THIS PROSPECTUS OR ANY SUPPLEMENT. THAT IS
TRUE WHETHER THE STATEMENTS ARE IN CONNECTION WITH THE SOLICITATIONS OF PROXIES
OR THE OFFERING OF SECURITIES. YOU SHOULD NOT RELY UPON ANY SUCH INFORMATION OR
REPRESENTATIONS EVEN IF SOMEONE MAKES THEM, BECAUSE THEY ARE NOT AUTHORIZED BY
PLEXUS OR ANYONE ELSE. PLEXUS DOES NOT IMPLY OR REPRESENT BY DELIVERING THIS
PROSPECTUS THAT THERE HAVE BEEN NO CHANGES IN PLEXUS OR ITS BUSINESS SINCE THE
DATE OF THE PROSPECTUS OR THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME
AFTER ITS DATE.
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TABLE OF CONTENTS
PROSPECTUS
SUMMARY ......................................................................3
FORWARD-LOOKING STATEMENTS AND CAUTIONARY FACTORS .............................4
RISK FACTORS...................................................................4
RECENT DEVELOPMENTS...........................................................12
PLEXUS MARKET INFORMATION.....................................................14
PLEXUS SUMMARY FINANCIAL DATA.................................................15
PLEXUS CORP...................................................................16
OTHER INFORMATION ABOUT PLEXUS WHICH YOU CAN OBTAIN...........................24
INFORMATION ABOUT PLEXUS COMMON STOCK.........................................25
PLAN OF DISTRIBUTION..........................................................28
LEGAL OPINIONS................................................................29
EXPERTS .....................................................................29
PROCEDURE FOR SUBMITTING SHAREHOLDER PROPOSALS................................29
This prospectus incorporates by reference additional information about
Plexus. Please see "Other Information About Plexus Which You Can Obtain" on page
24. Plexus will provide you this information without charge, if you make a
request to:
Plexus Corp.
Attn: Corporate Secretary
55 Jewelers Park Drive
P.O. Box 156
Neenah WI 54956
Telephone No.: (920) 722-3451
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SUMMARY
This section is a summary of important information in this prospectus. It
includes summaries of information which Plexus believes is material. However,
because it is a summary, it is brief and only highlights the more detailed and
extensive material in, or incorporated by reference in, this prospectus. You
should read carefully all materials which Plexus provides. You should not rely
solely on this summary. If there are any differences between the summary and the
full materials, the full descriptions are controlling.
Unless we state otherwise, all data "per share" of Plexus Common, and all
information regarding the shares, have been restated for Plexus' 2-for-1 stock
splits in 1997 and 2000, and for the 1999 acquisition of SeaMED Corporation, for
which Plexus "pooled" financial statements and restated its historical financial
statements.
Plexus Corp.
Plexus provides product realization services to original equipment
manufacturers, or OEMs, in the networking/telecommunications, medical,
industrial, computer and transportation industries. We provide advanced
electronics design, manufacturing and testing services to our customers and
focus on complex, high-end products. We offer our customers the ability to
outsource all stages of product realization, including: development and design,
materials procurement and management, prototyping and new product introduction,
testing, manufacturing and after-market support. For many customers, we serve
both a design and production function, allowing those customers to concentrate
on concept development, distribution and marketing, while accelerating their
time to market, reducing their investment in manufacturing capacity and
optimizing total product cost.
We believe that our broad service offerings with respect to the design and
realization of complex, high-end products within the electronics manufacturing
services, or EMS, industry provide us with significant competitive advantages.
Through a staff of over 350 product development engineers, we offer a complete
menu of engineering services, including digital and analog design, mechanical
and industrial design, embedded software design, printed circuit board design,
test equipment and software development, product verification and new product
introduction services. Our manufacturing services include printed circuit board
assembly, product configuration, testing, final product and system box build and
after-market support. Throughout the production process, we offer logistics
services, such as materials procurement, inventory management, packaging and
distribution.
For more information about Plexus, you should see "Plexus Corp." later in
the prospectus. Plexus provides more information, including its audited
financial statements, in reports filed with the Commission which are
incorporated by reference. Documents which are incorporated by reference are
considered to be part of the prospectus even though they are not included with
it. You may obtain copies of those reports from the Commission or by asking
Plexus. See "Other Information About Plexus Which You Can Obtain" for
information on how to do that.
Plexus Corp. was incorporated in Wisconsin in December 1979. Our principal
executive offices are located at 55 Jewelers Park Drive, Neenah, Wisconsin
54957-0156, and our telephone number at that location is (920) 722-3451.
Plexus Common
Shares of Plexus common stock are traded on the NASDAQ Stock Market. The
trading symbol for Plexus common stock is "PLXS." See "Plexus Market
Information."
Plexus is a Wisconsin corporation, organized under the Wisconsin Business
Corporation Law. The WBCL and Plexus' Articles of Incorporation together
determine the rights of Plexus' shareholders. Among other things, the WBCL has
provisions which may affect the ability of other parties to acquire Plexus.
Also, the WBCL provides
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that shareholders of Wisconsin corporations may be personally liable for certain
employee compensation claims; that personal liability may apply to Plexus
shares. See "Information about Plexus Common Stock."
Method of Distribution
Plexus will offer the shares of Plexus common stock in business combination
transactions. The terms under which the shares will be offered will vary from
transaction to transaction. In some circumstances, Plexus will describe the
terms of the transaction in a supplement. In other circumstances no formal
supplement is required, and then you may receive further information about the
transaction by other means. See "Plan of Distribution."
FORWARD-LOOKING STATEMENTS AND CAUTIONARY FACTORS
This prospectus and any prospectus supplement, including the documents
incorporated by reference, may contain statements that constitute
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. Prospective investors are cautioned that any such
forward-looking statements are not guarantees of future performance and involve
known and unknown risks, uncertainties and other factors which may cause the
actual results, performance or achievements to differ materially from the future
results, performance or achievements expressed or implied in the forward-
looking statements. The words "anticipate," "believe," "estimate," "expect,"
"project," "objective" and similar expressions are intended to identify
forward-looking statements. In addition to the assumptions and other factors
referred to specifically in connection with those statements, factors that could
cause our actual results to differ materially from those contemplated in the
forward- looking statements include factors described under the caption "Risk
Factors" or similar cautionary captions in the documents incorporated herein by
reference.
RISK FACTORS
Any investment in the securities we are offering involves significant risk.
You should consider carefully the following information about these risks,
together with the other information contained or incorporated by reference into
this prospectus or in any supplement to this prospectus, before you decide to
buy our securities. If any of the following risks actually occur, our business,
operating results and financial condition would suffer, possibly to a material
degree. In these circumstances, the market price of our securities could
decline, and you may lose part or all of the money you paid to buy our
securities. You may obtain the information incorporated by reference into this
prospectus without charge by following the instructions in the "Other
Information You Can Obtain" section of this prospectus.
OUR CUSTOMER REQUIREMENTS AND OPERATING RESULTS VARY SIGNIFICANTLY FROM QUARTER
TO QUARTER, WHICH COULD NEGATIVELY IMPACT THE PRICE OF OUR COMMON STOCK.
Our quarterly results may vary significantly depending on various factors,
many of which are beyond our control. These factors include:
- the volume of customer orders relative to our capacity
- the timing of customer orders, particularly in light of the fact that
some of our customers place a significant percentage of their orders
during the last few weeks of a quarter
- the typical short life cycle of our customers' products
- market acceptance of and demand for our customers' products
- changes in our sales mix to our customers
- the timing of our expenditures in anticipation of future orders
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- our effectiveness in managing manufacturing processes
- changes in cost and availability of labor and components
- changes in economic conditions
- local events that may affect our production volume, such as local
holidays.
Due to the nature of turnkey manufacturing services, our quarterly and
annual results are affected by the level and timing of customer orders,
fluctuations in material costs and availability, and the degree of automation
used in the manufacturing process.
OUR CUSTOMERS MAY CANCEL THEIR ORDERS, CHANGE PRODUCTION QUANTITIES OR DELAY
PRODUCTION.
Electronics manufacturing service providers must provide increasingly rapid
product turnaround for their customers. We generally do not obtain firm,
long-term purchase commitments from our customers and we continue to experience
reduced lead-times in customer orders. Customers may cancel their orders, change
production quantities or delay production for a number of reasons. The success
of our customers' products in the market affects our business. Cancellations,
reductions or delays by a significant customer or by a group of customers could
seriously harm our operating results.
In addition, we make significant decisions, including determining the
levels of business that we will seek and accept, production schedules, component
procurement commitments, personnel needs and other resource requirements, based
on our estimates of customer requirements. The short-term nature of our
customers' commitments and the possibility of rapid changes in demand for their
products reduces our ability to estimate accurately the future requirements of
those customers.
On occasion, customers may require rapid increases in production, which can
stress our resources and reduce operating margins. Although we have increased
our manufacturing capacity and plan further increases, we may not have
sufficient capacity at any given time to meet all of our customers' demands. In
addition, because many of our costs and operating expenses are relatively fixed,
a reduction in customer demand can harm our gross margins and operating results.
WE MAY NOT BE ABLE TO OBTAIN RAW MATERIALS OR COMPONENTS FOR OUR ASSEMBLIES ON A
TIMELY BASIS OR AT ALL.
We rely on a limited number of suppliers for many components used in the
assembly process. We do not have any long-term supply agreements. At various
times, there have been shortages of some of the electronic components that we
use, and suppliers of some components have lacked sufficient capacity to meet
the demand for these components. Over the past 12-plus months, component
shortages have become more prevalent in our industry. In some cases, supply
shortages and delays in deliveries of particular components have resulted in
curtailed production, or delays in production, of assemblies using that
component, which has contributed to an increase in our inventory levels. We
expect that shortages and delays in deliveries of some components will continue.
If we are unable to obtain sufficient components on a timely basis, we may
experience manufacturing and shipping delays, which could harm our relationships
with customers and reduce our sales.
A significant portion of our sales is derived from turnkey manufacturing in
which we provide materials procurement. While most of our customer contracts
permit quarterly or other periodic adjustments to pricing based on decreases and
increases in component prices and other factors, we typically bear the risk of
component price increases that occur between any such repricings or, if such
repricing is not permitted, during the balance of the term of the particular
customer contract. Accordingly, component price increases could adversely affect
our operating results.
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THE MAJORITY OF OUR SALES COMES FROM A SMALL NUMBER OF CUSTOMERS AND IF WE LOSE
ANY OF THESE CUSTOMERS, OUR SALES AND OPERATING RESULTS COULD DECLINE
SIGNIFICANTLY.
Sales to our ten largest customers have represented a majority of our
sales in recent periods. Our ten largest customers accounted for approximately
67% of our net sales for the nine months ended June 30, 2000 and 61% of our
fiscal 1999 net sales. Our largest customers were Lucent Technologies and
General Electric accounting for approximately 24% and 11%, respectively, of our
net sales for the nine month period ended June 30, 2000 and 16% and 12%,
respectively, of our fiscal 1999 net sales. The identities of our principal
customers have varied from year to year, and our principal customers may not
continue to purchase services from us at current levels, if at all. Significant
reductions in sales to any of these customers, or the loss of major customers,
could seriously harm our business. If we are not able to timely replace expired,
canceled or reduced contracts with new business, our sales will decrease.
WE MAY FAIL TO COMPLETE SUCCESSFULLY FUTURE ACQUISITIONS AND MAY NOT INTEGRATE
SUCCESSFULLY ACQUIRED BUSINESSES, WHICH COULD ADVERSELY AFFECT OUR OPERATING
RESULTS.
We have pursued a strategy that has included growth through
acquisitions. We cannot assure you that we will be able to complete successfully
future acquisitions, due primarily to increased competition for the acquisition
of electronics manufacturing service operations. If we are unable to acquire
additional businesses, our growth could be inhibited. Similarly, we cannot
assure you that we will be able to integrate successfully the operations and
management of our recent acquisitions or future acquisitions. Acquisitions
involve significant risks that could have a material adverse effect on us. These
risks include:
OPERATING RISKS, SUCH AS THE:
- inability to integrate successfully our acquired operations,
businesses and personnel
- inability to realize anticipated synergies, economies of scale
or other value
- difficulties in scaling up production and coordinating
management of operations at new sites
- strain placed on our personnel, systems and resources
- possible modification or termination of an acquired business
customer program, including cancellation of current or
anticipated programs
- loss of key employees of acquired businesses.
FINANCIAL RISKS, SUCH AS THE:
- dilutive effect of the issuance of additional equity
securities
- incurrence of additional debt and related interest costs
- inability to achieve expected operating margins to offset the
increased fixed costs associated with acquisitions
- incurrence of large write-offs or write-downs
- amortization of goodwill or other intangible assets
- unforeseen liabilities of the acquired businesses.
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<PAGE> 96
EXPANSION OF OUR BUSINESS AND OPERATIONS MAY NEGATIVELY IMPACT OUR BUSINESS.
We may expand our operations by establishing or acquiring new
facilities or by expanding capacity in our current facilities. We may expand
both in geographical areas in which we currently operate and in new geographical
areas within the United States and internationally. We may not be able to find
suitable facilities on a timely basis or on terms satisfactory to us. Expansion
of our business and operations involves numerous business risks, including the:
- inability to integrate successfully additional facilities or
capacity and to realize anticipated synergies, economies of
scale or other value
- additional fixed costs which may not be fully absorbed by the
new business
- difficulties in the timing of expansions, including delays in
the implementation of construction and manufacturing plans
- diversion of management's attention from other business areas
during the planning and implementation of expansions
- strain placed on our operational, financial, management,
technical and information systems and resources
- disruption in manufacturing operations
- incurrence of significant costs and expenses
- inability to locate enough customers or employees to support
the expansion.
OPERATING IN FOREIGN COUNTRIES EXPOSES US TO INCREASED RISKS.
We recently acquired operations in Mexico and the United Kingdom as a
result of purchasing the turnkey contract electronics manufacturing service
operations of Elamex, S.A. de C.V. and the stock of Keltek (Holdings) Limited.
We may in the future expand into other international regions. We have limited
experience in managing geographically dispersed operations and in operating in
Mexico and the United Kingdom. We also purchase a significant number of
components manufactured in foreign countries. Because of these international
aspects of our operations, we are subject to the following risks that could
materially impact our operating results:
- economic or political instability
- transportation delays or interruptions and other effects of
less developed infrastructure in many countries
- foreign exchange rate fluctuations
- utilization of different systems and equipment
- difficulties in staffing and managing foreign personnel and
diverse cultures.
In addition, changes in policies by the U.S. or foreign governments
could negatively affect our operating results due to changes in duties, tariffs,
taxes or limitations on currency or fund transfers. Also, our Mexico based
operation utilizes the Maquiladora program, which provides reduced tariffs and
eases import regulations, and we could be adversely affected by changes in that
program.
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WE MAY NOT BE ABLE TO MAINTAIN OUR ENGINEERING, TECHNOLOGICAL AND MANUFACTURING
PROCESS EXPERTISE.
The markets for our manufacturing and engineering services are
characterized by rapidly changing technology and evolving process development.
The continued success of our business will depend upon our ability to:
- hire, retain and expand our qualified engineering and
technical personnel
- maintain and enhance our technological capabilities
- develop and market manufacturing services which meet changing
customer needs
- successfully anticipate or respond to technological changes in
manufacturing processes on a cost-effective and timely basis.
Although we believe that our operations utilize the assembly and
testing technologies, equipment and processes that are currently required by our
customers, we cannot be certain that we will develop the capabilities required
by our customers in the future. The emergence of new technologies, industry
standards or customer requirements may render our equipment, inventory or
processes obsolete or noncompetitive. In addition, we may have to acquire new
assembly and testing technologies and equipment to remain competitive. The
acquisition and implementation of new technologies and equipment may require
significant expense or capital investment which could reduce our operating
margins and our operating results. Our failure to anticipate and adapt to our
customers' changing technological needs and requirements could have an adverse
effect on our business.
FAILURE TO MANAGE OUR GROWTH MAY SERIOUSLY HARM OUR BUSINESS.
We have experienced rapid growth, both internally and through
acquisitions. This growth has placed, and will continue to place, significant
strain on our operations. To manage our growth effectively, we must continue to
improve and expand our financial, operational and management information
systems; continue to develop the management skills of our managers and
supervisors; and continue to train, manage and motivate our employees. If we are
unable to manage our growth effectively, our operating results could be harmed.
OUR TURNKEY MANUFACTURING SERVICES INVOLVE INVENTORY RISK.
Some of our contract manufacturing services are provided on a turnkey
basis, where we purchase some or all of the materials required for designing,
product assembling and manufacturing. These services involve greater resource
investment and inventory risk management than consignment services, where the
customer provides these materials. Accordingly, various component price
increases and inventory obsolescence could adversely affect our selling price,
gross margins and operating results.
START-UP COSTS AND INEFFICIENCIES RELATED TO NEW PROGRAMS CAN ADVERSELY AFFECT
OUR OPERATING RESULTS.
Start-up costs, the management of labor and equipment resources in
connection with the establishment of new programs and new customer
relationships, and the need to estimate required resources in advance can
adversely affect our gross margins and operating results. These factors are
particularly evident in the early stages of the life-cycle of new products and
new programs. These factors also affect our ability to efficiently use labor and
equipment. In addition, if any of these new programs or new customer
relationships were terminated, our operating results could be harmed,
particularly in the short-term.
WE ARE SUBJECT TO EXTENSIVE GOVERNMENT REGULATIONS.
We are also subject to environmental regulations relating to the use,
storage, discharge, recycling and disposal of hazardous chemicals used in our
manufacturing process. If we fail to comply with present and future
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<PAGE> 98
regulations, we could be subject to future liabilities or the suspension of
business. These regulations could restrict our ability to expand our facilities
or require us to acquire costly equipment or incur significant expense. While we
are not currently aware of any material violations, we may have to spend funds
to comply with present and future regulations or be required to perform site
remediation.
In addition, our medical device business, which represented
approximately 31% of our fiscal year 1999 sales, is subject to substantial
government regulation, primarily from the FDA and similar regulatory bodies in
other countries. We must comply with statutes and regulations covering the
design, development, testing, manufacturing, labeling, marketing and
distribution of medical devices and the reporting of certain information
regarding their safety. Noncompliance with these rules can result in, among
other things, us and our customers being subject to fines, injunctions, civil
penalties, criminal prosecution, recall or seizure of devices, total or partial
suspension of production, failure of the government to grant pre-market
clearance or record approvals for projections or the withdrawal of marketing
approvals. The FDA also has the authority to require repair or replacement of
equipment, or refund of the cost of a device manufactured or distributed by our
customers. In addition, the failure or noncompliance could have an adverse
effect on our reputation.
OUR PRODUCTS ARE FOR THE ELECTRONICS INDUSTRY, WHICH PRODUCES TECHNOLOGICALLY
ADVANCED PRODUCTS WITH SHORT LIFE CYCLES.
Factors affecting the electronics industry, in particular the short
life cycle of products, could seriously harm our customers and, as a result, us.
These factors include:
- the inability of our customers to adapt to rapidly changing
technology and evolving industry standards, which result in
short product life cycles
- the inability of our customers to develop and market their
products, some of which are new and untested
- the potential that our customers' products may become obsolete
or the failure of our customers' products to gain widespread
commercial acceptance.
INCREASED COMPETITION MAY RESULT IN DECREASED DEMAND OR PRICES FOR OUR SERVICES.
The electronics manufacturing services industry is highly competitive.
We compete against numerous U.S. and foreign electronics manufacturing services
providers with global operations, as well as those who operate on a local or
regional basis. In addition, current and prospective customers continually
evaluate the merits of manufacturing products internally. Consolidation in the
electronics manufacturing services industry results in a continually changing
competitive landscape. The consolidation trend in the industry also results in
larger and more geographically diverse competitors who have significant combined
resources with which to compete against us.
Some of our competitors have substantially greater managerial,
manufacturing, engineering, technical, financial, systems, sales and marketing
resources than we do. These competitors may:
- respond more quickly to new or emerging technologies
- have greater name recognition, critical mass and geographic
and market presence
- be better able to take advantage of acquisition opportunities
- adapt more quickly to changes in customer requirements
- devote greater resources to the development, promotion and
sale of their services
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<PAGE> 99
- be better positioned to compete on price for their services.
We may be operating at a cost disadvantage compared to manufacturers
who have greater direct buying power from component suppliers, distributors and
raw material suppliers or who have lower cost structures. As a result,
competitors may procure a competitive advantage and obtain business from our
customers. Our manufacturing processes are generally not subject to significant
proprietary protection, and companies with greater resources or a greater market
presence may enter our market or increase their competition with us. Increased
competition could result in price reductions, reduced sales and margins or loss
of market share.
WE MAY FAIL TO SECURE NECESSARY ADDITIONAL FINANCING.
We have made and intend to continue to make substantial capital
expenditures to expand our operations, acquire businesses and remain competitive
in the rapidly changing electronics manufacturing services industry. Our future
success may depend on our ability to obtain additional financing and capital to
support our continued growth and operations, including our working capital
needs. We may seek to raise capital by:
- issuing additional common stock or other equity securities
- issuing debt securities
- increasing available borrowings under our existing credit
facility or obtaining new credit facilities
- obtaining off-balance sheet financing.
We may not be able to obtain additional capital when we want or need
it, and capital may not be available on satisfactory terms. If we issue
additional equity securities or convertible debt to raise capital, it may be
dilutive to your ownership interest. Furthermore, any additional financing and
capital may have terms and conditions that adversely affect our business, such
as restrictive financial or operating covenants.
WE DEPEND ON CERTAIN KEY PERSONNEL, AND THE LOSS OF KEY PERSONNEL MAY HARM OUR
BUSINESS.
Our future success depends in large part on the continued service of
our key technical and management personnel and on our ability to continue to
attract and retain qualified employees, particularly those highly skilled
design, process and test engineers involved in the manufacture of existing
products and the development of new products and processes. The competition for
these individuals is intense, and the loss of key employees, generally none of
whom is subject to an employment agreement for a specified term or a
post-employment non-competition agreement, could harm our business. We believe
that we have a relatively small management group whose resources could be
strained as a result of expansion of our business.
PRODUCTS WE MANUFACTURE MAY CONTAIN DESIGN OR MANUFACTURING DEFECTS WHICH COULD
RESULT IN REDUCED DEMAND FOR OUR SERVICES AND LIABILITY CLAIMS AGAINST US.
We manufacture products to our customers' specifications which are
highly complex and may at times contain design or manufacturing errors or
failures. Defects have been discovered in products we manufactured in the past
and, despite our quality control and quality assurance efforts, defects may
occur in the future. Defects in the products we manufacture, whether caused by a
design, manufacturing or component failure or error, may result in delayed
shipments to customers or reduced or cancelled customer orders. If these defects
occur in large quantities or too frequently, our business reputation may also be
impaired. In addition, these defects may result in liability claims against us.
The FDA investigates and checks, occasionally on a random basis, compliance with
statutory and regulatory requirements. Violations may lead to penalties or shut
downs of a program or a facility.
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<PAGE> 100
THE PRICE OF OUR COMMON STOCK HAS BEEN AND MAY CONTINUE TO BE VOLATILE AND YOU
MIGHT NOT BE ABLE TO SELL YOUR SHARES AT OUR CURRENT MARKET PRICE.
Between October 1, 1999 and September 30, 2000, our stock price has
fluctuated between a low of $12.22 per share and a high of $81.00 per share. The
price of our common stock may fluctuate significantly in response to a number of
events and factors relating to our company, our competitors and the market for
our services, many of which are beyond our control.
In addition, the stock market in general, and especially the Nasdaq
National Market along with market prices for technology companies, in
particular, have experienced extreme volatility that has often been unrelated to
the operating performance of these companies. These broad market and industry
fluctuations may adversely affect the market price of our common stock,
regardless of our operating results.
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<PAGE> 101
RECENT DEVELOPMENTS
Fourth Quarter Fiscal 2000 Results
While Plexus has not completed or released its financial statements as
of September 30, 2000 or its fiscal quarter then ended, it has announced certain
summary financial information. That information, which is unaudited, is
presented below. It remains subject to completion of Plexus' year-end audit.
<TABLE>
<CAPTION>
At, or for
the quarter ended,
September 30, 2000
------------------
(in thousands,
except per share data)
<S> <C>
OPERATING STATEMENT DATA:
Net sales....................................... $ 249,365
Cost of sales................................... 213,872
--------------
Gross profit.................................... 35,493
Operating expenses:
Selling and administrative expenses........... 10,615
Goodwill amortization......................... 795
Merger costs.................................. 69
--------------
Total operating expenses.................... 11,479
--------------
Operating income................................ 24,014
Other income (expense):
Interest expense.............................. (2,135)
Miscellaneous................................. (104)
--------------
Income before income taxes...................... 21,775
Income taxes.................................... 9,603
--------------
Net income...................................... $ 12,172
==============
Earnings per share:
Basic......................................... $ 0.33
==============
Diluted....................................... $ 0.31
==============
Weighted average shares outstanding:
Basic......................................... 36,872
==============
Diluted....................................... 39,898
==============
BALANCE SHEET DATA:
Working capital................................. $ 213,596
Total assets.................................... 515,608
Long-term debt.................................. 141,409
Stockholders' equity............................ 209,362
</TABLE>
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Stock Offering
In October 2000, Plexus completed an underwritten public offering of
3.0 million shares of its common stock, at a per share offering price to the
public of $50.00. After reflecting the payment of estimated offering expenses
and the underwriting discount of $2.375 per share, Plexus received net proceeds
of approximately $142.3 million. The underwriters purchased an additional
450,000 shares, at the offering price, on November 7, 2000 under their
overallotment option. The effects of the offering are not yet reflected in the
fiscal 2000 results above.
The following table shows Plexus' use of those proceeds. It sets forth
Plexus' unaudited capitalization as of September 30, 2000:
- on an actual basis
- on an as adjusted basis to reflect the sale of 3,450,000
shares of common stock, after deducting the underwriting
discounts and commissions and estimated offering expenses that
Plexus will pay, and the application of the net proceeds of
$163.7 million Plexus received from the offering.
You should read this information together with our consolidated
financial statements and the related notes incorporated by reference into this
prospectus and "Plexus Summary Financial Data."
<TABLE>
<CAPTION>
September 30, 2000
-------------------------------------
Actual As Adjusted
---------- ----------
(In thousands, except per share data)
(unaudited)
<S> <C> <C>
Cash and cash equivalents....................................... $ 5,293 $ 84,549
========== ==========
Credit facility, including current portion...................... $ 134,450 50,000
Other long-term debt............................................ 15,324 15,324
---------- ----------
Total debt............................................. 149,774 65,324
---------- ----------
Stockholders' equity:
Preferred stock, $0.01 par value; authorized shares--5,000;
issued and outstanding shares--none........................... - -
Common stock, $0.01 par value; authorized shares--60,000;
issued and outstanding shares--37,022 actual and 40,022
as adjusted................................................... 371 405
Additional paid-in capital...................................... 72,699 236,371
Accumulated other comprehensive income.......................... (285) (285)
Retained earnings............................................... 136,577 136,577
---------- ----------
Total stockholders' equity............................. 209,362 373,068
---------- ----------
Total capitalization................................... $ 359,136 $ 438,392
========== ==========
</TABLE>
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PLEXUS MARKET INFORMATION
Plexus common stock trades on the Nasdaq Stock Market under the symbol
"PLXS". Plexus had approximately 525 shareholders of record at November 3, 2000.
The following table summarizes high and low prices and cash dividends paid for
Plexus common stock for the periods shown. The high and low prices are actual
trade prices as reported on Nasdaq.
<TABLE>
<CAPTION>
Price Range of
Common Stock
------------------------------
High Low
--------- ---------
<S> <C> <C>
1999 Fiscal Year (ended September 30, 1999)
First Quarter................................................ $ 17.38 $ 8.50
Second Quarter............................................... $ 20.13 $ 12.81
Third Quarter................................................ $ 17.38 $ 13.38
Fourth Quarter............................................... $ 17.19 $ 13.94
2000 Fiscal Year (ended September 30, 2000)
First Quarter................................................ $ 24.50 $ 12.22
Second Quarter............................................... $ 37.00 $ 20.22
Third Quarter................................................ $ 57.63 $ 26.00
Fourth Quarter............................................... $ 81.00 $ 43.38
2001 Fiscal Year (ending September 30, 2001)
First Quarter (through November 6, 2000)..................... $ 78.38 $ 44.69
</TABLE>
We have never declared or paid any cash dividends on our common stock.
We anticipate that all earnings in the foreseeable future will be retained to
finance the development of our business.
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<PAGE> 104
PLEXUS SUMMARY FINANCIAL DATA
The following selected consolidated financial data should be read in
conjunction with Plexus' consolidated financial statements and related notes
incorporated by reference herein. The consolidated financial statements have
been prepared to give retroactive effect to the merger with SeaMED Corporation
on July 23, 1999, which was accounted for as a pooling-of-interests. The
selected consolidated financial data as of and for each of the years in the
five-year period ended September 30, 1999 have been derived from Plexus'
consolidated financial statements. The unaudited consolidated financial data for
the nine months ended June 30, 1999 and 2000 have been derived from Plexus'
financial records. See also "Recent Developments."
<TABLE>
<CAPTION>
Nine Months
Fiscal year ended September 30, ended June 30,
---------------------------------------------------------------- ------------------------
1995 1996 1997 1998 1999 1999 2000
--------- --------- --------- --------- --------- --------- ---------
(in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATING STATEMENT
DATA:
Net sales.................. $ 300,795 $ 342,254 $ 438,565 $ 466,795 $ 492,414 $ 360,180 $ 502,275
Cost of sales.............. 274,207 311,094 387,333 406,648 426,005 312,734 430,604
--------- --------- --------- --------- --------- --------- ---------
Gross profit............... 26,588 31,160 51,232 60,147 66,409(1) 47,446(2) 71,671
--------- --------- --------- --------- --------- --------- ---------
Operating expenses:
Selling and administrative 13,081 15,546 20,463 23,754 26,443 19,863 24,487
Plant closing, relocation and
severance - - - - 981 765 -
Merger/acquisition costs. - - - - 4,557 - 1,062
Amortization of goodwill. - - - - - - 222
--------- --------- --------- --------- --------- --------- ---------
Total operating expenses 13,081 15,546 20,463 23,754 31,981 20,628 25,771
--------- --------- --------- --------- --------- --------- ---------
Operating income........... 13,507 15,614 30,769 36,393 34,428(1) 26,818(2) 45,900(3)
Other income (expense):
Interest expense......... (2,664) (2,286) (1,014) (86) (274) (253) (435)
Miscellaneous............ 325 464 1,160 975 1,995 1,680 1,388
--------- --------- --------- --------- --------- --------- ---------
Income before income taxes. 11,168 13,792 30,915 37,282 36,149 28,245 46,853
Income taxes............... 4,095 5,442 12,022 14,345 15,838 11,430 18,830
--------- --------- --------- --------- --------- --------- ---------
Net income................. $ 7,073 $ 8,350 $ 18,893 $ 22,937 $ 20,311(1) $ 16,815(2) $ 28,023(3)
========= ========= ========= ========= ========= ========= =========
Earnings per share:
Basic.................... $ 0.24 $ 0.29 $ 0.60 $ 0.68 $ 0.59 $ 0.49 $ 0.78
Diluted.................. $ 0.22 $ 0.26 $ 0.54 $ 0.63 $ 0.55(1) $ 0.45(2) $ 0.73(3)
Weighted average shares
outstanding:
Basic.................... 26,280 26,472 30,732 33,688 34,646 34,528 35,740
Diluted.................. 31,436 31,850 35,116 36,196 37,021 36,984 38,324
BALANCE SHEET DATA:
Working capital............ $ 75,374 $ 55,683 $ 70,544 $ 91,159 $ 110,411 $ 113,927 $ 146,154
Total assets............... 124,345 122,301 152,453 184,354 229,636 218,812 393,254
Long-term debt............. 42,955 16,658 3,516 2,587 142 2,814 46,893
Stockholders' equity....... 45,826 53,788 89,404 115,863 146,403 141,522 187,707
OTHER DATA:
Return on average assets... 5.6% 6.8% 13.8% 13.6% 9.8% 11.1%(4) 12.0%(4)
Return on average equity... 17.0% 16.8% 26.4% 22.3% 15.5% 17.4%(4) 22.4%(4)
Inventory turnover ratio (5) 4.8x 5.6x 6.6x 7.1x 6.2x 6.9x 4.6x
</TABLE>
------------------
(1) In connection with the acquisition of SeaMED Corporation, we recorded
merger and other one-time related charges in fiscal 1999 of
approximately $7.7 million (approximately $6.0 million after-tax).
Excluding these charges, gross profit would have been approximately
$68.6 million, operating income
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<PAGE> 105
would have been approximately $42.1 million, net income would have been
approximately $26.3 million and diluted earnings per share would have
been $0.71.
(2) In connection with the operations of SeaMED Corporation, we recorded
one-time charges in the nine months ended June 30, 1999 of
approximately $2.9 million (approximately $1.9 million after tax)
relating to plant closing costs, the write down of obsolete inventory
and a loss on an engineering contract. Excluding these charges, gross
profit would have been approximately $49.6 million, operating income
would have been approximately $29.8 million, net income would have been
approximately $18.8 million and diluted earnings per share would have
been $0.51.
(3) In connection with the acquisition of Agility, Incorporated and the
acquisition of the turnkey electronics manufacturing services
operations of Elamex, S.A. de C.V., we recorded one-time
acquisition-related charges in the nine months ended June 30, 2000 of
approximately $1.1 million (approximately $0.7 million after tax).
Excluding these one-time charges, operating income would have been
approximately $47.0 million, net income would have been approximately
$28.8 million and diluted earnings per share would have been $0.75.
(5) Calculations for the nine months ended June 30, 1999 and 2000 are
annualized.
(6) Calculations of inventory turnover are based on average inventory
turnover for the period and are annualized for the nine months ended
June 30, 1999 and 2000. Our quarterly calculations of inventory
turnover, which are included and incorporated by reference herein, are
based on inventory at period end.
PLEXUS CORP.
Overview
Plexus provides product realization services to original equipment
manufacturers, or OEMs, in the networking/telecommunications, medical,
industrial, computer and transportation industries. We provide advanced
electronics design, manufacturing and testing services to our customers and
focus on complex, high-end products. We offer our customers the ability to
outsource all stages of product realization, including: development and design,
materials procurement and management, prototyping and new product introduction,
testing, manufacturing and after-market support.
We believe that our broad service offerings with respect to the design
and realization of complex, high- end products within the electronics
manufacturing services, or EMS, industry provide us with a significant
competitive advantage. Through a staff of over 350 product development
engineers, we offer a complete menu of engineering services, including digital
and analog design, mechanical and industrial design, embedded software design,
printed circuit board design, test equipment and software development, product
verification and new product introduction services. Our manufacturing services
include printed circuit board assembly, product configuration, testing, final
product and system box build and after-market support. Throughout the production
process, we offer logistics services, such as materials procurement, inventory
management, packaging and distribution.
Our customers include industry leading OEMs such as Lucent
Technologies, Cisco Systems, General Electric, Unisys, Siemens, Honeywell and
Johnson & Johnson, and emerging technology companies such as Equipe
Communications, Gotham Networks, Sitara Networks and Appian Communications. Due
to our focus on serving OEMs in high-growth technology and medical sectors, our
business is influenced by major technological trends such as the level and rate
of development of fiber optics infrastructure, the expansion of network
computing and Internet use, and the expansion of outsourcing by OEMs generally.
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<PAGE> 106
Established in 1979, we have approximately 5,300 full-time employees
and 18 facilities in 13 locations totaling approximately 1.25 million square
feet. Over the past year, we have expanded our capacity and geographic reach
through a series of strategic acquisitions. Through these transactions, we have
enhanced our access to and ability to provide services within important
technology corridors in Boston, Chicago and Seattle; established a base in
Europe; significantly increased the size and capabilities of our medical
services offerings; significantly expanded our capacity with respect to the
assembly of configured-to-order wireless products; and acquired proven low-cost
manufacturing operations in Mexico.
Industry Background
The EMS industry is comprised of companies that provide a range of
manufacturing services to electronics OEMs. The EMS industry has experienced
rapid growth in recent years, due to the expansion of the overall industry and
increased outsourcing of manufacturing and related functions by electronics
OEMs. These growth characteristics are driven by accelerating product
development cycles, the demand for network infrastructure expansion to handle
greater voice and data traffic and the enhanced functionality of communications
devices. Technology Forecasters projects that the EMS industry will grow by
approximately 28 percent each year through 2004, with total industry sales
projected to be approximately $260.3 billion by 2004.
OEMs have increasingly outsourced manufacturing and other related
functions to EMS companies in an effort to focus their own resources on core
competencies, while leveraging the expertise of EMS providers in design,
procurement, assembly and test operations and supply chain management.
As OEM outsourcing has increased, many EMS providers have established
strong strategic relationships with their OEM customers. In addition, some OEMs
have sold manufacturing operations to EMS providers with demonstrated expertise
in generating manufacturing efficiencies. Key benefits to OEMs from outsourcing
include:
- accelerated time to market and decreased time-to-volume
manufacturing
- reduced operating costs and capital requirements
- increased ability to focus resources on core competencies
- improved access to leading design and manufacturing
technologies
- increased ability to leverage EMS companies' logistics
expertise
- improved inventory management and purchasing power.
Competitive Advantages
We believe that we distinguish ourselves from our competitors by
providing a wide range of product realization services to electronics OEMs. Our
competitive advantages include our ability to:
Offer a complete menu of engineering capabilities. With over 20 years
of experience in electronics design engineering, we provide comprehensive
engineering and design services, including printed circuit board design,
hardware and software design, test design, prototyping and new product
introduction. For example, we are a leading provider of these design and
engineering services to the medical products manufacturing industry. Our
engineering capability is a core strength, and we currently maintain a staff of
over 350 product development engineers. Our engineers possess hard-to-find
skills such as application-specific integrated circuit design, radio frequency
design, power supply design, optical network design and embedded software
engineering.
Accelerate new product introduction and time to market for our
customers. Because we offer a full range of electronic product development and
design and test engineering services, we are able to accelerate the time to
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<PAGE> 107
market for our customers' products. Through our New Product Introduction Plus
centers, we offer our customers concurrent product and test design services,
prompt turnaround of prototyping and testing solutions and pilot production
product runs, with the goal of providing a smooth, cost-effective transition to
volume production and accelerating time to market for our customers' products.
Provide a full range of product realization services. Along with our
engineering and design capability, we offer manufacturing and assembly services.
We have the expertise to assemble very complex electronic products that utilize
multiple printed circuit boards and subassemblies. We are particularly
experienced in the networking/telecommunication and medical industries. We also
offer assembly services such as configuring products and incorporating
electronic assemblies into subassemblies and fabricating products from
components manufactured to specification by others. We believe that by offering
a full range of product realization services, we reduce our customers' costs and
accelerate the time to market for their products.
Provide services for complex, high-end products. Because of our
engineering expertise and high-end manufacturing capabilities, we focus on
providing services for complex products such as optical switches, radio
frequency/wireless technology, ultrasound devices and other complex medical
device products. As a result, we are able to attract customers in high-end,
emerging technology markets such as optical networking, radio frequency and
wireless technology.
Strategy
Plexus' objective is to be the leading provider of product realization
services in the EMS industry, with a focus on high-end, value-driven engineering
and manufacturing services. We seek to provide our customers with a full range
of electronic product development and design, new product introduction, test and
manufacturing services. Our strategy includes:
Leveraging our engineering expertise. We intend to continue to leverage
our engineering and design leadership to generate profitable manufacturing
opportunities. For example, our printed circuit board design and test
development services have led to new contracts in the medical and
networking/telecommunications industries, including optical networking programs.
Leveraging our engineering expertise also allows us to cultivate an engineering
sales channel and enables us to more effectively survey the marketplace of
emerging products and technologies for potential new customers and products.
Expanding our design engineering expertise. We intend to continue
expanding our engineering and design expertise and the breadth of engineering
and design services we provide. We actively recruit new engineering talent and
focus on retaining our existing engineering staff. In addition, a primary focus
of our acquisition strategy is to increase our engineering capabilities and
capacity. We also seek to enter into strategic alliances with research and
development organizations that enable us to provide complementary technologies
and broader services to our customers. We will strive to use our expanding
engineering and design capability base to provide more expertise and a broader
range of customer services.
Accelerating time to market for our customers. Our design engineering,
testing and new product introduction services help our customers reduce the time
to market for their products. Our New Product Introduction Plus centers provide
quick turnaround of prototyping and printed circuit board design and provide
timely and cost-effective testing solutions, which helps speed the transition to
volume production. Our ability to reduce customers' time to market allows us to
attract new customers and to pursue opportunities to provide services for new
products, including those in emerging technology markets.
Focusing on complex, high-end products. We intend to continue using our
engineering and design capabilities to focus on complex, high-end products. We
will continue to explore new opportunities to provide services focused on
high-end products through our expanded presence in important technology
corridors, our strategic alliances with research and development organizations
and our engineering and design expertise.
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<PAGE> 108
Pursuing strategic acquisitions to expand our geographic reach and
service offerings. We continue to review opportunities to acquire engineering
and manufacturing operations in North America, Europe and Asia. Expanding our
geographic reach broadens the services we offer and enhances our customer
relationships. The primary focus of these geographic and service expansions is
to enable our customers to focus on their core competencies and reduce
development cost and time to market for their products.
Services
Plexus offers a broad range of integrated services that provide
customers with a total design, new product introduction and manufacturing
solution to take a product from initial design through production to
after-market support. Our customers may utilize any or all of the following
services and tend to use more of these services as their outsourcing strategies
mature:
Product development and design. We provide comprehensive product
development and design and test engineering services. These services include
project management, initial feasibility studies, product concept definition,
specifications for product features and functions, product engineering
specifications, microprocessor selection, circuit design, software design,
application-specific integrated circuit design, printed circuit board layout,
product housing design, development of test specifications and product
validation testing. Through our product development and design services, we
provide customers with a complete product design that can be manufactured
efficiently.
Prototyping and new product introduction services. We provide rapid
assembly of prototype products within our dedicated, streamlined New Product
Introduction Plus centers. We supplement our prototype assembly services with
value-added services, including printed circuit board design, materials
management, manufacturing defects analysis, analysis of the manufacturability
and testability of a design, test implementation and pilot production runs
leading to volume production. These services link our engineering organization,
our customers' engineering organizations and our volume manufacturing
organization. This link facilitates an efficient transition to manufacturing. We
believe that these services provide significant value to our customers by
accelerating their products' time-to-market schedule.
Test development and product testing. Because product functionality has
driven components and assembly techniques to become increasingly complex, there
is a need to design and assemble increasingly complex in-circuit and functional
test equipment for electronic products and assemblies. Our internal development
of this test equipment allows us to rapidly implement test solutions and
efficiently test printed circuit assemblies, subassemblies and product and
system assemblies. We also develop and utilize specialized equipment that allows
us to environmentally stress test products during functional testing to assure
reliability. We believe that the design and production of test equipment is an
important factor in our ability to provide technology-driven products of
consistent and high quality.
Manufacturing and assembly. We provide turnkey manufacturing services
for a variety of electronic products to diverse industries. These services
include developing and implementing a materials strategy that meets customers'
demand and flexibility requirements, assembling printed circuit assemblies
utilizing a wide range of assembly technologies, building and configuring final
product and system boxes and testing assemblies to meet customers' requirements.
We have the expertise to assemble very complex electronic products that utilize
multiple printed circuit boards and subassemblies. These complex products are
typically configured to fulfill unique customer requirements and many are
shipped directly to our customers' end users. In addition, we have developed
special processes and tools to meet industry-specific requirements. Among these
are the tools and processes to assemble finished medical devices that meet U.S.
Food and Drug Administration Quality Systems Regulation requirements and similar
regulatory requirements of other countries.
After-market support. We provide service support for manufactured
products. In this context, supported products, which may or may not be under the
customer's warranty, may be returned for repairs or upgrades at the customer's
discretion.
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<PAGE> 109
Recent Combinations and Acquisitions
Since fiscal 1998, we have completed six acquisitions that have added
facilities totaling approximately 539,000 square feet and over 2,400 new
employees. We have actively pursued combinations and acquisitions to expand our
geographic reach, increase our design, engineering and manufacturing capability
and breadth of service offerings and strengthen and broaden our customer
relationships. Since fiscal 1998, we have completed the following acquisitions:
<TABLE>
<CAPTION>
Facilities
Date Acquired Company/Operations Sq. Ft. Employees Location(s)
---- --------------------------- ------- --------- -----------
<S> <C> <C> <C> <C>
July 2000 Keltek (Holdings) Limited 77,000 461 Kelso, Scotland;
Melden, England
May 2000 Turnkey electronics manufacturing 250,000 1,394 Juarez, Mexico
operations of Elamex, S.A. de C.V.
April 2000 Agility, Incorporated 25,000 98 Ayer, Massachusetts
December Printed circuit board operations of -- 45 Everett, Washington
1999 Intermec Technologies Corporation (1)
September Printed circuit board operations of 25,000 125 Wheeling, Illinois
1999 Shure, Incorporated
July 1999 SeaMED Corporation 162,000 301 Bothell, Washington
</TABLE>
------------------
(1) Combined with Plexus' existing Bothell, Washington operations.
Customers and Industries Served
We provide services to a wide variety of customers, ranging from large
multi-national companies to smaller emerging technology companies, including
start-ups. Because of the variety of services we offer, our flexibility in
design and manufacturing and our ability to respond to customer needs in a
timely fashion, we believe that we are well-positioned to offer our services to
customers in most market segments. For many customers, we serve both a design
and production function, thereby permitting customers to concentrate on concept
development, distribution and marketing, while accelerating their time to
market, reducing their investment in manufacturing capacity and optimizing total
product cost.
During fiscal 1999, we provided services to approximately 140
customers, ranging from emerging technology companies such as Equipe
Communications, Gotham Networks, Sitara Networks and Appian Communications to
industry leaders such as Lucent Technologies, Cisco Systems, General Electric,
Unisys, Siemens, Honeywell and Johnson & Johnson. Lucent Technologies and
General Electric represented over 10 percent of our net sales for the periods
set forth below:
<TABLE>
<CAPTION>
Percentage of Net Sales
-------------------------------------------------
Fiscal Year Nine Months ended
--------------------
Customer 1998 1999 June 30, 2000
-------- ---- ---- -----------------
<S> <C> <C> <C>
Lucent Technologies........ * 16% 24%
General Electric........... * 12% 11%
</TABLE>
-----------------
* represents sales less than 10 percent
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<PAGE> 110
Many of our large customers, including Lucent Technologies and General
Electric, contract independently through multiple divisions, subsidiaries,
production facilities or locations. We believe that in most cases our sales to
one such subsidiary, division, facility or location are not dependent on sales
to others. Although the complete loss of any major customer could have a
significant negative impact on us, we do not believe the loss of all divisions,
subsidiaries, facilities or locations of a major customer to be likely.
We provided services within the following industries in the following
proportions:
<TABLE>
<CAPTION>
Percentage of Net Sales
---------------------------------------
Fiscal Year
--------------- Nine Months ended
Customer 1998 1999 June 30, 2000
-------- ---- ---- -----------------
<S> <C> <C> <C>
Networking/Telecommunications........ 15% 24% 35%
Medical.............................. 29% 31% 29%
Industrial........................... 20% 23% 19%
Computer............................. 23% 14% 10%
Transportation/Other................. 13% 8% 7%
</TABLE>
Materials and Suppliers
We purchase raw materials and electronic components from manufacturers
and distribution companies. The key electronic components we purchase include
printed circuit boards, specialized components such as application-specific
integrated circuits, semi-conductors, interconnect products, electronic
subassemblies (including memory modules, power supply modules and cable and wire
harnesses), resistors and capacitors. Along with these electronic components, we
also purchase components for use in higher-level assembly and manufacturing.
These components include sheet metal fabrications, aluminum extrusions, die
castings and various other hardware and fastener components. These components
range from standard to highly customized and they vary widely in terms of market
volatility and price.
From time to time, allocation of components becomes an integral part of
the electronics industry, and component shortages can occur with respect to
particular components. In response, we actively manage our business in a way
that minimizes our exposure to materials and component shortages. We have
developed a corporate procurement organization whose primary purpose is to
create strong supplier alliances to ensure, as much as possible, a steady flow
of components at competitive prices. Because we design products and can
influence what components are used in some new products, components
manufacturers often provide us with a greater amount of materials and
components, even during shortages. We have also established and continue to
expand strategic relationships with international purchasing offices, and we
attempt to leverage our design position with suppliers. Beyond this, we have
undertaken a series of flexibility initiatives, including the utilization of
in-plant stores, point- of-use programs, assured supply programs and similar
efforts. All of these undertakings seek to improve our overall supply chain
flexibility and to accommodate our growth plans.
Sales and Marketing
We market our services primarily through our sales and marketing
organization of 65 people, which includes salespeople, strategic customer
managers, technology specialists and advertising and other corporate
communications personnel. Our sales and marketing efforts focus on generating
new customers and pursuing profitable opportunities. We use our ability to
provide a full range of product realization services as a marketing tool, and
our technology specialists participate in marketing through direct customer
contact and participation in industry symposia and seminars. Our sales force is
integrated with the rest of our business and is aligned
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<PAGE> 111
geographically within important technology corridors. We support our sales and
marketing efforts with in-depth industry research.
Competition
The market for the products and services we provide is highly
competitive. We compete primarily on the basis of engineering, testing and
production capability, technological capabilities and the capacity for
responsiveness, quality and price. There are many competitors in the electronics
design and assembly industry. Larger and more geographically diverse competitors
have substantially more resources than we do. Other, smaller competitors compete
only in narrow, specific areas of our business. We also compete against
companies that design or manufacture items in-house rather than by outsourcing.
In addition, we compete against foreign, low- labor-cost manufacturers. This
foreign, low-labor-cost competition tends to focus on commodity and consumer-
related products, which is not our primary focus.
Facilities
Our facilities comprise an integrated network of technology and
manufacturing centers, with corporate headquarters located in our engineering
facility in Neenah, Wisconsin. We own or lease facilities with approximately 1.4
million square feet of capacity. This includes approximately 1.0 million square
feet in the United States, approximately 250,000 square feet in Mexico and
approximately 132,000 square feet in Europe. We are also undertaking expansion
projects to expand significantly several of our existing facilities. The
geographic diversity of our technology and manufacturing centers allows us to
offer services from locations near our customers and major electronics markets.
We believe that this approach reduces material and transportation costs,
simplifies logistics and communications and improves inventory management. This
enables us to provide customers with a more complete, cost-effective solution.
Our facilities are described in the following table:
<TABLE>
<CAPTION>
Location Type Size (Sq. Ft.) Owned/Leased
-------- ---- -------------- ------------
<S> <C> <C> <C>
Neenah, Wisconsin (1).............. Manufacturing 305,000 Leased
Juarez, Mexico (1)................. Manufacturing 250,000 Leased
Neenah, Wisconsin (1).............. Manufacturing 95,000 Owned
Kelso, Scotland (2) Manufacturing 57,000 Leased
Richmond, Kentucky (3)............. Manufacturing 45,000 Owned
Maldon, England.................... Manufacturing 40,000 Owned
Kelso, Scotland (2)................ Manufacturing 37,000 Owned
Wheeling, Illinois (4)............. Manufacturing 25,000 Leased
Appleton, Wisconsin (5)............ NPI Plus Center 67,000 Owned
Ayer, Massachusetts................ NPI Plus Center 65,000 Leased
Bothell, Washington................ NPI Plus Center 60,000 Leased
Redmond, Washington................ NPI Plus Center 21,000 Leased
Blaine, Minnesota.................. NPI Plus Center 14,000 Owned
</TABLE>
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<PAGE> 112
<TABLE>
<CAPTION>
Location Type Size (Sq. Ft.) Owned/Leased
-------- ---- -------------- ------------
<S> <C> <C> <C>
Milpitas, California............... NPI Plus Center 5,000 Leased
Neenah, Wisconsin.................. Engineering 105,000 Owned
Bothell, Washington................ Engineering 81,000 Leased
Raleigh, North Carolina............ Engineering 14,000 Leased
Louisville, Colorado............... Engineering 14,000 Leased
Neenah, Wisconsin.................. Office/Warehouse 100,000 Leased
Redmond, Washington (6)............ Office/Warehouse 60,000 Leased
Bothell, Washington (6)............ Office/Warehouse 10,000 Leased
Blaine, Minnesota.................. Office/Warehouse 5,200 Leased
El Paso, Texas..................... Office/Warehouse 5,000 Leased
</TABLE>
------------------
(1) Includes more than one building.
(2) The Kelso operations recently moved to a new 57,000 square foot leased
facility. We anticipate disposing of the 37,000 square foot owned
facility which we previously used for these operations.
(3) We are expanding this facility by approximately 55,000 square feet,
which is expected to be completed by July 2001.
(4) These operations are moving to a new 135,000 square-foot leased
facility, which is expected to be completed by August 2001.
(5) We acquired this facility in July 2000 and expect operations to
commence in the first quarter of fiscal 2001.
(6) These buildings are being subleased to an unrelated third party and not
used in our business operations.
Further Information
Statements in this prospectus modify and supersede any different,
inconsistent or less complete statements in any document incorporated by
reference in this prospectus. You should not consider any modified or superseded
statement to be a part of this prospectus, because Plexus does not make it a
part of this prospectus.
Further information regarding Plexus, including financial statements
and Management's Discussion and Analysis, are incorporated by reference from
filings with the Commission. See "Other Information About Plexus You Can
Obtain."
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<PAGE> 113
OTHER INFORMATION ABOUT PLEXUS WHICH YOU CAN OBTAIN
Plexus is a public company, and must provide information to the public
under by the Securities Exchange Act of 1934. Therefore, Plexus files reports,
proxy statements and other information with the Securities and Exchange
Commission. You may inspect and copy these materials at the Commission's public
reference facilities, which are located at:
- Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549,
- 7 World Trade Center, New York, New York 10048, and
- Citicorp Center, 500 West Madison Street, Chicago, Illinois
60661.
You may also obtain copies of these documents material by writing to the
Commissions's Public Reference Section, Washington, D.C. 20549; in that case,
you will be charged for the copies at the rates which the Commission sets. You
may also obtain copies from the Commission's Web site (http://www.sec.gov).
Because Plexus common stock is traded on the NASDAQ Stock Market, you can
inspect material filed by Plexus at the offices of National Association of
Securities Dealers, Inc., 1735 K Street N.W., Washington, D.C. 20006.
Plexus has filed a Registration Statement on Form S-4 under the
Securities Act with the Commission which covers the shares of common stock
described in this prospectus. The Registration Statement has information in
addition to the information in this prospectus. You may obtain that additional
information at the addresses above. This prospectus, and the documents which
this prospectus incorporates by reference, describe certain contracts or other
documents. These descriptions are only summaries, and are not necessarily
complete. If you wish further information rather than this summary, you should
review a copy of the document if Plexus has filed it as an exhibit to the
Registration Statement. When Plexus has filed a document as an exhibit, a
complete reading of the document will you provide more information than a
summary. Plexus is not responsible if you fail to read the full document.
This prospectus "incorporates by reference" certain Plexus documents.
That means that the contents of those documents are considered to be part of
this prospectus even though they are not actually included with it. Plexus will
provide you with a copy of any of those documents. Plexus will provide you the
documents without charge if you are a person to whom Plexus delivers this
prospectus, or if you are a beneficial owner of securities which are held in
street name. Plexus will not necessarily provide exhibits unless those exhibits
are specifically incorporated by reference in the document. You can obtain
copies of the documents by writing to Plexus Corp., 55 Jewelers Park Drive,
Neenah, Wisconsin 54956, Attn: Corporate Secretary, or by calling Plexus'
corporate secretary at 920/722-3451.
This prospectus incorporates by reference the following documents. Each
of them has been filed by Plexus with the Commission as required by the Exchange
Act:
- Form 10-K for the year ended September 30, 1999;
- Forms 10-Q for the quarters ended December 31, 1999, March 31,
2000 and June 30, 2000;
- Current Reports on Form 8-K dated April 28, 2000, May 23, 2000
(as twice amended), July 14, 2000, September 19, 2000 and
October 13, 2000;
- The description of Plexus common stock on Form 8-A, as
amended; and
- The description of Plexus' preferred stock purchase rights on
Form 8-A dated August 13, 1998.
This prospectus also incorporates all reports and definitive proxy or
information statements filed by Plexus under Section 13(a), 13(c), 14 or 15(d)
of the Exchange Act after this prospectus' date. They will be incorporated by
reference into this prospectus from the date on which Plexus files such
documents.
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<PAGE> 114
INFORMATION ABOUT PLEXUS COMMON STOCK
Our authorized capital stock consists of 60,000,000 shares of common
stock, $0.01 par value per share, and 5,000,000 shares of preferred stock, $.01
par value per share. Our articles of incorporation currently designate 1,000,000
of the preferred shares as Series A Junior Participating Preferred Stock of
which none is issued or outstanding.
Common Stock
As of November 1, 2000, there were approximately 40,059,000 shares of
common stock outstanding held of record by approximately 525 shareholders. As of
August 31, 2000, there were outstanding options to purchase approximately
4,090,000 shares of common stock, of which approximately 2,299,000 were
immediately exercisable. Our common stock is quoted on the Nasdaq National
Market under the symbol "PLXS."
Holders of common stock are entitled to one vote for each share held on
all matters to be voted upon by the shareholders and do not have cumulative
rights. Accordingly, holders of a majority of the shares of common stock
entitled to vote in any election of directors may elect all of the directors
standing for election. Holders of common stock are entitled to receive ratably
such dividends, if any, as may be declared by the board of directors out of
funds legally available therefor, subject to any preferential dividend payable
to the outstanding preferred stock. Upon our liquidation, dissolution or winding
up, the holders of common stock are entitled to receive ratably our net assets
available after the payment of all debts and other liabilities and subject to
the prior rights of any outstanding preferred stock.
Holders of the common stock have no preemptive, subscription,
redemption or conversion rights. The outstanding shares of common stock are
validly issued, fully paid and nonassessable. However, Wisconsin law imposes
personal liability on shareholders of Wisconsin corporations for debts owed to
employees for services performed, but not exceeding six months service in any
one case. While the relevant statute limits this liability to the par value of
the shares held, this limitation has been interpreted by a Wisconsin trial court
to mean the consideration paid to the corporation for such shares. This decision
was affirmed by a split decision of the Wisconsin Supreme Court without a
written opinion, although the decision was subsequently overturned on other
grounds.
The rights, preferences and privileges of holders of common stock are
subject to, and may be adversely affected by, the rights of the holders of
shares of any series of preferred stock which we may determine and issue in the
future, as described below. Currently, there are no shares of preferred stock
outstanding.
Preferred Stock
Our board is authorized without further shareholder approval to issue
from time to time up to an aggregate of 5,000,000 shares of preferred stock in
one or more series and to fix or alter the designations, preferences, rights and
any qualifications, limitations or restrictions of the shares of each such
series thereof. These include the dividend rights, dividend rates, conversion
rights, voting rights, terms of redemption (including sinking fund provisions),
redemption of price or prices, liquidation preferences and the number of shares
constituting any series or designations of such series. The issuance of
preferred stock may have the effect of delaying, deferring or preventing a
change of control of Plexus. We have no present plans to issue any shares of
preferred stock, but have designated 1,000,000 shares of Series A Junior
Participating Preferred Stock in connection with the adoption of our shareholder
rights plan, described below.
Shareholder Rights Plan
On August 13, 1998, our board of directors adopted a shareholder rights
plan which provides for one preferred stock purchase right for each outstanding
common stock. The rights agreement provides that until the rights distribution
date, the rights will be transferred with and only with the common stock until
the triggering
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<PAGE> 115
event. The rights are evidenced by common stock certificates. The rights are
non-exercisable until the rights distribution date. The rights will expire on
August 11, 2008.
Each right entitles shareholders to buy one-one hundredth of a share of
newly created Series A Junior Participating Preferred Stock at an exercise price
of $54.00, subject to adjustment, in the event a person acquires or makes a
tender exchange offer for 15% or more of the outstanding stock. In such event,
each right entitles the holder, other than the person acquiring 15% or more of
the outstanding stock, to purchase shares of common stock with market value of
twice the rights' exercise price. In addition, if we are acquired in a merger or
other business combination or if we sell more than 50% of our consolidated
assets or voting power, our shareholders are entitled (other than the acquiror)
to purchase for the purchase price shares of the common stock of the acquiring
entity or its parents having a market value of two times the exercise price. At
any time prior to such event, the board of directors may redeem the rights at
one cent per share per right. The existence of the rights may, under certain
circumstances, render more difficult or discourage attempts to acquire us.
Statutory Provisions Applicable to Common Stock
Business Combination Statute. Sections 180.1140 to 180.1144 of the
Wisconsin Business Corporation Law regulate a broad range of business
combinations between a resident domestic corporation and an interested
shareholder. A business combination is defined to include any of the following
transactions:
- merger or share exchange
- sale, lease, exchange, mortgage, pledge, transfer or other
disposition of assets equal to 5% or more of the market value
of the stock or assets of the company or 10% of its earning
power or income
- issuance of stock or rights to purchase stock with a market
value equal to 5% or more of the outstanding stock
- adoption of a plan of liquidation or dissolution.
A "resident domestic corporation" is defined to mean a Wisconsin
corporation that has a class of voting stock that is registered or traded on a
national securities exchange or that is registered under Section 12(g) of the
Exchange Act and that, as of the relevant date, satisfies any of the following:
- its principal offices are located in Wisconsin
- it has significant business operations located in Wisconsin
- more than 10% of the holders of record of its shares are
residents of Wisconsin
- more than 10% of its shares are held of record by residents of
Wisconsin.
Plexus is a resident domestic corporation for purposes of these
statutory provisions.
An interested shareholder is defined to mean a person who beneficially
owns, directly or indirectly, 10% of the voting power of the outstanding voting
stock of a corporation or who is an affiliate or associate of the corporation
and beneficially owned 10% of the voting power of the then outstanding voting
stock within the last three years.
Under this law, we cannot engage in a business combination with an
interested shareholder for a period of three years following the date such
person becomes an interested shareholder, unless the board of directors approved
the business combination or the acquisition of the stock that resulted in the
person becoming an
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<PAGE> 116
interested shareholder before such acquisition. We may engage in a business
combination with an interested shareholder after the three-year period with
respect to that shareholder expires only if one or more of the following
conditions is satisfied:
- the board of directors approved the acquisition of the stock
prior to such shareholder's acquisition date
- the business combination is approved by a majority of the
outstanding voting stock not beneficially owned by the
interested shareholder
- the consideration to be received by shareholders meets certain
fair price requirements of the statute with respect to form
and amount.
Fair Price Statute. The Wisconsin Business Corporation Law also
provides, in Sections 180.1130 to 180.1133, that certain mergers, share
exchanges or sales, leases, exchanges or other dispositions of assets in a
transaction involving a significant shareholder and a resident domestic
corporation such as Plexus require a supermajority vote of shareholders in
addition to any approval otherwise required, unless shareholders receive a fair
price for their shares that satisfies a statutory formula. A significant
shareholder for this purpose is defined as a person or group who beneficially
owns, directly or indirectly, 10% or more of the voting stock of the
corporation, or is an affiliate of the corporation and beneficially owned,
directly or indirectly, 10% or more of the voting stock of the corporation
within the last two years. Any such business combination must be approved by 80%
of the voting power of the corporation's stock and at least two-thirds of the
voting power of the corporation's stock not beneficially held by the significant
shareholder who is party to the relevant transaction or any of its affiliates or
associates, in each case voting together as a single group, unless the following
fair price standards have been met:
- the aggregate value of the per share consideration is equal to
the highest of:
- the highest price paid for any common shares of the
corporation by the significant shareholder in the transaction
in which it became a significant shareholder or within two
years before the date of the business combination
- the market value of the corporation's shares on the date of
commencement of any tender offer by the significant
shareholder, the date on which the person became a significant
shareholder or the date of the first public announcement of
the proposed business combination, whichever is higher
- the highest preferential liquidation or dissolution
distribution to which holders of the shares would be entitled
- either cash, or the form of consideration used by the
significant shareholder to acquire the largest number of
shares, is offered.
Control Share Voting Restrictions. Under Section 180.1150 of the
Wisconsin Business Corporation Law, unless otherwise provided in the articles of
incorporation, the voting power of shares of a resident domestic corporation
held by any person or group of persons acting together in excess of 20% of the
voting power in the election of directors is limited (in voting on any matter)
to 10% of the full voting power of those shares. This restriction does not apply
to shares acquired directly from the resident domestic corporation, in certain
specified transactions, or in a transaction in which the corporation's
shareholders have approved restoration of the full voting power of the otherwise
restricted shares. Because of the 10% threshold contained in Wisconsin's
business combination statute discussed above, this control share threshold of
20% may not be implicated unless the board of directors first approves a
transaction that permits a shareholder to exceed the 10% ownership level.
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<PAGE> 117
Defensive Action Restrictions. Section 180.1134 of the Wisconsin
Business Corporation Law provides that, in addition to the vote otherwise
required by law or the articles of incorporation of a resident domestic
corporation, the approval of the holders of a majority of the shares entitled to
vote is required before such corporation can take certain action while a
takeover offer is being made or after a takeover offer has been publicly
announced and before it is concluded. This statute requires shareholder approval
for the corporation to do either of the following:
- acquire more than 5% of its outstanding voting shares at a
price above the market price from any individual or
organization that owns more than 3% of the outstanding voting
shares and has held such shares for less than two years,
unless a similar offer is made to acquire all voting shares
and all securities which may be converted into voting shares
- sell or option assets of the corporation which amount to 10%
or more of the market value of the corporation, unless the
corporation has at least three independent directors
(directors who are not officers or employees) and a majority
of the independent directors vote not to have this provision
apply to the corporation.
The foregoing provisions of Wisconsin law and the Plexus shareholder
rights agreement, the ability to issue additional shares of the common stock and
preferred stock without further shareholder approval (except as may be required
by the Nasdaq National Market corporate governance standards) and the ability of
the board of directors to fix the designations of further classes of preferred
stock (including the ability to issue preferred stock with substantial voting
rights) could have the effect, among others, of discouraging take-over proposals
for or impeding a business combination involving Plexus.
PLAN OF DISTRIBUTION
This prospectus covers the offer and sale by Plexus of up to 2,000,000
shares of Plexus common stock, which Plexus may issue from time to time in
connection with the future acquisitions of other businesses, or securities of
other businesses, in business combination transactions in accordance with Rule
415(a)(1)(viii) of Regulation C under the Securities Act or as otherwise
permitted under the Securities Act.
Plexus expects that the terms upon which it may issue the shares in
business combination transactions will be determined through negotiations with
the officers, boards of directors, principal owners and/or other representatives
of the businesses to be acquired. It is expected that the shares of Plexus
common stock that are issued will be valued at prices reasonably related to the
market prices for Plexus common stock prevailing at either the time an
acquisition agreement is executed or at the time an acquisition is consummated.
Under some circumstances, securities laws may not require Plexus to
provide additional information beyond this prospectus. For example, if
securities laws would require Plexus to register its shares under the Securities
Act except for the possibility of that the transaction may be "integrated," or
considered "combined", with other transactions, Plexus does not need, or intend,
to provide a supplement. However, if an acquisition transaction must be
registered even without integration, then Plexus will provide you with this
prospectus and either:
- give you a supplement, which will have specific information
about your transaction, which Plexus will file as part of a
registration statement; or
- supplement this prospectus by the incorporation by reference
of information contained in an Plexus report on Form 8-K filed
with the Commission.
Of the shares being offered hereby, Plexus expects that between 411,000
and 256,876 shares will be issued in connection with its pending acquisition of
e2E Corporation, assuming that Plexus' stock price is between $50.00 and $80.00.
Plexus cannot assure you that the acquisitions will be completed as anticipated.
In the event
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that any of the acquisition is not completed, shares which were to have been
issued in the acquisition may be offered in connection with other future
acquisitions.
All expenses to these offerings are expected to be borne by Plexus,
although any business to be acquired is likely to be required to bear all of its
expenses in connection with any business combination transaction. Because any
supplement to this registration statement may also constitute a proxy statement
of such acquired business, the acquired business may bear certain of the
expenses relating thereto.
No underwriting discounts or commissions will be paid in connection
with the issuance of shares of Plexus common stock by Plexus in any business
combination transactions, although Plexus, or an acquired business, may engage
investment advisors in connection with the evaluation of any specific
acquisition.
LEGAL OPINIONS
Quarles & Brady LLP, Milwaukee, Wisconsin, counsel for Plexus, will
render opinions on the legality of the shares being offered hereby and as to
certain other matters in connection with the business combination transactions
pursuant to which shares of Plexus common stock may be issued. At November 6,
2000, one Quarles & Brady LLP attorney providing services with respect to the
Registration Statement owned an aggregate of 1,000 shares of Plexus common
stock.
EXPERTS
Plexus' consolidated financial statements and the related financial
statement schedules incorporated in this prospectus by reference from its Annual
Report on Form 10-K for the fiscal year ended September 30, 1999 have been
audited by PricewaterhouseCoopers LLP, independent accountants, as stated in
their reports, which are incorporated herein by reference, and have been so
incorporated in reliance upon the reports of such firm given upon their
authority as experts in accounting and auditing.
The financial statements of SeaMED Corporation, a company acquired by
Plexus in 1999, for its fiscal years ended June 30, 1998 and 1997 (not presented
separately herein), which are referred to in the report of
PricewaterhouseCoopers on the Plexus financial statements, have been audited by
Ernst & Young LLP, independent auditors, as set forth in their report included
in our annual report on Form 10-K for the fiscal year ended September 30, 1999
and incorporated herein by reference. The reference to the SeaMED financial
statements was made in reliance upon such report given on authority of such firm
as experts in accounting and auditing.
The financial statements of Contract Electronics Manufacturing Services
Operations of Elamex, S.A. de C.V. as of and for the year ended December 31,
1999, incorporated in this prospectus by reference from the Current Report on
Form 8-K/A of Plexus dated May 23, 2000, have been audited by Deloitte & Touche
LLP, independent auditors, as stated in their report, which is incorporated
herein by reference, and have been so incorporated in reliance upon the report
of such firm given upon their authority as experts in accounting and auditing.
PROCEDURE FOR SUBMITTING SHAREHOLDER PROPOSALS
Shareholder proposals must have been received by Plexus no later than
September 21, 2000 in order to be considered for inclusion in the 2001 annual
meeting proxy statement. In addition, Plexus' bylaws provide that any proposal
for action, or nomination to the board of directors, proposed other than by the
board of directors must be received by Plexus in writing, together with
specified accompanying information, at least 70 days prior to an annual meeting
for the action to be considered at the meeting. Plexus' year 2001 annual meeting
of shareholders is tentatively scheduled for March 7, 2001, and notice of intent
to consider other questions and/or nominees and related information must
therefore be received by December 27, 2000. The purpose of the bylaws is to
assure adequate notice of, and information regarding, any matter as to which
shareholder action may be sought.
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