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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------
SCHEDULE 14D-1
Tender Offer Statement Pursuant to Section
14(d)(1) of the Securities Exchange Act of 1934
Microcom, Inc.
(Name of Subject Company)
Compaq-Boston, Inc.
(Bidder)
a direct wholly-owned subsidiary of
Compaq Computer Corporation
Common Stock, $0.01 Par Value Per Share
(Title of Class of Securities)
--------------
595019100
(CUSIP Number)
J. David Cabello, Esq.
Senior Vice President
General Counsel and Secretary
Compaq Computer Corporation
20555 SH 249
Houston, TX 77070
(281) 370-0670
(Name, Address and Telephone Number of
Person Authorized to Receive Notices
and Communications on Behalf of Bidder)
Copies to:
Chris Mayer
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Telephone: (212) 450-4000
CALCULATION OF FILING FEE
Transaction valuation(*) Amount of filing fee
- ---------------------------------------- --------------------
(*) Based upon $16.25 cash per share for $59,769
18,390,357 shares.
[ ] Check box if any part of the fee is offset as provided by Rule
0-11(a)(2) and identify the filing with which the offsetting fee was
previously paid. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
Amount Previously Paid: Not applicable.
Form or Registration No.: Not applicable.
Filing Party: Not applicable.
Date Filed: Not applicable.
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| CUSIP NO. 595019100 |
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| | |
| 1 | NAMES OF REPORTING PERSONS |
| | S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON |
| | Compaq Computer Corporation |
| | 76-0011617 |
- -----------------------------------------------------------------------------
| 2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* |
| | (a) [ ] |
| | (b) [ ] |
- -----------------------------------------------------------------------------
| 3 | SEC USE ONLY |
- -----------------------------------------------------------------------------
| 4 | SOURCE OF FUNDS* |
| | WC |
- -----------------------------------------------------------------------------
| 5 | CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS |
| | REQUIRED PURSUANT TO ITEMS 2(e) OR 2(f) [ ] |
- -----------------------------------------------------------------------------
| 6 | CITIZENSHIP OR PLACE OF ORGANIZATION |
| | Delaware |
- -----------------------------------------------------------------------------
| 7 | AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH |
| | REPORTING PERSON |
| | 0 |
- -----------------------------------------------------------------------------
| 8 | CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) |
| | EXCLUDES CERTAIN SHARES* [ ] |
- -----------------------------------------------------------------------------
| 9 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7) |
| | 0 |
- -----------------------------------------------------------------------------
| 10 | TYPE OF REPORTING PERSON* |
| | HC, CO |
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| CUSIP NO. 595019100 |
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| | |
| 1 | NAMES OF REPORTING PERSONS |
| | S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSON |
| | Compaq-Boston, Inc. |
| | |
- -----------------------------------------------------------------------------
| 2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* |
| | (a) [ ] |
| | (b) [ ] |
- -----------------------------------------------------------------------------
| 3 | SEC USE ONLY |
- -----------------------------------------------------------------------------
| 4 | SOURCE OF FUNDS* |
| | WC |
- -----------------------------------------------------------------------------
| 5 | CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS |
| | REQUIRED PURSUANT TO ITEMS 2(e) OR 2(f) [ ] |
- -----------------------------------------------------------------------------
| 6 | CITIZENSHIP OR PLACE OF ORGANIZATION |
| | Massachusetts |
- -----------------------------------------------------------------------------
| 7 | AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH |
| | REPORTING PERSON |
| | 0 |
- -----------------------------------------------------------------------------
| 8 | CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) |
| | EXCLUDES CERTAIN SHARES* [ ] |
- -----------------------------------------------------------------------------
| 9 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7) |
| | 0 |
- -----------------------------------------------------------------------------
| 10 | TYPE OF REPORTING PERSON* |
| | CO |
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Item 1. Security and Subject Company.
(a) The name of the subject company is Microcom, Inc., a Massachusetts
corporation (the "Company"), and the address of its principal executive
offices is set forth in Section 7 "Certain Information Concerning the Company"
of the Offer to Purchase, which is incorporated herein by reference.
(b) This Statement relates to the offer by Compaq-Boston, Inc., a
Massachusetts corporation ("Purchaser") and a wholly-owned subsidiary of
Compaq Computer Corporation, a Delaware corporation ("Parent"), to purchase
all outstanding shares of Common Stock, $0.01 par value (the "Shares"), of the
Company at $16.25 per share, net to the seller in cash, upon the terms and
conditions set forth in the Offer to Purchase and in the related Letter of
Transmittal, copies of which are attached hereto as Exhibits (a)(1) and (a)(2)
(which are herein collectively referred to as the "Offer"). The information
set forth in the introduction to the Offer to Purchase (the "Introduction") is
incorporated herein by reference.
(c) The information set forth in Section 6 "Price Range of Shares;
Dividends" of the Offer to Purchase is incorporated herein by reference.
Item 2. Identity and Background.
(a)-(d), (g) This statement is filed by Purchaser. The information set
forth in the Introduction, Section 8 "Certain Information Concerning Purchaser
and Parent" and Schedule I of the Offer to Purchase is incorporated herein by
reference.
(e)-(f) Neither Parent, Purchaser, nor, to the best knowledge of
Purchaser, any of the persons listed in Schedule I of the Offer to Purchase,
has during the last five years (i) been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) or (ii) been a party to
a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
activities subject to, federal or state securities laws or finding any
violation of such laws.
Item 3. Past Contacts, Transactions or Negotiations with the Subject Company.
(a)-(b) The information set forth in the Introduction, Section 8
"Certain Information Concerning Purchaser and Parent" and Section 10
"Background of the Offer; Past Contacts or Negotiations with the Company" of
the Offer to Purchase is incorporated herein by reference.
Item 4. Source and Amount of Funds or Other Consideration.
(a)-(b) The information set forth in Section 9 "Source and Amount of
Funds" of the Offer to Purchase is incorporated herein by reference.
(c) Not applicable.
Item 5.Purpose of the Tender Offer and Plans or Proposals of the Bidder.
(a)-(e) The information set forth in the Introduction and Section 12
"Purpose of the Offer; Plans for the Company" of the Offer to Purchase is
incorporated herein by reference.
(f)-(g) The information set forth in Section 13 "Effect of the Offer on
the Market for Shares; Stock Quotations; Registration under the Exchange Act"
of the Offer to Purchase is incorporated herein by reference.
Item 6. Interest in Securities of the Subject Company.
(a)-(b) The information set forth in the Introduction, Section 8 "Certain
Information Concerning Purchaser and Parent" and Schedule 1 of the Offer to
Purchase is incorporated herein by reference.
Item 7. Contracts, Arrangements, Understandings or Relationships with Respect
to the Subject Company's Securities.
The information set forth in the Introduction, Section 8 "Certain
Information Concerning the Purchaser and Parent", Section 10 "Background of
the Offer; Past Contacts or Negotiations with the Company" and Schedule I of
the Offer to Purchase is incorporated herein by reference.
Item 8. Persons Retained, Employed or to be Compensated.
The information set forth in Section 18 "Fees and Expenses" of the Offer
to Purchase is incorporated herein by reference.
Item 9. Financial Statements of Certain Bidders.
The information set forth in Section 8 "Certain Information Concerning
Purchaser and Parent" of the Offer to Purchase is incorporated herein by
reference.
Item 10. Additional Information.
(a) The information set forth in Section 10 "Background of the Offer;
Past Contacts or Negotiations with the Company" of the Offer to Purchase in
incorporated herein by reference.
(b)-(c) The information set forth in Section 17 "Certain Legal Matters;
Regulatory Approvals" of the Offer to Purchase is incorporated herein by
reference.
(d) The information set forth in Section 13 "Effect of the Offer on the
Market for Shares; Stock Quotations; Registration under the Exchange Act" of
the Offer to Purchase is incorporated herein by reference.
(e) The information set forth in the Introduction and Section 17 "Certain
Legal Matters; Regulatory Approvals" of the Offer to Purchase is incorporated
herein by reference.
(f) The information set forth in the Offer to Purchase and the Letter of
Transmittal is incorporated herein by reference in its entirety.
Item 11. Material to be Filed as Exhibits.
(a)(1) Offer to Purchase, dated April 16, 1997
(a)(2) Letter of Transmittal (including Guidelines for Certification
of Taxpayer Identification Number on Substitute Form W-9)
(a)(3) Notice of Guaranteed Delivery
(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies
and Other Nominees
(a)(5) Letter to Clients for use by Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees
(a)(6) Text of Press Release issued by Parent dated April 10, 1997
(a)(7) Form of summary advertisement dated April 16, 1997
(b) None
(c)(1) Agreement and Plan of Merger dated as of April 9, 1997, among
Microcom, Inc., Compaq Computer Corporation and Compaq-Boston,
Inc.
(c)(2) Agreement dated as of April 9, 1997 between Compaq Computer
Corporation and Lewis A. Bergins, President and Chief
Executive Officer of Microcom, Inc.
(c)(3) Confidentiality and Nondisclosure Agreement dated April 11,
1997 between Microcom, Inc. and Compaq Computer Corporation
(d) None
(e) None
(f) None
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Dated: April 16, 1997
Compaq-Boston, Inc.
By: /s/ J. David Cabello
---------------------------
Name: J. David Cabello
Title: Secretary
Compaq Computer Corporation
By: /s/ J. David Cabello
---------------------------
Name: J. David Cabello
Title: Senior Vice President,
General Counsel and Secretary
EXHIBIT INDEX
Exhibit Sequentially
Number Description Numbered Page
- ------- ----------- -------------
(a)(1) Offer to Purchase, dated April 16, 1997
(a)(2) Letter of Transmittal (including Guidelines for
Certification of Taxpayer Identification Number
on Substitute Form W-9)
(a)(3) Notice of Guaranteed Delivery
(a)(4) Letter to Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees
(a)(5) Letter to Clients for use by Brokers, Dealers,
Commercial Banks, Trust Companies and Other
Nominees
(a)(6) Text of Press Release issued by Parent dated
April 10, 1997
(a)(7) Form of summary advertisement dated April 16, 1997
(b) None
(c)(1) Agreement and Plan of Merger dated as of April 9,
1997, among Microcom, Inc., Compaq Computer
Corporation and Compaq-Boston, Inc.
(c)(2) Agreement dated as of April 9, 1997 between Compaq
Computer Corporation and Lewis A. Bergins, President
and Chief Executive Officer of Microcom, Inc.
(c)(3) Confidentiality and Nondisclosure Agreement dated
April 9, 1997 between Microcom, Inc. and Compaq
Computer Corporation
(d) None
(e) None
(f) None
EXHIBIT (a)(1)
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
of
Microcom, Inc.
at
$16.25 Net Per Share
by
Compaq-Boston, Inc.
a wholly-owned subsidiary of
Compaq Computer Corporation
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON TUESDAY, MAY 13, 1997, UNLESS THE OFFER IS EXTENDED.
THE BOARD OF DIRECTORS OF MICROCOM, INC. (THE "COMPANY") HAS
UNANIMOUSLY APPROVED THE OFFER AND THE MERGER DESCRIBED HEREIN, UNANIMOUSLY
DETERMINED THAT THE OFFER AND THE MERGER ARE FAIR TO, AND IN THE BEST
INTERESTS OF, THE COMPANY'S SHAREHOLDERS, AND UNANIMOUSLY RECOMMENDS THAT THE
COMPANY'S SHAREHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO
THE OFFER.
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THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING
VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER A
NUMBER OF SHARES OF COMMON STOCK, PAR VALUE $0.01 PER SHARE (THE "SHARES"), OF
THE COMPANY WHICH, TOGETHER WITH THE SHARES THEN OWNED BY COMPAQ COMPUTER
CORPORATION, WOULD REPRESENT AT LEAST A MAJORITY OF THE TOTAL NUMBER OF
OUTSTANDING SHARES ON A FULLY DILUTED BASIS.
-------------------
IMPORTANT
Any shareholder desiring to tender all or any portion of his or
her Shares should either (1) complete and sign the Letter of Transmittal (or
facsimile thereof) in accordance with the instructions in the Letter of
Transmittal and deliver it with the certificate(s) representing tendered
Shares and all other required documents to the Depositary or tender such
Shares pursuant to the procedures for book-entry transfer set forth in Section
2 or (2) request his or her broker, dealer, commercial bank, trust company or
other nominee to effect the transaction for him or her. A shareholder having
Shares registered in the name of a broker, dealer, commercial bank, trust
company or other nominee must contact such person if he or she desires to
tender such Shares.
Any shareholder who desires to tender Shares and cannot deliver
the certificate(s) representing such Shares and all other required documents
to the Depositary by the expiration of the Offer or who cannot comply with the
procedures for book-entry transfer on a timely basis must tender such Shares
pursuant to the guaranteed delivery procedure set forth in Section 2.
Questions and requests for assistance may be directed to the
Information Agent or the Dealer Manager at their respective addresses and
telephone numbers set forth on the back cover of this Offer to Purchase.
Additional copies of this Offer to Purchase, the Letter of Transmittal and
the Notice of Guaranteed Delivery may also be obtained from the Information
Agent, brokers, dealers, commercial banks or trust companies.
The Dealer Manager for the Offer is:
GREENHILL & CO., LLC
April 16, 1997
TABLE OF CONTENTS
Page
INTRODUCTION............................................................. 1
1. Terms of the Offer....................................................... 3
2. Procedure for Tendering Shares........................................... 3
3. Withdrawal Rights........................................................ 5
4. Acceptance for Payment and Payment....................................... 6
5. Certain Tax Considerations............................................... 7
6. Price Range of Shares; Dividends......................................... 7
7. Certain Information Concerning the Company............................... 8
8. Certain Information Concerning Purchaser and Parent..................... 10
9. Source and Amount of Funds.............................................. 12
10. Background of the Offer; Past Contacts or Negotiations with the Company 12
11. The Merger Agreement; Other Arrangements............................... 13
12. Purpose of the Offer; Plans for the Company............................ 18
13. Effect of the Offer on the Market for Shares; Stock
Quotations; Registration under the Exchange Act........................ 18
14. Dividends and Distributions............................................ 19
15. Extension of Tender Period; Termination; Amendment..................... 19
16. Certain Conditions of the Offer........................................ 20
17. Certain Legal Matters; Regulatory Approvals............................ 21
18. Fees and Expenses...................................................... 24
19. Miscellaneous.......................................................... 24
Schedule I Information Concerning Directors
and Executive Officers of Parent and Purchaser.......................I-1
INTRODUCTION
To the Holders of Common Stock of
Microcom, Inc.:
Compaq-Boston, Inc., a Massachusetts corporation ("Purchaser")
and a wholly-owned subsidiary of Compaq Computer Corporation, a Delaware
corporation ("Parent"), hereby offers to purchase all outstanding shares of
Common Stock, $0.01 par value (the "Shares"), of Microcom, Inc., a
Massachusetts corporation (the "Company"), at $16.25 per Share, net to the
seller in cash, upon the terms and subject to the conditions set forth in this
Offer to Purchase and in the related Letter of Transmittal (which together
constitute the "Offer"). Tendering shareholders will not be obligated to pay
brokerage fees or commissions or, except as set forth in Instruction 6 of the
Letter of Transmittal, transfer taxes on the purchase of Shares pursuant to
the Offer. Parent will pay all charges and expenses of Greenhill & Co., LLC
(the "Dealer Manager"), ChaseMellon Shareholder Services, LLC (the
"Depositary") and Corporate Investor Communications, Inc. (the "Information
Agent") incurred in connection with the Offer. See Section 18.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING
VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION DATE (AS
HEREINAFTER DEFINED) A NUMBER OF SHARES WHICH, TOGETHER WITH THE SHARES THEN
OWNED BY PARENT, WOULD REPRESENT AT LEAST A MAJORITY OF THE TOTAL NUMBER OF
OUTSTANDING SHARES ON A FULLY DILUTED BASIS (THE "MINIMUM CONDITION"). SEE
SECTION 16.
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED
THE OFFER AND THE MERGER DESCRIBED HEREIN, UNANIMOUSLY DETERMINED THAT THE
OFFER AND THE MERGER ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE COMPANY'S
SHAREHOLDERS, AND UNANIMOUSLY RECOMMENDS THAT THE COMPANY'S SHAREHOLDERS
ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER.
MORGAN STANLEY & CO. INCORPORATED, FINANCIAL ADVISOR TO THE
COMPANY, HAS DELIVERED TO THE BOARD OF DIRECTORS OF THE COMPANY ITS WRITTEN
OPINION TO THE EFFECT THAT, AS OF THE DATE OF THE MERGER AGREEMENT (AS
HEREINAFTER DEFINED), THE $16.25 IN CASH TO BE RECEIVED BY THE HOLDERS OF
SHARES IN THE OFFER AND THE MERGER IS FAIR TO SUCH HOLDERS FROM A FINANCIAL
POINT OF VIEW. The full text of the written opinion of Morgan Stanley & Co.
Incorporated containing the assumptions made, the matters considered and the
scope of the review undertaken in rendering such opinion as well as the
limitations of such opinion is included with the Company's
Solicitation/Recommendation Statement on Schedule 14D-9, which is being mailed
to shareholders concurrently herewith. Shareholders are urged to read the
full text of such opinion in conjunction with this Offer.
The Offer is being made pursuant to an Agreement and Plan of
Merger dated as of April 9, 1997 (the "Merger Agreement") among the Company,
Parent and the Purchaser. The Merger Agreement provides, among other things,
that as soon as practicable after the consummation of the Offer, Purchaser
will be merged with and into the Company (the "Merger"), with the Company
continuing as the surviving corporation (the "Surviving Corporation").
Pursuant to the Merger, each outstanding Share (other than Shares held by
Parent or any subsidiary of Parent, Shares held by shareholders properly
exercising appraisal rights under Massachusetts law and Shares of Restricted
Stock (as hereinafter defined)) will be converted into a right to receive
$16.25 in cash, without interest. See Section 11. For a discussion of the
treatment of stock options and Shares of Restricted Stock, see Section 11.
The Merger Agreement provides that effective upon acceptance
for payment pursuant to the Offer of a number of Shares that satisfies the
Minimum Condition, Parent shall be entitled to designate the number of
directors, rounded up to the next whole number, on the Company's Board of
Directors that equals the product of (i) the total number of directors on the
Company's Board of Directors multiplied by (ii) the percentage that the number
of Shares beneficially owned by Parent (including Shares accepted for payment)
bears to the total number of Shares outstanding. See Section 11.
Based upon information provided by the Company, as of April 9,
1997, there were outstanding 16,288,011 Shares and stock options to purchase
an aggregate of 2,102,346 Shares. Based upon the foregoing, as of April 9,
1997, there were approximately 18,390,357 Shares outstanding on a fully
diluted basis. Neither Parent nor Purchaser beneficially owns any Shares.
Accordingly, Purchaser believes that the Minimum Condition would be satisfied
if approximately 9,195,179 Shares are validly tendered pursuant to the Offer
and not withdrawn.
Under the Business Corporation Law of the Commonwealth of
Massachusetts ("Massachusetts Law") and the Company's Articles of
Organization, the Merger requires the approval of the holders of a majority of
the outstanding Shares. If the Minimum Condition is satisfied, Purchaser
would have sufficient voting power to approve the Merger without the
affirmative vote of any other shareholder of the Company. However, there can
be no assurance that Purchaser will acquire at least a majority of the
outstanding Shares.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL
CONTAIN IMPORTANT INFORMATION AND SHOULD BE READ IN THEIR ENTIRETY BEFORE ANY
DECISION IS MADE WITH RESPECT TO THE OFFER.
1. Terms of the Offer. Upon the terms and subject to the
conditions set forth in the Offer, Purchaser will accept for payment and pay
for all Shares that are validly tendered by the Expiration Date and not
withdrawn as provided in Section 3. The term "Expiration Date" shall mean
12:00 Midnight, New York City time, on May 13, 1997, unless Purchaser shall
have extended the period of time for which the Offer is open, in which event
the term "Expiration Date" shall mean the latest time and date at which the
Offer, as so extended by Purchaser, shall expire.
The Offer is subject to certain conditions set forth in Section
16, including satisfaction of the Minimum Condition and expiration or
termination of the waiting period applicable to Purchaser's acquisition of
Shares pursuant to the Offer under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act"). If any such condition
is not satisfied prior to the Expiration Date, Purchaser may (i) terminate the
Offer and return all tendered Shares to tendering shareholders, (ii) extend
the Offer and, subject to withdrawal rights as set forth in Section 3, retain
all such Shares until the expiration of the Offer as so extended, (iii) waive
such condition and, subject to any requirement to extend the period of time
during which the Offer is open, purchase all Shares validly tendered by the
Expiration Date and not withdrawn or (iv) delay acceptance for payment or
payment for Shares, subject to applicable law, until satisfaction or waiver of
the conditions to the Offer.
Purchaser expressly reserves the right to waive the Minimum
Condition or any of the other conditions to the Offer and to make any change
in the terms or conditions of the Offer; provided that no change may be made
which changes the form of consideration to be paid or decreases the price per
Share or the number of Shares sought in the Offer or which imposes conditions
to the Offer in addition to the Minimum Condition and those conditions set
forth in Section 16 or amends such conditions in a manner adverse to the
Company. For a description of Purchaser's right to extend the period of time
during which the Offer is open and to amend, delay or terminate the Offer, see
Sections 15 and 16.
The Company has provided the Purchaser with the Company's
shareholder lists and security position listings for the purpose of
disseminating the Offer to holders of Shares. This Offer to Purchase and the
related Letter of Transmittal will be mailed to record holders of Shares and
will be furnished to brokers, banks and similar persons whose names, or the
names of whose nominees, appear on the shareholder list or, if applicable, who
are listed as participants in a clearing agency's security position listing
for subsequent transmittal to beneficial owners of Shares.
2. Procedure for Tendering Shares. To tender Shares pursuant
to the Offer, either (a) a properly completed and duly executed Letter of
Transmittal (or facsimile thereof) together with any required signature
guarantees, or in the case of a book-entry transfer, an Agent's Message (as
hereinafter defined), and any other required documents, must be received by
the Depositary at one of its addresses set forth on the back cover of this
Offer to Purchase and either certificates for the Shares to be tendered must
be received by the Depositary at one of such addresses or such Shares must be
delivered pursuant to the procedures for book-entry transfer described below
(and a Book Entry Confirmation (as hereinafter defined) received by the
Depositary), in each case by the Expiration Date, or (b) the guaranteed
delivery procedure described below must be complied with.
The term "Agent's Message" means a message, transmitted by a
Book-Entry Transfer Facility (as hereinafter defined) to and received by the
Depositary and forming a part of a Book-Entry Confirmation (as hereinafter
defined) which states that such Book-Entry Transfer Facility has received an
express acknowledgment from the participant tendering the Shares that such
participant has received and agrees to be bound by the terms of the Letter of
Transmittal and that the Company may enforce such agreement against such
participant.
Book-Entry Transfer. The Depositary will establish an account
with respect to the Shares at The Depository Trust Company and Philadelphia
Depository Trust Company (each a "Book-Entry Transfer Facility" and
collectively the "Book-Entry Transfer Facilities") for purposes of the Offer
within two business days after the date of this Offer to Purchase. Any
financial institution that is a participant in the system of any Book-Entry
Transfer Facility may make delivery of Shares by causing such Book-Entry
Transfer Facility to transfer such Shares into the Depositary's account in
accordance with the procedures of such Book-Entry Transfer Facility. However,
although delivery of Shares may be effected through book-entry transfer, the
Letter of Transmittal (or facsimile thereof), properly completed and duly
executed, together with any required signature guarantees, or an Agent's
Message, and any other required documents must, in any case, be received by
the Depositary at one of its addresses set forth on the back cover of this
Offer to Purchase by the Expiration Date, or the guaranteed delivery procedure
described below must be complied with. The confirmation of a book-entry
transfer of Shares into the Depositary's account at a Book-Entry Transfer
Facility as described above is referred to herein as a "Book-Entry
Confirmation". Delivery of documents to a Book-Entry Transfer Facility in
accordance with such Book-Entry Transfer Facility's procedures does not
constitute delivery to the Depositary.
Signature Guarantees. Except as otherwise provided below,
all signatures on a Letter of Transmittal must be guaranteed by an Eligible
Institution. "Eligible Institution" means a financial institution
(including most commercial banks, savings and loan associations and
brokerage houses) which is a member of a recognized Medallion Program
approved by The Securities Transfer Association Inc., including the
Securities Transfer Agents Medallion Program (STAMP), the Stock Exchange
Medallion Program (SEMP) and the New York Stock Exchange, Inc. Medallion
Signature Program (MSP). Signatures on a Letter of Transmittal need not be
guaranteed (a) if the Letter of Transmittal is signed by the registered
holder(s) of the Shares tendered therewith and such holder has not
completed the box entitled "Special Payment Instructions" or the box
entitled "Special Delivery Instructions" on the Letter of Transmittal or
(b) if such Shares are tendered for the account of an Eligible Institution.
See Instructions 1 and 5 of the Letter of Transmittal.
Guaranteed Delivery. If a shareholder desires to tender Shares
pursuant to the Offer and cannot deliver certificate(s) representing such
Shares and all other required documents to the Depositary by the Expiration
Date, or such shareholder cannot complete the procedure for delivery by
book-entry transfer on a timely basis, such Shares may nevertheless be
tendered if all of the following conditions are met:
(i) such tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of
Guaranteed Delivery substantially in the form provided by Purchaser is
received by the Depositary (as provided below) by the Expiration Date; and
(iii) the certificates for such Shares (or a Book-Entry
Confirmation), together with a properly completed and duly executed Letter
of Transmittal (or facsimile thereof) with any required signature
guarantees, or an Agent's Message, and any other required documents, are
received by the Depositary within three National Association of Securities
Dealers, Inc. Automated Quotation ("Nasdaq") National Market System
trading days after the date of execution of the Notice of Guaranteed
Delivery.
The Notice of Guaranteed Delivery may be delivered by hand or
transmitted by telegram, telex, facsimile transmission or mail to the
Depositary and must include a guarantee by an Eligible Institution in the form
set forth in such Notice of Guaranteed Delivery.
The method of delivery of Shares and all other required
documents, including through Book-Entry Transfer Facilities, is at the option
and risk of the tendering shareholder and the delivery will be deemed made
only when actually received by the Depositary. If certificates for Shares are
sent by mail, registered mail with return receipt requested, properly insured,
is recommended. In all cases, sufficient time should be allowed to ensure
timely delivery.
By executing a Letter of Transmittal, a tendering shareholder
irrevocably appoints designees of Purchaser as such shareholder's proxies in
the manner set forth in the Letter of Transmittal to the full extent of such
shareholder's rights with respect to the Shares tendered by such shareholder
and accepted for payment by Purchaser (and any and all other Shares or other
securities issued or issuable in respect of such Shares on or after April 9,
1997). All such proxies shall be irrevocable and coupled with an interest in
the tendered Shares. Such appointment is effective only upon the acceptance
for payment of such Shares by Purchaser. Upon such acceptance for payment,
all prior proxies and consents granted by such shareholder with respect to
such Shares and other securities will, without further action, be revoked, and
no subsequent proxies may be given nor subsequent written consents executed by
such shareholder (and, if given or executed, will not be deemed to be
effective). Such designees of Purchaser will be empowered to exercise all
voting and other rights of such shareholder as they, in their sole discretion,
may deem proper at any annual, special or adjourned meeting of the Company's
shareholders, by written consent or otherwise. Purchaser reserves the right
to require that, in order for Shares to be validly tendered, immediately upon
Purchaser's acceptance for payment of such Shares, Purchaser is able to
exercise full voting rights with respect to such Shares and other securities
(including voting at any meeting of shareholders then scheduled or acting by
written consent without a meeting).
The tender of Shares pursuant to any one of the procedures
described above will constitute the tendering shareholder's acceptance of the
Offer, as well as the tendering shareholder's representation and warranty that
(a) such shareholder owns the Shares being tendered within the meaning of Rule
14e-4 promulgated under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), (b) the tender of such Shares complies with Rule 14e-4, and
(c) such shareholder has the full power and authority to tender and assign the
Shares tendered, as specified in the Letter of Transmittal. Purchaser's
acceptance for payment of Shares tendered pursuant to the Offer will
constitute a binding agreement between the tendering shareholder and Purchaser
upon the terms and subject to the conditions of the Offer.
All questions as to the form of documents and the validity,
eligibility (including time of receipt) and acceptance for payment of any
tender of Shares will be determined by Purchaser, in its sole discretion,
which determination shall be final and binding. Purchaser reserves the
absolute right to reject any or all tenders of Shares determined by it not
to be in proper form or the acceptance for payment of or payment for which
may, in the opinion of Purchaser's counsel, be unlawful. Purchaser also
reserves the absolute right to waive any defect or irregularity in any
tender of Shares, whether or not similar defects or irregularities are
waived in the case of other Shares. None of Parent, Purchaser, the Dealer
Manager, the Depositary, the Information Agent or any other person will be
under any duty to give notification of any defect or irregularity in
tenders or incur any liability for failure to give any such notification.
Under the federal income tax laws, the Depositary will be
required to withhold 31% of the amount of any payments made to certain
shareholders pursuant to the Offer. In order to avoid such backup
withholding, each tendering shareholder must provide the Depositary with such
shareholder's correct taxpayer identification number and certify that such
shareholder is not subject to such backup withholding by completing the
Substitute Form W-9 included in the Letter of Transmittal. If a shareholder
is a non-resident alien or foreign entity not subject to back up withholding,
the shareholder must give the Depositary a completed Form W-8 Certificate of
Foreign Status prior to receipt of any payment.
3. Withdrawal Rights. Tenders of Shares made pursuant to the
Offer may be withdrawn at any time prior to the Expiration Date. Thereafter,
such tenders are irrevocable, except that they may be withdrawn after June 14,
1997 unless theretofore accepted for payment as provided in this Offer to
Purchase. If Purchaser extends the period of time during which the Offer is
open, is delayed in accepting for payment or paying for Shares or is unable to
accept for payment or pay for Shares pursuant to the Offer for any reason,
then, without prejudice to Purchaser's rights under the Offer, the Depositary
may, on behalf of Purchaser, retain all Shares tendered, and such Shares may
not be withdrawn except as otherwise provided in this Section 3.
To be effective, a written, telegraphic, telex or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
one of its addresses set forth on the back cover of this Offer to Purchase and
must specify the name of the person who tendered the Shares to be withdrawn
and the number of Shares to be withdrawn and the name of the registered holder
of Shares, if different from that of the person who tendered such Shares. If
the Shares to be withdrawn have been delivered to the Depositary, a signed
notice of withdrawal with (except in the case of Shares tendered by an
Eligible Institution) signatures guaranteed by an Eligible Institution must be
submitted prior to the release of such Shares. In addition, such notice must
specify, in the case of Shares tendered by delivery of certificates, the name
of the registered holder (if different from that of the tendering shareholder)
and the serial numbers shown on the particular certificates evidencing the
Shares to be withdrawn or, in the case of Shares tendered by book-entry
transfer, the name and number of the account at one of the Book-Entry Transfer
Facilities to be credited with the withdrawn Shares. Withdrawals may not be
rescinded, and Shares withdrawn will thereafter be deemed not validly tendered
for purposes of the Offer. However, withdrawn Shares may be retendered by
again following one of the procedures described in Section 2 at any time prior
to the Expiration Date.
All questions as to the form and validity (including time of
receipt) of any notice of withdrawal will be determined by Purchaser, in its
sole discretion, which determination shall be final and binding. None of
Parent, Purchaser, the Dealer Manager, the Depositary, the Information Agent
or any other person will be under any duty to give notification of any defect
or irregularity in any notice of withdrawal or incur any liability for failure
to give any such notification.
4. Acceptance for Payment and Payment. Upon the terms and
subject to the conditions of the Offer, Purchaser will accept for payment and
pay for all Shares validly tendered by the Expiration Date and not withdrawn
pursuant to Section 3 as soon as practicable after the later of (i) the
Expiration Date and (ii) the satisfaction or waiver of the conditions set
forth in Section 16. In addition, Purchaser reserves the right, in its sole
discretion and subject to applicable law, to delay the acceptance for payment
or payment for Shares in order to comply in whole or in part with any
applicable law. For a description of Purchaser's right to terminate the Offer
and not accept for payment or pay for Shares or to delay acceptance for
payment or payment for Shares, see Sections 15 and 16.
For purposes of the Offer, Purchaser shall be deemed to have
accepted for payment tendered Shares when, as and if Purchaser gives oral
or written notice to the Depositary of its acceptance of the tenders of
such Shares. Payment for Shares accepted for payment pursuant to the Offer
will be made by deposit of the purchase price with the Depositary, which
will act as agent for the tendering shareholders for the purpose of
receiving payments from Purchaser and transmitting such payments to
tendering shareholders. In all cases, payment for Shares accepted for
payment pursuant to the Offer will be made only after timely receipt by the
Depositary of certificates for such Shares (or a Book-Entry Confirmation),
a properly completed and duly executed Letter of Transmittal (or facsimile
thereof) or, in the case of a book-entry transfer, an Agent's Message, and
any other required documents. See Section 2. Accordingly, payment may be
made to tendering shareholders at different times if delivery of the Shares
and other required documents occur at different times. Under no
circumstances will interest be paid by Purchaser on the consideration paid
for Shares pursuant to the Offer, regardless of any delay in making such
payment.
If Purchaser increases the consideration to be paid for Shares
pursuant to the Offer, Purchaser will pay such increased consideration for all
Shares purchased pursuant to the Offer.
Purchaser reserves the right to transfer or assign, in whole or
from time to time in part, to one or more of its affiliates the right to
purchase Shares tendered pursuant to the Offer, but any such transfer or
assignment will not relieve Purchaser of its obligations under the Offer or
prejudice the rights of tendering shareholders to receive payment for Shares
validly tendered and accepted for payment.
If any tendered Shares are not purchased pursuant to the Offer
for any reason, or if certificates are submitted for more Shares than are
tendered, certificates for such unpurchased or untendered Shares will be
returned (or, in the case of Shares tendered by book-entry transfer, such
Shares will be credited to an account maintained at one of the Book-Entry
Transfer Facilities), without expense to the tendering shareholder, as
promptly as practicable following the expiration or termination of the Offer.
Purchaser acknowledges that (i) Rule 14e-1(c) under the
Exchange Act requires Purchaser to pay the consideration offered or return the
Shares tendered promptly after the termination or withdrawal of the Offer, and
(ii) unless otherwise permitted by law, Purchaser may not delay acceptance for
payment of, or payment for, any Shares upon the occurrence of any of the
conditions specified in Section 16 without extending the period of time during
which the Offer is open.
5. Certain Tax Considerations. Sales of Shares by
shareholders of the Company pursuant to the Offer will be taxable
transactions for federal income tax purposes and may also be taxable
transactions under applicable state and local and other tax laws.
In general, a shareholder will recognize gain or loss equal to
the difference between the tax basis of his or her Shares and the amount of
cash received in exchange therefor. Such gain or loss will be capital gain or
loss if the Shares are capital assets in the hands of the shareholder and will
be long-term gain or loss if the holding period for the Shares is more than
one year as of the date of the sale of such Shares. Legislation that would
reduce the tax rate on long-term capital gain is now pending before the United
States Congress but its enactment is uncertain.
The foregoing discussion may not apply to shareholders who
acquired their Shares pursuant to the exercise of stock options or other
compensation arrangements with the Company or who are not citizens or
residents of the United States or who are otherwise subject to special tax
treatment under the Internal Revenue Code of 1986, as amended.
THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED
FOR GENERAL INFORMATION ONLY AND IS BASED UPON PRESENT LAW. DUE TO THE
INDIVIDUAL NATURE OF TAX CONSEQUENCES, SHAREHOLDERS ARE URGED TO CONSULT THEIR
TAX ADVISORS AS TO THE SPECIFIC TAX CONSEQUENCES TO THEM OF THE OFFER,
INCLUDING THE EFFECTS OF APPLICABLE STATE, LOCAL OR OTHER TAX LAWS.
6. Price Range of Shares; Dividends. The Shares are
traded in the over-the-counter market and are quoted on the Nasdaq National
Market under the symbol MNPI. The following table sets forth, for the
periods indicated, the high and low sale prices per Share as quoted on the
Nasdaq National Market, as reported in the Company's Annual Report on Form
10-K for the year ended March 31, 1996 (the "Company 10-K") with respect to
the fiscal year ended March 31, 1996 and thereafter as reported in
published financial sources. According to the Company, the Company has not
paid cash dividends on the Shares to date.
High Low
---- ---
Fiscal Year Ended March 31, 1996
First Quarter.............................. $ 16 7/8 $ 9 5/8
Second Quarter............................. 22 1/4 15
Third Quarter.............................. 28 14 5/8
Fourth Quarter............................. 34 1/2 18 7/8
Fiscal Year Ended March 31, 1997
First Quarter.............................. 31 1/8 10
Second Quarter ............................ 13 3/4 5 1/2
Third Quarter.............................. 16 7 7/8
Fourth Quarter............................. 13 3/4 8 3/4
Fiscal Year Ended March 31, 1998
First Quarter (through April 15, 1997)..... $ 16 1/8 $ 8 1/4
On April 9, 1997, the last full day of trading before public
announcement of the execution of the Merger Agreement, the reported closing
sales price per Share on the Nasdaq National Market was $10 1/2. On April
15, 1997, the last full day of trading prior to commencement of the Offer,
the reported closing sales price per Share on the Nasdaq National Market
was $15 7/8.
SHAREHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR THE SHARES.
7. Certain Information Concerning the Company. The Company
is a Massachusetts corporation with its principal executive offices located
at 500 Ridge River Drive, Norwood, Massachusetts 02062.
According to the Company 10-K, the Company is a leading
provider of central site and remote access solutions, offering a broad line of
products utilizing the Company's wide area network (WAN) technology and its
network management and remote access software.
The following selected consolidated financial data relating to
the Company and its subsidiaries has been taken or derived from the audited
financial statements contained in the Company 10-K and the unaudited financial
statements contained in the Company's quarterly report on Form 10-Q for its
fiscal quarters ended December 31, 1995 and December 31, 1996. More
comprehensive financial information is included in such 10-K and 10-Q's and
the other documents filed by the Company with the Securities and Exchange
Commission ("Commission"), and the financial data set forth below is qualified
in its entirety by reference to such reports and other documents and all of
the financial statements and notes contained therein. Such reports and other
documents may be examined and copies may be obtained from the offices of the
Commission in the manner set forth below.
Microcom, Inc.
SELECTED CONSOLIDATED FINANCIAL DATA
<TABLE>
<CAPTION>
Nine months ended December 31
(unaudited) Fiscal year ended March 31
--------------------------------- --------------------------------
1996 1995 1996 1995 1994
---- ---- ---- ---- ----
(in thousands, except per share amounts)
<S> <C> <C> <C> <C> <C> <C> <C>
Income Statement Data
Net sales.................... $131,181 $101,341 $146,044 $93,106 $56,464
-------- -------- -------- ------- -------
Gross margin................. 46,555 43,067 61,010 41,784 27,392
Operating income (loss)...... 4,685 10,354 14,768 7,517 (10,416)
Net income (loss)............ 2,813 8,662 12,490 5,761 (10,913)
Net income (loss) per share.. 0.17 0.57 0.80 0.49 (1.09)
Weighted average number of
shares outstanding......... 16,818 15,196 15,690 11,805 10,041
Balance Sheet Data
Working capital.............. $81,544 $81,455 $84,329 $17,732 $13,957
Total assets................. 143,067 118,810 129,199 57,788 38,453
Long-term portion of
capitalized leases......... 3,041 2,526 2,186 122 450
Total stockholders' equity... 108,559 97,551 103,109 35,282 26,231
</TABLE>
Except as otherwise stated in this Offer to Purchase, the
information concerning the Company contained herein has been taken from or
is based upon reports and other documents on file with the Commission or
otherwise publicly available. Although neither Purchaser nor Parent have
any knowledge that would indicate that any statements contained herein
based upon such reports and documents are untrue, neither Purchaser nor
Parent takes any responsibility for the accuracy or completeness of the
information contained in such reports and other documents or for any
failure by the Company to disclose events that may have occurred and may
affect the significance or accuracy of any such information but that are
unknown to Purchaser or Parent.
The Company is subject to the informational filing requirements
of the Exchange Act and in accordance therewith files periodic reports, proxy
statements and other information with the Commission relating to its business,
financial condition and other matters. The Company is required to disclose in
such proxy statements certain information, as of particular dates, concerning
the Company's directors and officers, their remuneration, stock options
granted to them, the principal holders of the Company's securities and any
material interest of such persons in transactions with the Company. Such
reports, proxy statements and other information may be inspected at the public
reference facilities maintained by the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 and should also be available for inspection and copying
at the regional offices of the Commission in New York (Seven World Trade
Center, 13th Floor, New York, New York 10048) and Chicago (Citicorp Center,
500 West Madison Street (Suite 1400), Chicago, Illinois 60661). Such material
may also be obtained from the Commission's web site at http://www.sec.gov.
Copies of such material should be obtainable by mail, upon payment of the
Commission's customary charges, by writing to the Commission's principal
office at 450 Fifth Street, N.W., Washington, D.C. 20549. Such material
should also be available for inspection at the offices of Nasdaq National
Market operations, 1735 K Street, N.W., Washington D.C. 20006.
In the course of the discussions between representatives of
Parent and the Company (see Section 10) certain projections of future
operating performance were furnished to Parent's representatives. Set forth
below is a summary of such projections. The projections should be read
together with the financial statements of the Company referred to herein.
Microcom, Inc.
PROJECTED FINANCIAL INFORMATION
Fiscal year ending March 31, 1998
(in thousands, except per Share amounts)
----------------------------------------
Revenues........................... $274,835
Cost of goods sold................. 171,929
Operating expenses................. 68,496
Income from operations before
income taxes.................... 34,410
Net income......................... 25,807
Net income per share............... 1.50
The foregoing projections were not prepared with a view to
public disclosure or compliance with published guidelines of the Commission
or the guidelines established by the American Institute of Certified Public
Accountants regarding projections, and are included in this Offer to
Purchase only because they were provided to Parent. Neither Parent,
Purchaser nor the Company, nor any of their financial advisors nor the
Dealer Manager assumes any responsibility for the accuracy of these
projections. While presented with numerical specificity, these projections
are based upon a variety of assumptions relating to the businesses of the
Company which may not be realized and are subject to significant
uncertainties and contingencies, many of which are beyond the control of
the Company and many of which are described in more detail in "Risk
Factors" under Item 1, Business of the Company 10-K. There can be no
assurance that the projections will be realized, and actual results may
vary materially from those shown.
According to the Company, the revenue projections were based
principally on detailed forecasts for products presented by certain of its
major OEM customers, as well as its own estimates for new OEM customers and for
products sold through distribution. Expense forecasts were based partially on
historical experience as well as estimates based on sales forecasts and
attainment of certain manufacturing efficiencies. The projections were
prepared on a stand-alone basis and do not reflect any effect from the Offer
and the Merger.
8. Certain Information Concerning Purchaser and Parent.
Purchaser is a Massachusetts corporation incorporated on April 9, 1997 and to
date has engaged in no activities other than those incident to its formation,
the execution and delivery of the Merger Agreement and the commencement of the
Offer. Purchaser is a wholly-owned subsidiary of Parent. The principal
executive offices of the Purchaser are located at 20555 SH 249, Houston, Texas
77070.
Parent is a Delaware corporation. It is principally engaged in
designing, developing, manufacturing, and marketing a wide range of computing
products, including desktop computers, portable computers, workstations,
communications products and tower PC servers and peripheral products that
store and manage data in network environments. Parent markets its products
primarily to business, home, government and education customers.
The principal executive offices of Parent are located at 20555
SH 249, Houston, Texas 77070. The name, business address, principal
occupation or employment, five year employment history and citizenship of each
director and executive officer of Parent and Purchaser are set forth on
Schedule I hereto.
The following selected consolidated financial data relating to
Parent and its subsidiaries has been taken or derived from the audited
financial statements contained in Parent's Annual Report on Form 10-K for the
year ended December 31, 1996. More comprehensive financial information is
included in such Annual Report and the other documents filed by Parent with
the Commission, and the financial data set forth below is qualified in its
entirety by reference to such Annual Report and other documents and all of the
financial statements and notes contained therein. Such reports and other
documents may be examined and copies may be obtained from the offices of the
Commission in the same manner as set forth with respect to the Company in
Section 7.
Compaq Computer Corporation
SELECTED CONSOLIDATED FINANCIAL DATA
<TABLE>
<CAPTION>
Year ended December 31
------------------------------------------
1996 1995 1994
---- ----- ----
(in millions, except per share amounts)
<S> <C> <C> <C>
Income Statement Data
Sales.............................................. $18,109 $14,755 $10,866
Gross margin....................................... 4,196 3,388 2,727
Income before provision for income taxes........... 1,876 1,188(*) 1,172
Net income......................................... 1,313 789(*) 867
Earnings per share................................. 4.66 2.87(*) 3.21
Shares used in computing earnings per common and
common equivalent share.......................... 281.4 275.0 270.1
Balance Sheet Data
Current assets..................................... 9,169 6,527 5,158
Total assets....................................... 10,526 7,818 6,166
Current liabilities................................ 3,852 2,680 2,013
Long-term debt..................................... 300 300 300
Stockholders' equity............................... 6,144 4,614 3,674
</TABLE>
- ------------------
(*) Includes a $241 million ($.87 per share) non-recurring, non-tax deductible
charge for purchased in-process technology in connection with certain
acquisitions in 1995.
Parent is subject to the informational filing requirements
of the Exchange Act and in accordance therewith files periodic reports,
proxy statements and other information with the Commission relating to its
business, financial condition and other matters. Parent is required to
disclose in such proxy statements certain information, as of particular
dates, concerning its directors and officers, their remuneration, stock
options granted to them, the principal holders of its securities and any
material interests of such persons in transactions with Parent. Such
reports, proxy statements and other information should be available for
inspection and copying at the offices of the Commission in the same manner
as set forth with respect to the Company in Section 7. Such material
should also be available for inspection at the library of the New York
Stock Exchange, 20 Broad Street, New York, New York 10005.
Except as described in this Offer to Purchase, (i) neither
Parent nor Purchaser nor, to the best of their knowledge, any of the persons
listed in Schedule I hereto, nor any associate or majority-owned subsidiary of
any of the foregoing beneficially owns, or has any right to acquire, directly
or indirectly, any Shares and (ii) neither Parent nor Purchaser nor, to the
best of their knowledge, any of the persons or entities referred to above nor
any director, executive officer or subsidiary of any of the foregoing, has
effected any transaction in the Shares during the past 60 days.
Except as described in this Offer to Purchase, neither Parent
nor Purchaser nor, to the best of their knowledge, any of the persons listed
in Schedule I hereto, has any contract, arrangement, understanding or
relationship with any other person with respect to any securities of the
Company, including, but not limited to, any contract, arrangement,
understanding or relationship concerning the transfer or voting of such
securities, finder's fees, joint ventures, loan or option arrangements, puts
or calls, guarantees of loans, guarantees, division of profits or loss or the
giving or withholding of proxies. Except as set forth in this Offer to
Purchase, since April 1, 1994, neither Parent, Purchaser nor, to the best of
their knowledge, any of the persons listed in Schedule I hereto, has had any
business relationship or transaction with the Company or any of its executive
officers, directors, or affiliates that is required to be reported under the
rules and regulations of the Commission applicable to the Offer. Except as
set forth in this Offer to Purchase, since April 1, 1994, there have been no
contacts, negotiations or transactions between Parent, Purchaser or any of
their subsidiaries or, to the best knowledge of Parent and Purchaser, any of
the persons listed in Schedule I hereto, on the one hand, and the Company or
its affiliates, on the other hand, concerning a merger, consolidation or
acquisition, tender offer or other acquisition of securities, an election of
directors or a sale or other transfer of a material amount of assets.
9. Source and Amount of Funds. The total amount of funds
required by Purchaser to purchase Shares pursuant to the Offer and to pay
related fees and expenses is estimated to be approximately $305 million (on a
fully diluted basis). Purchaser will obtain such funds through a capital
contribution from Parent. Parent will obtain such funds from its general
corporate funds.
10. Background of the Offer; Past Contacts or Negotiations
with the Company
Since early 1996, Parent has been evaluating possible business
relationships with companies with a strong presence in the wide area network
and remote access market. During this period, McKinsey & Company, Inc.
("McKinsey") and Greenhill & Co., LLC ("Greenhill") have assisted Parent in
evaluating such companies.
In November 1996, representatives of Parent contacted
representatives of the Company to explore a possible OEM relationship. During
December 1996, representatives of the Company and Parent met to pursue the OEM
relationship.
In late December 1996, Parent began considering whether the
Company would be a possible acquisition candidate.
On January 9, 1997, Alan Lutz, Senior Vice President, Group
Manager, Communication Products Division of Parent, met with Roland Pampel,
then President and Chief Executive Officer of the Company and Lewis Bergins,
then Executive Vice President, International Operations, currently Chief
Executive Officer, of the Company to discuss the Company's plans for the
future. During that conversation, Mr. Bergins indicated to Mr. Lutz that the
Company might be receptive to an offer to acquire the entire Company.
Parent continued thereafter to consider the possible
acquisition of the Company.
On February 26, 1997, Mr. Lutz and Earl Mason, Senior Vice
President and Chief Financial Officer of the Parent, presented a business and
financial analysis of the Company at a telephonic meeting of the Board of
Directors of the Parent. The Board of Directors of the Parent authorized
management to continue to explore the possible acquisition of the Company.
On February 26, 1997, Mr. Lutz contacted Mr. Bergins to discuss
the possibility of an acquisition of the Company and the need to conduct a due
diligence investigation.
On March 4 and 5, 1997, representatives of Parent, Parent's
outside counsel and Greenhill met with representatives of the Company, the
Company's outside counsel and Morgan Stanley & Co. Incorporated ("Morgan
Stanley"), the Company's financial advisor, to discuss matters relating to the
Company and its business.
On March 6, Mr. Lutz traveled to Boston to meet with Mr.
Bergins to discuss a possible transaction structure and Mr. Bergin's continued
role with the Company following consummation of such a transaction.
On March 7, 1997, Mr. Lutz and representatives from Greenhill
met with the Company's outside counsel and Morgan Stanley to discuss potential
terms under which a transaction could be consummated. Initial proposals from
both sides were considered during this meeting. Mr. Lutz and Mr. Bergins
discussed due diligence issues in a phone conversation on March 10, 1997.
During the rest of March, Parent conducted further due
diligence concerning the Company. On March 19, Mr. Bergins, Mr. Pampel and
Peter Minihane, the Company's Chief Financial Officer, as well as
representatives from the Company's auditors and outside counsel, met with Mr.
Lutz and David Cabello, Senior Vice President, General Counsel and Secretary
of the Parent, and other representatives of Parent to discuss several
outstanding due diligence issues.
On March 27, 1997, at a regularly scheduled meeting of the
Board of Directors of the Parent, Messrs. Lutz, Mason and Cabello, together
with representatives from Greenhill, made business, financial and legal
presentations to the Board of Directors of the Parent regarding the potential
acquisition of the Company. The Board of Directors of the Parent decided that
the Parent should continue negotiations with the Company. Thereafter,
representatives of Parent and the Company, as well as their outside counsel,
discussed the terms of a merger agreement.
On April 8, 1997, at a telephonic meeting of the Board of
Directors of the Parent, the Board approved the acquisition of the Company
subject to certain conditions, including the negotiation of a definitive
merger agreement satisfactory to Parent.
On April 9, 1997, Parent offered the Company a price of $16.25
per Share. That afternoon the Company's Board of Directors met to discuss the
proposed transaction with Parent and, at the end of the meeting, approved the
transaction, subject to the resolution of certain open issues. Discussions
between Parent and the Company continued during that afternoon, and the
Merger Agreement was executed after the close of the market.
11. The Merger Agreement; Other Arrangements
Merger Agreement
The following is a summary of the Merger Agreement, a copy of
which is filed as an Exhibit to Purchaser's Tender Offer Statement on Schedule
14D-1 dated April 16, 1997 (the "Schedule 14D-1"). Such summary is qualified
in its entirety by reference to the Merger Agreement.
The Offer. The Merger Agreement provides for the making of the
Offer. The obligation of the Purchaser to accept for payment or pay for
Shares tendered pursuant to the Offer is subject to the satisfaction of the
Minimum Condition and certain other conditions that are described in Section
16. The Purchaser has agreed that no change in the Offer may be made which
changes the form of consideration to be paid or decreases the price per Share
or the number of Shares sought in the Offer or which imposes conditions to the
Offer in addition to the Minimum Condition and those conditions described in
Section 16 or amends such conditions in a manner adverse to the Company.
Recommendation. The Company's Board of Directors has (i)
unanimously determined that the Merger Agreement and the transactions
contemplated thereby, including the Offer and the Merger, are fair to and in
the best interest of the Company's shareholders, (ii) unanimously approved the
Merger Agreement and the transactions contemplated thereby, including the
Offer and the Merger and (iii) unanimously resolved, subject to their fiduciary
duties as advised in writing by counsel, to recommend acceptance of the Offer
and approval and adoption of the Merger Agreement and the Merger by the
Company's shareholders.
The Merger. The Merger Agreement provides that, upon the terms
and subject to the conditions thereof, Purchaser shall be merged with and
into the Company in accordance with Massachusetts Law (the "Effective Time").
As a result of the Merger, the separate corporate existence of the Purchaser
will cease and the Company will be the surviving corporation (the "Surviving
Corporation").
At the Effective Time, (i) each Share held in the treasury of
the Company or owned by Parent or any subsidiary thereof (including Purchaser)
shall be canceled, and no payment shall be made with respect thereto; (ii)
each share of common stock of Purchaser then outstanding shall be converted
into and become one share of common stock of the Surviving Corporation; and
(iii) each Share outstanding immediately prior to the Effective Time shall,
except as otherwise provided in (i) above and except Shares as to which
appraisal rights have been properly exercised under Massachusetts Law and
Shares of Restricted Stock, be converted into the right to receive $16.25 per
Share in cash, without interest.
At the Effective Time, the articles of organization of the
Surviving Corporation shall be amended to read in their entirety as set forth
in the articles of organization of Purchaser, except that the name of the
Surviving Corporation shall be "Microcom, Inc." The Surviving Corporation
shall initially be authorized to issue up to 100,000 shares of common stock,
par value $0.01 per share. The bylaws of Purchaser in effect at the Effective
Time shall be the bylaws of the Surviving Corporation until amended in
accordance with applicable law. From and after the Effective Time, until
successors are duly elected or appointed and qualified in accordance with
applicable law, (a) the directors of Purchaser at the Effective Time shall be
the directors of the Surviving Corporation and (b) the officers of the Company
at the Effective Time shall be the officers of the Surviving Corporation.
Restricted Stock. With respect to any Share acquired upon
exercise of an option granted under any stock option or incentive plan of the
Company that as of the Effective Date is subject to contractual forfeiture or
resale restrictions ("Restricted Stock"), such Share shall be canceled
immediately prior to the Effective Time, and Parent shall grant, as of the
Effective Time, to each former holder of Restricted Stock, a number of shares
of Parent common stock having a market value, based on the most recent per
share closing price of Parent common stock on the New York Stock Exchange
prior to the Effective Date, equal to the product of (i) the number of Shares
of Restricted Stock formerly held by such holder and (ii) $16.25. Such Parent
common stock shall be subject to the same contractual forfeiture or resale
restrictions as applied to the Restricted Stock immediately prior to the
cancellation thereof.
Employee Stock Purchase Plan. At the Effective Time, the
Company's 1987 Stock Purchase Plan ("Company Stock Purchase Plan") shall be
terminated, and Parent shall pay each participant in the Plan in cash at or
promptly after the Effective Time, in cancellation of all rights under such
Plan, the amount of such participant's account balance under the Plan.
Stock Options. At the Effective Time, each option to purchase
Shares outstanding under any employee stock option or compensation plan or
arrangement of the Company (except for the Company Stock Purchase Plan),
whether or not vested or exercisable, shall be canceled. With respect to
options held by current and former directors and certain officers of the
Company, Parent shall pay the holders thereof in cash at the Effective Time
for each such option an amount determined by multiplying (A) the excess, if
any, of $16.25 over the applicable exercise price per Share of such option by
(B) the number of Shares to which such option relates. With respect to options
held by any other Person, Parent shall issue in exchange therefor an option to
purchase shares of common stock of Parent (a "Substitute Option"). The number
of shares of Parent's common stock subject to such Substitute Option and the
exercise price thereunder shall be computed in compliance with the
requirements of Section 424(a) of the Internal Revenue Code of 1986, as
amended (the "Code"), and the rules and regulations promulgated thereunder.
Such Substitute Option shall vest in accordance with the same schedule and
shall have the same term as the original option in respect of which it is
granted. The Substitute Options will not qualify as incentive stock options
under Section 422 of the Code.
Agreements of Parent, Purchaser and the Company. The Merger
Agreement provides that effective upon acceptance for payment pursuant to the
Offer of a number of Shares that satisfies the Minimum Condition, Parent shall
be entitled to designate the number of directors, rounded up to the next whole
number, on the Company's Board of Directors that equals the product of (i) the
total number of directors on the Company's Board of Directors (giving effect
to the election of any additional directors pursuant to this paragraph)
multiplied by (ii) the percentage that the number of Shares beneficially owned
by Parent (including Shares accepted for payment) bears to the total number of
Shares outstanding, and the Company shall take all action necessary to cause
the Parent's designees to be elected or appointed to the Company's Board of
Directors, including, without limitation, increasing the number of directors,
and seeking and accepting resignations of its incumbent directors. The Merger
Agreement further provides that the Company shall use its best efforts to
cause at least three members of the Company's Board of Directors as of the
date of the Merger Agreement who are not employees of the Company to remain
members of the Board of Directors until the Effective Time.
If Parent exercises its right to designate directors, Parent
currently intends to designate one or more of the following persons to serve
as directors of the Company: Alan G. Lutz, J. David Cabello, Edward E.
Olkkola, Earl L. Mason and Robert W. Stearns. The foregoing information and
certain other information contained in this Offer to Purchase and Schedule I
hereto and in the Company's Solicitation/Recommendation Statement on Schedule
14D-9 (the "Schedule 14D-9") being mailed to shareholders herewith are being
provided in accordance with the requirements of Section 14(f) of the Exchange
Act and Rule 14f-1 thereunder.
Pursuant to the Merger Agreement, the Company shall cause a
meeting of its shareholders (the "Company Shareholder Meeting") to be duly
called and held as soon as reasonably practicable after consummation of the
Offer for the purpose of voting on the approval and adoption of the Merger
Agreement.
The Merger Agreement provides that the Company will promptly
prepare and file with the Commission under the Exchange Act a proxy statement
relating to the Company Shareholder Meeting (the "Proxy Statement"). The
Company has agreed to use its best efforts to obtain the necessary approvals
by its shareholders of the Merger Agreement and the transactions contemplated
thereby. Parent has agreed to vote all Shares then beneficially owned by it
in favor of adoption of the Merger Agreement.
The Company has agreed that, prior to the Effective Time, the
Company will not adopt or propose any change in its articles of organization
or bylaws; in addition, the Company has agreed that, prior to the Effective
Time, the Company will not, and will not permit any of its subsidiaries (each,
a "Subsidiary") to (a) merge or consolidate with any other Person or acquire a
material amount of assets of any other Person, other than purchases of
materials or products in the ordinary course of business; (b) sell, lease,
license or otherwise dispose of any material assets or property to any Person
except (i) pursuant to existing contracts or commitments, and (ii) in the
ordinary course consistent with past practice; (c) settle or compromise any
suit or claims or threatened suit or claim relating to the transactions
contemplated under the Merger Agreement; (d) agree or commit to do any of the
foregoing; or (e) take or agree or commit to take any action that would make
any representation and warranty of the Company under the Merger Agreement
inaccurate in any respect at, or as of any time prior to, the Effective Time.
Pursuant to the Merger Agreement, the Company has agreed that
from the date of the Merger Agreement until the termination thereof, the
Company and the Subsidiaries and the officers, directors, employees or other
agents of the Company and the Subsidiaries will not, directly or indirectly,
(i) take any action to solicit, initiate or encourage any Acquisition Proposal
(as hereinafter defined) or (ii) except as otherwise required by the fiduciary
duties of the Board of Directors as advised in writing by counsel, engage in
negotiations with, or disclose any nonpublic information relating to the
Company or any Subsidiary or afford access to the properties, books or records
of the Company or any Subsidiary to, any Person. The Company has agreed to
notify Parent promptly after (i) receipt of any Acquisition Proposal, (ii) the
Company has actual knowledge that any Person is considering making an
Acquisition Proposal or (iii) the Company has received any request for
nonpublic information relating to the Company or any Subsidiary or for access
to the properties, books or records of the Company or any Subsidiary by any
Person that the Company has actual knowledge is considering making, or has
made, an Acquisition Proposal and to keep Parent fully informed of the status
and details of any such Acquisition Proposal or request. The Company has
agreed not to engage in negotiations with, or disclose any nonpublic
information to, any Person unless it receives from such Person an executed
confidentiality agreement with terms no less favorable to the Company than the
confidentiality agreement between Company and Parent dated April 9, 1997.
Pursuant to the Merger Agreement, the Company has agreed to cease immediately
and cause to be terminated all activities, discussions or negotiations, if
any, with any Persons conducted prior to April 9, 1997 with respect to any
Acquisition Proposal. "Acquisition Proposal" means any offer or proposal for
a merger or other business combination involving the Company or any Subsidiary
or the acquisition of any equity interest in, or a substantial portion of the
assets of, the Company or any Subsidiary, other than the transactions
contemplated by the Merger Agreement.
The parties have agreed that for two years following the
Effective Time, the Company's employees will be provided benefits that are
substantially comparable in the aggregate to those provided by the Company to
its employees as of April 9, 1997, excluding all forms of stock-based or
equity-based compensation.
Parent, Purchaser and the Company have agreed that for five
years after the Effective Time, Parent will cause the Surviving Corporation to
indemnify and hold harmless the present and former officers and directors of
the Company in respect of acts or omissions occurring prior to the Effective
Time to the extent provided under the Company's articles of organization and
bylaws in effect on the date of the Merger Agreement, subject to any
limitation imposed from time to time under applicable law. In addition,
Parent has agreed that for five years after the Effective Time, Parent will
cause the Surviving Corporation to use its best efforts to provide officers'
and directors' liability insurance in respect of acts or omissions occurring
prior to the Effective Time covering each such Person currently covered by the
Company's officers' and directors' liability insurance policy on terms with
respect to coverage and amount no less favorable than those of such policy in
effect on the date of the Merger Agreement. Parent will not be obligated to
cause the Surviving Corporation to pay premiums in excess of 150% of the
amount per annum the Company paid in the twelve months ended December 31,
1996, which amount has been disclosed to Parent.
Representations and Warranties. The Merger Agreement contains
customary representations and warranties of the parties thereto including
representations by the Company as to its corporate existence and power,
corporate authorizations, governmental authorizations, non-contravention,
capitalization, Subsidiaries, Commission filings, financial statements,
disclosure documents, absence of certain changes, absence of undisclosed
material liabilities, litigation, taxes, employee matters, compliance with
laws, finders' fees, patents and other proprietary rights, environmental
matters, approvals and antitakeover provisions.
Conditions to the Merger. The obligations of the Company,
Parent and Purchaser to consummate the Merger are subject to the satisfaction
of the following conditions: (i) the adoption by the shareholders of the
Company of the Merger Agreement in accordance with Massachusetts Law; (ii) any
applicable waiting period under the HSR Act relating to the Merger shall have
expired or been terminated; (iii) no provision of any applicable law or
regulation and no judgment, injunction, order or decree shall prohibit the
consummation of the Merger; and (iv) Purchaser shall have purchased Shares
pursuant to the Offer.
Termination. The Merger Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time,
notwithstanding any approval of the Merger Agreement by the shareholders of
the Company, (a) by mutual written consent of the Company and Parent; (b) by
either the Company or Parent, if the Offer has not been consummated by June 4,
1997; (c) by either the Company or Parent if there shall be any law or
regulation that makes consummation of the Offer or the Merger illegal or
otherwise prohibited or if any judgment, injunction, order or decree enjoining
Parent or the Company from consummating the Offer or the Merger is entered and
such judgment, injunction, order or decree shall become final and
nonappealable; (d) by either the Company or Parent if the Company shall have
entered into, or shall have publicly announced its intention to enter into, an
agreement or an agreement in principle with respect to any Acquisition
Proposal; (e) by Parent if the Board of Directors of the Company shall have
withdrawn or materially modified in a manner adverse to Parent the Board's
approval or recommendation of the Offer or the Merger; or (f) by Parent if any
person or group (as defined in Section 13(d)(3) of the Exchange Act) (other
than Parent, the Purchaser or any affiliate thereof) shall have become the
beneficial owner (as defined in Rule 13d-3 promulgated under the Exchange Act)
of a majority of the outstanding Shares. If the Merger Agreement is
terminated, the Merger Agreement will become void and of no effect with no
liability on the part of the Company, Parent or the Purchaser other than
obligations of the Company under certain provisions of the Merger Agreement to
pay certain fees to, and expenses of, Parent (as described below).
Fees and Expenses. The Company has agreed that if the Merger
Agreement is terminated (i) in accordance with clause (b) under "Termination"
above and (x) the Company shall have failed to observe or perform in any
material respect any of its obligations under the Merger Agreement or (y) an
Acquisition Proposal shall have been received prior to June 4, 1997 and not
publicly rejected by the Company's Board of Directors, or (ii) in accordance
with clauses (d), (e) or (f) above, the Company will pay to Parent, within two
business days following such event, an amount in immediately available funds
equal to $10,460,000.
The Company has agreed to pay Parent an amount in immediately
available funds equal to the sum of (i) Parent's out-of-pocket expenses in
connection with the transactions contemplated by the Merger Agreement (but not
in excess of $2 million) and (ii) $2 million, after the termination of the
Merger Agreement pursuant to the provisions described in clause (b) under
"Termination" above, where any of the representations or warranties of the
Company set forth in the Merger Agreement were not true and correct as of the
date of the Merger Agreement. The Company shall be not be required to pay
such a fee if it has paid a fee to Parent pursuant to the previous paragraph.
Except as described in the preceding paragraph, the Merger
Agreement provides that the Company, Parent and Purchaser shall each bear all
costs and expenses incurred by it in connection with the Merger Agreement and
the transactions contemplated thereby.
Amendment and Waivers. Any provision of the Merger Agreement
may be amended or waived prior to the Effective Time if, and only if, such
amendment or waiver is in writing and signed, (i) in the case of an amendment,
by the Company, Parent and Purchaser or (ii) in the case of a waiver, by the
party against whom the waiver is to be effective. A termination or amendment
of the Merger Agreement requires, in the case of the Company, action by the
Company's Board of Directors or the duly authorized designee of the Company's
Board of Directors. In the event that Parent's designees are appointed or
elected to the Board of Directors of the Company after the consummation of the
Offer and prior to the Effective Time, the affirmative vote of at least a
majority of the continuing Directors will be required for the Company to agree
to amend, waive compliance with or terminate the Merger Agreement.
Employment Agreements
Parent has expressed to representatives of the Company that,
following consummation of the Offer and the Merger, Parent intends to grant to
certain officers and employees of the Company options to purchase common stock
of Parent, in amounts and on terms determined in accordance with Parent's
customary practices as applicable to similarly situated employees of Parent.
Parent has entered into a written agreement dated as of April
9, 1997 with Lewis A. Bergins, President and Chief Executive Officer of the
Company (the "Continuation Agreement"), pursuant to which Mr. Bergins would
continue to serve as President of the Company after consummation of the
Merger. The Continuation Agreement has a one-year term, subject to extension
upon the agreement of the parties. Under the Continuation Agreement Mr.
Bergins would receive: (i) base salary of approximately $285,000 per annum,
subject to annual increases; (ii) eligibility for a target bonus for 1997 of
$215,000, depending upon attainment of certain agreed-upon performance
criteria; and (iii) an option to purchase 25,000 shares of Parent's common
stock. In the event of termination of Mr. Bergins' employment during the term
of the Continuation Agreement other than for "cause," as defined in the
Continuation Agreement, the Continuation Agreement provides that Mr. Bergins
would be entitled to severance compensation from Parent of one year's
continuance of his annual base salary as in effect at the time of termination.
The Continuation Agreement supersedes Mr. Bergins' existing compensation and
severance arrangements with the Company. A copy of the Continuation Agreement
is filed as an Exhibit to Purchaser's Schedule 14D-1, and the foregoing
summary is qualified in its entirety by reference to the Continuation
Agreement.
Confidentiality Agreement
Parent and the Company executed a confidentiality and non-
disclosure agreement dated April 9, 1997. A copy of such agreement is
filed as an Exhibit to Purchaser's Schedule 14D-1.
12. Purpose of the Offer; Plans for the Company. The
purpose of the Offer is to acquire control of, and the entire equity
interest in, the Company. Purchaser currently intends, as soon as
practicable after consummation of the Offer, to consummate the Merger.
In connection with its consideration of the Offer, Purchaser
has made a preliminary review, and will continue to review, on the basis of
available information, various possible business strategies that it might
consider in the event that it acquires control of the Company. Such
strategies are expected to include the integration of certain assets or lines
of business of the Company with those of Purchaser. If Purchaser acquires
Shares pursuant to the Offer and depending upon the number of Shares so
acquired, Purchaser intends to conduct a detailed review of the Company and
its assets, businesses, operations, properties, policies, corporate structure,
capitalization and the responsibilities and qualifications of the Company's
management and personnel and consider what, if any, changes Purchaser deems
desirable in light of the circumstances which then exist.
Except as described above or elsewhere in this Offer to
Purchase, Purchaser has no present plans or proposals that would relate to or
result in an extraordinary corporate transaction involving the Company or any
of its subsidiaries (such as a merger, reorganization, liquidation, relocation
of any operations or sale or other transfer of a material amount of assets),
any change in the Company's Board of Directors or management, any material
change in the Company's capitalization or dividend policy or any other
material change in the Company's corporate structure or business.
13. Effect of the Offer on the Market for Shares; Stock
Quotations; Registration under the Exchange Act. The purchase of Shares
pursuant to the Offer will reduce the number of Shares that might otherwise
trade publicly and may reduce the number of holders of Shares, which could
adversely affect the liquidity and market value of the remaining Shares held
by shareholders other than Purchaser. Purchaser cannot predict whether the
reduction in the number of Shares that might otherwise trade publicly would
have an adverse or beneficial effect on the market price for, or marketability
of, the Shares or whether such reduction would cause future market prices to
be greater or less than the Offer price.
Depending upon the number of Shares purchased pursuant to
the Offer, the Shares may no longer meet the standards for continued
inclusion in the Nasdaq National Market. If, as a result of the purchase
of Shares pursuant to the Offer, the Shares no longer meet the criteria for
continuing inclusion in the Nasdaq National Market, the market for the
Shares could be adversely affected. According to Nasdaq's published
guidelines, in order for the Shares to be eligible for continued inclusion
in the Nasdaq National Market, there must continue to be, among other
things, at least 100,000 publicly held Shares, held by at least 400
shareholders (or 300 shareholders of round lots), with a market value of at
least $1 million. If the Shares were no longer eligible for inclusion in
the Nasdaq National Market, they may nevertheless continue to be included
in the Nasdaq SmallCap Market unless, among other things, the number of
publicly held Shares (excluding Shares held by officers, directors and
beneficial owners of more than 10% of the Shares) was less than 100,000, or
there were fewer than 300 holders in total. If the Shares are no longer
eligible for inclusion in the Nasdaq National Market or the Nasdaq SmallCap
Market, the Shares might still be quoted on the OTC Bulletin Board.
The Shares are currently "margin securities" under the
regulations of the Board of Governors of the Federal Reserve System (the
"Federal Reserve Board"), which has the effect, among other things, of
allowing brokers to extend credit on the collateral of such Shares. Depending
upon factors similar to those described above regarding listing and market
quotations, the Shares might no longer constitute "margin securities" for the
purposes of the Federal Reserve Board's margin regulations and, therefore,
could no longer be used as collateral for loans made by brokers.
The Shares are currently registered under the Exchange Act.
Such registration may be terminated upon application of the Company to the
Commission if the Shares are neither listed on a national securities exchange
nor held by 300 or more holders of record. Termination of the registration of
the Shares under the Exchange Act would substantially reduce the information
required to be furnished by the Company to holders of Shares and to the
Commission and would make certain of the provisions of the Exchange Act, such
as the short-swing profit recovery provisions of Section 16(b), the
requirement of furnishing a proxy statement pursuant to Section 14(a) in
connection with a shareholder's meeting and the related requirement of an
annual report to shareholders and the requirements of Rule 13e-3 under the
Exchange Act with respect to "going private" transactions, no longer
applicable to the Shares. Furthermore, "affiliates" of the Company and persons
holding "restricted securities" of the Company may be deprived of the ability
to dispose of such securities pursuant to Rule 144 promulgated under the
Securities Act of 1933. If registration of the Shares under the Exchange Act
were terminated, the Shares would no longer be "margin securities" or eligible
for listing or Nasdaq reporting. Purchaser intends to seek to cause the
Company to terminate registration of the Shares under the Exchange Act as soon
after consummation of the Offer as the requirements for termination of
registration of the Shares are met.
14. Dividends and Distributions. If on or after April 9,
1997, the Company should (i) split, combine or otherwise change the Shares
or its capitalization, (ii) acquire or otherwise cause a reduction in the
number of outstanding Shares or (iii) issue or sell any additional Shares
(other than Shares issued pursuant to and in accordance with the terms in
effect on April 9, 1997 of employee stock options), shares of any other
class or series of capital stock, other voting securities or any securities
convertible into, or options, rights, or warrants, conditional or
otherwise, to acquire, any of the foregoing, then, without prejudice to
Purchaser's rights under Sections 15 and 16, Purchaser may, in its sole
discretion, make such adjustments in the purchase price and other terms of
the Offer as it deems appropriate including the number or type of
securities to be purchased.
If, on or after April 9, 1997, the Company should declare or
pay any dividend on the Shares or any distribution with respect to the Shares
(including the issuance of additional Shares or other securities or rights to
purchase any securities) that is payable or distributable to shareholders of
record on a date prior to the transfer to the name of Purchaser or its nominee
or transferee on the Company's stock transfer records of the Shares purchased
pursuant to the Offer, then, without prejudice to Purchaser's rights under
Sections 15 and 16, (i) the purchase price per Share payable by Purchaser
pursuant to the Offer will be reduced to the extent of any such cash dividend
or distribution and (ii) the whole of any such non-cash dividend or
distribution to be received by the tendering shareholders will (a) be received
and held by the tendering shareholders for the account of Purchaser and will
be required to be promptly remitted and transferred by each tendering
shareholder to the Depositary for the account of Purchaser, accompanied by
appropriate documentation of transfer, or (b) at the direction of Purchaser,
be exercised for the benefit of Purchaser, in which case the proceeds of such
exercise will promptly be remitted to Purchaser. Pending such remittance and
subject to applicable law, Purchaser will be entitled to all rights and
privileges as owner of any such non-cash dividend or distribution or proceeds
thereof and may withhold the entire purchase price or deduct from the purchase
price the amount or value thereof, as determined by Purchaser in its sole
discretion.
15. Extension of Tender Period; Termination; Amendment.
Purchaser reserves the right, at any time or from time to time, in its sole
discretion and regardless of whether or not any of the conditions specified in
Section 16 shall have been satisfied, (i) to extend the period of time during
which the Offer is open by giving oral or written notice of such extension to
the Depositary and by making a public announcement of such extension or (ii)
subject to the terms of the Merger Agreement, to amend the Offer in any
respect by making a public announcement of such amendment. There can be no
assurance that Purchaser will exercise its right to extend or amend the Offer.
If Purchaser decreases the percentage of Shares being sought
or increases or decreases the consideration to be paid for Shares pursuant
to the Offer and the Offer is scheduled to expire at any time before the
expiration of a period of 10 business days from, and including, the date
that notice of such increase or decrease is first published, sent or given
in the manner specified below, the Offer will be extended until the
expiration of such period of 10 business days. If Purchaser makes a
material change in the terms of the Offer (other than a change in price or
percentage of securities sought) or in the information concerning the
Offer, or waives a material condition of the Offer, Purchaser will extend
the Offer, if required by applicable law, for a period sufficient to allow
shareholders to consider the amended terms of the Offer. In a published
release, the Commission has stated that in its view an offer must remain
open for a minimum period of time following a material change in the terms
of such offer and that the waiver of a condition such as the Minimum
Condition is a material change in the terms of an offer. The release
states that an offer should remain open for a minimum of five business days
from the date the material change is first published, sent or given to
security holders, and that if material changes are made with respect to
information that approaches the significance of price and share levels, a
minimum of 10 business days may be required to allow adequate dissemination
and investor response. The term "business day" shall mean any day other
than Saturday, Sunday or a federal holiday and shall consist of the time
period from 12:01 A.M. through 12:00 Midnight, New York City time.
Purchaser also reserves the right, in its sole discretion, in
the event any of the conditions specified in Section 16 shall not have been
satisfied and so long as Shares have not theretofore been accepted for
payment, to delay (except as otherwise required by applicable law) acceptance
for payment of or payment for Shares or to terminate the Offer and not accept
for payment or pay for Shares.
If Purchaser extends the period of time during which the Offer
is open, is delayed in accepting for payment or paying for Shares or is unable
to accept for payment or pay for Shares pursuant to the Offer for any reason,
then, without prejudice to Purchaser's rights under the Offer, the Depositary
may, on behalf of Purchaser, retain all Shares tendered, and such Shares may
not be withdrawn except as otherwise provided in Section 3. The reservation
by Purchaser of the right to delay acceptance for payment of or payment for
Shares is subject to applicable law, which requires that Purchaser pay the
consideration offered or return the Shares deposited by or on behalf of
shareholders promptly after the termination or withdrawal of the Offer.
Any extension, termination or amendment of the Offer will be
followed as promptly as practicable by a public announcement thereof. Without
limiting the manner in which Purchaser may choose to make any public
announcement, Purchaser will have no obligation (except as otherwise required
by applicable law) to publish, advertise or otherwise communicate any such
public announcement other than by making a release to the Dow Jones News
Service. In the case of an extension of the Offer, Purchaser will make a
public announcement of such extension no later than 9:00 A.M., New York City
time, on the next business day after the previously scheduled Expiration Date.
16. Certain Conditions of the Offer. Notwithstanding any
other provision of the Offer, Purchaser shall not be required to accept for
payment or pay for any Shares, and, may terminate the Offer, if (i) the
Minimum Condition shall not have been satisfied by June 4, 1997, (ii) the
applicable waiting period under the HSR Act shall not have expired or been
terminated by June 4, 1997 or (iii) at any time on or after April 9, 1997
and prior to the acceptance for payment of Shares, any of the following
conditions exist:
(a) there shall be threatened, instituted or pending any action,
suit, investigation or proceeding by any government or governmental authority
or agency, domestic or foreign, or by any other person, domestic or foreign,
before any court or governmental authority or agency, domestic or foreign, (i)
challenging or seeking to make illegal, to delay materially or otherwise
directly or indirectly to restrain or prohibit the making of the Offer, the
acceptance for payment of or payment for some of or all the Shares pursuant to
the Offer or the consummation of the Merger, seeking to obtain material
damages or otherwise directly or indirectly relating to the transactions
contemplated by the Offer or the Merger, (ii) seeking to restrain or prohibit
Parent's ownership or operation (or that of its respective subsidiaries or
affiliates) of all or any material portion of the business or assets of the
Company and its Subsidiaries, taken as a whole, or of Parent and its
subsidiaries, taken as a whole, or to compel Parent or any of its subsidiaries
or affiliates to dispose of or hold separate all or any material portion of
the business or assets of the Company and its Subsidiaries, taken as a whole,
or of Parent and its subsidiaries, taken as a whole, (iii) seeking to impose
or confirm material limitations on the ability of Parent or any of its
subsidiaries or affiliates effectively to exercise full rights of ownership of
the Shares, including, without limitation, the right to vote any Shares
acquired or owned by Parent or any of its subsidiaries or affiliates on all
matters properly presented to the Company's shareholders, or (iv) seeking
to require divestiture by Parent or any of its subsidiaries or affiliates
of any Shares, or (v) that otherwise is reasonably likely to have a
material adverse effect on the financial condition, business, assets or
results of operations of the Company and its Subsidiaries taken as a whole
(a "Material Adverse Effect"), or materially adversely affect Parent and
its subsidiaries, taken as a whole; or
(b) there shall be any action taken, or any statute, rule,
regulation, injunction, order or decree proposed, enacted, enforced,
promulgated, issued or deemed applicable to the Offer or the Merger, by any
court, government or governmental authority or agency, domestic or foreign
other than the application of the waiting period provisions of the HSR Act to
the Offer or the Merger that is reasonably likely, directly or indirectly, to
result in any of the consequences referred to in clauses (i) through (v) of
paragraph (a) above; or
(c) (i) there shall be initiated, threatened, instituted or pending
any action, suit, investigation or proceeding by any government or
governmental authority or agency, domestic or foreign, that, in the reasonable
judgment of Parent, would materially adversely affect the Company and its
Subsidiaries, taken as a whole, or (ii) except as disclosed in writing to
Parent prior to the signing of the Merger Agreement, there has been since
December 31, 1996 any event, occurrence or development or state of
circumstances or facts which has had or could reasonably be expected to have a
Material Adverse Effect; or
(d) there shall have occurred a decline of at least 20% in either the
Dow Jones Average of Industrial Stocks or the Standard & Poor's 500 Index from
the date of the Merger Agreement through the date of termination or expiration
of the Offer; or
(e) the Company shall have breached or failed to perform in any
material respect any of its covenants or agreements under the Merger
Agreement, or any of the representations and warranties of the Company set
forth in the Merger Agreement shall not be true in any material respect when
made or at any time prior to consummation of the Offer as if made at and as of
such time (except as to any representation or warranty which speaks as of a
specific date, which must be untrue as of such date); or
(f) the Company shall have entered into, or shall have publicly
announced its intention to enter into, an agreement or an agreement in
principle with respect to any Acquisition Proposal or the Board of
Directors of the Company shall have withdrawn or materially modified in a
manner adverse to Parent the Board's approval or recommendation of the
Offer or the Merger; or
(g) any person or group (as defined in Section 13 (d)(3) of the
Exchange Act) (other than Parent, Purchaser or any affiliate thereof) shall
have become the beneficial owner (as defined in Rule 13d-3 promulgated under
the Exchange Act) of a majority of the outstanding Shares; or
(h) the Merger Agreement shall have been terminated in accordance
with its terms.
The foregoing conditions are for the sole benefit of Parent and
Purchaser and may, subject to the terms of the Merger Agreement, be waived by
Parent and Purchaser in whole or in part at any time and from time to time
in their discretion. The failure by Parent or Purchaser at any time to
exercise any of the foregoing rights shall not be deemed a waiver of any such
right, the waiver of any such right with respect to particular facts and
circumstances shall not be deemed a waiver with respect to any other facts and
circumstances, and each such right shall be deemed an ongoing right that may
be asserted at any time and from time to time prior to the consummation of the
Offer.
17. Certain Legal Matters; Regulatory Approvals.
General. Based on its examination of publicly available
information filed by the Company with the Commission and other publicly
available information concerning the Company, Purchaser is not aware of any
governmental license or regulatory permit that appears to be material to the
Company's business that might be adversely affected by Purchaser's acquisition
of Shares as contemplated herein or, except as set forth below, of any
approval or other action by any government or governmental administrative or
regulatory authority or agency, domestic or foreign, that would be required
for the acquisition or ownership of Shares by Purchaser as contemplated
herein. Should any such approval or other action be required, Purchaser
currently contemplates that, except as described below under "State Takeover
Statutes", such approval or other action will be sought. There can be no
assurance that any such approval or other action, if needed, would be obtained
or would be obtained without substantial conditions or that if such approvals
were not obtained or such other actions were not taken adverse consequences
might not result to the Company's business or certain parts of the Company's
business might not have to be disposed of, any of which could cause Purchaser
to elect to terminate the Offer without the purchase of Shares thereunder.
Purchaser's obligation under the Offer to accept for payment and pay for
Shares is subject to certain conditions. See Section 16.
State Takeover Statutes. A number of states have adopted laws
which purport, to varying degrees, to apply to attempts to acquire
corporations that are incorporated in, or which have substantial assets,
shareholders, principal executive offices or principal places of business or
whose business operations otherwise have substantial economic effects in, such
states. The Company, directly or through subsidiaries, conducts business in a
number of states throughout the United States, some of which have enacted such
laws. Except as described herein, Purchaser does not know whether any of
these laws will, by their terms, apply to the Offer or any merger or other
business combination between Purchaser or any of its affiliates and the
Company and has not complied with any such laws. To the extent that certain
provisions of these laws purport to apply to the Offer or any such merger or
other business combination, Purchaser believes that there are reasonable bases
for contesting such laws.
In 1982, in Edgar v. MITE Corp., the Supreme Court of the
United States invalidated on constitutional grounds the Illinois Business
Takeover Statute which, as a matter of state securities law, made takeovers of
corporations meeting certain requirements more difficult. However, in 1987 in
CTS Corp. v. Dynamics Corp. of America, the Supreme Court held that the State
of Indiana could, as a matter of corporate law, constitutionally disqualify a
potential acquiror from voting shares of a target corporation without the
prior approval of the remaining shareholders where, among other things, the
corporation is incorporated in, and has a substantial number of shareholders
in, the state. Subsequently, in TLX Acquisition Corp. v. Telex Corp., a
Federal District Court in Oklahoma ruled that the Oklahoma statutes were
unconstitutional insofar as they apply to corporations incorporated outside
Oklahoma in that they would subject such corporations to inconsistent
regulations. Similarly, in Tyson Foods, Inc. v. McReynolds, a Federal
District Court in Tennessee ruled that four Tennessee takeover statutes were
unconstitutional as applied to corporations incorporated outside Tennessee.
This decision was affirmed by the United States Court of Appeals for the Sixth
Circuit. In December 1988, a Federal District Court in Florida held in Grand
Metropolitan PLC v. Butterworth, that the provisions of the Florida Affiliated
Transactions Act and the Florida Control Share Acquisition Act were
unconstitutional as applied to corporations incorporated outside of Florida.
If any government official or third party should seek to
apply any state takeover law to the Offer or the Merger or other merger or
business combination between Purchaser or any of its affiliates and the
Company, Purchaser will take such action as then appears desirable, which
action may include challenging the applicability or validity of such
statute in appropriate court proceedings. In the event it is asserted that
one or more state takeover statutes is applicable to the Offer or the
Merger and an appropriate court does not determine that it is inapplicable
or invalid as applied to the Offer or the Merger, Purchaser might be
required to file certain information with, or to receive approvals from,
the relevant state authorities or holders of Shares, and Purchaser might be
unable to accept for payment or pay for Shares tendered pursuant to the
Offer, or be delayed in continuing or consummating the Offer or the Merger.
In such case, Purchaser may not be obligated to accept for payment or pay
for any tendered Shares. See Sections 15 and 16.
Massachusetts has enacted a business combination statute that,
in general, prohibits any business combination between a widely held
Massachusetts corporation and an interested shareholder for three years after
that person becomes an interested (i.e., 5%) shareholder unless: (a) prior to
the date that person becomes an interested shareholder, the board of directors
of the corporation approved either the transaction that made the acquiror an
interested shareholder or the proposed business combination; (b) upon
consummation of the transaction that made the acquiror an interested
shareholder, the acquiror owns at least 90 percent of the voting stock,
excluding shares held by directors, officers and employee stock plans in which
employee participants do not have the right to determine confidentially
whether shares held by the plan will be tendered; or (c) at or subsequent to
the time the acquiror becomes an interested shareholder, the board of
directors of the corporation and holders of two-thirds of the shares of voting
stock not held by the interested shareholder approves the business
combination. Massachusetts has also enacted a control share acquisition
statute that provides, in general, that shares of a widely held Massachusetts
corporation acquired in a control share acquisition (as defined in the
statute) will not have voting rights unless, among other things, voting rights
for such shares are approved by a vote of the shareholders of the corporation,
not including those holding such shares. Excluded from the definition of
"control share acquisition," is, among other things, an acquisition by merger
or tender offer pursuant to a merger agreement to which the Massachusetts
corporation is a party. Massachusetts has also enacted a take-over bid
statute that imposes certain procedural requirements and prohibitions in
connection with a Take-over bid (as defined in the statute). The Company has
taken all necessary steps to render the Massachusetts business combination
statute, control share acquisition statute and take-over bid statute
inapplicable to the acquisition of Shares in the Offer or the Merger.
Antitrust. Under the HSR Act and the rules that have been
promulgated thereunder by the Federal Trade Commission (the "FTC"), certain
acquisition transactions may not be consummated unless certain information has
been furnished to the Antitrust Division of the Department of Justice (the
"Antitrust Division") and the FTC and certain waiting period requirements have
been satisfied. The purchase of Shares pursuant to the Offer is subject to
such requirements.
Pursuant to the requirements of the HSR Act, Purchaser
expects to file a Notification and Report Form with respect to the Offer
and Merger with the Antitrust Division and the FTC on or before April 17,
1997. As a result, the waiting period applicable to the purchase of Shares
pursuant to the Offer is scheduled to expire at 11:59 P.M., New York City
time, on May 2, 1997. However, prior to such time, the Antitrust Division
or the FTC may extend the waiting period by requesting additional
information or documentary material relevant to the Offer from Purchaser.
If such a request is made, the waiting period will be extended until 11:59
P.M., New York City time, on the tenth day after substantial compliance by
Purchaser with such request. Thereafter, such waiting period can be
extended only by court order.
A request is being made pursuant to the HSR Act for early
termination of the waiting period applicable to the Offer. There can be no
assurance, however, that the 15-day HSR Act waiting period will be terminated
early. Shares will not be accepted for payment or paid for pursuant to the
Offer until the expiration or earlier termination of the applicable waiting
period under the HSR Act. See Section 16. Any extension of the waiting
period will not give rise to any withdrawal rights not otherwise provided for
by applicable law. See Section 3. If Purchaser's acquisition of Shares is
delayed pursuant to a request by the Antitrust Division or the FTC for
additional information or documentary material pursuant to the HSR Act, the
Offer may, but need not, be extended.
The Antitrust Division and the FTC frequently scrutinize the
legality under the antitrust laws of transactions such as the acquisition of
Shares by Purchaser pursuant to the Offer. At any time before or after the
consummation of any such transactions, the Antitrust Division or the FTC could
take such action under the antitrust laws as it deems necessary or desirable
in the public interest, including seeking to enjoin the purchase of Shares
pursuant to the Offer or seeking divestiture of the Shares so acquired or
divestiture of substantial assets of Parent or the Company. Private parties
(including individual states) may also bring legal actions under the antitrust
laws. Purchaser does not believe that the consummation of the Offer will
result in a violation of any applicable antitrust laws. However, there can be
no assurance that a challenge to the Offer on antitrust grounds will not be
made, or if such a challenge is made, what the result will be. See Section 16
for certain conditions to the Offer, including conditions with respect to
litigation and certain governmental actions and Section 11 for certain
termination rights in connection with antitrust suits.
Appraisal Rights. If the Merger is consummated, shareholders
of the Company may have the right to dissent and demand appraisal of their
Shares under Massachusetts Law. Under Massachusetts Law, dissenting
shareholders who comply with the applicable statutory procedures will be
entitled to receive a judicial determination of the fair value of their Shares
(exclusive of any element of value arising from the accomplishment or
expectation of the Merger) and to receive payment of such fair value in cash,
together with a fair rate of interest, if any. Any such judicial
determination of the fair value of the Shares could be based upon
considerations other than or in addition to the price paid in the Offer, the
consideration per Share to be paid in the Merger and the market value of the
Shares, including asset values and the investment value of the Shares.
Shareholders should recognize that the value so determined could be higher or
lower than the price per Share paid pursuant to the Offer or the consideration
per Share to be paid in the Merger.
Other. Based upon Purchaser's examination of publicly
available information concerning the Company, it appears that the Company and
its Subsidiaries own property and conduct business in a number of foreign
countries. In connection with the acquisition of Shares pursuant to the
Offer, the laws of certain of these foreign countries may require the filing
of information with, or the obtaining of the approval of, governmental
authorities therein. After commencement of the Offer, Purchaser will seek
further information regarding the applicability of any such laws and currently
intends to take such action as they may require, but no assurance can be given
that such approvals will be obtained. If any action is taken prior to
completion of the Offer by any such government or governmental authority,
Purchaser may not be obligated to accept for payment or pay for any tendered
Shares. See Sections 15 and 16.
18. Fees and Expenses. Greenhill is acting as financial
advisor to Purchaser and is acting as Dealer Manager in connection with the
Offer. Parent has agreed to pay Greenhill as compensation for its services
as financial advisor and Dealer Manager a fee of approximately $440,000 in
connection with the announcement of the transaction and an additional fee
of approximately $1.8 million upon consummation of the Offer. Parent has
also agreed to reimburse Greenhill for certain out-of-pocket expenses
incurred in connection with the Offer (including the fees and disbursements
of outside counsel) and to indemnify Greenhill against certain liabilities,
including certain liabilities under the federal securities laws.
Parent has retained Corporate Investor Communications, Inc., to
act as the Information Agent and ChaseMellon Shareholder Services, LLC, to act
as the Depositary in connection with the Offer. The Information Agent may
contact holders of Shares by mail, telephone, telex, telegraph and personal
interviews and may request brokers, dealers and other nominee shareholders to
forward materials relating to the Offer to beneficial owners. The Information
Agent and the Depositary each will receive reasonable and customary
compensation for their respective services, will be reimbursed for certain
out-of-pocket expenses and will be indemnified against certain liabilities in
connection therewith, including certain liabilities under the federal
securities laws.
Neither Parent nor Purchaser will pay any fees or commissions
to any broker or dealer or any other person (other than the Dealer Manager,
the Information Agent and the Depository) for soliciting tenders of Shares
pursuant to the Offer. Brokers, dealers, commercial banks and trust companies
will, upon request, be reimbursed by Parent or Purchaser for reasonable and
necessary costs and expenses incurred by them in forwarding materials to their
customers.
19. Miscellaneous. The Offer is not being made to, nor will
tenders be accepted from or on behalf of, holders of Shares in any
jurisdiction in which the making of the Offer or acceptance thereof would not
be in compliance with the laws of such jurisdiction. However, Purchaser may,
in its discretion, take such action as it may deem necessary to make the Offer
in any such jurisdiction and extend the Offer to holders of Shares in such
jurisdiction.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE
ANY REPRESENTATION ON BEHALF OF PURCHASER NOT CONTAINED IN THIS OFFER TO
PURCHASE OR IN THE LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED.
Purchaser has filed with the Commission a Tender Offer
Statement on Schedule 14D-1, together with exhibits, pursuant to Rule 14d-3 of
the General Rules and Regulations under the Exchange Act, furnishing certain
additional information with respect to the Offer. The Schedule 14D-1 and any
amendments thereto, including exhibits, may be examined and copies may be
obtained from the offices of the Commission in the manner set forth in Section
7 of this Offer to Purchase (except that such information will not be
available at the regional offices of the Commission).
COMPAQ-BOSTON, INC.
April 16, 1997
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS
1. Directors and Executive Officers of Parent. The name,
business address, present principal occupation or employment and five-year
employment history of each director and executive officer of Parent and
certain other information are set forth below. Unless otherwise indicated
below, the address of each director and officer is 20555 SH 249, Houston,
Texas 77070. Unless otherwise indicated, each occupation set forth
opposite an individual's name refers to employment with Parent. All
directors and officers listed below are citizens of the United States
except Eckhard Pfeiffer, Andreas Barth and Hans W. Gutsch who are citizens
of Germany. Directors are identified by an asterisk.
<TABLE>
<CAPTION>
Present Principal Occupation or Employer and
Name and Business Address Material Positions Held During the Past Five Years
------------------------- --------------------------------------------------
<S> <C>
Benjamin M. Rosen*........................... Chairman of the Board of Directors since 1983; Chairman of
Rosen Motors since 1993.
Eckhard Pfeiffer*............................ President and Chief Executive Officer since October 1991.
Lawrence T. Babbio*.......................... Vice Chairman and Director of Bell Atlantic Corporation since
February 1995; Executive Vice President and Chief Operating
Officer of Bell Atlantic Corporation from 1994 to 1995;
Chairman, President and Chief Executive Officer of Bell
Atlantic Enterprises International, Inc., from 1991 to 1994.
Robert Ted Enloe, III*....................... Managing Partner of Balquita Partners, Ltd. since 1996; Chief
Executive Officer of Liberte Investors from 1992 to 1996;
President of Liberte Investors from 1975 to 1996; President of
L&N Housing Corp. from 1981 to 1992.
George H. Heilmeier*......................... Chairman of the Board and Chief Executive Officer of Bell
Communications Research, Inc. since January 1997; President
and Chief Executive Officer of Bell Communications Research,
Inc. since 1991.
George E.R. Kinnear II*...................... Chairman Emeritus of the Board of the Retired Officers
Association of the United States; Executive Vice President of
the University of New Hampshire from 1988 to 1992.
Peter N. Larson*............................. Chairman and Chief Executive of Brunswick Corporation since
April 1995; Worldwide Chairman of the Consumer Personal
Care Group of Johnson & Johnson from 1994 to 1995;
Company Group Chairman of Johnson & Johnson from 1991 to
1994.
Kenneth L. Lay*.............................. Chairman of the Board and Chief Executive Officer of Enron
Corp. since February 1986.
Kenneth Roman*............................... Independent management consultant; Executive Vice President
of American Express from 1989 to 1991.
Lucille Salhany*............................. President and Chief Executive Officer of United Paramount
Network since September 1994; Chairman of FOX
Broadcasting Company from 1993 to 1994; Chairman of
Twentieth Television from 1991 to 1993.
Andreas Barth................................ Senior Vice President, Europe, Middle East and Africa since
December 1991.
J. David Cabello............................. Senior Vice President, General Counsel and Secretary since
December 1996; Vice President and Assistant General Counsel
from 1995 to 1996; Patent Counsel from 1987 to 1995.
Hans W. Gutsch............................... Senior Vice President, Human Resources and Environment,
since November 1994; Vice President, Human Resources and
Environment, Europe, Middle East and Africa from 1993 to
1994; Vice President, Human Resources, Europe from 1992 to
1993; Director of Human Resources for Europe from 1988 to
1992.
Michael D. Heil.............................. Senior Vice President, Consumer Products Group, since
September 1995; President and General Manager of Los
Angeles Cellular Telephone Co. from 1989 to 1995.
Alan G. Lutz................................. Senior Vice President, Communication Products Group, since
November 1996; Executive Vice President and President,
Computer Systems Group, of Unisys Corporation from 1994 to
1996; President of Kassandra Group from 1993 to 1994; Senior
Vice President and President Public Networks, Northern
Telecom LTD from 1987 to 1993.
Earl L. Mason................................ Senior Vice President and Chief Financial Officer since June
1996; Senior Vice President, Inland Steel Industries, Inc.
("ISI") from 1995 to 1996; Chief Financial Officer and
President, Inland International, Inc from 1994 to 1996; Vice
President, ISI, from 1994 to 1995; Vice President - Finance
and Principal Financial Officer, ISI, from 1991 to 1994.
Gregory E. Petsch............................ Senior Vice President, Manufacturing and Quality, since July
1993; Vice President, from 1991 to 1993.
John T. Rose................................. Senior Vice President, Enterprise Computing Group, since July
1996; Senior Vice President, Desktop PC Division, from 1993
to 1996; Vice President of Digital Equipment Corporation's
Personal Computing Systems Business prior thereto.
Richard N. Snyder............................ Senior Vice President, Worldwide Sales, Marketing, Service
and Support, since November 1996; Senior Vice President, Dell
Americas of Dell Computer Corporation from 1995 to 1996;
Hewlett-Packard Company from 1973 to 1995.
Robert W. Stearns............................ Senior Vice President, Technology and Corporate Development,
since January 1996; Vice President, Corporate Development,
from 1993 to 1996; consultant with McKinsey & Co. from
1992 to 1993; Vice President, Corporate Marketing,
Motorola/Codex from 1986 to 1992.
Michael J. Winkler........................... Senior Vice President, PC Products Group, since November
1996; Senior Vice President, Portable PC Division from 1995
to 1996; Vice President and General Manager of Computer
Systems Division of Toshiba America Information Systems
from 1991 to 1995.
John W. White................................ Vice President and Chief Information Officer since February
1994; Vice President of Texas Instruments, Inc. and President
of its Information Technology Group prior thereto.
</TABLE>
2. Directors and Executive Officers of Purchaser. The name,
business address, present principal occupation or employment and five-year
employment history of each director and executive officer of Purchaser and
certain other information are set forth below. Unless otherwise indicated
below, the address of each director and officer is 20555 SH 249, Houston,
Texas 77070. Unless otherwise indicated, each occupation set forth opposite
an individual's name refers to employment with Parent. All directors and
officers listed below are citizens of the United States. Directors are
identified by an asterisk.
<TABLE>
<CAPTION>
Present Principal Occupation or Employer and
Name and Business Address Material Positions Held During the Past Five Years
------------------------- --------------------------------------------------
<S> <C>
J. David Cabello*............................. Senior Vice President, General Counsel and Secretary since
December 1996; Vice President and Assistant General
Counsel from 1995 to 1996; Patent Counsel from 1987 to
1995.
Alan G. Lutz*................................. Senior Vice President, Communication Products Group,
since November 1996; Executive Vice President and
President, Computer Systems Group, of Unisys Corporation
from 1994 to 1996; President of Kassandra Group from
1993 to 1994; Northern Telecom LTD from 1987 to 1993.
Edward E. Olkkola*............................ Vice President, Communication Products
Division, Communication Products Group, since January
1996; Director of Business Development from 1993 to
1996; Director of Systems Networking of Motorola
Information Systems Group prior thereto.
Earl L. Mason................................. Senior Vice President and Chief Financial Officer since
June 1996; Senior Vice President, ISI from 1995 to 1996;
Chief Financial Officer and President, Inland International,
Inc from 1994 to 1996; Vice President, ISI, from 1994 to
1995; Vice President - Finance and Principal Financial
Officer, ISI, from 1991 to 1994.
</TABLE>
Facsimile copies of the Letter of Transmittal will be accepted. The Letter of
Transmittal and certificates for Shares and any other required documents
should be sent to the Depositary at one of the addresses set forth below:
The Depositary for the Offer is:
ChaseMellon Shareholder Services, LLC
<TABLE>
<CAPTION>
<S> <C> <C>
By Mail: By Facsimile Transmission By Hand or Overnight
Reorganization Department (for Eligible Institutions only): Courier:
P.O. Box 3301 (201) 329-8936 Reorganization Department
South Hackensack, NJ 07606 120 Broadway, 13th Floor
New York, NY 10271
Confirm By Telephone:
(201) 296-4209
</TABLE>
Questions or requests for assistance or additional copies of this Offer to
Purchase and the Letter of Transmittal may be directed to the Information
Agent or the Dealer Manager at their respective addresses and telephone
numbers set forth below. Shareholders may also contact their broker, dealer,
commercial bank or trust company for assistance concerning the Offer.
The Information Agent for the Offer is:
Corporate Investor Communications, Inc.
111 Commerce Road
Carlstadt, New Jersey 07072-2586
Banks and Brokers Call Collect: (201) 896-1900
All Others Call Toll-Free: (888) 624-5467
The Dealer Manager for the Offer is:
GREENHILL & CO., LLC
31 West 52nd Street
New York, NY 10019
(212) 408-0660
EXHIBIT (a)(2)
LETTER OF TRANSMITTAL
To Tender Shares of Common Stock
of
Microcom, Inc.
Pursuant to the Offer to Purchase
dated April 16,1997
of
Compaq-Boston, Inc.
a wholly-owned subsidiary of
Compaq Computer Corporation
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON TUESDAY, MAY 13, 1997, UNLESS THE OFFER IS EXTENDED.
To: ChaseMellon Shareholder Services, LLC, as Depositary
By Hand or
By Mail: By Facsimile: Overnight Courier:
Reorganization (for Eligible Reorganization
Department Institutions only) Department
P.O. Box 3301 (201) 329-8936 120 Broadway, 13th Floor
South Hackensack, Confirm by Telephone: New York, NY 10271
NJ 07606 (201) 296-4209
Delivery of this instrument to an address other than as set forth above
or transmission of instructions to a facsimile number other than the ones
listed above will not constitute a valid delivery.
This Letter of Transmittal is to be used if certificates are to be
forwarded herewith or, unless an Agent's Message (as defined in the Offer to
Purchase) is utilized, if delivery of Shares (as defined below) is to be made
by book-entry transfer to the Depositary's account at The Depository Trust
Company or Philadelphia Depository Trust Company (hereinafter collectively
referred to as the "Book-Entry Transfer Facilities") pursuant to the
procedures set forth in Section 2 of the Offer to Purchase.
Shareholders who cannot deliver their Shares and all other documents
required hereby to the Depositary by the Expiration Date (as defined in the
Offer to Purchase) must tender their Shares pursuant to the guaranteed delivery
procedure set forth in Section 2 of the Offer to Purchase. See Instruction 2.
DESCRIPTION OF SHARES TENDERED
<TABLE>
<CAPTION>
Name(s) and Address(es) of Registered Holder(s) Shares Tendered
(Please fill in, if blank) (Attach additional list if necessary)
__________________________________________________________
<S> <C> <C> <C>
Total Number of
Shares Number of
Certificate Represented by Shares
Number(s)* Certificate(s)* Tendered**
___________ _______________ ___________
Total Shares
<FN>
_______________
* Need not be completed by stockholders tendering by book-entry transfer.
** Unless otherwise indicated, it will be assumed that all Shares
represented by any certificates delivered to the Depositary are being
tendered. See Instruction 4.
</TABLE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ ACCOMPANYING INSTRUCTIONS CAREFULLY
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY
TRANSFER TO THE DEPOSITARY'S ACCOUNT AT ONE OF THE BOOK-ENTRY TRANSFER
FACILITIES AND COMPLETE THE FOLLOWING:
Name of Tendering
Institution__________________________________________________________
Account
No.__________________________________________________________________at
[ ] The Depository Trust Company
[ ] Philadelphia Depository Trust Company
Transaction Code No.__________________________________________________
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING:
Name(s) of Tendering
Shareholder(s)____________________________________________________
Date of Execution of Notice of Guaranteed
Delivery__________________________________________________________
Name of Institution which Guaranteed
Delivery__________________________________________________________
If delivery is by book-entry
transfer:_________________________________________________________
Name of Tendering
Institution_______________________________________________________
Account
No._______________________________________________________________at
[ ] The Depository Trust Company
[ ] Philadelphia Depository Trust Company
Transaction Code No.___________________________
___________________________
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
The undersigned hereby tenders to Compaq-Boston, Inc., a
Massachusetts corporation (the "Purchaser") and a wholly-owned subsidiary
of Compaq Computer Corporation, the above-described shares of Common Stock,
$0.01 par value (the "Shares"), of Microcom, Inc., a Massachusetts
corporation (the "Company"), pursuant to the Purchaser's offer to purchase
all outstanding Shares at a price of $16.25 per Share, net to the seller in
cash, upon the terms and subject to the conditions set forth in the Offer
to Purchase dated as of April 16, 1997, receipt of which is hereby
acknowledged, and in this Letter of Transmittal (which together constitute
the "Offer"). Tendering shareholders will not be obligated to pay
brokerage fees or commissions or, except as set forth in Instruction 6 of
the Letter of Transmittal, transfer taxes on the purchase of Shares
pursuant to the Offer. Purchaser will pay all charges and expenses of
GREENHILL & CO., LLC (the "Dealer Manager"), CHASEMELLON SHAREHOLDER
SERVICES, LLC (the "Depositary") and CORPORATE INVESTOR COMMUNICATIONS,
INC. (the "Information Agent") incurred in connection with the Offer. The
Purchaser reserves the right to transfer or assign, in whole or from time
to time in part, to one or more of its affiliates the right to purchase
Shares tendered pursuant to the Offer.
Upon the terms and subject to the terms and conditions of the
Offer and effective upon acceptance for payment of and payment for the
Shares tendered herewith, the undersigned hereby sells, assigns and
transfers to or upon the order of the Purchaser all right, title and
interest in and to all the Shares that are being tendered hereby (and any
and all other Shares or other securities issued or issuable in respect
thereof on or after April 9, 1997) and appoints the Depositary the true and
lawful agent and attorney-in-fact of the undersigned with respect to such
Shares (and all such other Shares or securities), with full power of
substitution (such power of attorney being deemed to be an irrevocable
power coupled with an interest), to (a) deliver certificates for such
Shares (and all such other Shares or securities), or transfer ownership of
such Shares (and all such other Shares or securities) on the account books
maintained by any of the Book-Entry Transfer Facilities, together, in any
such case, with all accompanying evidences of transfer and authenticity, to
or upon the order of the Purchaser, (b) present such Shares (and all such
other Shares or securities) for transfer on the books of the Company and
(c) receive all benefits and otherwise exercise all rights of beneficial
ownership of such Shares (and all such other Shares or securities), all in
accordance with the terms of the Offer.
The undersigned hereby irrevocably appoints Alan G. Lutz, J.
David Cabello and Edward E. Olkkola and each of them, the attorneys and
proxies of the undersigned, each with full power of substitution, to
exercise all voting and other rights of the undersigned in such manner as
each such attorney and proxy or his substitute shall in his sole discretion
deem proper, with respect to all of the Shares tendered hereby which have
been accepted for payment by the Purchaser prior to the time of any vote or
other action (and any and all other Shares or other securities issued or
issuable in respect thereof on or after April 9, 1997), at any meeting of
shareholders of the Company (whether annual or special and whether or not
an adjourned meeting), by written consent or otherwise. This proxy is
irrevocable and is granted in consideration of, and is effective upon, the
acceptance for payment of such Shares by the Purchaser in accordance with
the terms of the Offer. Such acceptance for payment shall revoke any other
proxy or written consent granted by the undersigned at any time with
respect to such Shares (and all such other Shares or securities), and no
subsequent proxies will be given or written consents will be executed by
the undersigned (and if given or executed, will not be deemed to be
effective).
The undersigned hereby represents and warrants that the
undersigned has full power and authority to tender, sell, assign and
transfer the Shares tendered hereby (and any and all other Shares or
other securities issued or issuable in respect thereof on or after April
9, 1997) and that when the same are accepted for payment by the
Purchaser, the Purchaser will acquire good and unencumbered title
thereto, free and clear of all liens, restrictions, charges and
encumbrances and not subject to any adverse claims. The undersigned
will, upon request, execute and deliver any additional documents deemed
by the Depositary or the Purchaser to be necessary or desirable to
complete the sale, assignment and transfer of the Shares tendered hereby
(and all such other Shares or securities).
All authority herein conferred or agreed to be conferred shall
survive the death or incapacity of the undersigned, and any obligation of
the undersigned hereunder shall be binding upon the heirs, personal
representatives, successors and assigns of the undersigned. Except as
stated in the Offer, this tender is irrevocable.
The undersigned understands that tenders of Shares pursuant to
any one of the procedures described in Section 2 of the Offer to Purchase
and in the instructions hereto will constitute an agreement between the
undersigned and the Purchaser upon the terms and subject to the conditions
of the Offer.
Unless otherwise indicated under "Special Payment Instructions",
please issue the check for the purchase price of any Shares purchased, and
return any Shares not tendered or not purchased, in the name(s) of the
undersigned (and, in the case of Shares tendered by book-entry transfer, by
credit to the account at the Book-Entry Transfer Facility designated
above). Similarly, unless otherwise indicated under "Special Delivery
Instructions", please mail the check for the purchase price of any Shares
purchased and any certificates for Shares not tendered or not purchased (and
accompanying documents, as appropriate) to the undersigned at the address
shown below the undersigned's signature(s). In the event that both
"Special Payment Instructions" and "Special Delivery Instructions" are
completed, please issue the check for the purchase price of any Shares
purchased and return any Shares not tendered or not purchased in the
name(s) of, and mail said check and any certificates to, the person(s) so
indicated. The undersigned recognizes that the Purchaser has no
obligation, pursuant to the "Special Payment Instructions", to transfer any
Shares from the name of the registered holder(s) thereof if the Purchaser
does not accept for payment any of the Shares so tendered.
SPECIAL PAYMENT INSTRUCTIONS
(See Instructions 5, 6 and 7)
To be completed ONLY if the check for the
purchase price of Shares purchased (less the amount
of any federal income and backup withholding tax
required to be withheld) or certificates for Shares not
tendered or not purchased are to be issued in the
name of someone other than the undersigned.
Mail [ ] check
[ ] certificate(s) to:
Name_______________________________________________________
(Please Print)
Address____________________________________________________
___________________________________________________________
(Zip Code)
___________________________________________________________
(Taxpayer Identification No.)
SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 5 and 7)
To be completed ONLY if the check for the
purchase price of Shares purchased (less the amount of
any federal income and backup withholding tax
required to be withheld) or certificates for Shares not
tendered or not purchased are to be mailed to someone
other than the undersigned or to the undersigned at an
address other than that shown below the undersigned's
signature(s)
Mail [ ] check
[ ] certificate(s) to:
Name_______________________________________________________
(Please Print)
Address____________________________________________________
___________________________________________________________
(Zip Code)
___________________________________________________________
(Taxpayer Identification No.)
SIGN HERE
(Please complete Substitute Form W-9 below)
______________________________________________________
Signature(s) of Owner(s)
______________________________________________________
Dated_________________________________________________, 199_
Name(s)_______________________________________________
(Please Print)
______________________________________________________
Capacity (full title)_________________________________
Address_______________________________________________
______________________________________________________
(Include Zip Code)
Area Code and
Telephone Number______________________________________
(Must be signed by registered holder(s) exactly as
name(s) appear(s) on stock certificate(s) or on a
security position listing or by person(s) authorized
to become registered holder(s) by certificates and
documents transmitted herewith. If signature is by
a trustee, executor, administrator, guardian,
attorney-in-fact, agent, officer of a corporation or
other person acting in a fiduciary or representative
capacity, please set forth full title and see
Instruction 5.)
Guarantee of Signature(s)
(If required; see Instructions 1 and 5)
Name of Firm__________________________________________
Authorized Signature__________________________________
Dated________________________________________ , 199_
Payer: ChaseMellon Shareholder Services, LLC
SUBSTITUTE Part I Taxpayer Identification No.
FORM W-9 -- For All Accounts
Department of the Treasury Enter your taxpayer identification
Internal Revenue Service number in the appropriate box. For
most individuals and sole proprietors,
Payer's Request for this is your social security number.
Taxpayer Identification No. For other entities, it is your Employer
Identification Number. If you do not
have a number, see How to Obtain a
TIN in the enclosed Guidelines.
Note: If the account is in more than
one name, see the chart on page 2 of
the enclosed Guidelines to determine
what number to enter.
____________________________________
Social Security number
or
____________________________________
Employer Identification Number
Part II For Payees Exempt
from Backup
Withholding (see
enclosed
Guidelines)
Certification. -- Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct Taxpayer Identification
Number (or I am waiting for a number to be issued to me), and either
(a) I have mailed or delivered an application to receive a taxpayer
identification number to the appropriate Internal Revenue Service
Center or Social Security Administration Office or (b) I intend to
mail or deliver an application in the near future. I understand that
if I do not provide a taxpayer identification number within sixty
(60) days, 31% of all reportable payments made to me thereafter will
be withheld until I provide a number;
(2) I am not subject to backup withholding either because (a) I am exempt
from backup withholding, or (b) I have not been notified by the
Internal Revenue Service ("IRS") that I am subject to backup
withholding as a result of a failure to report all interest or
dividends, or (c) the IRS has notified me that I am no longer subject
to backup withholding; and
(3) Any other information provided on this form is true, correct and
complete.
You must cross item (2) above if you have been notified by the IRS that you
are currently subject to backup withholding because of underreporting
interest or dividends on your tax return and you have not received a notice
from the IRS advising you that backup withholding has terminated.
SIGNATURE________________________________________DATE_________________ ,199_
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER.
PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
INSTRUCTIONS
Forming Part of the Terms and Conditions of the Offer
1. Guarantee of Signatures. Except as otherwise provided below, all
signatures on this Letter of Transmittal must be guaranteed by a firm which is
a member of a recognized Medallion Program approved by The Securities Transfer
Associations, Inc. (an "Eligible Institution"). Signatures on this Letter of
Transmittal need not be guaranteed (a) if this Letter of Transmittal is signed
by the registered holder(s) of the Shares (which term, for purposes of this
document, shall include any participant in one of the Book-Entry Transfer
Facilities whose name appears on a security position listing as the owner of
Shares) tendered herewith and such holder(s) have not completed the
instruction entitled "Special Payment Instructions" on this Letter of
Transmittal or (b) if such Shares are tendered for the account of an Eligible
Institution. See Instruction 5.
2. Delivery of Letter of Transmittal and Shares. This Letter of
Transmittal is to be used either if certificates are to be forwarded herewith
or, unless an Agent's Message is utilized, if delivery of Shares is to be made
by book-entry transfer pursuant to the procedures set forth in Section 2 of
the Offer to Purchase. Certificates for all physically delivered Shares, or
a confirmation of a book-entry transfer into the Depositary's account at one
of the Book-Entry Transfer Facilities of all Shares delivered electronically,
as well as a properly completed and duly executed Letter of Transmittal (or
facsimile thereof or, in the case of a book-entry transfer, an Agent's
Message) and any other documents required by this Letter of Transmittal, must
be received by the Depositary at one of its addresses set forth on the front
page of this Letter of Transmittal by the Expiration Date. Shareholders who
cannot deliver their Shares and all other required documents to the Depositary
by the Expiration Date must tender their Shares pursuant to the guaranteed
delivery procedure set forth in Section 2 of the Offer to Purchase. Pursuant
to such procedure: (a) such tender must be made by or through an Eligible
Institution, (b) a properly completed and duly executed Notice of Guaranteed
Delivery substantially in the form provided by the Purchaser must be received
by the Depositary by the Expiration Date and (c) the certificates for all
physically delivered Shares, or a confirmation of a book-entry transfer into
the Depositary's account at one of the Book-Entry Transfer Facilities of all
Shares delivered electronically, as well as a properly completed and duly
executed Letter of Transmittal (or facsimile thereof or, in the case of a
book-entry delivery, an Agent's Message) and any other documents required by
this Letter of Transmittal, must be received by the Depositary within three
National Association of Securities Dealers, Inc. Automated Quotation
("Nasdaq") National Market System trading days after the date of execution of
such Notice of Guaranteed Delivery, all as provided in Section 2 of the Offer
to Purchase.
The method of delivery of Shares and all other required documents is at
the option and risk of the tendering shareholder. If certificates for Shares
are sent by mail, registered mail with return receipt requested, properly
insured, is recommended.
No alternative, conditional or contingent tenders will be accepted, and
no fractional Shares will be purchased. By executing this Letter of
Transmittal (or facsimile thereof), the tendering shareholder waives any right
to receive any notice of the acceptance for payment of the Shares.
3. Inadequate Space. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares should be listed on a separate
schedule attached hereto.
4. Partial Tenders (not applicable to shareholders who tender by
book-entry transfer). If fewer than all the Shares represented by any
certificate delivered to the Depositary are to be tendered, fill in the number
of Shares which are to be tendered in the box entitled "Number of Shares
Tendered". In such case, a new certificate for the remainder of the Shares
represented by the old certificate will be sent to the person(s) signing this
Letter of Transmittal, unless otherwise provided in the appropriate box on
this Letter of Transmittal, as promptly as practicable following the
expiration or termination of the Offer. All Shares represented by
certificates delivered to the Depositary will be deemed to have been tendered
unless otherwise indicated.
5. Signatures on Letter of Transmittal; Stock Powers and Endorsements.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares tendered hereby, the signature(s) must correspond with the name(s) as
written on the face of the certificates without alteration, enlargement or any
change whatsoever.
If any of the Shares tendered hereby is held of record by two or more
persons, all such persons must sign this Letter of Transmittal.
If any of the Shares tendered hereby are registered in different names
on different certificates, it will be necessary to complete, sign and submit
as many separate Letters of Transmittal as there are different registrations
of certificates.
If this Letter of Transmittal is signed by the registered holder(s) of
the Shares tendered hereby, no endorsements of certificates or separate stock
powers are required unless payment of the purchase price is to be made, or
Shares not tendered or not purchased are to be returned, in the name of any
person other than the registered holder(s). Signatures on any such
certificates or stock powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Shares tendered hereby, certificates must be
endorsed or accompanied by appropriate stock powers, in either case, signed
exactly as the name(s) of the registered holder(s) appear(s) on the
certificates for such Shares. Signature(s) on any such certificates or stock
powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal or any certificate or stock power is
signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or
representative capacity, such person should so indicate when signing, and
proper evidence satisfactory to the Purchaser of the authority of such person
so to act must be submitted.
6. Stock Transfer Taxes. The Purchaser will pay any stock transfer
taxes with respect to the sale and transfer of any Shares to it or its order
pursuant to the Offer. If, however, payment of the purchase price is to be
made to, or Shares not tendered or not purchased are to be returned in the
name of, any person other than the registered holder(s), or if a transfer tax
is imposed for any reason other than the sale or transfer of Shares to the
Purchaser pursuant to the Offer, then the amount of any stock transfer taxes
(whether imposed on the registered holder(s), such other person or otherwise)
will be deducted from the purchase price unless satisfactory evidence of the
payment of such taxes, or exemption therefrom, is submitted herewith.
7. Special Payment and Delivery Instructions. If the check for the
purchase price of any Shares purchased is to be issued, or any Shares not
tendered or not purchased are to be returned, in the name of a person other
than the person(s) signing this Letter of Transmittal or if the check or any
certificates for Shares not tendered or not purchased are to be mailed to
someone other than the person(s) signing this Letter of Transmittal or to the
person(s) signing this Letter of Transmittal at an address other than that
shown above, the appropriate boxes on this Letter of Transmittal should be
completed. Shareholders tendering Shares by book-entry transfer may request
that Shares not purchased be credited to such account at any of the Book-Entry
Transfer Facilities as such shareholder may designate under "Special Payment
Instructions". If no such instructions are given, any such Shares not
purchased will be returned by crediting the account at the Book-Entry Transfer
Facilities designated above.
8. Substitute Form W-9. Under the federal income tax laws, the
Depositary will be required to withhold 31% of the amount of any payments made
to certain shareholders pursuant to the Offer. In order to avoid such backup
withholding, each tendering shareholder, and, if applicable, each other payee,
must provide the Depositary with such shareholder's or payee's correct
taxpayer identification number and certify that such shareholder or payee is
not subject to such backup withholding by completing the Substitute Form W-9
set forth above. In general, if a shareholder or payee is an individual, the
taxpayer identification number is the Social Security number of such
individual. If the Depositary is not provided with the correct taxpayer
identification number, the shareholder or payee may be subject to a $50
penalty imposed by the Internal Revenue Service. Certain shareholders or
payees (including, among others, all corporations and certain foreign
individuals) are not subject to these backup withholding and reporting
requirements. Exempt holders should indicate their exempt status on the
Substitute Form W-9. In order to satisfy the Depositary that a foreign
individual qualifies as an exempt recipient, such shareholder or payee must
submit a statement, signed under penalties of perjury, attesting to that
individual's exempt status. Such statements can be obtained from the
Depositary. For further information concerning backup withholding and
instructions for completing the Substitute Form W-9 (including how to obtain a
taxpayer identification number if you do not have one and how to complete the
Substitute Form W-9 if Shares are held in more than one name), consult the
enclosed Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
Failure to complete the Substitute Form W-9 will not, by itself, cause
Shares to be deemed invalidly tendered, but may require the Depositary to
withhold 31% of the amount of any payments made pursuant to the Offer. Backup
withholding is not an additional federal income tax. Rather, the federal
income tax liability of a person subject to backup withholding will be reduced
by the amount of tax withheld. If withholding results in an overpayment of
taxes, a refund may be obtained provided that the required information is
furnished to the Internal Revenue Service. NOTE: FAILURE TO COMPLETE AND
RETURN THE SUBSTITUTE FORM W-9 MAY RESULT IN BACKUP WITHHOLDING OF 31% OF ANY
PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW THE ENCLOSED
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE
FORM W-9 FOR ADDITIONAL DETAILS.
9. Requests for Assistance or Additional Copies. Requests for
assistance or additional copies of the Offer to Purchase and this Letter of
Transmittal may be obtained from the Information Agent or the Dealer Manager
at their respective addresses or telephone numbers set forth below.
<TABLE>
<CAPTION>
(DO NOT WRITE IN SPACES BELOW)
Date Received_____________ Accepted By______________ Checked By___________
Shares Shares Shares Check Amount Shares Certificate Block
Surrendered Tendered Accepted No. of Check Returned No. No.
- ---------------------- ---------- ---------- ---------- ---------- ---------- ------------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Gr______
Net_____
Delivery Prepared By_________ Checked By_________ Date______________
</TABLE>
The Information Agent is:
Corporate Investor Communications, Inc.
111 Commerce Road
Carlstadt, New Jersey 07072-2586
Banks and Brokers Call Collect: (201) 896-1900
All Others Call Toll-Free: (888) 624-5467
The Dealer Manager is:
GREENHILL & CO., LLC
31 West 52nd Street
New York NY 10019
(212) 408-0660
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
Guidelines for Determining the Proper Identification Number to Give the Payer
- -- Social Security numbers have nine digits separated by two hyphens: i.e.
000-00-0000. Employer identification numbers have nine digits separated by
only one hyphen: i.e. 00-0000000. The table below will help determine the
number to give the payer.
<TABLE>
<CAPTION>
Give the Give the
For this type of account SOCIAL SECURITY number of: For this type of account EMPLOYER IDENTIFICATION
number of:
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. An individual's account The individual 6. A valid trust, estate, or Legal entity (Do not
pension trust furnish the identifying
number of the personal
representative or
trustee unless the
legal entity itself
is not designated
in the account
title).(4)
2. Two or more individuals The actual owner of the account 7. Corporate account The corporation
(joint account) or, if combined funds, the first
individual on the account(1)
3. Custodian account of a minor The minor(2) 8. Association, club, religious, The organization
(Uniform Gift to Minors Act) charitable, educational or
other tax-exempt organization
account
4. a. The usual revocable The grantor-trustee(1) 9. Partnership account The partnership
savings trust account
(grantor is also trustee)
b. So-called trust account The actual owner(1) 10. A broker or registered The broker or nominee
that is not a legal or nominee
valid trust under State
law
5. Sole proprietorship account The owner(3) 11. Account with the Department The public entity
of Agriculture in the name
of a public entity (such as
a State or local government,
school district or prison)
that receives agricultural
program payments
<FN>
- ------------
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) You must show your individual name, but you may also enter your
business or "doing business as" name. You may use either your social
security number or employer identification number.
(4) List first and circle the name of the legal trust, estate, or pension
trust.
</TABLE>
Note: if no name is circled when there is more than one name, the number will
be considered to be that of the first name listed.
How to Obtain a TIN
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card, or
Form SS-4, Application for Employer Identification Number, at the local office
of the Social Security Administration or the Internal Revenue Service and
apply for a number.
Payees Exempt from Backup Withholding
Payees specifically exempted from backup withholding on ALL payments by the
Payer include the following:
o A corporation.
o A financial institution.
o An organization exempt from tax under section 501(a), or an individual
retirement plan, or a custodial account under section 403(b)(7).
o The United States or any agency or instrumentality thereof.
o A State, the District of Columbia, a possession of the United States or any
political subdivision or instrumentality thereof.
o A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof.
o An international organization or any agency or instrumentality thereof.
o A registered dealer in securities or commodities registered in the U.S. or
a possession of the U.S.
o A real estate investment trust.
o A common trust fund operated by a bank under section 584(a).
o An entity registered at all times under the Investment Company Act of 1940.
o A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
o Payments to nonresident aliens subject to withholding under section 1441.
o Payments to partnerships not engaged in a trade or business in the U.S. and
which have at least one nonresident partner.
o Payments of patronage dividends where the amount received is not paid in
money.
o Payments made by certain foreign organizations.
Payments of interest not generally subject to backup withholding include the
following:
o Payments of interest on obligations issued by individuals.
Note: You may be subject to backup withholding if this interest is $600 or
more and is paid in the course of the payer's trade of business and you have
not provided your correct taxpayer identification number to the payer.
o Payments of tax-exempt interest (including exempt-interest dividends
under section 852).
o Payments described in section 6049(b)(5) to nonresident aliens.
o Payments on tax-free covenant bonds under section 1451.
o Payments made by certain foreign organizations.
Exempt payees described above should file Substitute Form W-9 to avoid
possible erroneous backup withholding. FURNISH YOUR TAXPAYER IDENTIFICATION
NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM IN PART II, SIGN AND DATE THE
FORM, AND RETURN IT TO THE PAYER.
Certain payments, other than interest, dividends and patronage dividends
that are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under sections 6041, 6041A(a),
6045 and 6050A.
Privacy Act Notice. -- Section 6109 requires most recipients of dividend,
interest or other payments to give their correct taxpayer identification
numbers to payers who must report the payments to the IRS. The IRS uses the
numbers for identification purposes and to help verify the accuracy of tax
returns. Payers must be given the numbers whether or not recipients are
required to file tax returns. Payers must generally withhold 31% of taxable
interest, dividend and certain other payments to a payee who does not furnish
a taxpayer identification number to a payer. Certain penalties may also apply.
Penalties
(1) Penalty for Failure to Furnish Taxpayer Identification Number. -- If you
fail to furnish your correct taxpayer identification number to a payer, you
are subject to a penalty of $50 for each such failure unless your failure is
due to reasonable cause and not to willful neglect.
(2) Civil Penalty for False Information With Respect to Withholding. -- If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(3) Criminal Penalty for Falsifying Information. -- Wilfully falsifying
certifications or affirmations may subject you to criminal penalties including
fines and/or imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE.
EXHIBIT (a)(3)
NOTICE OF GUARANTEED DELIVERY
This form, or a form substantially equivalent to this form, must be used
to accept the Offer (as defined below) if the shares of Common Stock of
Microcom, Inc. and all other documents required by the Letter of Transmittal
cannot be delivered to the Depositary by the expiration of the Offer. Such
form may be delivered by hand or facsimile transmission, telex or mail to the
Depositary. See Section 2 of the Offer to Purchase.
To: ChaseMellon Shareholder Services, LLC, as Depositary
By Mail: By Facsimile: By Hand or
Overnight Courier:
Reorganization (for Eligible Reorganization
Department Institutions only) Department
P.O. Box 3301 (201) 329-8936 120 Broadway, 13th Floor
South Hackensack, Confirm by New York, NY 10271
NJ 07606 Telephone:
(201) 296-4209
Ladies and Gentlemen:
The undersigned hereby tenders to Compaq-Boston, Inc., a Massachusetts
corporation (the "Purchaser") and a wholly-owned subsidiary of Compaq Computer
Corporation, upon the terms and subject to the conditions set forth in the
Offer to Purchase dated April 16, 1997 and the related Letter of Transmittal
(which together constitute the "Offer"), receipt of which is hereby
acknowledged, _______ shares of Common Stock, $0.01 par value per share (the
"Shares"), of Microcom, Inc., a Massachusetts corporation, pursuant to the
guaranteed delivery procedure set forth in Section 2 of the Offer to Purchase.
Certificate Nos. (if available): SIGN HERE
_____________________________ _____________________________
(Signature(s))
_____________________________ _____________________________
(Name(s)) (Please Print)
If shares will be tendered by
book-entry transfer: _____________________________
Name of Tendering (Address)
Institution _________________
Account No. _______________at _____________________________
(Zip Code)
[ ] The Depository Trust
Company
[ ] Philadelphia Depository _____________________________
Trust Company (Area Code and Telephone No.)
GUARANTEE
(Not to be used for signature guarantee)
The undersigned, a firm which is a member of a registered national
securities exchange or the National Association of Securities Dealers, Inc.,
or a commercial bank or trust company having an office or correspondent in the
United States, guarantees (a) that the above named person(s) "own(s)" the
Shares tendered hereby within the meaning of Rule 14e-4 under the Securities
Exchange Act of 1934, (b) that such tender of Shares complies with Rule 14e-4
and (c) to deliver to the Depositary the Shares tendered hereby, together with
a properly completed and duly executed Letter(s) of Transmittal (or
facsimile(s) thereof) or an Agent's Message (as defined in the Offer to
Purchase) in the case of a book-entry delivery and any other required
documents, all within three National Association of Securities Dealers, Inc.
Automated Quotation ("Nasdaq") National Market System trading days of the date
hereof.
____________________________________________.
(Name of Firm)
____________________________________________.
(Authorized Signature)
____________________________________________.
(Name)
____________________________________________.
(Address)
____________________________________________.
(Zip Code)
____________________________________________.
(Area Code and Telephone No.)
Dated: __________________, 199_.
EXHIBIT (a)(4)
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
of
Microcom, Inc.
at
$16.25 Net Per Share
by
Compaq-Boston, Inc.
a wholly-owned subsidiary of
Compaq Computer Corporation
April 16, 1997
To Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees:
We have been appointed by Compaq-Boston, Inc., a Massachusetts
corporation (the "Purchaser") and a wholly-owned subsidiary of Compaq Computer
Corporation, to act as Dealer Manager in connection with its offer to purchase
all outstanding shares of Common Stock, $0.01 par value (the "Shares"), of
Microcom, Inc., a Massachusetts corporation (the "Company"), at $16.25 per
Share, net to the seller in cash, upon the terms and subject to the conditions
set forth in the Purchaser's Offer to Purchase dated April 16, 1997 and the
related Letter of Transmittal (which together constitute the "Offer").
For your information and for forwarding to your clients for
whom you hold Shares registered in your name or in the name of your nominee,
we are enclosing the following documents:
1. Offer to Purchase dated April 16, 1997;
2. Letter of Transmittal for your use and for the
information of your clients, together with Guidelines for
Certification of Taxpayer Identification Number on
Substitute Form W-9 providing information relating to
backup federal income tax withholding;
3. Notice of Guaranteed Delivery to be used to accept the
Offer if the Shares and all other required documents
cannot be delivered to the Depositary by the Expiration
Date (as defined in the Offer to Purchase);
4. A form of letter which may be sent to your clients for
whose accounts you hold Shares registered in your name or
in the name of your nominee, with space provided for
obtaining such clients' instructions with regard to the
Offer; and
5. Return envelope addressed to ChaseMellon Shareholder
Services, LLC, the Depositary.
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, TUESDAY, MAY 13, 1997, UNLESS THE OFFER IS EXTENDED.
The Purchaser will not pay any fees or commissions to any
broker or dealer or other person (other than the Dealer Manager, the
Information Agent or the Depositary as described in the Offer to Purchase) for
soliciting tenders of Shares pursuant to the Offer. The Purchaser will,
however, upon request, reimburse brokers, dealers, commercial banks and trust
companies for reasonable and necessary costs and expenses incurred by them in
forwarding materials to their customers. The Purchaser will pay all stock
transfer taxes applicable to its purchase of Shares pursuant to the Offer,
subject to Instruction 6 of the Letter of Transmittal.
In order to accept the Offer, a duly executed and properly
completed Letter of Transmittal and any required signature guarantees, or
an Agent's Message (as defined in the Offer to Purchase) in connection with
a book-entry delivery of Shares, and any other required documents, should
be sent to the Depositary by 12:00 midnight, New York City time, on May 13,
1997.
Any inquiries you may have with respect to the Offer should be
addressed to, and additional copies of the enclosed materials may be obtained
from, the Information Agent or the undersigned at the addresses and telephone
numbers set forth on the back cover of the Offer to Purchase.
Very truly yours,
GREENHILL & CO., LLC
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL
CONSTITUTE YOU THE AGENT OF COMPAQ-BOSTON, INC, COMPAQ COMPUTER CORPORATION,
THE DEALER MANAGER, THE INFORMATION AGENT OR THE DEPOSITARY, OR AUTHORIZE YOU
OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENT ON BEHALF OF ANY
OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE DOCUMENTS ENCLOSED
HEREWITH AND THE STATEMENTS CONTAINED THEREIN.
EXHIBIT (a)(5)
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
of
Microcom, Inc.
at
$16.25 Net Per Share
by
Compaq-Boston, Inc.
a wholly-owned subsidiary of
Compaq Computer Corporation
To Our Clients:
Enclosed for your consideration are the Offer to Purchase
dated April 16, 1997 and the related Letter of Transmittal (which together
constitute the "Offer") in connection with the offer by Compaq-Boston,
Inc., a Massachusetts corporation (the "Purchaser") and a wholly-owned
subsidiary of Compaq Computer Corporation, a Delaware corporation
("Parent"), to purchase for cash all outstanding shares of Common Stock,
$0.01 par value (the "Shares"), of Microcom, Inc., a Massachusetts
corporation (the "Company"). We are the holder of record of Shares held
for your account. A tender of such Shares can be made only by us as the
holder of record and pursuant to your instructions. The Letter of
Transmittal is furnished to you for your information only and cannot be
used by you to tender Shares held by us for your account.
We request instructions as to whether you wish us to tender any
or all of the Shares held by us for your account, upon the terms and subject
to the conditions set forth in the Offer to Purchase and the Letter of
Transmittal.
Your attention is invited to the following:
1. The tender price is $16.25 per Share, net to you in cash.
2. The Offer and withdrawal rights will expire at 12:00
Midnight, New York City time, on Tuesday, May 13, 1997, unless the Offer is
extended.
3. The Offer is conditioned upon, among other things, there
being validly tendered by the Expiration Date (as defined in the Offer) and
not withdrawn a number of Shares which, together with the Shares then owned by
the Parent, represents at least a majority of the total number of outstanding
shares on a fully diluted basis.
4. Any stock transfer taxes applicable to the sale of Shares
to the Purchaser pursuant to the Offer will be paid by the Purchaser, except
as otherwise provided in Instruction 6 of the Letter of Transmittal.
If you wish to have us tender any or all of your Shares, please
so instruct us by completing, executing, detaching and returning to us the
instruction form on the detachable part hereof. An envelope to return your
instructions to us is enclosed. If you authorize tender of your Shares, all
such Shares will be tendered unless otherwise specified on the detachable part
hereof. Your instructions should be forwarded to us in ample time to permit
us to submit a tender on your behalf by the expiration of the Offer.
The Offer is not being made to, nor will tenders be accepted
from or on behalf of, holders of Shares in any jurisdiction in which the
making of the Offer or acceptance thereof would not be in compliance with the
laws of such jurisdiction.
Payment for Shares purchased pursuant to the Offer will in all cases be
made only after timely receipt by ChaseMellon Shareholders Services, LLC (the
"Depositary") of (a) Share Certificates or timely confirmation of the
book-entry transfer of such Shares into the account maintained by the
Depositary at The Depository Trust Company or the Philadelphia Depository
Trust Company (collectively, the "Book-
Entry Transfer Facilities"), pursuant to the procedures set forth in Section 2
of the Offer to Purchase, (b) the Letter of Transmittal (or a facsimile
thereof), properly completed and duly executed, with any required signature
guarantees or an Agent's Message (as defined in the Offer to Purchase), in
connection with a book-
entry delivery, and (c) any other documents required by the Letter of
Transmittal. Accordingly, payment may not be made to all tendering
shareholders at the same time depending upon when certificates for or
confirmations of book-entry transfer of such Shares into the Depositary's
account at a Book-Entry Transfer Facility are actually received by the
Depositary.
Instructions with Respect to
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
of
Microcom, Inc.
The undersigned acknowledge(s) receipt of your letter and the
enclosed Offer to Purchase dated April 16, 1997, and the related Letter of
Transmittal, in connection with the offer by Compaq-Boston, Inc., to purchase
all outstanding shares of Common Stock, $0.01 par value per share (the
"Shares"), of Microcom, Inc.
This will instruct you to tender the number of Shares indicated below
held by you for the account of the undersigned, upon the terms and subject to
the conditions set forth in the Offer to Purchase and the related Letter of
Transmittal.
Number of Shares to be Tendered: SIGN HERE
__________________________Shares(1) __________________________
Signature(s)
Dated: ___________________ , 199_ __________________________
__________________________
__________________________
Please print name(s) and
address(es) here
___________
(1) Unless otherwise indicated, it will be assumed that all Shares held
by us for your account are to be tendered.
EXHIBIT (a)(6)
[Letterhead of Compaq Computer Corporation]
FOR IMMEDIATE RELEASE
Compaq Reaches Agreement to Acquire Microcom
Advances Compaq's Evolution of Communication Products
Business;
Allows End-to-End High-Performance Modem and ISDN
Connectivity
HOUSTON, April 10, 1997 -- As another bold step to broaden its
communication products lineup, Compaq Computer Corporation (NYSE:CPQ) today
announced it has reached a definitive agreement to acquire Microcom, Inc.
(NASDAQ:MNPI), a maker of remote access technologies and solutions.
A wholly-owned subsidiary of Compaq will promptly commence a tender
offer to acquire all of the outstanding shares of Microcom, Inc. for $16.25 per
share in cash, representing an aggregate approximate purchase price of $280
million. Microcom's Board of Directors and management team have approved the
acquisition and will recommend shareholder acceptance.
"Development of the strategically important and rapidly growing remote
access market is a top priority in Compaq's move to expand its communication
products business," said Alan Lutz, Senior Vice President and General Manager,
Communication Products Group, Compaq. "Combining Microcom's superb modem and
access technologies with Compaq's renowned experience in NT platforms allows
us to drive remote access price/performance advancements just as we have done
in the NT server market. We believe the joint synergy will allow us to offer
our customers the most attractive connectivity solutions. With Microcom, we
can now deliver complete end-to-end high-performance modem and ISDN(1)
connectivity -- solutions with both high connect rates(2) and high
throughput(3)," Lutz said. Compaq is the number one worldwide market share
leader in servers and the number four worldwide market share leader in client
modems(4).
- ------------
(1) Integrated Services Digital Network.
(2) "Connect rate" is the percentage of all connection attempts that succeed.
(3) "Throughput" is the amount of information that is passed through the
connection.
(4) Compaq estimates compiled from various sources.
"Microcom has been a standards-setter and technology pioneer in remote
access," Lutz continued. "A generation of computer users has taken advantage
of its well-engineered hardware and software solutions to connect -- remotely
by telephone -- their PCs to their networks. Combining this with Compaq's
distribution and marketing strength yields a potential world class market
force. The Microcom acquisition further enhances our goal of bringing access
to our customers, connecting people with people and people with information,"
he concluded.
Lew Bergins, who will continue as President of the wholly owned
subsidiary stated, "The synergies between the two companies are very strong.
This combination permits Microcom to be more competitive in achieving the
highest quality products and cost effectiveness."
Completion of the transaction is subject to certain conditions, including
clearance under the Hart-Scott-Rodino Antitrust Improvements Act. Following
the successful completion of the offer, all of the remaining shares of
Microcom will be acquired pursuant to a merger.
A remote access server provides the link between a local area network
(LAN) and the many remote PC users who need to connect to the LAN by modem.
The server usually has many, many telephone lines (ports) plus the connection
to the LAN. It requires special hardware and software to make the remote
connections both fast and secure. The demand for remote access servers is
expected to grow dramatically from $3.0 billion in 1996 to $8.3 billion in
2000(5) concurrent with the growth of the Internet, telecommuting and portable
computing.
- ------------
(5) Compaq estimates compiled from various sources.
Company Background
Compaq Computer Corporation, a Fortune 100 company, is the fifth largest
computer company in the world and the largest global supplier of personal
computers, delivering useful innovation through products that connect people
with people and people with information. The company is an industry leader in
environmentally friendly programs and business practices. Compaq is
strategically organized to meet the current and future needs of its customers,
offering Internet and enterprise computing solutions, networking products,
commercial PC products and consumer PCs. As the leader in distributed
enterprise solutions, Compaq has shipped over a million servers. In 1996, the
company reported worldwide sales of $18.1 billion. Compaq products are sold
and supported in more than 100 countries through a network of authorized
Compaq marketing partners. Customer support and information about Compaq and
its products can be found at http://www.compaq.com or by calling
1-800-OK-COMPAQ. Product information and reseller locations can be obtained
by calling 1-800-345-1518.
Headquartered in Norwood, Mass., Microcom is a worldwide leader in
providing central site and remote access solutions to OEMs, Internet service
providers, regional Bell operating companies, corporations, universities and
individual mobile PC users. The company's products enable users to access and
communicate with corporate Local Area Networks (LANs), the Internet, intranets
and online services from remote locations. Microcom's products and
technologies include modems, central site systems, OEM solutions, network
security, network management, remote access and remote control software.
# # #
Compaq, Registered U.S. Patent and Trademark Office. Product names mentioned
herein may be trademarks and/or registered trademarks of their respective
companies.
For further editorial information, contact:
Compaq Computer Corporation
John Sweney 713-514-0484 [email protected]
Miller/Shandwick Technologies
Eric Grodziski 617-536-0470 [email protected]
EXHIBIT (a)(7)
This announcement is not an offer to purchase or a solicitation
of an offer to sell Shares. The Offer is made solely by the Offer to Purchase
dated April 16, 1997 and the related Letter of Transmittal and is not being
made to, nor will tenders be accepted from or on behalf of, holders of Shares
in any jurisdiction in which the making of the Offer or acceptance thereof
would not be in compliance with the laws of such jurisdiction.
Notice of Offer to Purchase for Cash
All Outstanding Shares of Common Stock
of
Microcom, Inc.
at
$16.25 Net per Share
by
Compaq-Boston, Inc.
a wholly-owned subsidiary of
Compaq Computer Corporation
Compaq-Boston, Inc., a Massachusetts corporation (the
"Purchaser") and a wholly-owned subsidiary of Compaq Computer Corporation, a
Delaware corporation ("Parent"), hereby offers to purchase all outstanding
shares of Common Stock, $0.01 par value (the "Shares"), of Microcom, Inc., a
Massachusetts corporation (the "Company"), at $16.25 per Share, net to the
seller in cash, upon the terms and subject to the conditions set forth in the
Offer to Purchase dated April 16, 1997 (the "Offer to Purchase") and in the
related Letter of Transmittal (which together constitute the "Offer").
THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00
MIDNIGHT, NEW YORK CITY TIME, ON TUESDAY, MAY 13, 1997 UNLESS
THE OFFER IS EXTENDED.
The Offer is conditioned upon, among other things, there being
validly tendered and not withdrawn prior to the Expiration Date (as defined in
the Offer to Purchase) a number of Shares which, together with the Shares then
owned by Parent, represents at least a majority of the total number of
outstanding shares on a fully diluted basis.
The Offer is being made pursuant to an Agreement and Plan of
Merger dated as of April 9, 1997 (the "Merger Agreement"), among the Company,
Parent and Purchaser. The Merger Agreement provides, among other things, that
as soon as practicable after the consummation of the Offer and satisfaction or
waiver of all conditions to the Merger, Purchaser will be merged with and into
the Company (the "Merger"), with the Company surviving. Pursuant to the
merger, each outstanding share (other than Shares owned by Parent or any
subsidiary of Parent, Shares held by shareholders properly exercising
appraisal rights and Shares subject to certain contractual forfeiture or
resale restrictions (as described in the Offer to Purchase)) will be converted
into and represent the right to receive $16.25 in cash, without interest.
The Board of Directors of the Company has unanimously approved
the Offer and the Merger, unanimously determined that the Offer and the Merger
are fair to, and in the best interests of, the Company's shareholders, and
unanimously recommends that the Company's shareholders accept the Offer and
tender their Shares pursuant to the Offer.
The Offer is subject to certain conditions set forth in the
Offer to Purchase. If any such condition is not satisfied, the Purchaser may,
subject to certain limitations set forth in the Merger Agreement and described
in the Offer to Purchase, (i) terminate the Offer and return all tendered
Shares to tendering shareholders, (ii) extend the Offer and, subject to
withdrawal rights as set forth below, retain all such Shares until the
expiration of the Offer as so extended, (iii) waive such condition and,
subject to any requirement to extend the period of time during which the Offer
is open, purchase all Shares validly tendered prior to the Expiration Date and
not withdrawn or (iv) delay acceptance for payment or payment for Shares,
subject to applicable law, until satisfaction or waiver of the conditions to
the Offer.
The Purchaser reserves the right, at any time or from time to
time, to extend the period of time during which the Offer is open by giving
oral or written notice of such extension to ChaseMellon Shareholder Services,
LLC (the "Depositary). Any such extension will be followed as promptly as
practicable by public announcement thereof. During any such extension, all
Shares previously tendered and not withdrawn will remain subject to the Offer,
subject to applicable withdrawal rights.
For purposes of the Offer, the Purchaser shall be deemed to
have accepted for payment tendered Shares when, as and if the Purchaser gives
oral or written notice to the Depositary of its acceptance of the tenders of
such Shares. Payment for Shares accepted for payment pursuant to the Offer
will be made only after timely receipt by the Depositary of certificates for
such Shares (or a confirmation of a book-entry transfer of such Shares into
the Depositary's account at one of the Book-Entry Transfer Facilities (as
defined in the Offer to Purchase)), a properly completed and duly executed
Letter of Transmittal (or facsimile thereof, or in the case of a book-entry
transfer, an Agent's Message (as defined in the Offer to Purchase)) and any
other required documents.
Tenders of Shares made pursuant to the Offer may be withdrawn
at any time prior to the Expiration Date. Thereafter, such tenders are
irrevocable, except that they may be withdrawn after June 14, 1997 unless
theretofore accepted for payment as provided in the Offer to Purchase. To be
effective, a written, telegraphic, telex or facsimile transmission notice of
withdrawal must be timely received by the Depositary at one of its addresses
set forth in the Offer to Purchase and must specify the name of the person who
tendered the Shares to be withdrawn and the number of Shares to be withdrawn.
If the Shares to be withdrawn have been delivered to the Depositary, a signed
notice of withdrawal with (except in the case of Shares tendered by an
Eligible Institution (as defined in the Offer to Purchase)) signatures
guaranteed by an Eligible Institution must be submitted prior to the release
of such Shares. In addition, such notice must specify, in the case of Shares
tendered by delivery of certificates, the name of the registered holder (if
different from that of the tendering shareholder) and the serial numbers shown
on the particular certificates evidencing the Shares to be withdrawn or, in
the case of Shares tendered by book-entry transfer, the name and number of the
account at one of the Book-Entry Transfer Facilities to be credited with the
withdrawn Shares.
The information required to be disclosed by paragraph
(e)(1)(vii) of Rule 14d-6 of the General Rules and Regulations under the
Securities Exchange Act of 1934 is contained in the Offer to Purchase and is
incorporated herein by reference.
The Company is providing its shareholder list and security
position listings for the purpose of disseminating the Offer to holders of
Shares. The Offer to Purchase and the related Letter of Transmittal will be
mailed to record holders of Shares and will be furnished to brokers, banks and
similar persons whose names, or the names of whose nominees, appear on the
shareholder list or, if applicable, who are listed as participants in a
clearing agency's security position listing for subsequent transmittal to
beneficial owners of Shares.
The Offer to Purchase and Letter of Transmittal contain
important information which should be read before any decision is made with
respect to the Offer.
Requests for copies of the Offer to Purchase and the related
Letter of Transmittal and other tender offer materials may be directed to the
Information Agent or the Dealer Manager as set forth below, and copies will be
furnished promptly at the Purchaser's expense. No fees or commissions will be
paid to brokers, dealers or other persons (other than the Information Agent
and the Dealer Manager) for soliciting tenders of Shares pursuant to the Offer.
The Information Agent for the Offer is:
Corporate Investor Communications, Inc.
111 Commerce Road
Carlstadt, New Jersey 07072-2586
Banks and Brokers Call Collect (201) 896-1900
All Others Call Toll-Free (888) 624-5467
The Dealer Manager for the Offer is:
GREENHILL & CO., LLC
31 West 52nd Street
New York New York 10019
(212) 408-0660
April 16, 1997
EXHIBIT (c)(1)
CONFORMED COPY
AGREEMENT AND PLAN OF MERGER
dated as of
April 9, 1997
among
MICROCOM, INC.
COMPAQ COMPUTER CORPORATION
and
COMPAQ-BOSTON, INC.
TABLE OF CONTENTS
Page
ARTICLE 1
THE OFFER
SECTION 1.1. The Offer...................................................1
SECTION 1.2. Company Action..............................................2
SECTION 1.3. Directors...................................................3
ARTICLE 2
THE MERGER
SECTION 2.1. The Merger..................................................3
SECTION 2.2. Conversion of Shares........................................4
SECTION 2.3. Surrender and Payment.......................................4
SECTION 2.4. Dissenting Shares...........................................6
SECTION 2.6. Employee Stock Purchase Plan................................7
SECTION 2.7. Option Restricted Stock.....................................7
ARTICLE 3
THE SURVIVING CORPORATION
SECTION 3.1. Articles of Organization....................................8
SECTION 3.2. Bylaws......................................................8
SECTION 3.3. Directors and Officers......................................8
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
SECTION 4.1. Corporate Existence and Power...............................8
SECTION 4.2. Corporate Authorization.....................................9
SECTION 4.3. Governmental Authorization..................................9
SECTION 4.4. Non-Contravention...........................................9
SECTION 4.5. Capitalization.............................................10
SECTION 4.6. Subsidiaries...............................................10
SECTION 4.7. SEC Filings................................................11
SECTION 4.8. Financial Statements.......................................11
SECTION 4.9. Disclosure Documents.......................................12
SECTION 4.10. Absence of Certain Changes.................................12
SECTION 4.11. No Undisclosed Material Liabilities........................14
SECTION 4.12. Litigation.................................................14
SECTION 4.13. Taxes......................................................14
SECTION 4.14. ERISA......................................................15
SECTION 4.15. Compliance with Laws.......................................16
SECTION 4.16. Finders' Fees..............................................16
SECTION 4.17. Patents and Other Proprietary Rights.......................16
SECTION 4.18. Environmental Matters......................................17
SECTION 4.19. Approvals; Antitakeover Provisions.........................18
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
OF BUYER
SECTION 5.1. Corporate Existence and Power..............................19
SECTION 5.2. Corporate Authorization....................................19
SECTION 5.3. Governmental Authorization.................................19
SECTION 5.4. Non-Contravention..........................................19
SECTION 5.5. Disclosure Documents.......................................20
SECTION 5.6. Finders' Fees..............................................20
ARTICLE 6
COVENANTS OF THE COMPANY
SECTION 6.1. Conduct of the Company.....................................20
SECTION 6.2. Stockholder Meeting; Proxy Material........................21
SECTION 6.3. Access to Information......................................21
SECTION 6.4. Other Offers...............................................22
ARTICLE 7
COVENANTS OF BUYER
SECTION 7.1. Obligations of Merger Subsidiary...........................23
SECTION 7.2. Voting of Shares...........................................23
SECTION 7.3. Director and Officer Liability.............................23
SECTION 7.4. Tax Certification..........................................23
ARTICLE 8
COVENANTS OF BUYER
AND THE COMPANY
SECTION 8.1. Best Efforts...............................................24
SECTION 8.2. Certain Filings............................................24
SECTION 8.3. Public Announcements.......................................24
SECTION 8.4. Notices of Certain Events..................................24
SECTION 8.5. Employee Benefits..........................................25
SECTION 8.6. Further Assurances.........................................25
ARTICLE 9
CONDITIONS TO THE MERGER
SECTION 9.1. Conditions to the Obligations of Each Party................25
ARTICLE 10
TERMINATION
SECTION 10.1. Termination...............................................26
SECTION 10.2. Effect of Termination.....................................26
ARTICLE 11
MISCELLANEOUS
SECTION 11.1. Notices...................................................26
SECTION 11.2. Survival of Representations and Warranties................27
SECTION 11.3. Amendments; No Waivers....................................28
SECTION 11.4. Fees and Expenses.........................................28
SECTION 11.5. Successors and Assigns....................................29
SECTION 11.6. Governing Law.............................................29
SECTION 11.7. Counterparts; Effectiveness...............................29
SECTION 11.8. Entire Agreement..........................................29
SECTION 11.9. Definitions...............................................30
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of April 9, 1997 among
Microcom, Inc., a Massachusetts corporation (the "Company"), Compaq Computer
Corporation, a Delaware corporation ("Buyer"), and Compaq-Boston, Inc., a
Massachusetts corporation and a wholly-owned subsidiary of Buyer ("Merger
Subsidiary").
The parties hereto agree as follows:
ARTICLE 1
THE OFFER
SECTION 1.1. The Offer. (a) Provided that nothing shall have
occurred that would result in a failure to satisfy any of the conditions set
forth in Annex I hereto, Merger Subsidiary shall, as promptly as practicable
after the date hereof, but in no event later than five business days following
the public announcement of the terms of this Agreement, commence an offer (the
"Offer") to purchase all of the outstanding shares (the "Shares") of common
stock, $0.01 par value per share, of the Company (the "Common Stock") at a
price of $16.25 per Share, net to the seller in cash. The Offer shall be
subject to the condition that a number of Shares which, together with the
Shares then owned by Buyer, represents at least a majority of the Shares
outstanding on a fully diluted basis shall be validly tendered in accordance
with the terms of the Offer prior to the expiration date of the Offer and not
withdrawn (the "Minimum Condition") and to the other conditions set forth in
Annex I hereto. Merger Subsidiary expressly reserves the right to waive the
Minimum Condition or any of the other conditions to the Offer and to make any
change in the terms or conditions of the Offer; provided that no change may be
made which changes the form of consideration to be paid or decreases the price
per Share or the number of Shares sought in the Offer or which imposes
conditions to the Offer in addition to those set forth in Annex I or amends
the terms and conditions of the Offer in a manner adverse to the Company.
(b) As soon as practicable on the date of commencement of the
Offer, Merger Subsidiary shall file with the SEC (as defined in Section 4.7) a
Tender Offer Statement on Schedule 14D-1 with respect to the Offer which will
contain the offer to purchase and form of the related letter of transmittal
(together with any supplements or amendments thereto, collectively the
"Offer Documents"). Buyer and the Company each agrees promptly to correct
any information provided by it for use in the Offer Documents if and to the
extent that it shall have become false or misleading in any material
respect. Merger Subsidiary agrees to take all steps necessary to cause the
Offer Documents as so corrected to be filed with the SEC and to be
disseminated to holders of Shares, in each case as and to the extent
required by applicable federal securities laws. The Company and its
counsel shall be given an opportunity to review and comment on the Schedule
14D-1 prior to its being filed with the SEC.
SECTION 1.2. Company Action. (a) The Company hereby consents to
the Offer and represents that its Board of Directors, at a meeting duly called
and held, has (i) unanimously determined that this Agreement and the
transactions contemplated hereby, including the Offer and the Merger (as
defined in Section 2.1), are fair to and in the best interest of the Company's
stockholders, (ii) unanimously approved this Agreement and the transactions
contemplated hereby, including the Offer and the Merger, which approval
satisfies in full any applicable requirements of the Business Corporation Law
of the Commonwealth of Massachusetts ("Massachusetts Law" or "MBCL") and any
applicable requirements of Chapters 110C, 110D, 110E and 110F of the
Massachusetts General Laws, and (iii) unanimously resolved, except as may be
required, in response to an unsolicited bona fide written Acquisition Proposal
(as defined in Section 6.4), in order to comply with the fiduciary duties of
the Board of Directors under applicable law as advised in writing by Choate,
Hall & Stewart ("Company Counsel"), to recommend acceptance of the Offer and
approval and adoption of this Agreement and the Merger by its stockholders.
The Company further represents that Morgan Stanley & Co. Incorporated has
delivered to the Company's Board of Directors its written opinion that the
consideration to be paid in the Offer and the Merger is fair to the holders of
Shares from a financial point of view. The Company has been advised that all
of its directors and executive officers intend either to tender their Shares
pursuant to the Offer or to vote in favor of the Merger. The Company will
promptly furnish Buyer with a list of its stockholders, mailing labels and any
available listing or computer file containing the names and addresses of all
record holders of Shares and lists of securities positions of Shares held in
stock depositories, in each case true and correct as of the most recent
practicable date, and will provide to Buyer such additional information
(including, without limitation, updated lists of stockholders, mailing labels
and lists of securities positions) and such other assistance as Buyer may
reasonably request in connection with the Offer. Buyer will return such
materials promptly if the Offer is not consummated.
(b) As soon as practicable on the day that the Offer is commenced,
the Company will file with the SEC a Solicitation/Recommendation Statement on
Schedule 14D-9 (the "Schedule 14D-9") which shall reflect the recommendations
of the Company's Board of Directors referred to above. The Company and Buyer
each agree promptly to correct any information provided by it for use in the
Schedule 14D-9 if and to the extent that it shall have become false or
misleading in any material respect. The Company agrees to take all steps
necessary to cause the Schedule 14D-9 as so corrected to be filed with the SEC
and to be disseminated to holders of Shares, in each case as and to the extent
required by applicable federal securities laws. Buyer and its counsel shall
be given an opportunity to review and comment on the Schedule 14D-9 prior to
its being filed with the SEC.
SECTION 1.3. Directors. (a) Effective upon the acceptance for
payment pursuant to the Offer of a number of Shares that satisfies the Minimum
Condition, Buyer shall be entitled to designate the number of directors,
rounded up to the next whole number, on the Company's Board of Directors that
equals the product of (i) the total number of directors on the Company's Board
of Directors (giving effect to the election of any additional directors
pursuant to this Section) multiplied by (ii) the percentage that the number of
Shares beneficially owned by Buyer (including Shares accepted for payment)
bears to the total number of Shares outstanding; and the Company shall take
all action necessary to cause Buyer's designees to be elected or appointed to
the Company's Board of Directors, including, without limitation, increasing
the number of directors and seeking and accepting resignations of incumbent
directors. At such times, the Company will use its best efforts to cause
individuals designated by Buyer to constitute the same percentage as such
individuals represent on the Company's Board of Directors of (A) each committee
of the Board and (B) each board of directors (and committee thereof) of each
Subsidiary (as defined in Section 4.6). Notwithstanding the foregoing, the
Company shall use its best efforts to cause at least three members of the
Company's Board of Directors as of the date hereof who are not employees of
the Company (the "Continuing Directors") to remain members of the Board of
Directors until the Effective Time (as defined in Section 2.1(b)), and the
Buyer consents thereto.
(b) The Company's obligations to appoint designees to the Board
of Directors shall be subject to Section 14(f) of the Exchange Act (as defined
in Section 4.3) and Rule 14f-1 promulgated thereunder. The Company shall
promptly take all actions required pursuant to Section 14(f) and Rule 14f-1 in
order to fulfill its obligations under this Section and shall include in the
Schedule 14D-9 such information with respect to the Company and its officers
and directors as is required under Section 14(f) and Rule 14f-1 to fulfill its
obligations under this Section. Buyer will supply to the Company in writing
and be solely responsible for any information with respect to itself and its
nominees, officers, directors and affiliates required by Section 14(f) and
Rule 14f-1.
ARTICLE 2
THE MERGER
SECTION 2.1. The Merger. (a) At the Effective Time (as defined
below), Merger Subsidiary shall be merged (the "Merger") with and into the
Company in accordance with Section 78 of the MBCL, whereupon the separate
existence of Merger Subsidiary shall cease, and the Company shall be the
surviving corporation (the "Surviving Corporation").
(b) As soon as practicable after satisfaction or, to the extent
permitted hereunder, waiver of all conditions to the Merger, the Company and
Merger Subsidiary will file articles of merger ("Articles of Merger") with the
Secretary of State of the Commonwealth of Massachusetts and make all other
filings or recordings required by Massachusetts Law in connection with the
Merger. The Merger shall become effective at such time as the Articles of
Merger are duly filed with the Secretary of State of the Commonwealth of
Massachusetts (the "Effective Time").
(c) From and after the Effective Time, the Surviving Corporation
shall possess all the rights, privileges, powers and franchises and be subject
to all of the restric
tions, disabilities and duties of the Company and Merger Subsidiary, all as
provided under Massachusetts Law.
SECTION 2.2. Conversion of Shares. At the Effective Time:
(a) each Share held by the Company as treasury stock or owned by
Buyer or any subsidiary of Buyer immediately prior to the Effective Time
shall be canceled, and no payment shall be made with respect thereto;
(b) each share of common stock of Merger Subsidiary outstanding
immediately prior to the Effective Time shall be converted into and
become one share of common stock of the Surviving Corporation with the
same rights, powers and privileges as the shares so converted and shall
constitute the only outstanding shares of capital stock of the Surviving
Corporation; and
(c) each Share outstanding immediately prior to the Effective
Time shall, except as otherwise provided in Section 2.2(a) or as
provided in Section 2.4 with respect to Shares as to which appraisal
rights have been exercised or as provided in Section 2.7 with respect to
Option Restricted Stock, be converted into the right to receive $16.25
in cash, without interest (the "Merger Consideration").
SECTION 2.3. Surrender and Payment. (a) Prior to the Effective
Time, Buyer shall appoint an agent (the "Exchange Agent") for the purpose
of exchanging certificates representing Shares for the Merger
Consideration. Buyer will make available to the Exchange Agent, in such
amounts as may be needed from time to time, the Merger Consideration to be
paid in respect of the Shares. Promptly after the Effective Time, Buyer
will send, or will cause the Exchange Agent to send, to each holder of
Shares at the Effective Time a letter of transmittal for use in such
exchange (which shall specify that the delivery shall be effected, and risk
of loss and title shall pass, only upon proper delivery of the certificates
representing Shares to the Exchange Agent).
(b) Each holder of Shares that have been converted into a right
to receive the Merger Consideration, upon surrender to the Exchange Agent
of a certificate or certificates representing such Shares, together with a
properly completed letter of transmittal covering such Shares, will be
entitled to receive the Merger Consideration payable in respect of such
Shares. From and after the Effective Time, all Shares which have been so
converted shall no longer be outstanding and shall automatically be
canceled and retired, and each such certificate shall, after the Effective
Time, represent for all purposes, only the right to receive such Merger
Consideration.
(c) If any portion of the Merger Consideration is to be paid to a
Person other than the registered holder of the Shares represented by the
certificate or certificates surrendered in exchange therefor, it shall be a
condition to such payment that the certificate or certificates so surrendered
shall be properly endorsed or otherwise be in proper form for transfer and
that the Person requesting such payment shall pay to the Exchange Agent any
transfer or other taxes required as a result of such payment to a Person other
than the registered holder of such Shares or establish to the satisfaction of
the Exchange Agent that such tax has been paid or is not payable. For
purposes of this Agreement, "Person" means an individual, a corporation, a
limited liability company, a partnership, an association, a trust or any other
entity or organization, including a government or political subdivision or any
agency or instrumentality thereof.
(d) After the Effective Time, there shall be no further
registration of transfers of Shares. If, after the Effective Time,
certificates representing Shares are presented to the Surviving Corporation,
they shall be canceled and exchanged for the consideration provided for, and
in accordance with the procedures set forth, in this Article 2.
(e) Any portion of the Merger Consideration made available to the
Exchange Agent pursuant to Section 2.3(a) that remains unclaimed by the
holders of Shares six months after the Effective Time shall be returned to
Buyer, upon demand, and any such holder who has not exchanged Shares for the
Merger Consideration in accordance with this Section 2.3 prior to that time
shall thereafter look only to Buyer for payment of the Merger Consideration in
respect of Shares. Notwithstanding the foregoing, Buyer shall not be liable
to any holder of Shares for any amount paid to a public official pursuant to
applicable abandoned property laws. Any amounts remaining unclaimed by
holders of Shares two years after the Effective Time (or such earlier date
immediately prior to such time as such amounts would otherwise escheat to or
become property of any governmental entity) shall, to the extent permitted by
applicable law, become the property of Buyer free and clear of any claims or
interest of any Person previously entitled thereto.
(f) Any portion of the Merger Consideration made available to the
Exchange Agent pursuant to Section 2.3(a) to pay for Shares for which
appraisal rights have been perfected shall be returned to Buyer, upon demand.
SECTION 2.4. Dissenting Shares. Notwithstanding Section 2.2, Shares
which are held of record by stockholders who shall not have voted such Shares
in favor of the Merger, if applicable, and who shall have properly exercised
rights to demand payment of the fair value of such Shares in accordance with
Sections 86 through 98, inclusive, of the MBCL shall not be converted into the
right to receive the Merger Consideration, but the holders thereof instead
shall be entitled to payment of the fair value of such Shares in accordance
with the provisions of Sections 86 to 92, inclusive, of the MBCL, provided,
however, that (i) if such a holder fails to file a notice of election to
dissent in accordance with Section 86 of the MBCL or, after filing such notice
of election, subsequently delivers an effective written withdrawal of such
notice or fails to establish his entitlement to appraisal rights as provided
in Sections 87 through 98, inclusive, of the MBCL, or (ii) if such holder
shall otherwise lose his appraisal rights, then in either of such cases such
Shares shall be treated as if they had been converted as of the Effective Time
into a right to receive the Merger Consideration. The Company shall give
Buyer prompt notice of any demands received by the Company for the payment of
fair value for Shares, and Buyer shall have the right to participate in all
negotiations and proceedings with respect to such demands. The Company shall
not, except with the prior written consent of Buyer, make any payment with
respect to, or settle or offer to settle, any such demands.
SECTION 2.5 Stock Options. (a) At the Effective Time, each option
to purchase shares of Common Stock outstanding under any employee stock option
or compensation plan or arrangement of the Company (except for the Microcom,
Inc. 1987 Employee Stock Purchase Plan (the "Company Stock Purchase Plan"))
that is vested and exercisable (including any option that becomes vested
and exercisable by its terms as a result of the transactions contemplated
hereby) held by (i) the Chief Executive Officer of the Company, (ii) the
Chief Financial Officer of the Company or (iii) any director or former
director of the Company shall be canceled, and Buyer shall pay each such
holder in cash at the Effective Time for each such option an amount
determined by multiplying (A) the excess, if any, of the Merger
Consideration over the applicable exercise price per share of such option
by (B) the number of shares to which such option relates.
(b) Except as otherwise provided in Section 2.5(a) above, at the
Effective Time, each option to purchase shares of Common Stock outstanding
under any employee stock option or compensation plan or arrangement of the
Company (except for the Company Stock Purchase Plan), whether or not vested or
exercisable, shall be canceled, and Buyer shall issue in exchange therefor an
option to purchase shares of common stock of Buyer (a "Substitute Option").
The number of shares of Buyer's common stock subject to such Substitute Option
and the exercise price thereunder shall be computed in compliance with the
requirements of Section 424(a) of the Internal Revenue Code of 1986, as
amended, and the rules and regulations promulgated thereunder (the "Code").
Such Substitute Option shall vest in accordance with the same schedule and
shall have the same term as the original option in respect of which it is
granted, and shall otherwise be subject to all of the other terms and
conditions of options granted under the employee stock option or compensation
plan or arrangement of Buyer. The Substitute Option will not qualify as an
incentive stock option under Section 422 of the Code. Notwithstanding the
foregoing, in the case of any Substitute Option issued in exchange for an
option exercisable for shares of Common Stock which shares would upon
exercise, as of the Effective Time, be subject to contractual forfeiture or
resale restrictions ("Forfeiture Provisions"), the Substitute Option shall
become exercisable according to a schedule that mirrors the expiration of such
Forfeiture Provisions, but the shares of Buyer's common stock acquired upon
exercise of the Substitute Option shall not be subject to Forfeiture
Provisions.
(c) Prior to the Effective Time, the Company shall take all actions
(including, if appropriate, amending the terms of the Company's stock option
or compensation plans or arrangements) that are necessary to give effect to
the transactions contemplated by Sections 2.5(a) and 2.5(b).
SECTION 2.6 Employee Stock Purchase Plan. (a) As of the Effective
Time, the Company Stock Purchase Plan shall be terminated. Buyer shall pay
each participant in any current offering under such Plan in cash at or
promptly after the Effective Time, in cancellation of all rights under such
Plan, the amount of such participant's account balance under the Plan.
(b) Prior to the Effective Time, the Company shall take all actions
(including, if appropriate, amending the terms of the Company Stock Purchase
Plan) that are necessary to give effect to the transactions contemplated by
Section 2.6(a).
SECTION 2.7 Option Restricted Stock. The provisions of this Section
2.7 shall apply to each share of Common Stock acquired upon exercise of an
option granted under any stock option or incentive plan of the Company that
as of the Effective Date is subject to Forfeiture Provisions ("Option
Restricted Stock"). Notwithstanding Section 2.2, the Option Restricted
Stock shall not be tendered by any holder thereof into the Offer and shall
be canceled immediately prior to the Effective Time. In consideration of
such forbearance and cancellation, Buyer shall grant, as of the Effective
Time, to each former holder of Option Restricted Stock, a number of shares
of Buyer common stock having a market value, based on the most recent per
share closing price of Buyer common stock on the New York Stock Exchange
prior to the Effective Date, equal to the product of (i) the number of
shares of Option Restricted Stock formerly held by such holder and (ii) the
Merger Consideration. Such Buyer common stock shall be subject to the same
Forfeiture Provisions as applied to the Option Restricted Stock immediately
prior to the cancellation thereof. The Company shall use its best efforts
to obtain such consents by the affected holders of Option Restricted Stock
as are necessary to effect the provisions of this Section 2.7.
ARTICLE 3
THE SURVIVING CORPORATION
SECTION 3.1. Articles of Organization. The Articles of
Organization of the Surviving Corporation shall be amended pursuant to the
Articles of Merger to read in their entirety as set forth in the Articles of
Organization of Merger Subsidiary, except that the name of the Surviving
Corporation shall be "Microcom, Inc."
(b) The Surviving Corporation shall initially be authorized to issue
up to 100,000 shares of its common stock, par value $.01 per share.
(c) The purposes of the Surviving Corporation shall be as set forth
in the Articles of Organization of Merger Subsidiary as in effect on the
date hereof until such time as such purposes may be amended as provided in
the Articles of Organization of the Surviving Corporation and by applicable
law.
SECTION 3.2. Bylaws. The bylaws of Merger Subsidiary in effect
at the Effective Time shall be the bylaws of the Surviving Corporation until
amended in accordance with applicable law.
SECTION 3.3. Directors and Officers. From and after the
Effective Time, until successors are duly elected or appointed and qualified
in accordance with applicable law, (a) the directors of Merger Subsidiary at
the Effective Time shall be the directors of the Surviving Corporation and (b)
the officers of the Company at the Effective Time shall be the officers of the
Surviving Corporation.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY
The Company represents and warrants to Buyer that:
SECTION 4.1. Corporate Existence and Power. The Company is a
corporation duly incorporated, validly existing and in good standing under the
laws of the Commonwealth of Massachusetts and has all corporate powers and all
material governmental licenses, authorizations, consents and approvals
required to carry on its business as now conducted. The Company is duly
qualified to do business as a foreign corporation and is in good standing
in each jurisdiction where the character of the property owned or leased by
it or the nature of its activities makes such qualification necessary,
except for those jurisdictions where the failure to be so qualified would
not, individually or in the aggregate, have a material adverse effect on
the financial condition, business, assets or results of operations of the
Company and the Subsidiaries taken as a whole (a "Material Adverse
Effect"). The Company has heretofore delivered to Buyer true and complete
copies of the Company's Articles of Organization and bylaws as currently in
effect.
SECTION 4.2. Corporate Authorization. The execution, delivery and
performance by the Company of this Agreement and the consummation by the
Company of the transactions contemplated hereby are within the Company's
corporate powers and, except as set forth in the following sentence, have been
duly authorized by all necessary corporate action. The affirmative vote of
the holders of a majority of the Shares approving this Agreement is the only
vote of the holders of the Company's capital stock necessary to approve the
transactions contemplated by this Agreement. This Agreement constitutes a
valid and binding agreement of the Company.
SECTION 4.3. Governmental Authorization. The execution, delivery
and performance by the Company of this Agreement and the consummation of the
Merger by the Company require no action by or in respect of, or filing with,
any governmental body, agency, official or authority other than (a) the filing
of the Articles of Merger in accordance with Massachusetts Law; (b) compliance
with any applicable requirements of the Hart-Scott-Rodino Antitrust
Improvements Act of 1976 (the "HSR Act"); and (c) compliance with any
applicable requirements of the Securities Exchange Act of 1934 and the rules
and regulations promulgated thereunder (the "Exchange Act").
SECTION 4.4. Non-Contravention. The execution, delivery and
performance by the Company of this Agreement and the consummation by the
Company of the transactions contemplated hereby do not and will not (a)
contravene or conflict with the Articles of Organization or bylaws of the
Company, (b) assuming compliance with the matters referred to in Section 4.3,
contravene or conflict with or constitute a violation of any provision of any
law, regulation, judgment, injunction, order or decree binding upon or
applicable to the Company or any Subsidiary, (c) constitute a default under or
give rise to a right of termination, cancellation or acceleration of any right
or obligation of the Company or any Subsidiary or to a loss of any benefit to
which the Company or any Subsidiary is entitled under any provision of any
agreement, contract or other instrument binding upon the Company or any
Subsidiary or any license, franchise, permit or other similar authorization
held by the Company or any Subsidiary, or (d) result in the creation or
imposition of any Lien on any asset of the Company or any Subsidiary except,
in the case of clauses (b), (c) and (d), for such matters as would not,
individually or in the aggregate, have a Material Adverse Effect. For
purposes of this Agreement, "Lien" means, with respect to any asset, any
mortgage, lien, pledge, charge, security interest or encumbrance of any kind
in respect of such asset.
SECTION 4.5. Capitalization. The authorized capital stock of the
Company consists of 30,000,000 shares of Common Stock, $0.01 par value per
share. As of April 9, 1997, there were outstanding 16,288,011 shares of
Common Stock and stock options to purchase an aggregate of 2,102,346 shares of
Common Stock (all of which are currently exercisable) at an average exercise
price of $8.24 per share (of which options to purchase an aggregate of 687,608
shares of Common Stock were vested). All outstanding shares of capital stock
of the Company have been duly authorized and validly issued and are fully paid
and nonassessable. All shares of Common Stock issuable upon exercise of
outstanding stock options have been duly authorized and will have been validly
issued and will be fully paid and nonassessable. Except as set forth in this
Section and except for changes since April 9, 1997 resulting from the exercise
of stock options and purchase rights outstanding on such date, there are
outstanding (a) no shares of capital stock or other voting securities of the
Company, (b) no securities of the Company convertible into or exchangeable for
shares of capital stock or voting securities of the Company and (c) no options
or other rights to acquire from the Company, and no obligation of the Company
to issue, any capital stock, voting securities or securities convertible into
or exchangeable for capital stock or voting securities of the Company (the
items in clauses (a), (b) and (c) being referred to collectively as the
"Company Securities"). There are no outstanding obligations of the Company or
any Subsidiary to repurchase, redeem or otherwise acquire any Company
Securities.
SECTION 4.6. Subsidiaries. (a) Each Subsidiary is a corporation
duly incorporated, validly existing and, if applicable, in good standing under
the laws of its jurisdiction of incorporation, has all corporate powers and
all material governmental licenses, authorizations, consents and approvals
required to carry on its business as now conducted and is duly qualified to do
business as a foreign corporation and is in good standing in each jurisdiction
where the character of the property owned or leased by it or the nature of its
activities makes such qualification necessary, except for those jurisdictions
where failure to be so qualified would not, individually or in the aggregate,
have a Material Adverse Effect. For purposes of this Agreement, "Subsidiary"
means any corporation or other entity of which securities or other ownership
interests having ordinary voting power to elect a majority of the board of
directors or other persons performing similar functions are directly or
indirectly owned by the Company. All Subsidiaries and their respective
jurisdictions of incorporation are identified in the Company's annual report
on Form 10-K for the fiscal year ended March 31, 1996 (the "Company 10-K").
(b) All of the outstanding capital stock of, or other voting
securities or ownership interests in, each Subsidiary, is owned by the
Company, directly or indirectly, free and clear of any Lien and free of any
other limitation or restriction (including any restriction on the right to
vote, sell or otherwise dispose of such stock or other securities or ownership
interests). There are no outstanding (i) securities of the Company or any
Subsidiary convertible into or exchangeable for shares of capital stock or
other voting securities or ownership interests in any Subsidiary and (ii)
options or other rights to acquire from the Company or any Subsidiary, or
other obligation of the Company or any Subsidiary to issue, any capital stock,
voting securities or other ownership interests in, or any securities
convertible into or exchangeable for any capital stock, voting securities or
ownership interests in, any Subsidiary (the items in clauses (i) and (ii)
being referred to collectively as the "Subsidiary Securities"). There are no
outstanding obligations of the Company or any Subsidiary to repurchase, redeem
or otherwise acquire any outstanding Subsidiary Securities.
SECTION 4.7. SEC Filings. (a) The Company has delivered to
Buyer (i) the Company's annual reports on Form 10-K for its fiscal years ended
March 31, 1994, 1995, and 1996, (ii) its quarterly report on Form 10-Q for its
fiscal quarter ended December 31, 1996 (the "Company 10-Q"), (iii) its proxy
or information statements relating to meetings of, or actions taken without a
meeting by, the stockholders of the Company held since March 31, 1996 and (iv)
all of its other reports, statements, schedules and registration statements
filed with the Securities and Exchange Commission (the "SEC") since March 31,
1996.
(b) As of its filing date, each such report or statement filed
pursuant to the Exchange Act did not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make
the statements made therein, in the light of the circumstances under which
they were made, not misleading.
(c) Each such registration statement, as amended or supplemented,
if applicable, filed pursuant to the Securities Act of 1933 as of the date
such statement or amendment became effective did not 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.
SECTION 4.8. Financial Statements. The audited consolidated
financial statements and unaudited consolidated interim financial statements
of the Company included in its annual reports on Form 10-K referred to in
Section 4.7 and the Company 10-Q fairly present, in conformity with generally
accepted accounting principles applied on a consistent basis (except as may be
indicated in the notes thereto), the consolidated financial position of the
Company and its consolidated subsidiaries as of the dates thereof and their
consolidated results of operations and cash flows for the periods then ended
(subject to normal year-end adjustments in the case of any unaudited interim
financial statements). For purposes of this Agreement, "Balance Sheet" means
the consolidated balance sheet of the Company as of December 31, 1996 set
forth in the Company 10-Q and "Balance Sheet Date" means December 31, 1996.
SECTION 4.9. Disclosure Documents. (a) Each document required to
be filed by the Company with the SEC in connection with the transactions
contemplated by this Agreement (the "Company Disclosure Documents"),
including, without limitation, the Schedule 14D-9, the proxy or information
statement of the Company (the "Company Proxy Statement"), if any, to be filed
with the SEC in connection with the Merger, and any amendments or supplements
thereto will, when filed, comply as to form in all material respects with the
applicable requirements of the Exchange Act.
(b) At the time the Company Proxy Statement or any amendment or
supplement thereto is first mailed to stockholders of the Company and at the
time such stockholders vote on adoption of this Agreement, the Company Proxy
Statement, as supplemented or amended, if applicable, will not contain any
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading. At the time of the
filing of any Company Disclosure Document other than the Company Proxy
Statement, at the time of any distribution thereof and at the time of
consummation of the Offer, such Company Disclosure Document will not contain
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading. The representations
and warranties contained in this Section 4.9(b) will not apply to statements
or omissions included in the Company Disclosure Documents based upon
information furnished to the Company in writing by Buyer specifically for use
therein.
(c) The information with respect to the Company or any Subsidiary
that the Company furnishes to Buyer in writing specifically for use in the
Offer Documents will not, at the time of the filing thereof, at the time of
any distribution thereof and at the time of the consummation of the Offer,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the
statements made therein, in the light of the circumstances under which they
were made, not misleading.
SECTION 4.10. Absence of Certain Changes. Except as disclosed in
writing to Buyer prior to the date hereof, since the Balance Sheet Date, the
Company and Subsidiaries have conducted their business in the ordinary course
consistent with past practice and there has not been:
(a) any event, occurrence or development or state of
circumstances or facts which has had or could reasonably be expected to
have a Material Adverse Effect;
(b) any declaration, setting aside or payment of any dividend or
other distribution with respect to any shares of capital stock of the
Company, or any repurchase, redemption or other acquisition by the
Company or any Subsidiary of any outstanding shares of capital stock or
other securities of, or other ownership interests in, the Company or any
Subsidiary;
(c) any amendment of any material term of any outstanding
security of the Company or any Subsidiary;
(d) any incurrence, assumption or guarantee by the Company or any
Subsidiary of any indebtedness for borrowed money other than in the
ordinary course of business and in amounts and on terms consistent with
past practices;
(e) any creation or assumption by the Company or any Subsidiary
of any Lien on any material asset other than in the ordinary course of
business consistent with past practices;
(f) any making of any loan, advance or capital contributions to
or investment in any Person other than loans, advances or capital
contributions to or investments in wholly-owned Subsidiaries made in the
ordinary course of business consistent with past practices or any
amendment of the terms of any loan to executive officers or directors;
(g) any damage, destruction or other casualty loss (whether or
not covered by insurance) affecting the business or assets of the
Company or any Subsidiary which, individually or in the aggregate, has
had or could reasonably be expected to have a Material Adverse Effect;
(h) any transaction or commitment made, or any contract or
agreement entered into, by the Company or any Subsidiary relating to its
assets or business (including the acquisition or disposition of any
assets) or any relinquishment by the Company or any Subsidiary of any
contract or other right, in either case, material to the Company and the
Subsidiaries taken as a whole, other than transactions and commitments
in the ordinary course of business consistent with past practice and
those contemplated by this Agreement;
(i) any change in any method of accounting or accounting practice
by the Company or any Subsidiary, except for any such change required by
reason of a concurrent change in generally accepted accounting
principles or in Regulation S-X promulgated under the Exchange Act;
(j) any tax election, other than those consistent with past
practice, not required by law or any settlement or compromise of any
tax liability in either case that is material to the Company and the
Subsidiaries;
(k) any (i) grant of any severance or termination pay to any
director, officer or employee of the Company or any Subsidiary, (ii)
increase in benefits payable under any existing severance or termination
pay policies or employment agreements, (iii) entering into of any
employment, deferred compensation or other similar agreement (or any
amendment to any such existing agreement) with any director, officer or
employee of the Company or any Subsidiary or (iv) increase in
compensation, bonus or other benefits payable to directors, officers or
employees of the Company or any Subsidiary, other than any such
increases payable to employees other than directors or officers in the
ordinary course of business consistent with past practice; or
(l) any labor dispute, other than routine individual grievances,
or any activity or proceeding by a labor union or representative thereof
to organize any employees of the Company or any Subsidiary, which
employees were not subject to a collective bargaining agreement at the
Balance Sheet Date, or any lockouts, strikes, slowdowns, work stoppages
or threats thereof by or with respect to such employees.
SECTION 4.11. No Undisclosed Material Liabilities. There are no
material liabilities or obligations of the Company or any Subsidiary of any
kind whatsoever, whether accrued, contingent, absolute, determined,
determinable or otherwise, and there is no existing condition, situation or
set of circumstances which could reasonably be expected to result in such a
liability or obligation, other than:
(a) liabilities or obligations disclosed or provided for in the
Balance Sheet;
(b) liabilities or obligations incurred in the ordinary course of
business consistent with past practice since the Balance Sheet
Date, which in the aggregate are not material to the Company and
the Subsidiaries, taken as a whole; and
(c) liabilities or obligations under this Agreement.
SECTION 4.12. Litigation. Except as set forth in the Company 10-K,
there is no action, suit, investigation or proceeding pending, or to the
knowledge of the Company threatened, against or affecting the Company or any
Subsidiary or any of their respective properties or any of their respective
officers or directors in their capacity as officers or directors of the
Company (or any basis therefor) before any court or arbitrator or before or by
any governmental body, agency or official (x) as of the date hereof, or (y)
which could reasonably be expected, individually or in the aggregate, to have
a Material Adverse Effect.
SECTION 4.13. Taxes. The Company has filed all material tax
returns, statements, reports and forms required to be filed with any tax
authority when due and in accordance with all applicable laws, and all taxes
shown as due and payable thereon have been timely paid, or withheld and
remitted, to the appropriate taxing authority. No deficiency in payment of
any taxes for any period has been asserted by any taxing authority which
remains unsettled at the date hereof except for deficiencies which would not
have a Material Adverse Effect. The Company and Subsidiaries do not own any
interest in real property in the State of New York or in any other
jurisdiction in which a tax is imposed on the transfer of a controlling
interest in an entity that owns any interest in real property.
SECTION 4.14. ERISA. (a) The Company has provided Buyer with a
list identifying each "employee benefit plan", as defined in Section 3(3) of
the Employee Retirement Income Security Act of 1974 ("ERISA"), each
employment, severance or similar contract, plan, arrangement or policy and
each plan or arrangement (written or oral) providing for compensation,
bonuses, profit-sharing, stock option or other stock related rights or
other forms of incentive or deferred compensation, vacation benefits,
insurance coverage (including any self-insured arrangements), health or
medical benefits, disability benefits, workers' compensation, supplemental
unemployment benefits, severance benefits and post-employment or retirement
benefits (including compensation, pension, health, medical or life
insurance benefits) which is maintained, administered or contributed to by
the Company or any affiliate (as defined below) and covers any employee or
former employee of the Company or any affiliate or under which the Company
or any affiliate has any liability. Copies of such plans (and, if
applicable, related trust agreements) and all amendments thereto and
written interpretations thereof have been furnished to Buyer together with
the three most recent annual reports (Form 5500 including, if applicable,
Schedule B thereto) prepared in connection with any such plan. Such plans
are referred to collectively herein as the "Employee Plans". For purposes
of this Section, "affiliate" of any Person means any other Person which,
together with such Person, would be treated as a single employer under
Section 414 of the Code. At no time has the Company or any Person who from
time to time is or was an affiliate of the Company ever maintained an
employee benefit plan that is subject to Title IV of ERISA.
(b) Nothing done or omitted to be done and no transaction or holding of
any asset under or in connection with any Employee Plan has or will make the
Company or any Subsidiary, any officer or director of the Company or any
Subsidiary subject to any liability under Title I of ERISA or liable for any
tax pursuant to Section 4975 of the Code that could have a Material Adverse
Effect.
(c) Each Employee Plan which is intended to be qualified under
Section 401(a) of the Code is so qualified and has been so qualified during
the period from its adoption to date, and each trust forming a part thereof is
exempt from tax pursuant to Section 501(a) of the Code. The Company has
furnished to the Buyer copies of the most recent Internal Revenue Service
determination letters with respect to each such Plan. Each Employee Plan has
been maintained in material compliance with its terms and with the
requirements prescribed by any and all statutes, orders, rules and
regulations, including but not limited to ERISA and the Code, which are
applicable to such Plan.
(d) Subject to Section 8.5 and except as disclosed in writing to
Buyer prior to the date hereof, no employee of the Company or any Subsidiary
will become entitled to any retirement, severance or similar benefit or
enhanced or accelerated benefit solely as a result of the transactions
contemplated hereby. Without limiting the generality of the foregoing, no
amount required to be paid or payable to or with respect to any employee of
the Company or any Subsidiary in connection with the transactions contemplated
hereby (either solely as a result thereof or as a result of such transactions
in conjunction with any other event) will be an "excess parachute payment"
within the meaning of Section 280G of the Code.
(e) No Employee Plan provides post-retirement health and medical,
life or other insurance benefits for retired employees of the Company and
its affiliates.
(f) Except as disclosed in writing to Buyer prior to the date
hereof, there has been no amendment to, written interpretation or announcement
(whether or not written) by the Company or any of its affiliates relating to,
or change in employee participation or coverage under, any Employee Plan which
would increase materially the expense of maintaining such Employee Plan above
the level of the expense incurred in respect thereof for the twelve months
ended on the Balance Sheet Date.
(g) Except as disclosed in writing to Buyer prior to the date
hereof, neither the Company nor any Subsidiary is a party to or subject to any
union contract or any employment contract or arrangement with any officer,
consultant, director or employee.
SECTION 4.15. Compliance with Laws. Neither the Company nor any
Subsidiary is in violation of, or has violated, any applicable provisions of
any laws, statutes, ordinances or regulations, except for any such violation
that, individually or in the aggregate, has not had and could not reasonably
be expected to have a Material Adverse Effect.
SECTION 4.16. Finders' Fees. Except for Morgan Stanley & Co.
Incorporated and Vannevar Management, Inc., copies of whose engagement
agreements have been provided to Buyer, there is no investment banker, broker,
finder or other intermediary which has been retained by or is authorized to
act on behalf, of the Company or any Subsidiary who might be entitled to any
fee or commission from Buyer or any of its affiliates upon consummation of the
transactions contemplated by this Agreement.
SECTION 4.17. Patents and Other Proprietary Rights. The
Company and Subsidiaries have rights to use, whether through ownership,
licensing or otherwise, all patents, trademarks, service marks, trade
names, copyrights, trade secrets, licenses, information, proprietary rights
and processes of which the Company is aware that are necessary for its
business as now conducted (collectively the "Intellectual Property
Rights"). The Company and Subsidiaries have not assigned, hypothecated or
otherwise encumbered any of the Intellectual Property Rights and none of
the licenses included in the Intellectual Property Rights purport to grant
sole or exclusive licenses to another entity or person, including, without
limitation sole or exclusive licenses limited to specific fields of use.
To the best of the Company's knowledge, the patents owned by the Company
and Subsidiaries are valid and enforceable and any patent issuing from
patent applications of the Company and Subsidiaries will be valid and
enforceable, except as such invalidity or unenforceability would not have a
Material Adverse Effect. Except as disclosed in writing to Buyer prior to
the date hereof: (i) the Company has no knowledge of any infringement by
any other party of any of the Intellectual Property Rights, and (ii) the
Company and Subsidiaries have not entered into any agreement to indemnify
any other party against any charge of infringement of any of its
Intellectual Property Rights except for such matters as would not,
individually or in the aggregate, have a Material Adverse Effect. To the
best of the Company's knowledge, the Company and Subsidiaries have not and
do not violate or infringe any intellectual property right of any other
person or entity, and the Company and Subsidiaries have not received any
communication alleging that it violates or infringes the intellectual
property right of any other person or entity, except as disclosed in
writing to Buyer prior to the date hereof and except for any such
violations or infringements as would not, individually or in the aggregate,
have a Material Adverse Effect. The Company and Subsidiaries have not been
sued for infringing any intellectual property right of another entity or
person. Except as disclosed in writing to Buyer prior to the date hereof,
none of the processes, techniques and formulae, research and development
results and other know-how relating to the business of the Company and
Subsidiaries, the value of which to the Company is contingent upon
maintenance of the confidentiality thereof, has been disclosed by the
Company or any affiliate thereof to any person or entity other than those
persons or entities who are bound to hold such information in confidence
pursuant to confidentiality agreements or by operation of law.
SECTION 4.18. Environmental Matters. (a) Except as set forth
in the Company 10-K:
(i) no notice, notification, demand, request for information,
citation, summons, complaint or order has been received by, or, to
the knowledge of the Company, is pending or threatened by any Person
against, the Company or any Subsidiary nor has any material penalty
been assessed against the Company or any Subsidiary with respect to
any (A) alleged violation of any Environmental Law or liability
thereunder, (B) alleged failure to have any permit, certificate,
license, approval, registration or authorization required under any
Environmental Law, (C) generation, treatment, storage, recycling,
transportation or disposal of any Hazardous Substance or (D)
discharge, emission or release of any Hazardous Substance; and
(ii) there are no Environmental Liabilities that have had or
could reasonably be expected to have a Material Adverse Effect.
(b) Except as disclosed in writing to Buyer prior to the date
hereof, there has been no environmental investigation, study, audit, test,
review or other analysis conducted of which the Company has knowledge in
relation to the current or prior business of the Company or any property or
facility now or previously owned or leased by the Company or any Subsidiary
which has not been delivered to Buyer prior to the date hereof.
(c) For purposes of this Section 4.18, the following terms
shall have the meanings set forth below:
"Company" and "Subsidiary" shall include any entity which is, in
whole or in part, a predecessor of the Company or any Subsidiary;
"Environmental Laws" means any federal, state, local or foreign
law, treaty, judicial decision, regulation, rule, judgment, order,
decree, injunction, permit, agreement or governmental restriction
or requirement relating to human health, the environment or
pollutants, contaminants, chemicals, toxins, hazardous substances
or wastes.
"Environmental Liabilities" means any and all liabilities of or
relating to the Company and any Subsidiary, whether contingent or
fixed, actual or potential, known or unknown, which (i) arise
under or relate to matters covered by Environmental Laws and (ii)
relate to actions occurring or conditions existing on or prior to
the Effective Time; and
"Hazardous Substances" means any toxic, radioactive, corrosive or
otherwise hazardous substance, including petroleum, its
derivatives, by-products and other hydrocarbons, or any substance
having any constituent elements displaying any of the foregoing
characteristics, which in any event is regulated under
Environmental Laws.
SECTION 4.19 Approvals; Antitakeover Provisions. The Company has
taken all action necessary to approve the Offer and the Merger such that the
approval is sufficient to render entirely inapplicable to the Offer and Merger
or Buyer or Merger Subsidiary the provisions of Chapter 110C, 110D, 110E and
110F of the Massachusetts General Laws. No other antitakeover or similar
statute or regulation applies or purports to apply to the transactions
contemplated by this Agreement.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
OF BUYER
Buyer represents and warrants to the Company that:
SECTION 5.1. Corporate Existence and Power. Each of Buyer and
Merger Subsidiary is a corporation duly incorporated, validly existing and in
good standing under the laws of its jurisdiction of incorporation and has all
corporate powers and all material governmental licenses, authorizations,
consents and approvals required to carry on its business as now conducted.
Since the date of its incorporation, Merger Subsidiary has not engaged in any
activities other than in connection with or as contemplated by this Agreement
or in connection with arranging any financing required to consummate the
transactions contemplated hereby.
SECTION 5.2. Corporate Authorization. The execution, delivery and
performance by Buyer and Merger Subsidiary of this Agreement and the
consummation by Buyer and Merger Subsidiary of the transactions contemplated
hereby are within the corporate powers of Buyer and Merger Subsidiary and have
been duly authorized by all necessary corporate action. This Agreement
constitutes a valid and binding agreement of each of Buyer and Merger
Subsidiary.
SECTION 5.3. Governmental Authorization. The execution, delivery
and performance by Buyer and Merger Subsidiary of this Agreement and the
consummation by Buyer and Merger Subsidiary of the transactions contemplated
by this Agreement require no action by or in respect of, or filing with, any
governmental body, agency, official or authority other than (a) the filing of
the Articles of Merger in accordance with Massachusetts Law, (b) compliance
with any applicable requirements of the HSR Act; and (c) compliance with any
applicable requirements of the Exchange Act.
SECTION 5.4. Non-Contravention. The execution, delivery and
performance by Buyer and Merger Subsidiary of this Agreement and the
consummation by Buyer and Merger Subsidiary of the transactions contemplated
hereby do not and will not (a) contravene or conflict with the certificate of
incorporation or bylaws of Buyer or the Articles of Organization or bylaws of
Merger Subsidiary, (b) assuming compliance with the matters referred to in
Section 5.3, contravene or conflict with any provision of law, regulation,
judgment, order or decree binding upon Buyer or Merger Subsidiary, or (c)
constitute a default under or give rise to any right of termination,
cancellation or acceleration of any right or obligation of Buyer or Merger
Subsidiary or to a loss of any benefit to which Buyer or Merger Subsidiary is
entitled under any agreement, contract or other instrument binding upon Buyer
or Merger Subsidiary, except, in the case of (b) and (c), for such matters as
would not materially adversely effect the ability of Buyer and Merger
Subsidiary to consummate the transactions contemplated by this Agreement.
SECTION 5.5. Disclosure Documents. (a) The information with
respect to Buyer and its subsidiaries that Buyer furnishes to the Company in
writing specifically for use in any Company Disclosure Document will not
contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements made therein, in the light of
the circumstances under which they were made, not misleading (i) in the case
of the Company Proxy Statement at the time the Company Proxy Statement or any
amendment or supplement thereto is first mailed to stockholders of the Company
and at the time the stockholders vote on adoption of this Agreement, and (ii)
in the case of any Company Disclosure Document other than the Company Proxy
Statement, at the time of the filing thereof, at the time of any distribution
thereof, and at the time of consummation of the Offer.
(b) The Offer Documents, when filed, will comply as to form in
all material respects with the applicable requirements of the Exchange Act and
will not at the time of the filing thereof, at the time of any distribution
thereof or at the time of consummation of the Offer, contain any untrue
statement of a material fact or omit to state any material fact necessary to
make the statements made therein, in the light of the circumstances under
which they were made, not misleading, provided, that this representation and
warranty will not apply to statements or omissions in the Offer Documents
based upon information furnished to Buyer or Merger Subsidiary in writing by
the Company specifically for use therein.
SECTION 5.6. Finders' Fees. Except for Greenhill & Co., LLC,
whose fees will be paid by Buyer, there is no investment banker, broker,
finder or other intermediary who might be entitled to any fee or commission
from the Company or any of its affiliates upon consummation of the
transactions contemplated by this Agreement.
ARTICLE 6
COVENANTS OF THE COMPANY
SECTION 6.1. Conduct of the Company. From the date hereof until
the Effective Time, the Company and the Subsidiaries shall conduct their
business in the ordinary course consistent with past practice and shall use
their best efforts to preserve intact their business organizations and
relationships with third parties and to keep available the services of their
present officers and employees. Without limiting the generality of the
foregoing, from the date hereof until the Effective Time:
(a) the Company will not adopt or propose any change in its
Articles of Organization or bylaws;
(b) the Company will not, and will not permit any Subsidiary to,
merge or consolidate with any other Person or acquire a material amount
of assets of any other Person, other than purchases of materials or
products in the ordinary course of business;
(c) the Company will not, and will not permit any Subsidiary to,
sell, lease, license or otherwise dispose of any material assets or
property except (i) pursuant to existing contracts or commitments and
(ii) in the ordinary course consistent with past practice;
(d) the Company will not, and will not permit any Subsidiary
to, settle or compromise any suit or claims or threatened suit or
claim relating to the transactions contemplated hereby;
(e) the Company will not, and will not permit any Subsidiary to,
agree or commit to do any of the foregoing; and
(f) the Company will not, and will not permit any Subsidiary to,
take or agree or commit to take any action that would make any
representation and warranty of the Company hereunder inaccurate in any
respect at, or as of any time prior to, the Effective Time.
SECTION 6.2. Stockholder Meeting; Proxy Material. The Company
shall cause a meeting of its stockholders (the "Company Stockholder Meeting")
to be duly called and held as soon as reasonably practicable following the
consummation of the Offer for the purpose of voting on the approval and
adoption of this Agreement, unless a vote shall not be required under
Massachusetts Law. The Directors of the Company shall, except as may be
required, in response to an unsolicited bona fide written Acquisition Proposal
(as defined in Section 6.4), in order to comply with the fiduciary duties of
the Board of Directors under applicable law as advised in writing by Company
Counsel, recommend approval and adoption of this Agreement by the Company's
stockholders. In connection with such meeting, the Company (a) will promptly
prepare and file with the SEC, will use its best efforts to have cleared by
the SEC and will thereafter mail to its stockholders as promptly as
practicable the Company Proxy Statement and all other proxy materials for such
meeting, (b) will use its best efforts to obtain the necessary approvals by
its stockholders of this Agreement and the transactions contemplated hereby
and (c) will otherwise comply with all legal requirements applicable to such
meeting.
SECTION 6.3. Access to Information. From the date hereof until
the Effective Time, the Company will give Buyer, its counsel, financial
advisors, auditors and other authorized representatives reasonable access to
the offices, properties, books and records of the Company and the Subsidiaries
and such financial and operating data and other information as such Persons
may reasonably request and will instruct the Company's employees, counsel and
financial advisors to cooperate with Buyer in its investigation of the
business of the Company and the Subsidiaries; provided that no investigation
pursuant to this Section 6.3, shall affect any representation or warranty
given by the Company to Buyer hereunder.
SECTION 6.4. Other Offers. From the date hereof until the
termination hereof, the Company and the Subsidiaries and the officers,
directors, employees or other agents of the Company and the Subsidiaries will
not, directly or indirectly, (i) take any action to solicit, initiate or
encourage any Acquisition Proposal or (ii) except as may be required, in
response to an unsolicited bona fide written Acquisition Proposal, in order to
comply with the fiduciary duties of the Board of Directors under applicable
law as advised in writing by Company Counsel, engage in negotiations with, or
disclose any nonpublic information relating to the Company or any Subsidiary
or afford access to the properties, books or records of the Company or any
Subsidiary to, any Person. The Company will promptly (and in no event later
than 24 hours after receipt of the relevant Acquisition Proposal) notify
(which notice shall be provided orally and in writing and shall identify the
Person making the relevant Acquisition Proposal and set forth the material
terms thereof) Buyer after (i) the Company has received any Acquisition
Proposal, (ii) the Company has actual knowledge that any Person is considering
making an Acquisition Proposal, or (iii) the Company has received any request
for nonpublic information relating to the Company or any Subsidiary, or for
access to the properties, books or records of the Company or any Subsidiary,
by any Person that the Company has actual knowledge is considering making, or
has made, an Acquisition Proposal. The Company will keep Buyer fully informed
of the status and details of any such Acquisition Proposal or request. The
Company shall not engage in negotiations with, or disclose any nonpublic
information to, any such Person unless it receives from such Person an
executed confidentiality agreement with terms no less favorable to the Company
than the Confidentiality Agreement (as defined in Section 11.9). The Company
shall, and shall cause its Subsidiaries and the Company's directors, officers,
employees, financial advisors and other agents or representatives to, cease
immediately and cause to be terminated all activities, discussions or
negotiations, if any, with any Persons conducted heretofore with respect to
any Acquisition Proposal. For purposes of this Agreement, "Acquisition
Proposal" means any offer or proposal for a merger or other business
combination involving the Company or any Subsidiary or the acquisition of any
equity interest in, or a substantial portion of the assets of, the Company or
any Subsidiary, other than the transactions contemplated by this Agreement.
ARTICLE 7
COVENANTS OF BUYER
SECTION 7.1. Obligations of Merger Subsidiary. Buyer will take
all action necessary to cause Merger Subsidiary to perform its obligations
under this Agreement and to consummate the Merger on the terms and conditions
set forth in this Agreement.
SECTION 7.2. Voting of Shares. Buyer agrees to vote all Shares
beneficially owned by it in favor of adoption of this Agreement at the Company
Stockholder Meeting.
SECTION 7.3. Director and Officer Liability. For five years
after the Effective Time, Buyer will cause the Surviving Corporation to
indemnify and hold harmless the present and former officers and directors of
the Company in respect of acts or omissions occurring prior to the Effective
Time to the extent provided under the Company's Articles of Organization and
bylaws in effect on the date hereof; provided that such indemnification shall
be subject to any limitation imposed from time to time under applicable law.
For five years after the Effective Time, Buyer will cause the Surviving
Corporation to use its best efforts to provide officers' and directors'
liability insurance in respect of acts or omissions occurring prior to the
Effective Time covering each such Person currently covered by the Company's
officers' and directors' liability insurance policy on terms with respect
to coverage and amount no less favorable than those of such policy in
effect on the date hereof, provided that in satisfying its obligation under
this Section, Buyer shall not be obligated to cause the Surviving
Corporation to pay premiums in excess of 150% of the amount per annum the
Company paid in the twelve months ended December 31, 1996, which amount has
been disclosed to Buyer. Buyer, Merger Subsidiary and the Company
acknowledge and agree that any directors and officers, present or former,
of the Company are third party beneficiaries under this Section 7.3 and, as
such, shall be entitled to the benefits of all covenants and obligations of
Buyer hereunder.
SECTION 7.4. Tax Certification. At any time during the period beginning
on the date hereof and ending on the Effective Time, the Company shall provide
to Buyer, within two business days of a request by Buyer, a certificate
meeting the requirements of Treas. Reg. Sec. 1.897-2(h) to the effect that the
Company is not, nor has it been within 5 years of the date thereof, a "United
States real property holding corporation" as defined in Section 897 of the
Code.
ARTICLE 8
COVENANTS OF BUYER
AND THE COMPANY
SECTION 8.1. Best Efforts. Subject to the terms and conditions
of this Agreement, each party will use its best efforts to take, or cause to
be taken, all actions and to do, or cause to be done, all things necessary,
proper or advisable under applicable laws and regulations to consummate the
transactions contemplated by this Agreement.
SECTION 8.2. Certain Filings. The Company and Buyer shall
cooperate with one another (a) in connection with the preparation of the
Company Disclosure Documents and the Offer Documents, (b) in determining
whether any action by or in respect of, or filing with, any governmental body,
agency or official, or authority is required, or any actions, consents,
approvals or waivers are required to be obtained from parties to any material
contracts, in connection with the consummation of the transactions
contemplated by this Agreement and (c) in seeking any such actions, consents,
approvals or waivers or making any such filings, furnishing information
required in connection therewith or with the Company Disclosure Documents or
the Offer Documents and seeking timely to obtain any such actions, consents,
approvals or waivers.
SECTION 8.3. Public Announcements. Buyer and the Company will
consult with each other before issuing any press release or making any public
statement with respect to this Agreement and the transactions contemplated
hereby and, except as may be required by applicable law or any listing
agreement with any national securities exchange or automated quotation system,
will not issue any such press release or make any such public statement prior
to such consultation.
SECTION 8.4. Notices of Certain Events. The Company shall
promptly notify Buyer, and Buyer shall promptly notify the Company, of:
(a) any notice or other communication from any Person alleging that the
consent of such Person is or may be required in connection with the
transactions contemplated by this Agreement;
(b) any notice or other communication from any governmental or
regulatory agency or authority in connection with the transactions
contemplated by this Agreement; and
(c) with respect only to the Company, any actions, suits, claims,
investigations or proceedings commenced or, to the best of its knowledge
threatened which, if pending on the date of this Agreement, would have
been required to have been disclosed pursuant to Section 4.12 or which
relate to the consummation of the transactions contemplated by this
Agreement.
SECTION 8.5. Employee Benefits. Buyer and the Company agree to
appoint personnel from their respective human relations departments that will
meet and coordinate the manner of transition of the insurance, compensation
and other benefit plans of the Company following the Merger. The parties
agree that for two years following the Effective Time, the Company's employees
will be provided benefits that are substantially comparable in the aggregate
to those provided by the Company to its employees as of the date hereof,
excluding all forms of stock-based or equity-based compensation.
SECTION 8.6. Further Assurances. At and after the Effective
Time, the officers and directors of the Surviving Corporation will be
authorized to execute and deliver, in the name and on behalf of the Company or
Merger Subsidiary, any deeds, bills of sale, assignments or assurances and to
take and do, in the name and on behalf of the Company or Merger Subsidiary,
any other actions and things to vest, perfect or confirm of record or
otherwise in the Surviving Corporation any and all right, title and interest
in, to and under any of the rights, properties or assets of the Company
acquired or to be acquired by the Surviving Corporation as a result of, or in
connection with, the Merger.
ARTICLE 9
CONDITIONS TO THE MERGER
SECTION 9.1. Conditions to the Obligations of Each Party. The
obligations of the Company, Buyer and Merger Subsidiary to consummate the
Merger are subject to the satisfaction of the following conditions:
(a) if required by Massachusetts Law, this Agreement shall have
been adopted by the stockholders of the Company in accordance with such
law;
(b) any applicable waiting period under the HSR Act relating to
the Merger shall have expired or has been terminated;
(c) no provision of any applicable law or regulation and no
judgment, injunction, order or decree shall prohibit the consummation
of the Merger; and
(d) Buyer shall have purchased Shares pursuant to the Offer.
ARTICLE 10
TERMINATION
SECTION 10.1. Termination. This Agreement may be terminated and
the Merger may be abandoned at any time prior to the Effective Time
(notwithstanding any approval of this Agreement by the stockholders of the
Company):
(a) by mutual written consent of the Company and Buyer;
(b) by either the Company or Buyer, if the Offer has not been
consummated by June 4, 1997;
(c) by either the Company or Buyer, if there shall be any law or
regulation that makes consummation of the Offer or the Merger illegal or
otherwise prohibited or if any judgment, injunction, order or decree
enjoining Buyer or the Company from consummating the Offer or the Merger
is entered and such judgment, injunction, order or decree shall become
final and nonappealable;
(d) by Buyer, upon the occurrence of any Trigger Event
described in clauses (i) or (ii) of Section 11.4(b); or
(e) by the Company, upon the occurrence of any Trigger Event
described in clause (i)(A) of Section 11.4(b).
The party desiring to terminate this Agreement pursuant to clauses (b), (c) or
(d) shall give written notice of such termination to the other party in
accordance with Section 11.1.
SECTION 10.2. Effect of Termination. If this Agreement is
terminated pursuant to Section 10.1, this Agreement shall become void and of
no effect with no liability on the part of any party hereto, except that the
agreements contained in Section 11.4 shall survive the termination hereof.
ARTICLE 11
MISCELLANEOUS
SECTION 11.1. Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including telecopy
or similar writing) and shall be given,
if to Buyer or Merger
Subsidiary to: Alan G. Lutz
Senior Vice President
Communication Products Group
Compaq Computer Corporation
20555 SH 249
Houston, TX 77070
with copies to: J. David Cabello, Esq.
Senior Vice President
General Counsel and Secretary
Compaq Computer Corporation
20555 SH 249
Houston, TX 77070
Davis Polk & Wardwell
450 Lexington Avenue
New York, NY 10017
Att: Christopher Mayer, Esq.
if to the Company, to: Microcom, Inc.
500 River Ridge Drive
Norwood, MA 02062-5028
Att: Lewis A. Bergins
President and Chief Executive Officer
with a copy to: Choate, Hall & Stewart
Exchange Place
53 State Street
Boston, MA 02109
Att: William C. Rogers, Esq.
or such other address or telecopy number as such party may hereafter specify
for the purpose by notice to the other parties hereto. Each such notice,
request or other communication shall be effective (a) if given by telecopy,
when such telecopy is transmitted to the telecopy number specified in this
Section and the appropriate telecopy confirmation is received or (b) if given
by any other means, when delivered at the address specified in this Section.
SECTION 11.2. Survival of Representations and Warranties. The
representations and warranties and agreements contained herein and in any
certificate or other writing delivered pursuant hereto shall not survive the
Effective Time or the termination of this Agreement except for the agreements
set forth in Section 11.4.
SECTION 11.3. Amendments; No Waivers. (a) Any provision of this
Agreement may be amended or waived prior to the Effective Time if, and only
if, such amendment or waiver is in writing and signed, in the case of an
amendment, by the Company, Buyer and Merger Subsidiary or in the case of a
waiver, by the party against whom the waiver is to be effective.
(b) A termination of this Agreement pursuant to Section 10.01 or an
amendment of this Agreement in accordance with Section 11.3(a) shall, in order
to be effective, require in the case of the Company action by its Board of
Directors or the duly authorized designee of its Board of Directors. In the
event that Buyer's designees are appointed or elected to the Board of
Directors of the Company as provided in Section 1.3, after the consummation of
the Offer and prior to the Effective Time, the affirmative vote of at least a
majority of the Continuing Directors shall be required for the Company to
agree to amend, waive compliance with or terminate this Agreement.
(c) No failure or delay by any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights
and remedies herein provided shall be cumulative and not exclusive of any
rights or remedies provided by law.
SECTION 11.4. Fees and Expenses. (a) Except as otherwise
provided in this Section, all costs and expenses incurred in connection with
this Agreement shall be paid by the party incurring such cost or expense.
(b) The Company agrees to pay Buyer a fee in immediately available
funds equal to $10,460,000 promptly, but in no event later than two
business days, after the termination of this Agreement as a result of the
occurrence of any of the events set forth below (a "Trigger Event"):
(i) (A) the Company shall have entered into, or shall have
publicly announced its intention to enter into, an agreement or an
agreement in principle with respect to any Acquisition Proposal,
or (B) the Board of Directors of the Company shall have withdrawn
or materially modified in a manner adverse to Buyer the Board's
approval or recommendation of the Offer or the Merger;
(ii) any person or group (as defined in Section 13(d)(3) of
the Exchange Act) (other than Buyer, the Merger Subsidiary or any
affiliate thereof) shall have become the beneficial owner (as
defined in Rule 13d-3 promulgated under the Exchange Act) of a
majority of the outstanding Shares; or
(iii) this Agreement shall have been terminated in accordance
with Section 10.1(b) and (x) the Company shall have failed to
observe or perform in any material respect any of its obligations
under this Agreement or (y) an Acquisition Proposal is received
prior to June 4, 1997 and not publicly rejected by the Company's
Board of Directors.
(c) The Company agrees to pay Buyer an amount in immediately available
funds equal to the sum of (i) Buyer's out-of-pocket expenses incurred in
connection with this transaction (but not to exceed $2 million ) and (ii) $ 2
million, if this Agreement shall have been terminated in accordance with
Section 10.1(b) and any representation or warranty made by the Company in this
Agreement shall not have been true and correct as of the date hereof; provided
that in the event the Company has made a payment to Buyer pursuant to Section
11.4(b) it shall not be required to make any further payment to Buyer pursuant
to this Section 11.4(c).
SECTION 11.5. Successors and Assigns. The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns, provided that no party
may assign, delegate or otherwise transfer any of its rights or obligations
under this Agreement without the consent of the other parties hereto except
that Buyer may transfer or assign, in whole or from time to time in part,
to one or more of its affiliates, the right to purchase shares pursuant to
the Offer, but any such transfer or assignment will not relieve Buyer of
its obligations under the Offer or prejudice the rights of tendering
stockholders to receive payment for Shares validly tendered and accepted
for payment pursuant to the Offer.
SECTION 11.6. Governing Law. This Agreement shall be construed in
accordance with and governed by the laws of the State of Delaware.
SECTION 11.7. Counterparts; Effectiveness; Third Party
Beneficiaries. This Agreement may be signed in any number of counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument. This Agreement shall become
effective when each party hereto shall have received counterparts hereof
signed by all of the other parties hereto. Except for Section 7.3 hereof, no
provision of this Agreement is intended to confer upon any Person other than
the parties hereto any rights or remedies hereunder.
SECTION 11.8. Entire Agreement. This Agreement and the
Confidentiality and Nondisclosure Agreement effective as of April 9, 1997
between Buyer and the Company ("Confidentiality Agreement") constitute the
entire agreement among Buyer, Merger Subsidiary and the Company with
respect to the subject matter hereof and supersede all prior agreements and
understandings, both written and oral, among Buyer, Merger Subsidiary and
the Company with respect to the subject matter hereof.
SECTION 11.9. Definitions. Each of the following terms is
defined in the Section set forth opposite such term:
Term Section
---- -------
Acquisition Proposal 6.4
Articles of Merger 2.1
Balance Sheet 4.8
Balance Sheet Date 4.8
Code 2.5
Common Stock 1.1
Company Counsel 1.2
Company Disclosure Documents 4.9
Company Proxy Statement 4.9
Company Securities 4.5
Company Stockholder Meeting 6.2
Company Stock Purchase Plan 2.5
Company 10-K 4.6
Company 10-Q 4.7
Confidentiality Agreement 11.8
Continuing Directors 1.3
Effective Time 2.1
Employee Plans 4.14
Environmental Laws 4.18
Environmental Liabilities 4.18
ERISA 4.14
Exchange Act 4.3
Exchange Agent 2.3
Hazardous Substances 4.18
HSR Act 4.3
Lien 4.4
Massachusetts Law 1.2
Material Adverse Effect 4.1
MBCL 1.2
Merger 2.1
Merger Consideration 2.2
Minimum Condition 1.1
Offer 1.1
Offer Documents 1.1
Option Restricted Stock 2.7
Person 2.3
Schedule 14D-9 1.2
SEC 4.7
Shares 1.1
Subsidiary 4.6
Subsidiary Securities 4.6
Substitute Option 2.5
Surviving Corporation 2.1
Trigger Event 11.4
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed as an instrument under seal by their
respective authorized officers as of the day and year first above written.
MICROCOM, INC.
By: /s/ Lewis A. Bergins
-------------------------------------
Lewis A. Bergin
President
By: /s/ Peter Minihan
-------------------------------------
Peter Minihan
Treasurer
COMPAQ COMPUTER CORPORATION
By: /s/ Eckhard Pfieffer
-------------------------------------
Eckhard Pfeiffer
President and Chief Executive Officer
COMPAQ-BOSTON, INC.
By: /s/ Alan G. Lutz
-------------------------------------
Alan G. Lutz
President
By: /s/ Earl l. Mason
-------------------------------------
Earl L. Mason
Treasurer
ANNEX I
Notwithstanding any other provision of the Offer, Buyer shall not
be required to accept for payment or pay for any Shares, and may terminate the
Offer, if (i) the Minimum Condition has not been satisfied by June 4, 1997,
(ii) the applicable waiting period under the HSR Act shall not have expired or
been terminated by June 4, 1997, or (iii) at any time on or after April 9,
1997 and prior to the acceptance for payment of Shares, any of the following
conditions exist:
(a) there shall be threatened, instituted or pending any action,
suit, investigation or proceeding by any government or governmental
authority or agency, domestic or foreign, or by any other person,
domestic or foreign, before any court or governmental authority or
agency, domestic or foreign, (i) challenging or seeking to make illegal,
to delay materially or otherwise directly or indirectly to restrain or
prohibit the making of the Offer, the acceptance for payment of or
payment for some of or all the Shares pursuant to the Offer or the
consummation of the Merger, seeking to obtain material damages or
otherwise directly or indirectly relating to the transactions
contemplated by the Offer or the Merger, (ii) seeking to restrain or
prohibit Buyer's ownership or operation (or that of its respective
subsidiaries or affiliates) of all or any material portion of the
business or assets of the Company and the Subsidiaries, taken as a
whole, or of Buyer and its subsidiaries, taken as a whole, or to compel
Buyer or any of its subsidiaries or affiliates to dispose of or hold
separate all or any material portion of the business or assets of the
Company and the Subsidiaries, taken as a whole, or of Buyer and its
subsidiaries, taken as a whole, (iii) seeking to impose or confirm
material limitations on the ability of Buyer or any of its subsidiaries
or affiliates effectively to exercise full rights of ownership of the
Shares, including, without limitation, the right to vote any Shares
acquired or owned by Buyer or any of its subsidiaries or affiliates on
all matters properly presented to the Company's stockholders, or (iv)
seeking to require divestiture by Buyer or any of its subsidiaries or
affiliates of any Shares, or (v) that otherwise is reasonably likely to
have a Material Adverse Effect or materially adversely affect Buyer and
its subsidiaries, taken as a whole; or
(b) there shall be any action taken, or any statute, rule,
regulation, injunction, order or decree proposed, enacted, enforced,
promulgated, issued or deemed applicable to the Offer or the Merger, by
any court, government or governmental authority or agency, domestic or
foreign other than the application of the waiting period provisions of
the HSR Act to the Offer or the Merger that is reasonably likely,
directly or indirectly, to result in any of the consequences referred to
in clauses (i) through (v) of paragraph (a) above; or
(c) (i) there shall be initiated, threatened, instituted or
pending any action, suit, investigation or proceeding by any government
or governmental authority or agency, domestic or foreign, that, in the
reasonable judgment of Buyer, would materially adversely affect the
Company and its Subsidiaries, taken as a whole, or (ii) except as
disclosed in writing to Buyer prior to the date hereof, there has been
since the Balance Sheet Date any event, occurrence or development or
state of circumstances or facts which has had or could reasonably be
expected to have a Material Adverse Effect; or
(d) there shall have occurred a decline of at least 20% in
either the Dow Jones Average of Industrial Stocks or the Standard &
Poor's 500 Index from the date of this Agreement through the date of
termination or expiration of the Offer; or
(e) the Company shall have breached or failed to perform in any
material respect any of its covenants or agreements under the Merger
Agreement, or any of the representations and warranties of the Company
set forth in the Merger Agreement shall not be true in any material
respect when made or at any time prior to consummation of the Offer as
if made at and as of such time (except as to any representation or
warranty which speaks as of a specific date, which must be untrue as of
such date); or
(f) the Company shall have entered into, or shall have publicly
announced its intention to enter into, an agreement or an agreement in
principle with respect to any Acquisition Proposal or the Board of
Directors of the Company shall have withdrawn or materially modified in
a manner adverse to Buyer the Board's approval or recommendation of the
Offer or the Merger; or
(g) any person or group (as defined in Section 13(d)(3) of the
Exchange Act) (other than Buyer, the Merger Subsidiary or any
affiliate thereof) shall have become the beneficial owner (as defined
in Rule 13d-3 promulgated under the Exchange Act) of a majority of
the outstanding Shares; or
(h) the Merger Agreement shall have been terminated in accordance
with its terms.
The foregoing conditions are for the sole benefit of Buyer and Merger
Subsidiary and may, subject to the terms of the Agreement, be waived by Buyer
and Merger Subsidiary in whole or in part at any time and from time to time in
their discretion. The failure by Buyer or Merger Subsidiary at any time to
exercise any of the foregoing rights shall not be deemed a waiver of any such
right, the waiver of any such right with respect to particular facts and
circumstances shall not be deemed a waiver with respect to any other facts and
circumstances, and each such right shall be deemed an ongoing right that may
be asserted at any time and from time to time prior to the Effective Time.
EXHIBIT (c)(2)
[Letterhead of Compaq Computer Corporation]
April 9, 1997
Mr. Lewis A. Bergins
Microcom, Inc.
500 River Ridge Drive
Norwood, MA 02062
Dear Lew:
On behalf of Compaq Computer Corporation ("Compaq"), it is our pleasure to
offer you, subject to consummation of the merger of Microcom, Inc.
("Microcom") with Compaq as defined in the Agreement and Plan of Merger among
Compaq, Microcom and Compaq-Boston, Inc. dated April 9, 1997 (the
"Acquisition"), the position of President of Microcom, reporting to Alan Lutz,
Senior Vice President, pursuant to the following terms and conditions.
Effective upon the Acquisition, these terms and conditions will supersede the
terms of any existing agreement between you and Microcom relating to your
employment by Microcom, and any such existing agreement will thereupon be
terminated.
1. Base salary $285,000 per annum, subject to normal yearly review for
increases. Target bonus for Compaq fiscal year 1997 $215,000
(payable to employees of record on January 1, 1998), subject to
performance criteria to be agreed upon within thirty days from the
date hereof, such as execution of product roadmap, retention of
key employees, and successful operating improvements. If
performance criteria is not agreed upon within thirty (30) days,
you may terminate this agreement and receive a severance payment of
(1) year's salary.
2. You will enter into the Compaq standard nondisclosure and
intellectual property agreement (the "Nondisclosure agreement")
prior to the consummation of the Acquisition and commencing
employment hereunder.
3. Stock option granted at closing of the Acquisition to purchase
25,000 shares of Compaq Common Stock under Compaq's 1989 Equity
Incentive Plan. Option price will be 100% of the Compaq closing
price on the last trading day of the month in which the
Acquisition closes. Stock will vest 20% on the first anniversary
of the date of grant. The remaining 80% will thereafter vest in
equal monthly installments over an additional 48 months. The
option will have a 10-year exercise period and will be a
nonqualified option.
4. You shall receive severance compensation of one year of salary
continuance at the annual base compensation rate in effect at the
time of termination, subject to your continued compliance with the
Nondisclosure Agreement if either of the following events occurs:
(a) either party decides not to renew this Agreement beyond the
initial term and there has been no involuntary termination of your
employment by Compaq "for cause," and you have not voluntarily
terminated your employment with us during the initial term of this
agreement, or
(b) Compaq has terminated the Agreement without cause during the
initial term.
5. Participation in such executive and employee benefit programs as
shall be in effect from time to time for officers of Microcom,
subject to the terms and conditions of such programs.
6. Being over fifty-five (55) years of age and having worked for
Microcom/Compaq for over ten (10) continuous years, you will be
entitled to benefits under Compaq's Retirement Health Plan.
For purposes of whether the one year salary continuance has been triggered on
involuntary dismissal, we define "for cause" as dishonesty, theft, fraud,
conviction of any crime, unethical business behavior, violation of the
Nondisclosure Agreement or willfully engaging in misconduct which is injurious
to Compaq or Microcom.
The terms of incentive bonuses in subsequent fiscal years will be discussed
with you and set at the beginning of each fiscal year, which is consistent
with existing policy.
Subject to the following sentence, this agreement will expire on the one-year
anniversary of the Acquisition. This Agreement may be renewed by agreement of
the parties for an additional one-year period on the first annual anniversary
date of the Acquisition.
We are very pleased that you have agreed to join us in this leadership role.
We look forward to a productive and successful working relationship with you.
If this letter accurately sets forth the terms of the offer that we have
negotiated with you, would you kindly indicate your acceptance in the space
provided and send one signed copy back to me at Compaq.
Sincerely,
/s/ Doug Richards
- ------------------------
Doug Richards
Vice President
I accept the position of President of Microcom effective upon the Acquisition
in accordance with the terms hereof this ______ day of April 1997. I agree
that, effective upon the Acquisition, this agreement will supersede any
existing agreement between Microcom and me relating to my employment by
Microcom, and any such existing agreement will be terminated.
/s/ Lewis A. Bergins
- ------------------------
Lewis A. Bergins
EXHIBIT (c)(3)
[Letterhead of Microcom, Inc.]
April 9, 1997
Alan G. Lutz, Senior Vice President
and General Manager, Communications
Products Group
Compaq Computer Corporation
20555 SH249
Houston, Texas 77070
CONFIDENTIALITY AGREEMENT
Dear Alan:
In connection with your possible interest in the acquisition of all or part
of the equity or assets as contemplated by that certain draft Agreement and
Plan of Merger, (any, a "Transaction") of Microcom, Inc. (the "Company"),
you have requested that we or our representatives furnish you or your
representatives with certain information relating to the Company or the
Transaction. All such information (whether written or oral) furnished
(whether before or after the date hereof) by us or our directors, officers,
employees, affiliates, representatives (including, without limitation,
financial advisors, attorneys and accountants) or agents (collectively,
"our Representatives") to you or your directors, officers, employees,
affiliates, representatives (including, without limitation, financial
advisors, attorneys and accountants) or agents or your potential sources of
financing for the Transaction (collectively, "your Representatives") and
all analyses, compilations, forecasts, studies or other documents prepared
by you or your Representatives in connection with your or their review of,
or your interest in, the Transaction which contain or reflect any such
information is hereinafter referred to as the "Information". The term
Information will not, however, include information which (i) is or becomes
publicly available other than as a result of a disclosure by you or your
Representatives or (ii) is or becomes available to you on a nonconfidential
basis from a source (other than us or our Representatives) which, to the
best of your knowledge after due inquiry, is not prohibited from disclosing
such information to you by a legal, contractual or fiduciary obligation to
us.
Accordingly, you hereby agree that:
1. You and your Representatives (i) will keep the Information confidential
and will not (except as required by applicable law, regulation or legal
process, and only after compliance with paragraph 3 below), without our
prior written consent, disclose any Information in any manner
whatsoever, and (ii) will not use any Information other than in
connection with the Transaction; provided, however, that you may reveal
the Information to your Representatives (a) who need to know the
Information for the purpose of evaluating the Transaction, (b) who are
informed by you of the confidential nature of the Information and (c)
who agree to act in accordance with the terms of this letter agreement.
You will cause your Representatives to observe the terms of this letter
agreement, and you will be responsible for any breach of this letter
agreement by any of your Representatives.
2. In the event that you or any of your Representatives are requested
pursuant to, or required by, applicable law, regulation or legal process
to disclose any of the Information, you will notify us promptly so that
we may seek a protective order or other appropriate remedy or, in our
sole discretion, waive compliance with the terms of this letter
agreement. In the event that no such protective order or other remedy
is obtained, or that the Company waives compliance with the terms of
this letter agreement, you will furnish only that portion of the
Information which you are advised by counsel is legally required and
will exercise all reasonable efforts to obtain reliable assurance that
confidential treatment will be accorded the Information.
3. If you determine not to proceed with the Transaction, you will promptly
inform our Representative, Morgan Stanley & Co. Incorporated ("Morgan
Stanley"), of that decision and, in that case, and at any time upon the
request of the Company or any of our Representatives, you will either
(i) promptly destroy all copies of the written Information in your or
your Representatives' possession and confirm such destruction to us in
writing, or (ii) promptly deliver to the Company at your own expense all
copies of the written Information in your or your Representatives'
possession. Any oral Information will continue to be subject to the
terms of this letter agreement.
4. You acknowledge that neither we, nor Morgan Stanley or its affiliates,
nor our other Representatives, nor any of our or their respective
officers, directors, employees, agents or controlling persons within the
meaning of Section 20 of the Securities Exchange Act of 1934, as
amended, makes any express or implied representation or warranty as to
the accuracy or completeness of the Information, and you agree that no
such person will have any liability relating to the Information or for
any errors therein or omissions therefrom. You further agree that you
are not entitled to rely on the accuracy or completeness of the
Information and that you will be entitled to rely solely on such
representations and warranties as may be included in any definitive
agreement with respect to the Transaction, subject to such limitations
and restrictions as may be contained therein.
5. You are aware, and you will advise your Representatives who are informed
of the matters that are the subject of this letter agreement, of the
restrictions imposed by the United States securities laws on the
purchase or sale of securities by any person who has received material,
non-public information from the issuer of such securities and on the
communication of such information to any other person when it is
reasonably foreseeable that such other person is likely to purchase or
sell such securities in reliance upon such information.
6. You agree that, for a period of two years from the date of this letter
agreement, you will not, directly or indirectly, solicit for employment
or hire any employee of the Company or any of its subsidiaries with whom
you have had contact or who were discussed with you in connection with
your consideration of the Transaction; provided, however, that the
foregoing provision will not prevent you from employing any such person
who (i) contacts you on his or her own initiative without any direct or
indirect solicitation by you (it being understood that any public
general solicitation not directed toward any particular individual or
group of individuals will not constitute solicitation for these
purposes) or (ii) who is terminated by such person's employer prior to
commencement of discussions with you.
7. Prior to execution of any definitive agreement with respect to the
Transaction, you agree that all (i) communications regarding the
Transaction, (ii) requests for additional information, facility tours or
management meetings, and (iii) discussions or questions regarding
procedures with respect to the Transaction, will be first submitted or
directed to Morgan Stanley and not to the Company. You acknowledge and
agree that (a) we may, without limitation, negotiate with any
prospective buyer and enter into a preliminary or definitive agreement
without prior notice to you or any other person, (b) we reserve the
right, in our sole discretion, to change the procedures relating to our
consideration of the Transaction at any time without prior notice to you
or any other person, to reject any and all proposals made by you or any
of your Representatives with regard to the Transaction, and to terminate
discussions and negotiations with you at any time and for any reason,
and (c) unless and until a written definitive agreement concerning the
Transaction has been executed, neither we nor any of our Representatives
will have any liability to you with respect to the Transaction, whether
by virtue of this letter agreement, any other written or oral expression
with respect to the Transaction or otherwise.
8. You acknowledge that remedies at law may be inadequate to protect us
against any actual or threatened breach of this letter agreement by you
or by your Representatives, and, without prejudice to any other rights
and remedies otherwise available to us, you agree to the granting of
injunctive relief in our favor without proof of actual damages. In the
event of litigation relating to this letter agreement, if a court of
competent jurisdiction determines in a final, nonappealable order that
this letter agreement has been breached by you or by your
Representatives, then you will reimburse the Company for its costs and
expenses (including, without limitation, legal fees and expenses)
incurred in connection with all such litigation.
9. You agree that no failure or delay by us in exercising any right, power
or privilege hereunder will operate as a waiver thereof, nor will any
single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any right, power or privilege
hereunder.
10. This letter agreement will be governed by and construed in accordance
with the laws of the Commonwealth of Massachusetts applicable to
contracts between residents of that State and executed in and to be
performed in that State.
11. This letter agreement contains the entire agreement between you and us
concerning the confidentiality of the Information, and no modifications
of this letter agreement or waiver of the terms and conditions hereof
will be binding upon you or us, unless approved in writing by each of
you and us.
Please confirm your agreement with the foregoing by signing and returning to
the undersigned the duplicate copy of this letter enclosed herewith.
Very truly yours,
MICROCOM, INC.
By:___________________________________
Name:_________________________________
Title:________________________________
Accepted and Agreed as of the date
first written above:
COMPAQ COMPUTER CORPORATION
By:___________________________________
Name:_________________________________
Title:________________________________
