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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14C INFORMATION
INFORMATION STATEMENT PURSUANT TO SECTION 14(C)
OF THE SECURITIES EXCHANGE ACT OF 1934
Check the appropriate box:
/ / Preliminary Information Statement
/ / Confidential, For Use of the Commission Only
(as permitted by Rule 14c-5(d)(2))
/X/ Definitive Information Statement
SUMMIT AUTONOMOUS INC.
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(Name of Registrant as Specified in Its Charter)
Payment of Filing Fee (Check the appropriate box):
/ / No fee required.
/ / Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth amount on which the filing
fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/X/ Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
$193,479
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(2) Form, Schedule or Registration Statement No.:
Schedule TO
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(3) Filing Party:
Alcon Acquisition Corp.
Alcon Holdings Inc.
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(4) Date Filed:
June 5, 2000
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[LOGO]
August 11, 2000
Dear Stockholder:
You are cordially invited to attend a Special Meeting of Stockholders, which
will be held on August 31, 2000 at 21 Hickory Drive, Waltham, Massachusetts
02451 at 10:00 a.m., local time.
As described in the enclosed Information Statement, at the Special Meeting
you will be asked to consider and vote upon the merger of Alcon Acquisition
Corp., a wholly-owned subsidiary of Alcon Holdings Inc., with and into Summit
Autonomous Inc. (the "Company"), pursuant to an Agreement and Plan of Merger
dated as of May 26, 2000. Upon consummation of the merger, each outstanding
share of the Company's common stock (other than shares held by the Company and
its subsidiaries, Alcon Holdings Inc. and its subsidiaries and dissenting
stockholders who perfect their dissenters' rights) will be converted into the
right to receive $19.00 in cash, without interest, upon surrender of
certificates formerly representing such shares.
The merger is the second and final step in the acquisition of the Company by
Alcon Holdings Inc. The first step was a tender offer by Alcon Acquisition Corp.
for all of the outstanding shares of the Company's common stock at a price of
$19.00 per share. Alcon Acquisition Corp. purchased 41,944,555 shares pursuant
to the tender offer and now owns approximately 88.9% of the outstanding shares
of the Company.
The affirmative vote of holders of two-thirds of the shares of the Company's
common stock outstanding and entitled to vote at the Special Meeting is
necessary to approve the Agreement and Plan of Merger. Alcon Acquisition Corp.
owns a sufficient number of shares to assure approval of the Agreement and Plan
of Merger at the Special Meeting and will vote all of its shares in favor of the
Agreement and Plan of Merger. As a result, the affirmative vote of any other
stockholder will not be required to approve the Agreement and Plan of Merger. In
light of the foregoing, the Company has determined not to solicit proxies from
its stockholders.
YOUR BOARD OF DIRECTORS HAS DETERMINED THAT THE TERMS OF THE MERGER ARE FAIR
TO AND IN THE BEST INTERESTS OF THE SUMMIT AUTONOMOUS STOCKHOLDERS. THE BOARD OF
DIRECTORS UNANIMOUSLY RECOMMENDS THAT SUMMIT AUTONOMOUS STOCKHOLDERS VOTE "FOR"
APPROVAL OF THE AGREEMENT AND PLAN OF MERGER.
Among the factors considered by the Board of Directors in evaluating the
merger was the opinion dated May 26, 2000 of Chase H&Q, the Company's financial
advisor, to the effect that as of such date, the cash consideration to be
received by the stockholders of the Company pursuant to the tender offer and the
merger was fair to such stockholders from a financial point of view. The opinion
contains a description of the procedures followed, matters considered and
limitation on the review undertaken by Chase H&Q in rendering its opinion. The
written opinion of Chase H&Q is attached as Annex B to the enclosed Information
Statement and should be read carefully and in its entirety by stockholders.
WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING, PLEASE READ THE
ATTACHED INFORMATION STATEMENT CAREFULLY. THE COMPANY IS NOT ASKING YOU FOR A
PROXY AND YOU ARE REQUESTED NOT TO SEND A PROXY.
Please do not send any certificates for your stock at this time. You will
receive instructions regarding the surrender of your stock certificates and
receipt of payment for your shares after the merger is effective.
Sincerely,
/s/ Robert J. Palmisano
Robert J. Palmisano
President and Chief Executive Officer
This Information Statement is dated August 10, 2000, and is being mailed to
Summit Autonomous stockholders on August 11, 2000.
[LETTERHEAD]
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[LOGO]
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
To the Stockholders of Summit Autonomous Inc.:
NOTICE IS HEREBY GIVEN that a Special Meeting of Stockholders of Summit
Autonomous Inc. (the "Company") will be held at 21 Hickory Drive, Waltham,
Massachusetts 02451 on August 31, 2000, at 10:00 a.m., local time, for the
following purposes:
1. To consider and vote upon a proposal to approve the Agreement and
Plan of Merger dated as of May 26, 2000 among Alcon Holdings Inc., Alcon
Acquisition Corp., a wholly-owned subsidiary of Alcon Holdings Inc., and the
Company (the "Merger Agreement"). The Merger Agreement provides, among other
things, that in accordance with the relevant provisions of the Massachusetts
Business Corporation Law, Alcon Acquisition Corp. will be merged with and
into the Company. Following the effective time of the merger, the Company
will continue as the surviving corporation and a wholly-owned subsidiary of
Alcon Holdings Inc. and each share of the Company's Common Stock, par value
$.01 per share (other than shares held by the Company and its subsidiaries,
Alcon Holdings Inc. and its subsidiaries and dissenting stockholders who
perfect their dissenters' rights), will be automatically converted into the
right to receive an amount in cash equal to $19.00, without interest, upon
surrender of certificates formerly representing such shares.
2. To transact such other business as may properly come before the
Special Meeting or any adjournments or postponements thereof.
The record date for the purpose of determining the stockholders who are
entitled to receive notice of and to vote at the Special Meeting is August 10,
2000. Only holders of the Company's common stock of record at the close of
business on that date will be entitled to notice of and to vote at the Special
Meeting or any adjournments or postponements thereof.
If the Merger Agreement is approved by the stockholders at the meeting and
the merger is consummated, any stockholder (1) who files with the Company,
before the taking of the vote on the approval of such action, a written
objection to the proposed action stating that he, she or it intends to demand
payment for his, her or its shares if the action is taken and (2) whose shares
are not voted in favor of such action, has or may have the right to demand in
writing from the Company, within twenty days after the date of mailing to such
stockholder of notice in writing that the corporate action has become effective,
payment for his, her or its shares and an appraisal of the value thereof. The
Company and any such stockholder shall in such cases have the rights and duties
and shall follow the procedure set forth in sections 86 to 98, inclusive, of
Chapter 156B of the General Laws of Massachusetts, a copy of which is attached
to this Information Statement as Annex C.
By order of the Board of Directors,
/s/ James A. Lightman
James A. Lightman
CLERK
THE AFFIRMATIVE VOTE OF TWO-THIRDS OF THE OUTSTANDING SHARES OF THE COMPANY'S
COMMON STOCK ENTITLED TO VOTE THEREON IS REQUIRED TO APPROVE THE MERGER
AGREEMENT. THE COMPANY IS NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT
TO SEND A PROXY.
PLEASE DO NOT SEND ANY SHARE CERTIFICATES
REPRESENTING YOUR SHARES AT THIS TIME.
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The date of this Information Statement is August 10, 2000.
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SUMMARY TERM SHEET
This summary term sheet highlights selected information from this
Information Statement and may not contain all information that is important to
you. If you wish to understand the merger fully and you would like a more
complete description of the legal terms of the merger, you should carefully read
this entire Information Statement and the documents to which it refers. The
merger agreement is attached as Annex A to this Information Statement. It is the
legal document that governs the merger.
THE SPECIAL MEETING
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DATE, PLACE AND TIME: The special meeting will be held at 10:00 a.m., local time,
on August 31, 2000, at 21 Hickory Drive, Waltham,
Massachusetts 02451.
PURPOSE OF THE SPECIAL The purpose of the special meeting is to approve the
MEETING: Agreement and Plan of Merger dated as of May 26, 2000 among
Alcon Holdings Inc., Alcon Acquisition Corp., a wholly-owned
subsidiary of Alcon Holdings Inc., and Summit Autonomous
Inc. If the merger is completed, Summit Autonomous Inc. will
become a wholly-owned subsidiary of Alcon Holdings Inc. and
you will be entitled to receive, subject to any applicable
dissenters' rights, $19.00 in cash, without interest, for
each share of Summit Autonomous Inc. common stock that you
own. See "The Special Meeting".
RECORD DATE: The close of business on August 10, 2000 is the record date
for determination of the Summit Autonomous Inc. stockholders
entitled to notice of the special meeting and entitled to
vote at the special meeting. See "The Special Meeting".
VOTE REQUIRED TO APPROVE THE The holders of two-thirds of the outstanding shares of
MERGER AGREEMENT: Summit Autonomous Inc. common stock must approve the merger
agreement. You are entitled to one vote for each share of
Summit Autonomous Inc. common stock that you owned on the
record date. ALCON ACQUISITION CORP. OWNS A SUFFICIENT
NUMBER OF SHARES TO ASSURE APPROVAL OF THE MERGER AGREEMENT
AT THE SPECIAL MEETING AND INTENDS TO VOTE ALL OF ITS SHARES
IN FAVOR OF THE MERGER AGREEMENT. AS A RESULT, THE MERGER
AGREEMENT WILL BE APPROVED EVEN IF NO STOCKHOLDERS OTHER
THAN ALCON ACQUISITION CORP. VOTE TO APPROVE IT. ALCON
ACQUISITION CORP. AND SUMMIT AUTONOMOUS INC. ARE NOT ASKING
YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A
PROXY. See "The Special Meeting".
THE PARTIES
SUMMIT AUTONOMOUS INC.: Summit Autonomous Inc. is a Massachusetts corporation
engaged in the manufacture and supply of excimer laser
systems and related products used to perform procedures that
correct common refractive vision disorders such as
nearsightedness, farsightedness and astigmatism. See "The
Parties".
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ALCON ACQUISITION CORP.: Alcon Acquisition Corp. is a Massachusetts corporation and a
wholly-owned subsidiary of Alcon Holdings Inc. Alcon
Acquisition Corp. was organized to acquire Summit Autonomous
Inc. and has not conducted any unrelated activities since
its organization. See "The Parties".
ALCON HOLDINGS INC.: Alcon Holdings Inc., a Delaware corporation, is a holding
company. The principal operating subsidiary of Alcon
Holdings Inc. is Alcon Laboratories, Inc., which is engaged
in the business of researching, developing, manufacturing
and marketing ophthalmic products including surgical
instruments and accessory products, intraocular lenses,
prescription drugs and contact lens care solutions. Alcon
Holdings Inc. is an indirect wholly-owned subsidiary of
Nestle S.A., a Swiss corporation. See "The Parties".
THE MERGER AND RELATED TRANSACTIONS
OVERVIEW: Pursuant to the merger agreement, Alcon Acquisition Corp.
will be merged with and into Summit Autonomous Inc., with
Summit Autonomous Inc. continuing as the surviving
corporation.
As a result of the merger, Summit Autonomous Inc. will
become a wholly-owned subsidiary of Alcon Holdings Inc. and
each share of Summit Autonomous Inc. common stock
outstanding at the time of the merger, other than shares
held by Summit Autonomous Inc. and its subsidiaries, Alcon
Holdings Inc. and its subsidiaries, and dissenting
stockholders who perfect their dissenters' rights, will, by
virtue of the merger and without any further action on the
part of the holder of such share, automatically be converted
into the right to receive $19.00 in cash, without interest.
After the consummation of the merger, you will have no
continuing equity interest in, and will not share in future
earnings, dividends or growth, if any, of Summit Autonomous
Inc.
RECOMMENDATION OF THE BOARD OF After an evaluation of business, financial and market
DIRECTORS: factors and consultation with its legal and financial
advisors, at a meeting of the Board of Directors held on May
26, 2000, prior to the commencement and consummation of the
tender offer by Alcon Acquisition Corp. and Alcon Holdings
Inc., the Board of Directors of Summit Autonomous Inc. (all
of whose members were unaffiliated with Alcon Holdings Inc.
and Alcon Acquisition Corp. on that date) determined that
the merger was fair to and in the best interests of Summit
Autonomous Inc. and its stockholders, unanimously approved
the merger agreement and the transactions contemplated
thereby and unanimously voted to recommend that Summit
Autonomous Inc. stockholders approve the merger agreement.
See "The Merger and Related Transactions--Recommendation s
of the Board of Directors" and "The Merger and Related
Transactions--Reasons for the Board of Directors'
Recommendations; Factors Considered".
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OPINION OF FINANCIAL ADVISOR: On May 26, 2000, Chase Securities Inc. ("Chase H&Q", a
division of Chase Securities Inc.) delivered its written
opinion to the Board of Directors to the effect that, as of
such date, the $19.00 per share in cash to be received by
Summit Autonomous Inc. stockholders in the tender offer and
the merger was fair to such holders from a financial point
of view. The full text of the written opinion of Chase H&Q
dated May 26, 2000, which contains a description of
procedures followed, matters considered, assumptions made
and limitations on the review undertaken by Chase H&Q in
rendering its opinion, is attached as Annex B to this
Information Statement. The opinion of Chase H&Q does not
constitute a recommendation as to how you should vote with
respect to the merger agreement. You should read the opinion
in its entirety. See "The Merger and Related
Transactions--Opinion of Chase H&Q".
ALCON HOLDING INC. OWNERSHIP After consummation of the tender offer and the cashing out
OF SUMMIT AUTONOMOUS INC. of certain employee stock options by Summit Autonomous Inc.,
COMMON STOCK: Alcon Acquisition Corp. owns 41,944,555 shares of Summit
Autonomous Inc. common stock (or approximately 88.9% of the
outstanding shares of Summit Autonomous Inc. common stock).
Alcon Acquisition Corp. can approve the merger agreement
without the affirmative vote of any other stockholder of
Summit Autonomous Inc. as a result of its ownership of
Summit Autonomous Inc. common stock.
DISSENTERS' RIGHTS: Under Massachusetts law, stockholders who do not vote in
favor of the merger agreement will be entitled to exercise
dissenters' rights in connection with the merger.
Stockholders desiring to exercise such dissenters' rights
will have the rights and duties and must follow the
procedures set forth in Sections 86 through 98 of the
Massachusetts Business Corporation Law. The full text of
these sections is attached to this Information Statement as
Annex C. Stockholders who wish to exercise dissenters'
rights must carefully follow the procedures described
therein and are urged to read Annex C in its entirety. See
Annex C.
METHOD OF ACCOUNTING: The merger will be accounted for under the purchase method
of accounting.
EFFECTIVE TIME: The merger will become effective as of the date and time
that the Articles of Merger are filed with the Secretary of
State of The Commonwealth of Massachusetts in accordance
with the Massachusetts Business Corporation Law, which is
expected to occur as soon as practicable after the special
meeting.
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EXCHANGE OF CERTIFICATES: Pursuant to the merger agreement, Alcon Acquisition Corp.
will deposit with ChaseMellon Shareholder Services, L.L.C.,
$19.00 per share in cash, to be paid with respect to the
shares outstanding immediately prior to the effective time
of the merger (other than shares held by Summit Autonomous
Inc. and its subsidiaries, Alcon Holdings Inc. and its
subsidiaries, and dissenting stockholders who perfect their
dissenters' rights). As soon as reasonably practicable after
the effective time of the merger, ChaseMellon Shareholder
Services, L.L.C. will send to each stockholder of record, as
of immediately prior to the effective time of the merger, a
letter of transmittal and detailed instructions specifying
the procedures to be followed in surrendering certificates.
SHARE CERTIFICATES SHOULD NOT BE FORWARDED TO CHASEMELLON
SHAREHOLDER SERVICES, L.L.C. UNTIL RECEIPT OF THE LETTER OF
TRANSMITTAL. Upon the surrender of a share certificate,
ChaseMellon Shareholder Services, L.L.C. will issue to the
surrendering holder a check representing an amount of cash
equal to $19.00 per share of common stock formerly
represented by the share certificates surrendered to
ChaseMellon Shareholder Services, L.L.C.
CONDITIONS TO THE MERGER: The consummation of the merger is subject only to the
following conditions:
- Summit Autonomous Inc. stockholders shall have approved
the merger agreement by an affirmative vote of the holders
of two-thirds of the outstanding shares;
- any consents, approvals and filings under any foreign
antitrust law, the absence of which would prohibit the
consummation of the merger, shall have been obtained or
made; and
- no legal restraint or prohibition preventing the
consummation of the merger shall be in effect.
All other conditions to the merger have been satisfied.
TERMINATION AND AMENDMENT OF The merger agreement may be terminated at any time prior to
THE MERGER AGREEMENT: the effective time of the merger by, among other things, the
mutual agreement of the parties or, if a governmental entity
takes any action that prohibits the merger and such action
becomes final and nonappealable, by either Summit Autonomous
Inc. or Alcon Holdings Inc. acting independently. The merger
agreement may be amended by the parties at any time, but
after the merger agreement has been approved by the
stockholders, no amendment may be made which by law requires
further approval of the stockholders without obtaining such
approval.
U.S. FEDERAL INCOME TAX If the merger is consummated, the exchange of shares by a
CONSEQUENCES: holder for cash pursuant to the merger will be a taxable
transaction under the Internal Revenue Code of 1986, as
amended. Because of the complexities of the tax laws, you
are advised to consult your own tax advisors concerning the
applicable Federal, state, local, foreign and other tax
consequences resulting from the merger.
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REGULATORY AND OTHER There are no U.S. Federal or state regulatory requirements
APPROVALS: which remain to be complied with in order to consummate the
merger (other than the filing of Articles of Merger with the
Secretary of State of The Commonwealth of Massachusetts).
SOURCE AND AMOUNT OF FUNDS: The total amount of funds required by Alcon Acquisition
Corp. to purchase all shares tendered pursuant to and to pay
all related fees and expenses in connection with the tender
offer was approximately $797 million. The amount of funds
required by Summit Autonomous Inc. to make all payments to
participants in Summit Autonomous Inc. stock option plans
pursuant to the merger agreement was approximately $39
million. The total amount of funds required by Alcon
Acquisition Corp. to consummate and to pay all related fees
and expenses in connection with the merger is estimated to
be approximately $104 million. Alcon Acquisition Corp. plans
to obtain all funds needed for the merger through capital
contributions or intercompany advances from Alcon Holdings
Inc. Such funds will be made available to Alcon Holdings
Inc. through intercompany advances from Nestle S.A. or an
affiliate of Nestle S.A.
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TABLE OF CONTENTS
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SUMMARY TERM SHEET.......................................... i
The Special Meeting....................................... i
The Parties............................................... i
The Merger and Related Transactions....................... ii
INTRODUCTION................................................ 1
Information Statement..................................... 1
Securities................................................ 1
QUESTIONS AND ANSWERS ABOUT THE MERGER...................... 1
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING
INFORMATION................................................. 3
THE SPECIAL MEETING......................................... 3
General Information....................................... 3
Purpose of the Special Meeting............................ 3
Record Date............................................... 4
Vote Required to Approve the Merger Agreement............. 4
THE PARTIES................................................. 4
Summit Autonomous Inc..................................... 4
Alcon Acquisition Corp.................................... 4
Alcon Holdings Inc........................................ 4
THE MERGER AND RELATED TRANSACTIONS......................... 5
General................................................... 5
Conversion of Securities.................................. 5
Vote Required to Approve the Merger....................... 5
Recommendations of the Board of Directors................. 6
Background of the Merger.................................. 6
Reasons for the Board of Directors' Recommendations;
Factors Considered...................................... 8
Opinion of Chase H&Q...................................... 9
Certain Company Projections............................... 15
Change of Control......................................... 16
Conditions to the Merger.................................. 16
Termination of the Merger Agreement....................... 16
Takeover Proposals........................................ 17
Fees and Expenses......................................... 18
Board of Directors........................................ 19
Employee Benefits......................................... 19
Reasonable Efforts; Notification.......................... 20
Representations and Warranties............................ 20
Procedure for Termination, Amendment, Extension or
Waiver...................................................... 20
Rights Agreement.......................................... 21
The Confidentiality Agreement............................. 21
Certain U.S. Federal Income Tax Consequences.............. 21
Method of Accounting...................................... 22
Regulatory and Other Approvals............................ 22
Source and Amount of Funds................................ 22
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DISSENTERS' RIGHTS.......................................... 22
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.................................................. 24
INTERESTS OF CERTAIN PERSONS IN THE MERGER.................. 25
Stock Options............................................. 25
Severance Agreements...................................... 25
Indemnification and Insurance............................. 26
MISCELLANEOUS............................................... 27
Other Matters............................................. 27
Incorporation of Certain Documents by Reference........... 27
Available Information..................................... 28
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Annex A..................................................... Agreement and Plan of Merger
Annex B..................................................... Opinion of Chase H&Q
Annex C..................................................... Appraisal Statute
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INTRODUCTION
INFORMATION STATEMENT
This Information Statement ("Information Statement") pursuant to
Section 14(c) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), is being furnished by Summit Autonomous Inc. (the "Company") to its
stockholders in connection with the proposed merger of Alcon Acquisition Corp.
(the "Purchaser"), a wholly-owned subsidiary of Alcon Holdings Inc. ("Parent"),
with and into the Company (the "Merger") pursuant to the Agreement and Plan of
Merger dated as of May 26, 2000 (the "Merger Agreement"). Following the
effective time (the "Effective Time") of the Merger, the Company will continue
as the surviving corporation (the "Surviving Corporation") and will be a
wholly-owned subsidiary of Parent.
The Merger is the second and final step in the acquisition of the Company by
Parent. The first step was the tender offer by the Purchaser and Parent to
purchase all of the outstanding shares of the Company's common stock (including
the associated preferred stock purchase rights) at a purchase price of $19.00
per share, net to the seller in cash, without interest (the "Offer Price"), upon
the terms and subject to the conditions set forth in the Offer to Purchase dated
June 5, 2000 (the "Offer to Purchase") and the related Letter of Transmittal
(together with the Offer to Purchase, the "Offer").
A copy of the Merger Agreement is attached hereto as Annex A and is
incorporated herein by reference.
SECURITIES
The title of the class of securities to which this Information Statement
relates is the common stock, par value $0.01 per share, of the Company ("Company
Common Stock"), including the associated preferred stock purchase rights (the
"Rights") issued pursuant to the Rights Agreements dated as of March 28, 2000,
as amended from time to time (the "Rights Agreement"). As of August 10, 2000,
there were 47,166,762 shares of Company Common Stock ("Shares") outstanding, of
which 41,944,555 were owned by the Purchaser.
QUESTIONS AND ANSWERS ABOUT THE MERGER
WHAT WILL HAPPEN IN THE MERGER?
Upon consummation of the Merger, the Purchaser will be merged with and into
the Company and stockholders who surrender their Share certificates, other than
the Company and its subsidiaries, Parent and its subsidiaries, the Purchaser and
dissenting stockholders who perfect their dissenters' rights, will receive a
cash payment of $19.00, without interest, for each of their Shares.
WHO WILL OWN THE COMPANY AFTER THE MERGER?
After the Merger, Parent will own all of the outstanding shares of the
Surviving Corporation.
WHY HAS THE MERGER BEEN PROPOSED?
The Merger is the second step in a two-part transaction, the purpose of
which is the acquisition by Parent of the entire equity interest in the Company.
The first step was a tender offer for all of the outstanding Shares, which was
consummated by the Purchaser on July 3, 2000. Pursuant to the Offer, the
Purchaser purchased 41,944,555 Shares and owns approximately 88.9% of the
outstanding Shares.
WHAT VOTE IS REQUIRED TO APPROVE THE MERGER AGREEMENT?
Approval of the Merger Agreement requires the affirmative vote of holders of
two-thirds of the Shares outstanding and entitled to vote at the Special
Meeting. THE PURCHASER ALREADY OWNS A SUFFICIENT NUMBER OF SHARES TO ASSURE
APPROVAL OF THE MERGER AGREEMENT AND WILL VOTE ALL OF ITS SHARES IN FAVOR OF THE
MERGER AGREEMENT. AS A RESULT, NO OTHER STOCKHOLDER WILL NEED TO VOTE "FOR" THE
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PROPOSAL FOR THE MERGER AGREEMENT TO BE APPROVED. WE ARE NOT ASKING YOU FOR A
PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
WHAT WILL I RECEIVE IN THE MERGER?
As a stockholder of the Company, you will receive $19.00 in cash, without
interest, for each Share that you validly surrender for payment. This is the
"Merger Consideration". For example, if you own 100 Shares, upon consummation of
the Merger, you will receive $1,900.00 in cash.
ARE DISSENTERS' RIGHTS AVAILABLE?
Yes. Under Massachusetts law, stockholders who file a written notice of
objection with the Company before the taking of the vote at the Special Meeting
and whose Shares are not voted in favor of the merger agreement will be entitled
to exercise dissenters' rights in connection with the merger. Stockholders
desiring to exercise such dissenters' rights will have the rights and duties and
must follow the procedures set forth in Sections 86 through 98 of the
Massachusetts Business Corporation Law. The full text of these sections is
attached to this Information Statement as Annex C. Stockholders who wish to
exercise dissenters' rights must carefully follow the procedures described
therein and are urged to read Annex C in its entirety.
IF THE MERGER IS CONSUMMATED, WHEN CAN I EXPECT TO RECEIVE THE MERGER
CONSIDERATION FOR MY SHARES OF COMPANY COMMON STOCK?
As soon as reasonably practicable after the Merger is consummated, you will
receive detailed instructions regarding the surrender of your Share
certificates. You should not send your Share certificates to the Company or
anyone else until you receive these instructions. The Purchaser will send
payment of the Merger Consideration to you as promptly as practicable following
receipt of your Share certificates and other required documents.
WHEN DO YOU EXPECT THE MERGER TO BE COMPLETED?
We expect the Merger to be consummated as soon as reasonably practicable
after the date of the Special Meeting.
WHAT ARE THE TAX CONSEQUENCES OF THE MERGER TO ME?
The receipt of cash in exchange for Shares in the Merger by you will be a
taxable transaction for U.S. Federal income tax purposes. To review the tax
consequences to you in greater detail, see "Certain U.S. Federal Income Tax
Consequences". Your tax consequences will depend on your personal situation. You
should consult your tax advisors for a full understanding of the tax
consequences of the Merger to you.
WHAT DO I NEED TO DO NOW?
This Information Statement contains important information regarding the
Merger and the Merger Agreement, as well as information about the Company, the
Purchaser and Parent. It also contains important information about what the
Board of Directors of the Company (the "Board of Directors") considered in
evaluating the Offer and the Merger. If you wish to understand the Merger fully,
we urge you to read this Information Statement carefully, including its Annexes.
You may also want to review the documents referenced under "Where You Can Find
More Information".
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TO WHOM CAN I TALK IF I HAVE QUESTIONS?
If you would like additional copies of this document, or if you would like
to ask any additional questions about the Merger, you should contact:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
44 Wall Street, 7th Floor
New York, NY 10005
Banks and Brokers Call: (917) 320-6235
All Others Please Call Toll-Free: (888) 509-7935
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING INFORMATION
This Information Statement, including through the incorporation by reference
of certain documents and other statements made from time to time by the Company,
Parent, the Purchaser, or their respective affiliates or representatives,
contains certain forward-looking statements. Those forward-looking statements
include the financial projections set forth under "The Merger and Related
Transactions--Certain Company Projections" as well as statements regarding the
intent, belief or current expectations of the Company, Parent and the Purchaser
and members of their respective management teams, as well as the assumptions on
which such statements are based. Such forward-looking statements are not
guarantees of future performance and involve risks and uncertainties, and actual
results may differ materially from those contemplated by such forward-looking
statements. Important factors currently known to management of the Company,
Parent and the Purchaser that could cause actual results to differ materially
from those contained in forward-looking statements include, but are not limited
to, the risks discussed herein and: (i) competition from other manufacturers and
vision correction technologies; (ii) delays in obtaining regulatory approvals;
(iii) challenges to patents owned and licensed by the Company affecting per
procedure revenues; (iv) adverse litigation results, (v) difficulties in
commercializing the LADARVision system; and (vi) dependence on sole source
suppliers. The Company, Parent and the Purchaser undertake no obligation to
update or revise forward-looking statements to reflect changes in assumptions,
the occurrence of unanticipated events, or changes in future operating results
over time.
THE SPECIAL MEETING
GENERAL INFORMATION
This Information Statement is being provided by the Board of Directors in
connection with the Special Meeting of the holders of the Shares.
The Special Meeting is scheduled to be held as follows:
August 31, 2000
10:00 a.m., local time
21 Hickory Drive
Waltham, Massachusetts 02451
PURPOSE OF THE SPECIAL MEETING
The Special Meeting is being held so that stockholders of the Company may
consider and vote upon a proposal to approve the Merger Agreement and to
transact any other business that is properly brought before the Special Meeting
or any postponement or adjournment thereof. Approval of the Merger Agreement
will constitute approval of the Merger and the other transactions contemplated
by the Merger Agreement.
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If the Merger Agreement is approved and the Merger becomes effective, the
Purchaser will merge with and into the Company, and the Company will become a
wholly-owned subsidiary of Parent. You will receive $19.00 in cash for each
Share that you own. The Merger Consideration will not be paid in exchange for
Shares that are held in the treasury of the Company, owned by Parent, its
subsidiaries or the Purchaser or held by dissenting stockholders who seek
appraisal of the fair value of their Shares and comply with all of the
Massachusetts law procedures set forth in Annex C.
RECORD DATE
The close of business on August 10, 2000 is the record date for
determination of stockholders of the Company entitled to notice of the Special
Meeting and entitled to vote at the Special Meeting. On the record date, there
were 47,166,762 Shares outstanding held by approximately 1,247 holders of
record.
VOTE REQUIRED TO APPROVE THE MERGER AGREEMENT
The holders of two-thirds of the outstanding Shares must approve the Merger
Agreement. You are entitled to one vote for each Share that you owned on the
record date. THE PURCHASER OWNS A SUFFICIENT NUMBER OF SHARES TO ASSURE APPROVAL
OF THE MERGER AGREEMENT AT THE SPECIAL MEETING AND WILL VOTE ALL OF ITS SHARES
IN FAVOR OF THE MERGER AGREEMENT. AS A RESULT, THE MERGER AGREEMENT WILL BE
APPROVED WITHOUT THE AFFIRMATIVE VOTE OF ANY OTHER STOCKHOLDER. WE ARE NOT
ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
THE PARTIES
SUMMIT AUTONOMOUS INC.
The Company is a Massachusetts corporation that is engaged in the
manufacture and supply of excimer laser systems and related products used to
perform procedures that correct common refractive vision disorders such as
nearsightedness, farsightedness and astigmatism.
The principal executive offices of the Company are located at 21 Hickory
Drive, Waltham, Massachusetts 02451. The telephone number is (781) 890-1234.
ALCON ACQUISITION CORP.
The Purchaser, a Massachusetts corporation that is a wholly-owned subsidiary
of Parent, was organized to acquire the Company and has not conducted any
unrelated activities since its organization. All outstanding shares of capital
stock of the Purchaser are owned by Parent.
The principal executive offices of the Purchaser are located at 6201 South
Freeway, Fort Worth, Texas 76134-2099. The telephone number is (817) 293-0450.
ALCON HOLDINGS INC.
Parent is a Delaware corporation and is a holding company. Parent's
principal operating subsidiary is Alcon Laboratories, Inc., which is engaged in
the business of researching, developing, manufacturing and marketing ophthalmic
products including surgical instruments and accessory products, intraocular
lenses, prescription drugs and contact lens care solutions.
The principal executive offices of Parent are located at 6201 South Freeway,
Fort Worth, Texas 76134-2099. The telephone number is (817) 293-0450.
Parent is an indirect wholly-owned subsidiary of Nestle S.A., a Swiss
corporation ("Nestle"). Nestle's subsidiaries manufacture and sell food and
beverage products throughout the world, engage in research and development
activities, manufacture and sell cosmetic products, and develop, manufacture
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and sell pharmaceutical products. The address of Nestle's principal office is
Avenue Nestle 55, CH-1800 Vevey, Switzerland.
THE MERGER AND RELATED TRANSACTIONS
GENERAL
The following summary of the Merger Agreement is qualified in its entirety
by reference to the Merger Agreement, a copy of which is attached as Annex A
hereto. You should read the Merger Agreement in its entirety if you would like a
more complete description of the matters summarized below.
The Merger Agreement provides that, following the satisfaction or waiver of
the conditions described below under "Conditions to the Merger", the Purchaser
will be merged with and into the Company, with the Company continuing as the
Surviving Corporation.
CONVERSION OF SECURITIES
As of the Effective Time, without any further action on the part of the
Purchaser, the Company or holders of securities of the Purchaser or the Company:
- Each issued and outstanding share of common stock of the Purchaser will be
converted into a number of shares of common stock of the Surviving
Corporation equal to the number of Shares outstanding immediately prior to
the Effective Time (excluding any Shares that are owned by any subsidiary
of the Company or Parent other than the Purchaser) divided by 1,000,
rounded up to the next whole share;
- Each Share that is owned directly by the Company, Parent or the Purchaser
will be cancelled and no consideration will be delivered for any such
Share;
- Each Share that is owned by any subsidiary of the Company or Parent (other
than the Purchaser) will be converted into one share of common stock of
the Surviving Corporation;
- Each other Share issued and outstanding prior to the Effective Time (other
than Shares as to which dissenters' rights have been perfected) will be
converted into the right to receive $19.00 in cash, without interest.
These Shares will no longer be outstanding and will automatically be
cancelled and retired and each holder of a certificate formerly
representing any of these Shares shall cease to have any rights except the
right to receive the Merger Consideration, less any applicable withholding
taxes, upon surrender of the Share certificate that formerly evidenced
Shares; and
- Shares of Company Common Stock as to which dissenters' rights have been
properly perfected will be converted into the right to receive from the
Surviving Corporation the fair value of such Shares in accordance with
Sections 86 through 98 of the Massachusetts Business Corporation Law. In
no event will dissenters be entitled to any on-going interest in the
Surviving Corporation.
As a result of the actions described above, at the Effective Time, the
Company will become a wholly-owned subsidiary of Parent.
VOTE REQUIRED TO APPROVE THE MERGER
The Massachusetts Business Corporation Law requires, among other things,
that the adoption of the Merger Agreement must be approved by the holders of
two-thirds of the Company's outstanding voting securities. The Board of
Directors has approved the Offer, the Merger and the Merger Agreement;
consequently, the only additional action of the Company necessary to effect the
Merger is
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approval of the Merger Agreement by the Company's stockholders. All Shares owned
by Parent or the Purchaser will be voted in favor of the approval of the Merger
Agreement. Because the Purchaser acquired more than two-thirds of the
outstanding Shares pursuant to the Offer, it has sufficient voting power to
effect the Merger without the affirmative vote of any other stockholder of the
Company.
RECOMMENDATIONS OF THE BOARD OF DIRECTORS
At a meeting held on May 26, 2000, the Board of Directors (i) approved the
Merger Agreement, the Offer, the Merger and the other transactions contemplated
by the Merger Agreement, (ii) determined that the terms of the Offer, the Merger
and the other transactions contemplated by the Merger Agreement were fair to and
in the best interests of the Company and its stockholders, (iii) recommended
that the Company's stockholders accept the Offer and tender their Shares
pursuant to the Offer and (iv) recommended that the Company's stockholders
approve the Merger Agreement.
BACKGROUND OF THE MERGER
For the purposes of this Section references to Parent include Alcon
Laboratories, Inc., Parent's principal operating subsidiary. From time to time
during 1999, officers of Parent discussed with officers of the Company potential
joint business arrangements, including a business combination.
During the summer of 1999 the Company was approached by a third party
concerning a possible acquisition of the Company. As discussions with the third
party progressed, the Company instructed its financial advisor to identify and
contact other possible bidders. In September and October 1999, the third party
conducted due diligence and the Company's financial advisor and the third
party's financial advisor commenced discussions with respect to a possible
transaction between the parties.
On November 4, 1999, the Company's Board of Directors met to discuss a
preliminary proposal for an acquisition of the Company by the third party. The
Board of Directors instructed the Company's financial advisor to negotiate
specific terms for a potential transaction.
In mid November 1999, the Company's financial advisor and the third party's
financial advisor had several discussions, after which the Company's financial
advisor was advised by the third party's financial advisor that mutually
satisfactory terms between the parties would not likely be reached. The
Company's financial advisor maintained contact with the third party's financial
advisors, but ceased active negotiation.
During such period, the Company's financial advisor had identified Parent as
a potential interested party and, on October 8, 1999, contacted Parent to
determine if it was interested in acquiring the Company. The Company's financial
advisor contacted several other parties, none of which expressed an interest in
making a bid for the Company. On November 5, 1999, Parent and the Company
entered into a confidentiality agreement covering non-public information
regarding the Company to be furnished to Parent.
From November 1999 through March 2000, there were a number of meetings and
conversations between the managements of Parent and the Company and the
financial advisors to Parent and the Company regarding a possible acquisition of
the Company. During this period representatives of Parent conducted a due
diligence investigation of the Company and discussed their analysis of the
valuation of the Company with the Company representatives.
On April 6, 2000, Mr. Timothy R.G. Sear, President and Chief Executive
Officer of Parent, sent a letter to Mr. Robert J. Palmisano, Chief Executive
Officer of the Company, proposing to acquire all the outstanding Shares for $15
per Share in cash, which included a draft of a proposed form of the Merger
Agreement. The letter stated that the proposal was conditioned on, among other
things, Parent's completion of certain additional due diligence.
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Shortly thereafter, the financial advisor to the Company informed the
financial advisor to Parent that Parent's proposed price was unacceptable and
that the Company would not review the draft of the proposed Merger Agreement.
On April 13, 2000, Mr. Sear sent a letter to Mr. Palmisano expressing
disappointment in the Company's response to Parent's proposal and suggesting
that the parties meet to discuss a potential transaction between Parent and the
Company.
On April 14, 2000, Mr. Palmisano sent a letter to Mr. Sear suggesting a
meeting in Florida to determine whether the parties could agree on a transaction
at an appropriate valuation.
On April 19, 2000, Mr. Sear and a representative of Parent's financial
advisor met with Mr. Palmisano and a representative of the Company's financial
advisor in Miami, Florida, to discuss the potential market for the Company's
products and the valuation of the Company. During the meeting, Mr. Palmisano
indicated that the Company's Board of Directors believed the Company was worth
significantly more than $15 per Share.
On April 28, 2000, Mr. Palmisano sent a letter to Mr. Sear providing
additional information regarding the potential market for the Company's
products.
During April 2000, representatives of Parent had several meetings with
representatives of the Company to discuss various aspects of the Company,
including the potential market for the Company's products, the Company's
financial projections, intellectual property and microkeratome technology.
On May 3, 2000, counsel for the Company provided to counsel for Parent their
initial comments on the draft of the proposed form of the Merger Agreement.
On May 9, 2000, Mr. Sear sent a letter to Mr. Palmisano stating that,
following the additional due diligence by Parent, Parent was increasing its
proposed price to acquire the Company to $16.50 per Share.
On May 11, 2000, Mr. Palmisano and Mr. Sear had a telephone conversation in
which Mr. Palmisano stated that the Board of Directors had rejected Parent's
proposal of $16.50 per Share. Mr. Palmisano stated that the Company's Board
would not accept less than $19 per Share.
As discussions were progressing with Parent, the financial advisor to the
third party which had expressed an interest in a transaction with the Company in
the summer and fall of 1999 had maintained intermittent contact with the
Company's financial advisor. During the week of May 15, 2000, the Company's
financial advisor told the third party's financial advisor that if the third
party was interested in pursuing a transaction with the Company, it needed to
make a proposal promptly. The third party's financial advisor advised the
Company's financial advisor that it did not believe the third party would be
able to make a competitive proposal, but that it would contact the Company's
financial advisor if that was not the case. As of this date, neither the Company
nor the Company's financial advisor has been contacted by the third party or its
financial advisor.
From May 3 through May 25, 2000, representatives of Parent and the Company,
including their financial advisors and counsel, had a number of discussions
regarding the terms of the proposed Merger Agreement.
On May 19, 2000, the Board of Directors, the Company's financial advisor and
the Company's counsel met to discuss the status of the discussions with the
third party and with Parent. After presentations by the Company's financial
advisor and the Company's counsel, the Board of Directors discussed the terms
and conditions of the proposed Merger Agreement.
On May 24, 2000, Parent's financial advisor contacted the Company's
financial advisor to determine whether a price of $18.50 per Share would be
acceptable. The Company's financial advisor stated that a price below $19 per
Share would not be acceptable.
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On May 25, 2000, Parent's financial advisor contacted the Company's
financial advisor to state that Parent would be willing to proceed with a
transaction at $19 per Share. Beginning in the evening of May 25, 2000, and
continuing on May 26, 2000, representatives of Parent and the Company and their
respective counsel negotiated the final terms of the Merger Agreement.
On May 26, 2000 the Board of Directors approved the proposed Merger
Agreement and the parties executed the Merger Agreement. Parent and the Company
then issued a joint press release announcing the transaction.
On June 5, 2000, in accordance with the Merger Agreement, the Purchaser
commenced the Offer.
On June 9, 2000, Nestle and the Company filed, pursuant to the Merger
Agreement, a Notification and Report Form for Certain Mergers and Acquisitions,
which was required to be submitted under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), with the Department of
Justice and the Federal Trade Commission. On June 24, 2000, the applicable
waiting period under the HSR Act expired.
At 12:00 midnight, New York City time, on Friday, June 30, 2000, the Offer
expired. On July 3, 2000, the Purchaser accepted for payment all Shares that
were validly tendered and not withdrawn pursuant to the Offer. On July 7, 2000,
the Purchaser was informed by ChaseMellon Shareholder Services, L.L.C. that a
total of 41,944,555 Shares, representing approximately 88.9% of the outstanding
Shares, had been validly tendered and not withdrawn.
On July 5, 2000, by written consent in lieu of a meeting of the Board of
Directors: (i) the Company accepted the resignations of the following directors:
Jeffrey A. Bernfeld, C. Glen Bradley, Richard F. Miller and John A. Norris; and
(ii) the following four designees of Parent were elected to the Board: Timothy
R. G. Sear, C. Allen Baker, Charles E. Miller, Sr., and Gerald D. Cagle.
REASONS FOR THE BOARD OF DIRECTORS' RECOMMENDATIONS; FACTORS CONSIDERED
On May 26, 2000, the Board of Directors (all of whose members were
unaffiliated with Alcon Holdings Inc. and Alcon Acquisition Corp. on that date)
approved the Merger Agreement and the transactions contemplated thereby,
including the Offer and the Merger, and recommended that all holders of Shares
accept the Offer and tender their Shares pursuant to the Offer, approve the
Merger and approve and adopt the Merger Agreement. In taking such action, the
Board of Directors considered a number of factors including, but not limited to,
the following:
1. The historical market prices, price to earnings ratios and other
multiples, recent trading activity and trading range of the Shares,
including the fact that the Offer Price represented (i) a premium of
approximately 49.8% over the $12.6875 closing price of the Shares on
NASDAQ on May 25, 2000, the last full trading day prior to the
announcement of the Offer and the Merger and (ii) a premium of
approximately 169% over the $7.0625 closing price of the Shares on NASDAQ
on February 28, 2000, the date in the last twelve months on which the
Shares had their lowest closing price.
2. The competitive challenges associated with going forward as a "stand
alone entity" given the entry, or likely entry, into the laser vision
correction industry of larger ophthalmic enterprises able to sell
refractive products with other ophthalmic products and services.
3. The fairness opinion of Chase H&Q delivered at the meeting of the Board
of Directors held on May 26, 2000. The full text of the written opinion
dated as of May 26, 2000 of Chase H&Q, which contains a description of
the procedures followed, matters considered, assumptions made and
limitations on the review undertaken by Chase H&Q in rendering its
opinion, is attached as Annex B hereto. Holders of Shares are urged to
read such opinion carefully in its entirety.
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4. The financial condition, operating results and forecasts of the Company.
5. The fact that no other party had presented the Company with an
acquisition proposal that would be more favorable to the Company and its
stockholders than the Offer and the Merger.
6. The fact that the Offer and the Merger provide for a prompt cash tender
offer for all Shares to be followed by the Merger for the same
consideration, thereby enabling the Company's stockholders, at the
earliest possible time, to obtain the benefits of the transaction in
exchange for their Shares.
7. The fact that Parent's and the Purchaser's obligations under the Offer
were not subject to any financing condition, and the financial strength
of Parent.
8. The terms and conditions of the Merger Agreement, including the parties'
representations, warranties and covenants, the conditions to their
respective obligations, the limited ability of Parent and the Purchaser
to terminate the Offer or the Merger Agreement and the provision for
payment of all cash with no financing condition.
9. The extensive arms-length negotiations between the Company and Parent
that resulted in the $19.00 per Share price.
10. The Merger Agreement permitted the Board of Directors, prior to the
acceptance for payment of Shares pursuant to the Offer, in order to
comply with its fiduciary duties, to furnish information and enter into
discussions and negotiations, in connection with an unsolicited
acquisition proposal that was reasonably likely to result in a superior
proposal and to withdraw its recommendation of the Merger in favor of a
superior unsolicited acquisition proposal.
11. The Merger Agreement permitted the Board of Directors, prior to the
acceptance for payment of Shares pursuant to the Offer, in the exercise
of its fiduciary duties, to terminate the Merger Agreement in favor of a
superior acquisition proposal, provided, that prior to such termination,
the Company must have paid Parent a fee of $32.5 million.
The foregoing discussion of information and factors considered and given
weight by the Board of Directors is not intended to be exhaustive, but is
believed to include all of the material factors, both positive and negative,
considered by the Board of Directors. In view of the variety of factors
considered in connection with its evaluation of the Offer and the Merger, the
Board of Directors did not find it practicable to, and did not, quantify or
otherwise assign relative weights to the specific factors considered in reaching
its determinations and recommendations. In addition, individual members of the
Board of Directors may have given different weights to different factors.
OPINION OF CHASE H&Q
At the May 26, 2000 meeting of the Board of Directors, Chase H&Q delivered
its oral opinion, subsequently confirmed in writing in an opinion dated May 26,
2000, to the Board of Directors, to the effect that, as of that date and based
upon the assumptions made, matters considered and limits of review set forth in
its opinion, the consideration of $19.00 per share in cash to be received by the
Company's stockholders in the Offer and the Merger was fair to such stockholders
from a financial point of view.
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The full text of Chase H&Q's written opinion dated May 26, 2000, which sets
forth the assumptions made, matters considered and certain limitations on the
scope of review undertaken by Chase H&Q, is attached as Annex B to this
Information Statement. Stockholders are urged to read this opinion in its
entirety. Chase H&Q's opinion was provided for the use and benefit of the Board
of Directors in its evaluation of the Offer and the Merger, was directed only to
the fairness to the Company's stockholders of the consideration to be received
in the Offer and the Merger from a financial point of view, and does not
constitute a recommendation as to how any stockholder should vote with respect
to the Merger or any other matters relating to the Merger. This summary of Chase
H&Q's opinion is qualified in its entirety by reference to the full text of its
opinion, which is attached to this Information Statement as Annex B.
In arriving at its opinion, Chase H&Q, among other things:
- reviewed the Merger Agreement;
- reviewed certain publicly available business and financial information
Chase H&Q deemed relevant relating to the Company and the industries in
which it operates;
- reviewed certain internal non-public financial and operating data and
forecasts provided to Chase H&Q by the management of the Company relating
to its business;
- discussed, with members of the senior management of the Company, the
Company's operations, historical financial statements and future
prospects;
- compared the financial and operating performance of the Company with
publicly available information concerning certain other companies Chase
H&Q deemed comparable and reviewed the relevant historical stock prices of
the Company Common Stock and certain publicly traded securities of such
other companies;
- compared the proposed financial terms of the Merger with the financial
terms of certain other transactions Chase H&Q deemed relevant; and
- made such other analyses and examinations as Chase H&Q deemed necessary or
appropriate.
In rendering its opinion, Chase H&Q assumed and relied upon, without
assuming any responsibility for verification, the accuracy and completeness of
all of the financial and other information provided to, discussed with or
reviewed by or for Chase H&Q, or publicly available, for purposes of its
opinion, and further relied upon the assurance of the management of the Company
that they were not aware of any facts that would make such information
inaccurate or misleading. Chase H&Q neither made nor obtained any independent
evaluations or appraisals of the assets or liabilities of the Company, nor did
Chase H&Q conduct a physical inspection of the properties or facilities of the
Company. Chase H&Q assumed that the financial forecasts provided to or discussed
with Chase H&Q by the Company had been reasonably determined on bases reflecting
the best currently available estimates and judgments of the management of the
Company as to the future financial performance of the Company. Chase H&Q
expressed no view as to such forecast or projection information or the
assumptions on which they were based.
For purposes of rendering its opinion, Chase H&Q assumed that, in all
respects material to its analysis, the representations and warranties of each
party contained in the Merger Agreement were true and correct, that each party
would perform all of the covenants and agreements required to be performed by it
under the Merger Agreement and that all conditions to the consummation of the
Offer and the Merger would be satisfied without waiver thereof. Chase H&Q also
assumed that the definitive Merger Agreement would not differ in any material
respects from the draft thereof furnished to Chase H&Q.
Chase H&Q's opinion was necessarily based on market, economic and other
conditions as they existed and could be evaluated on the date of its opinion.
Chase H&Q's opinion was limited to the
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fairness, from a financial point of view, to the Company's stockholders of the
consideration to be received in the Offer and the Merger, and Chase H&Q
expressed no opinion as to the merits of the underlying decision by the Company
to engage in the Merger.
The following is a summary of certain financial and comparative analyses
performed by Chase H&Q in arriving at its opinion. Some of these summaries of
financial analyses include information presented in tabular format. In order to
understand fully the financial analyses used by Chase H&Q, the tables must be
read together with the text of each summary. The tables alone do not constitute
a complete description of the financial analyses.
COMPARABLE PUBLIC COMPANIES ANALYSIS. Using publicly available information,
Chase H&Q compared certain financial and operating information and ratios for
the Company with corresponding financial and operating information and ratios
for the following two groups of companies in lines of business believed to be
generally comparable to those of the Company, as follows:
Group One
- Allergan, Inc.
- Bausch & Lomb Incorporated
- VISX, Incorporated
- The Cooper Companies, Inc.
- Sunrise Technologies International, Inc.
- STAAR Surgical Company
- KeraVision, Inc.
- LaserSight Incorporated
Group Two
- Medtronic, Inc.
- Baxter International Inc.
- Guidant Corporation
- Boston Scientific Corporation
- St. Jude Medical, Inc.
- ArthroCare Corporation
- Novoste Corporation
- Eclipse Surgical Technologies, Inc.
The analysis for Group One indicated that:
- the ratio of the total enterprise value, meaning the market value of
equity plus total debt, minority interest and preferred stock minus cash,
to projected revenue ranged from approximately: 2.2x to 7.2x for 2000,
with a mean of approximately 4.2x and a median of approximately 4.0x; and
2.0x to 4.7x for 2001, with a mean of approximately 3.4x and a median of
approximately 3.5x;
- the ratio of the total enterprise value to tax effected earnings before
interest and taxes, which is referred to as EBIT, ranged from
approximately: 13.1x to 51.6x for the last twelve month period, with a
mean of approximately 28.2x and a median of approximately 24.0x; and 18.4x
to 46.0x for 2000 (estimated), with a mean of approximately 28.8x and
median of approximately 23.5x; and
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- the ratio of the share price, based on the closing price per share on
May 18, 2000, to projected earnings per share ranged from approximately:
16.7x to 83.6x for 2000, with a mean of approximately 37.2x and a median
of approximately 25.8x; 4.9x to 50.8x for 2001, with a mean of
approximately 25.2x and a median of approximately 21.0x; and 11.6x to
28.1x for 2002, with a mean of approximately 19.9x and a median of
approximately 16.8x.
The analysis for Group Two indicated that:
- the ratio of the total enterprise value to projected revenue ranged from
approximately: 2.8x to 12.3x for 2000, with a mean of approximately 6.4x
and a median of approximately 4.1x; and 2.6x to 10.6x for 2001, with a
mean of approximately 5.6x and median of approximately 5.0x;
- the ratio of the total enterprise value to tax effected EBIT ranged from
approximately: 25.8x to 74.4x for the last twelve month period, with a
mean of approximately 40.7x and a median of approximately 30.1x; and 24.1x
to 60.6x for 2000 (estimated), with a mean of approximately 34.8x and
median of approximately 27.1x; and
- the ratio of the share price, based on the closing price per share on
May 18, 2000, to projected earnings per share ranged from approximately:
19.6x to 57.3x for 2000, with a mean of approximately 35.1x and a median
of approximately 29.2x; 16.7x to 49.5x for 2001, with a mean of
approximately 30.0x and a median of approximately 29.4x; and 14.0x to
40.6x for 2002, with a mean of approximately 26.3x and a median of
approximately 24.6x.
Based on these analyses, the implied equity value per Share ranged from
approximately $12.00 to $18.50.
PRECEDENT TRANSACTIONS ANALYSIS. Chase H&Q reviewed certain publicly
available information regarding selected business combinations in the medical
devices industry. The comparable transaction and the month in which each
transaction was announced were as follows:
- Bausch & Lomb Incorporated/Wesley Jessen VisionCare, Inc. (March 2000)
- Wesley Jessen VisionCare, Inc./Ocular Sciences, Inc. (March 2000)
- Biomet, Inc./Implant Innovations Inc. (August 1999)
- Guidant Corporation/Cardiothoracic Systems, Inc. (August 1999)
- Medtronic, Inc./Xomed Surgical Products, Inc. (August 1999)
- Abbott Laboratories/Perclose, Inc. (July 1999)
- Fox Paine & Co./Maxxim Medical, Inc. (June 1999)
- St. Jude Medical, Inc./Angio-Seal (a division of Tyco International Ltd.)
(February 1999)
- Medtronic, Inc./Arterial Vascular Engineering, Inc. (November 1998)
- Maxxim Medical, Inc./Circon Corporation (November 1998)
- Medtronic, Inc./Sofamor Danek Group, Inc. (November 1998)
- Summit Technology, Inc./Autonomous Technologies Corporation
(October 1998)
- General Electric Company/Marquette Medical Systems, Inc. (September 1998)
- Guidant Corporation/Sulzer Intermedics and Sulzer Osypka (divisions of
Sulzer Medica Ltd.) (September 1998)
- Guidant Corporation/InControl, Inc. (August 1998)
- Stryker Corporation/Howmedica (a division of Pfizer, Inc.) (July 1998)
- Johnson & Johnson/Depuy, Inc. (July 1998)
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- Arterial Vascular Engineering, Inc./C.R. Bard, Inc. (coronary cath lab
business) (July 1998)
- Medtronic, Inc./Physio-Control International Corporation (June 1998)
- Tyco International Ltd./United States Surgical Corporation (May 1998)
- Sulzer Medica Ltd./Spine-Tech, Inc. (December 1997)
- Respironics, Inc./Healthdyne Technologies, Inc. (November 1997)
- Bausch & Lomb Incorporated/Storz Instrument (October 1997)
- Bausch & Lomb Incorporated/Chiron Vision Corporation (October 1997)
- Beckman Instruments, Inc./Coulter Corporation (September 1997)
The analysis indicated that:
- the transaction value as a multiple of last twelve months revenue ranged
from approximately 1.3x to 14.9x, with a mean of approximately 4.6x and a
median of approximately 2.5x;
- the transaction price as a multiple of estimated one-year forward earnings
per share ranged from approximately 8.2x to 47.2x, with a mean of
approximately 23.8x and a median of approximately 22.1x;
- premiums paid relative to the closing price per share one day prior to the
announcement date ranged from approximately 3% to 67%, with a mean of
approximately 25.8% and a median of approximately 19.6%;
- premiums paid relative to the closing price per share four weeks prior to
the announcement date ranged from approximately 4% to 118%, with a mean of
approximately 47.5% and a median of approximately 36.6%;
- premiums paid relative to the closing price per share 90 days prior to the
announcement date ranged from approximately negative 11% to 95%, with a
mean of approximately 29.2% and a median of approximately 28.6%.
Based on this analysis, the implied equity value per Share using the
transaction multiples method ranged from approximately $10.50 to $21.00, and
using the premiums paid method the implied equity value per Share ranged from
approximately $13.50 to $24.00.
DISCOUNTED CASH FLOW ANALYSIS. Chase H&Q performed a discounted cash flow
analysis for the Company using financial forecasts provided by the Company to
calculate a present value of projected unlevered free cash flows for the
Company. For this analysis, Chase H&Q discounted the estimated unlevered free
cash flows using a range of discount rates from 25% to 35%. Chase H&Q added to
the present values of the cash flows the terminal value of tax-affected EBIT in
the year 2006, and discounted the terminal value using the range of discount
rates that was used to discount the unlevered free cash flows. The terminal
value was calculated using the terminal multiple method, assuming a range of
terminal multiples of one-year forward tax effected EBIT from 10.0x to 20.0x.
Based on this analysis, the implied equity value per Share ranged from
approximately $15.00 to $27.00.
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<PAGE>
The following is a summary of valuation ranges derived from Chase H&Q's
comparable public companies analysis, precedent transactions analysis and
discounted cash flow analysis, all as described above:
<TABLE>
<CAPTION>
METHOD OF ANALYSIS PER SHARE VALUATION RANGE
------------------ -------------------------
<S> <C>
Comparable Public Companies Analysis........................ $12.00 to $18.50
Precedent Transactions Analysis............................. $13.50 to $24.00
(Premiums Paid)
Precedent Transactions Analysis............................. $10.50 to $21.00
(Transaction Multiples)
Discounted Cash Flow Analysis............................... $15.00 to $27.00
</TABLE>
The summary set forth above does not purport to be a complete description of
the analyses performed by Chase H&Q in arriving at its opinion. Arriving at a
fairness opinion is a complex process not necessarily susceptible to partial
analysis or summary description. Chase H&Q believes that its analyses must be
considered as a whole and that selecting portions of analyses and of the factors
considered by it, without considering all such factors and analyses, could
create a misleading view of the processes underlying its opinion. Chase H&Q did
not assign relative weights to any of its analyses in preparing its opinion. The
matters considered by Chase H&Q in its analyses were based on numerous
macroeconomic, operating and financial assumptions with respect to industry
performance, general business and economic conditions and other matters, many of
which are beyond the Company's control and involve the application of complex
methodologies and educated judgment. Any estimates incorporated in the analyses
performed by Chase H&Q are not necessarily indicative of actual past or future
results or values, which may be significantly more or less favorable than such
estimates. Estimated values do not purport to be appraisals and do not
necessarily reflect the prices at which businesses or companies may be sold in
the future, and such estimates are inherently subject to uncertainty. None of
the comparable companies used in the comparable public companies analysis
described above is identical to the Company, and none of the comparable
transactions used in the comparable transactions analysis described above is
identical to the Merger. Accordingly, an analysis of publicly traded comparable
companies and transactions is not mathematical; rather it involves complex
considerations and judgments concerning differences in financial and operating
characteristics of the comparable companies and other factors that could affect
the public trading value of the comparable companies or company to which they
are being compared.
The Board of Directors selected Chase H&Q to act as its financial advisor on
the basis of the reputation of Chase H&Q as an internationally recognized
investment banking firm with substantial expertise in transactions similar to
the Merger and because it is familiar with the Company and its business. As part
of its financial advisory business, Chase H&Q is continually engaged in the
valuation of businesses and their securities in connection with mergers and
acquisitions and valuations for estate, corporate and other purposes. Chase H&Q
has acted as financial advisor to the Board of Directors in connection with the
Merger and will receive a fee for its services, payment of a significant portion
of which was contingent upon the consummation of the Offer. In the ordinary
course of business, Chase H&Q or its affiliates may trade in the debt and equity
securities of the Company for its own account and for the accounts of its
customers and, accordingly, may at any time hold a long or short position in
such securities.
The terms of the engagement of Chase H&Q by the Board of Directors are set
forth in a letter dated October 15, 1999. Pursuant to the terms of the letter
agreement, the Company agreed to pay Chase H&Q a fee of $650,000 in cash upon
delivery of its opinion. Upon consummation of a sale of the Company, the Company
also agreed to pay to Chase H&Q a fee in cash on closing in an amount equal to
0.45% of the aggregate consideration received by the Company's stockholders
(subject to a
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<PAGE>
minimum fee of $3,000,000), against which any fees previously paid by the
Company will be credited. The Company has also agreed to reimburse Chase H&Q for
its reasonable out-of-pocket expenses, including, without limitation, the
reasonable fees and disbursements of its counsel. In addition, the Company has
also agreed to indemnify Chase H&Q against certain liabilities and expenses
arising out of its engagement.
CERTAIN COMPANY PROJECTIONS
During the course of discussions between representatives of Parent and the
Company, the Company provided Parent or its representatives with certain
non-public business and financial information about the Company. This
information included the following projections of total revenues, net income and
earnings per share for the Company for the years ended December 31, 2000 through
2005:
<TABLE>
<CAPTION>
2000 2001 2002 2003 2004 2005
-------- -------- -------- -------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C>
Total revenues.................. $108,060 $146,468 $237,280 $295,093 $366,180 $457,680
Operating income................ 2,804 29,848 96,325 136,861 191,030 263,247
Net income...................... 3,553 20,303 61,438 87,852 123,213 170,425
Earnings per share.............. $ 0.08 $ 0.44 $ 1.30 $ 1.83 $ 2.55 $ 3.52
</TABLE>
The Company does not as a matter of course make public any projections as to
future performance or earnings, and the projections set forth above are included
in this Information Statement only because this information was provided to
Parent. The projections were not prepared with a view to public disclosure or
compliance with the published guidelines of the Securities and Exchange
Commission or the guidelines established by the American Institute of Certified
Public Accountants regarding projections or forecasts. The projections do not
purport to present operations in accordance with generally accepted accounting
principles, and the Company's independent auditors have not examined or compiled
the projections and accordingly assume no responsibility for them. The Company's
internal financial forecasts (upon which the projections provided to Parent and
the Purchaser were based in part) are, in general, prepared solely for internal
use and capital budgeting and other management decisions and are subjective in
many respects and thus susceptible to interpretations and periodic revision
based on actual experience and business developments. The projections also
reflect numerous assumptions made by management of the Company, including
assumptions with respect to the market for the Company's products and services,
general business, economic, market and financial conditions and other matters,
including effective tax rates consistent with historical levels for the Company
and interest rates and the anticipated amount of borrowings by the Company, all
of which are difficult to predict, many of which are beyond the Company's
control, and none of which were subject to approval by Parent or the Purchaser.
Accordingly, there can be no assurance that the assumptions made in preparing
the projections will prove accurate. It is expected that there will be
differences between actual and projected results, and actual results may be
materially greater or less than those contained in the projections. The
inclusion of the projections herein should not be regarded as an indication that
any of Parent, the Purchaser, the Company or their respective affiliates or
representatives considered or consider the projections to be a reliable
prediction of future events, and the projections should not be relied upon as
such. None of Parent, the Purchaser, the Company or any of their respective
affiliates or representatives has made or makes any representation to any person
regarding the ultimate performance of the Company compared to the information
contained in the projections, and none of them intends to update or otherwise
revise the projections to reflect circumstances existing after the date when
made or to reflect the occurrence of future events even in the event that any or
all of the assumptions underlying the projections are shown to be in error.
15
<PAGE>
Financial information with respect to the Company and its subsidiaries is
included in the Company's annual report on Form 10-K for the year ended
December 31, 1999, its quarterly report on Form 10-Q for the quarter ended
March 31, 2000 and other documents filed by the Company with the Securities and
Exchange Commission. See "Incorporation of Certain Documents by Reference" and
"Available Information".
CHANGE OF CONTROL
At 12:00 midnight, New York City time, on Friday, June 30, 2000, the Offer
expired. On July 3, 2000, the Purchaser accepted for payment all Shares that
were validly tendered and not withdrawn pursuant to the Offer. On July 7, 2000,
the Purchaser was informed by ChaseMellon Shareholder Services, L.L.C. that a
total of 41,944,555 Shares had been validly tendered and not withdrawn. As a
result, the Purchaser owns approximately 88.9% of the outstanding Shares. See
also "The Merger and Related Transactions--Background of the Merger", "The
Merger and Related Transactions--Board of Directors", "The Merger and Related
Transactions--Employee Benefits", "Interests of Certain Persons in the
Merger--Stock Options" and "Interests of Certain Persons in the
Merger--Severance Agreements".
CONDITIONS TO THE MERGER
Following the consummation of the Offer, the Merger Agreement provides that
the respective obligations of each party to effect the Merger are subject to the
satisfaction or waiver of certain remaining conditions, including the following:
(a) the Company's stockholders shall have approved the Merger by an affirmative
vote of the holders of two-thirds of the outstanding Shares (the "Company
Stockholder Approval"); (b) any consents, approvals and filings under any
foreign antitrust laws, the absence of which would prohibit the consummation of
the Merger, shall have been obtained or made; (c) no statute, rule, regulation,
executive order, decree, temporary restraining order, preliminary or permanent
injunction or other order enacted, entered, promulgated, enforced or issued by
any Governmental Entity (as defined below under "--Termination of the Merger
Agreement"), or other legal restraint or prohibition preventing the consummation
of the Merger shall be in effect; provided that each of the parties shall have
used all reasonable efforts to prevent the entry of any such injunction or other
order and to appeal as promptly as possible any such injunction or other order
that may be entered.
TERMINATION OF THE MERGER AGREEMENT
The Merger Agreement may be terminated at any time prior to the Effective
Time, whether before or after adoption of the Merger Agreement by the
stockholders of the Company:
(a) by mutual written consent of Parent, the Purchaser and the Company; or
(b) by either Parent or the Company:
(i) if any Federal, state, local or foreign government or any court of
competent jurisdiction, administrative agency or commission or other
governmental authority or instrumentality, domestic or foreign (a
"Governmental Entity"), shall have issued an order, decree or ruling
or taken any other action permanently enjoining, restraining or
otherwise prohibiting the acceptance for payment of, or payment for,
the Shares pursuant to the Offer or the Merger and such order,
decree, ruling or other action shall have become final and
nonappealable; or
(ii) if, upon a vote at a duly held meeting to obtain the Company
Stockholder Approval, the Company Stockholder Approval is not
obtained; provided that Parent may not terminate the Merger
Agreement pursuant to this termination provision if the Purchaser,
Parent or
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<PAGE>
any other subsidiary of Parent shall not have voted its Shares in
favor of obtaining the Company Stockholder Approval.
TAKEOVER PROPOSALS
The Merger Agreement provides that the Company will not, nor will it
authorize or permit any of its subsidiaries to, nor will it authorize or permit
any director, officer or employee of, or any investment banker, attorney or
other advisor or representative of, the Company or any of its subsidiaries to
(i) directly or indirectly, solicit, initiate or encourage the submission of any
Takeover Proposal (as defined below), (ii) enter into any agreement with respect
to any Takeover Proposal or (iii) directly or indirectly, participate in any
discussions or negotiations regarding, or furnish to any person any information
with respect to, or take any other action to facilitate any inquiries or the
making of any proposal that constitutes, or may reasonably be expected to lead
to, any Takeover Proposal. However, prior to July 3, 2000, the date on which the
Purchaser accepted Shares for payment pursuant to the Offer, the Merger
Agreement permitted the Board of Directors, to the extent necessary to act in a
manner consistent with its fiduciary obligations, as determined in good faith by
it after consultation with outside counsel, in response to a Takeover Proposal
that the Board of Directors determined, in good faith after consultation with
outside counsel and Chase H&Q or another nationally recognized independent
financial advisor, was reasonably likely to lead to a Superior Proposal (as
defined below), that was unsolicited and that did not otherwise result from a
breach or a deemed breach of this provision, and subject to compliance with the
certain obligations to notify Parent, (x) furnish information with respect to
the Company to the person making such Takeover Proposal (and its
representatives) pursuant to a customary confidentiality agreement; and
(y) participate in discussions or negotiations with the person making such
Takeover Proposal (and its representatives) regarding such Takeover Proposal.
The Company did not receive any Takeover Proposal from a third party prior to
consummation of the Offer.
"Takeover Proposal" means (i) any proposal or offer for a merger,
consolidation, dissolution, recapitalization or other business combination
involving the Company or any significant subsidiary of the Company, (ii) any
proposal for the issuance by the Company of over 20% of its equity securities as
consideration for the assets or securities of another person or (iii) any
proposal or offer to acquire in any manner, directly or indirectly, over 20% of
the equity securities or consolidated total assets of the Company, in each case
other than pursuant to the Offer, the Merger and the other transactions
contemplated by the Merger Agreement.
"Superior Proposal" means any proposal made by a third party to acquire
substantially all the equity securities or assets of the Company, pursuant to a
tender or exchange offer, a merger, a consolidation, a liquidation or
dissolution, a recapitalization or a sale of all or substantially all its
assets, (i) on terms which the Board of Directors determines in good faith to be
superior from a financial point of view to the holders of Shares to the Offer,
the Merger and the other transactions contemplated by the Merger Agreement
(after consultation with the Company's financial advisor, which shall be Chase
H&Q or another nationally recognized independent financial advisor), taking into
account all the terms and conditions of such proposal and the Merger Agreement
(including any proposal by Parent to amend the terms of the Offer, the Merger
and the transactions contemplated by the Merger Agreement) and (ii) that is
reasonably capable of being completed, taking into account all financial,
regulatory, legal and other aspects of such proposal.
The Merger Agreement further provides that, unless the Board of Directors,
after consultation with outside counsel, determines in its good faith judgment
that it is necessary to do so to fulfill its fiduciary obligations, neither the
Board of Directors nor any committee thereof may (i) withdraw (or modify in a
manner adverse to Parent or the Purchaser) or publicly propose to withdraw (or
modify in a manner adverse to Parent or the Purchaser) the approval or
recommendation by such Board of Directors or any such committee of the Merger
Agreement, the Offer or the Merger, (ii) approve any
17
<PAGE>
letter of intent, agreement in principle, acquisition agreement or similar
agreement relating to any Takeover Proposal, or (iii) approve or recommend, or
publicly propose to approve or recommend, any Takeover Proposal. However, prior
to the consummation of the Offer, the Company was permitted to take the actions
set forth in clauses (ii) or (iii) of the preceding sentence if: (i) the Board
of Directors received a Superior Proposal, (ii) in light of such Superior
Proposal the Board of Directors determined in good faith, after consultation
with outside counsel, that it was necessary to withdraw or modify its approval
or recommendation of the Merger Agreement, the Offer or the Merger in order to
act in a manner consistent with its fiduciary duty under applicable law,
(iii) the Company notified Parent in writing of the determinations described in
clause (ii) above, (iv) at least three business days following receipt by Parent
of the notice referred to in clause (iii) above, and taking into account any
revised proposal made by Parent since receipt of the notice referred to in
clause (iii) above, such Superior Proposal remained a Superior Proposal and the
Board of Directors again made the determinations referred to in clause (ii)
above, (v) the Company was in compliance with the provisions related to Takeover
Proposals referenced above (other than breaches that, individually and in the
aggregate, were not material and did not prejudice Parent's rights under the
Merger Agreement), (vi) the Company had previously paid the Termination Fee
described below, (vii) the Board of Directors concurrently approved, and the
Company concurrently entered into, a definitive agreement, providing for the
implementation of such Superior Proposal and (viii) Parent was not at such time
entitled to terminate the Merger Agreement pursuant to a Company breach or
failure to perform in any material respect any of its representations,
warranties or covenants contained in the Merger Agreement. The Company did not
receive a Superior Proposal or any other Takeover Proposal from a third party
prior to consummation of the Offer.
FEES AND EXPENSES
The Merger Agreement provides that, except as set forth below, all fees and
expenses incurred in connection with the Merger Agreement, the Offer, the Merger
and the other transactions contemplated by the Merger Agreement shall be paid by
the party incurring such fees or expenses, whether or not the Merger is
consummated.
The Merger Agreement would have required the Company to pay to Parent a fee
of $32.5 million (the "Termination Fee") if: (i) the Merger Agreement had been
terminated because the Offer expired without the Purchaser accepting Shares for
payment as a result of the failure of the condition set forth in paragraph (d)
of Exhibit A to the Merger Agreement; (ii) the Company had terminated the Merger
Agreement in order to enter into a definitive agreement with respect to a
Superior Proposal as described above; (iii) Parent had terminated the Merger
Agreement prior to consummation of the Offer because the Board of Directors had
withdrawn or modified its recommendation of the Offer or as a result of the
Company materially breaching its obligations described under "Takeover
Proposals"; (iv) after the date of the Merger Agreement, any person had made a
Takeover Proposal, (A) the Offer had remained open until the scheduled
expiration date immediately following the date such Takeover Proposal was made,
(B) fewer than two-thirds of the Shares outstanding on a fully diluted basis had
been tendered in the Offer by such expiration date, (C) the Merger Agreement had
been terminated under certain circumstances in which the Offer was not
consummated on or before November 26, 2000 or the Offer was not consummated as a
result of a failure of certain conditions and (D) within 12 months of such
termination the Company had entered into a definitive agreement to consummate,
or consummated, the transactions contemplated by the Takeover Proposal; or
(v) the Merger Agreement had been terminated by Parent under certain
circumstances as a result of a wilful breach by the Company and within
12 months of such termination the Company had entered into a definitive
agreement to consummate, or consummated, the transactions contemplated by a
Takeover Proposal.
The Merger Agreement provided that, if the Company had become obligated to
pay the Termination Fee pursuant to clause (v) described above as a result of a
wilful breach by the Company, Parent would have had the right to elect not to
receive the Termination Fee and instead pursue any
18
<PAGE>
and all rights, claims and causes of action it may have had with respect to such
breach under law. If Parent elected to receive the Termination Fee, and the
Company paid the Termination Fee as described above, the payment by the Company
of such fee would have been Parent's sole remedy with respect to such breach and
Parent would have been required to waive, to the fullest extent permitted by
law, any and all rights, claims and causes of action (other than claims of, or
causes of action arising from, fraud) it may have had against the Company with
respect to such breach.
BOARD OF DIRECTORS
The Merger Agreement provided that promptly upon consummation of the Offer,
the Purchaser was entitled to designate such number of directors on the Board of
Directors as would give the Purchaser representation on the Board of Directors
equal to at least that number of directors, rounded up to the next whole number,
which is the product of (a) the total number of directors on the Board of
Directors (giving effect to the directors elected pursuant to this sentence)
multiplied by (b) the percentage that (i) such number of Shares so accepted for
payment and paid for by the Purchaser plus the number of Shares otherwise owned
by the Purchaser or any other subsidiary of Parent bears to (ii) the number of
such Shares outstanding. Until the Effective Time, the Board of Directors shall
have at least three directors who were directors on the date of the Merger
Agreement (the "Independent Directors"). The Merger Agreement provides that, if
the number of Independent Directors is reduced below three for any reason
whatsoever, any remaining Independent Directors (or Independent Director, if
there is only one remaining) will be entitled to designate persons to fill such
vacancies who will be deemed to be Independent Directors for purposes of the
Merger Agreement or, if no Independent Directors then remain, the other
directors will designate three persons to fill such vacancies who are not
officers, stockholders or affiliates of the Company, Parent or the Purchaser,
and such persons will be deemed to be Independent Directors for purposes of the
Merger Agreement.
On July 5, 2000, by written consent in lieu of a meeting of the Board of
Directors: (i) the Company accepted the resignations of the following directors:
Jeffrey A. Bernfeld, C. Glen Bradley, Richard F. Miller and John A. Norris; and
(ii) the following four designees of Parent were elected to the Board: Timothy
R. G. Sear, C. Allen Baker, Charles E. Miller, Sr., and Gerald D. Cagle.
EMPLOYEE BENEFITS
The Merger Agreement provides that Parent will cause the Surviving
Corporation (i) to maintain for a period of one year after the Effective Time
the Company Benefit Plans (as defined in the Merger Agreement) (other than
equity-based plans) in effect on the date of the Merger Agreement or (ii) to
provide benefits (other than equity-based plans) to each current employee of the
Company and its subsidiaries that are not materially less favorable in the
aggregate to such employees than those benefits in effect for such employees on
the date of the Merger Agreement.
In addition, from and after July 5, 2000, the date on which the Purchaser's
designees were appointed to the Board of Directors (the "Control Date"), Parent
will cause the Company or the Surviving Corporation, as applicable, to honor in
accordance with their respective terms (as in effect on the date of the Merger
Agreement), all the Company's employment, severance and termination agreements,
plans and policies disclosed in the Company's disclosure schedule to the Merger
Agreement including any change in control provisions contained therein.
The Merger Agreement further provides that with respect to any "employee
benefit plan", as defined in Section 3(3) of ERISA, maintained by Parent or any
of its subsidiaries (including any severance plan), for all purposes, including
determining eligibility to participate and vesting, service with the Company or
any of its subsidiaries shall be treated as service with Parent or any of its
subsidiaries; provided, that such service need not be recognized to the extent
that such recognition would result in any duplication of benefits.
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<PAGE>
REASONABLE EFFORTS; NOTIFICATION
The Merger Agreement provides that each of the parties shall use all
reasonable efforts to take, or cause to be taken, all reasonable actions, and to
do, or cause to be done, and to assist and cooperate with the other parties in
doing, all things reasonably necessary, proper or advisable to consummate and
make effective, in the most expeditious manner practicable, the Merger and the
other transactions contemplated by the Merger Agreement, including (i) the
obtaining of all necessary actions or nonactions, waivers, consents and
approvals from Governmental Entities and the making of all necessary
registrations and filings (including filings with Governmental Entities, if any)
and the taking of all reasonable steps as may be necessary to obtain an approval
or waiver from, or to avoid an action or proceeding by, any Governmental Entity,
(ii) the obtaining of all necessary consents, approvals or waivers from third
parties, (iii) the defending of any lawsuits or other legal proceedings, whether
judicial or administrative, challenging the Merger Agreement or the consummation
of the transactions contemplated by the Merger Agreement, including, when
reasonable, seeking to have any stay or temporary restraining order entered by
any court or other Governmental Entity vacated or reversed and (iv) the
execution and delivery of any additional instruments necessary to consummate the
transactions contemplated by the Merger Agreement and to fully carry out the
purposes of the Merger Agreement. Nothing in the Merger Agreement is deemed to
require any party to waive any substantial rights or agree to any substantial
limitation on its operations or to dispose of any significant asset or
collection of assets.
The Company shall give prompt notice to Parent, and Parent or the Purchaser
shall give prompt notice to the Company, of (i) any representation or warranty
made by it contained in the Merger Agreement that is qualified as to materiality
becoming untrue or inaccurate in any respect or any such representation or
warranty that is not so qualified becoming untrue or inaccurate in any material
respect or (ii) the failure by it to comply with or satisfy in any material
respect any covenant, condition or agreement to be complied with or satisfied by
it under the Merger Agreement; provided, that no such notification shall affect
the representations, warranties, covenants or agreements of the parties or the
conditions to the obligations of the parties under the Merger Agreement.
REPRESENTATIONS AND WARRANTIES
The Merger Agreement contains various customary representations and
warranties.
PROCEDURE FOR TERMINATION, AMENDMENT, EXTENSION OR WAIVER
The Merger Agreement may be amended by the parties at any time, whether
before or after the Company Stockholder Approval has been obtained; provided
(i) that, after the Company Stockholder Approval has been obtained, there shall
be made no amendment that by law requires further approval by the Company's
stockholders without the further approval of such stockholders and (ii) that
after the Merger Agreement is adopted by the Company's stockholders, no such
amendment or modification shall be made that reduces the amount or changes the
form of Merger Consideration or otherwise materially and adversely affects the
rights of the Company's stockholders thereunder, without the further approval of
such stockholders. The Merger Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties thereto.
At any time prior to the Effective Time, the parties may (a) extend the time
for the performance of any of the obligations or other acts of the other
parties, (b) waive any inaccuracies in the representations and warranties
contained in the Merger Agreement or in any document delivered pursuant thereto
or (c) waive compliance with any of the agreements or conditions contained
therein. Any agreement on the part of a party to any such extension or waiver
shall be valid only if set forth in an instrument in writing signed on behalf of
such party. The failure by any party to the Merger
20
<PAGE>
Agreement to assert any of its rights under the Merger Agreement or otherwise
shall not constitute a waiver of such rights.
A termination of the Merger Agreement, an amendment of the Merger Agreement
or an extension or waiver shall, in order to be effective, require in the case
of Parent, the Purchaser or the Company, action by its Board of Directors or the
duly authorized designee of its Board of Directors; provided, that in the case
of the Company, such action shall also require action by a majority of the
Independent Directors.
RIGHTS AGREEMENT
The Rights Agreement was amended as of May 26, 2000, to render the Rights
inapplicable to the Offer, the Merger and the other transactions contemplated by
the Merger Agreement.
THE CONFIDENTIALITY AGREEMENT
Alcon Laboratories, Inc., the principal operating subsidiary of Parent, and
the Company entered into a Confidentiality Agreement on November 5, 1999.
Pursuant to the Confidentiality Agreement, the Company and Alcon agreed to keep
confidential certain information provided by the Company or its representatives.
The Merger Agreement provides that certain information exchanged pursuant to the
Merger Agreement will be subject to the Confidentiality Agreement.
CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES
The following discussion describes the material U.S. Federal income tax
consequences of the Merger. The discussion is based upon the Internal Revenue
Code of 1986, as amended (the "Code"), existing and proposed treasury
regulations, rulings, administrative pronouncements and judicial decisions,
changes to which could materially affect the tax consequences described in this
Information Statement and could be made on a retroactive basis. This discussion
does not address all aspects of U.S. Federal income taxation that may be
important to you based on your particular circumstances and does not address any
aspect of state, local, foreign or other tax laws. This summary generally
considers only Shares that are exchanged for cash pursuant to the Merger and
that are held as capital assets (generally, assets held for investment) and may
not apply to holders who acquired Shares pursuant to the exercise of employee
stock options or other compensation arrangements with the Company, holders that
are subject to special tax treatment, holders that hold Shares as part of a
"straddle", "hedge", or "conversion transaction", or holders the functional
currency of which is not the U.S. dollar. Holders that may be subject to special
tax treatment include broker-dealers, insurance companies, tax-exempt
organizations, financial institutions, and regulated investment companies.
CONSEQUENCES TO HOLDERS OF SHARES. A holder of Shares will recognize gain
or loss equal to the difference between the amount of cash received in the
Merger and the holder's adjusted tax basis in the Shares exchanged therefor.
Such gain or loss will be capital gain or loss and will be long-term capital
gain or loss if at the Effective Time the holder has a holding period for the
Shares of more than one year.
BACKUP WITHHOLDING AND INFORMATION REPORTING. Payments of cash to a holder
surrendering Shares will be subject to information reporting and "backup"
withholding at a rate of 31% of the cash payable to the holder, unless the
holder furnishes its taxpayer identification number in the manner prescribed in
applicable treasury regulations, certifies that such number is correct,
certifies as to no loss of exemption from backup withholding and meets certain
other conditions. Any amounts withheld from payments to a holder under the
backup withholding rules generally will be allowed as a credit against the
holder's U.S. Federal income tax liability, which may entitle such holder to a
refund provided the required information is furnished to the Internal Revenue
Service.
21
<PAGE>
The preceding discussion does not purport to be a complete analysis or
discussion of all potential tax effects relevant to the Merger. Thus,
stockholders are urged to consult their own tax advisors as to the specific tax
consequences to them of the Merger, including tax return reporting requirements,
the applicability and effect of Federal, state, local, foreign and other
applicable tax laws and the effect of any proposed changes in the tax laws.
METHOD OF ACCOUNTING
The Merger will be accounted for under the purchase method of accounting.
REGULATORY AND OTHER APPROVALS
There are no U.S. Federal or state regulatory requirements which remain to
be complied with in order to consummate the Merger (other than the filing of
articles of merger with the Secretary of State of The Commonwealth of
Massachusetts).
SOURCE AND AMOUNT OF FUNDS
The total amount of funds required by the Purchaser to purchase all Shares
tendered pursuant to and to pay all related fees and expenses in connection with
the Offer was approximately $797 million. The amount of funds required by the
Company to make all payments to participants in the Company's stock option plans
pursuant to the Merger Agreement was approximately $39 million. The total amount
of funds required by the Purchaser to consummate and to pay all related fees and
expenses in connection with the Merger is estimated to be approximately
$104 million. The Purchaser plans to obtain all funds needed for the Merger
through capital contributions or intercompany advances from Parent. Such funds
will be made available to Parent through intercompany advances from Nestle or an
affiliate of Nestle.
DISSENTERS' RIGHTS
Stockholders of the Company who do not vote in favor of adoption of the
Merger Agreement have the right to seek payment in cash of the fair value of
their Shares by complying with Sections 86 to 98, inclusive, of Chapter 156B of
the General Laws of Massachusetts ("Sections 86-98").
The following discussion is not a complete statement of the law pertaining
to appraisal rights under Massachusetts law, and is qualified in its entirety by
the full text of Sections 86-98, which are provided in their entirety as Annex C
to this Information Statement.
If the Merger Agreement is approved by the stockholders at the Special
Meeting and the Merger is consummated, any stockholder (1) who files with the
Company before the taking of the vote on the approval of such action written
objection to the proposed action stating that he, she or it intends to demand
payment for such person's Shares if the action is taken and (2) whose Shares are
not voted in favor of the Merger Agreement, has or may have the right to demand
in writing from the Company, within twenty days after the date of mailing to
such person of notice in writing that the corporate action has become effective,
payment for his, her or its Shares and an appraisal of the value thereof. The
Company and any such stockholder shall in such cases have the rights and duties
and shall follow the procedure set forth in Sections 86 to 98, inclusive, of
Chapter 156B of the General Laws of Massachusetts. FAILURE TO FOLLOW THE STEPS
REQUIRED BY SECTIONS 86 TO 98, INCLUSIVE, OF CHAPTER 156B OF THE GENERAL LAWS OF
MASSACHUSETTS FOR PERFECTING DISSENTERS' RIGHTS MAY RESULT IN THE LOSS OF SUCH
RIGHTS.
Therefore, under Massachusetts law, a stockholder wishing to exercise his,
her or its appraisal rights (1) must not vote, or permit his, her or its shares
to be voted, in favor of adoption of the Merger Agreement, (2) must deliver to
the Company prior to the vote on the Merger Agreement at the Special
22
<PAGE>
Meeting to be held on August 31, 2000, a written objection to the proposed
action stating that he, she or it intends to demand payment for his, her or its
Shares if the action is taken, and (3) within twenty days after the date of
mailing to such person of notice in writing that the Merger has become
effective, must demand in writing from the Company payment for such person's
Shares and an appraisal thereof. Within ten days after the Effective Time, the
Company will notify each stockholder who has properly filed written objection
and who did not vote, and whose shares were not voted, in favor of adoption of
the Merger Agreement that the Merger has become effective. The stockholder must
be the record holder of such Shares on the date the written objection is made
and must continue to hold such Shares of record until the Effective Time.
Accordingly, a stockholder who is the record holder of Shares on the date the
written demand for appraisal is made, but who thereafter transfers such Shares
prior to the Effective Time, will lose any right to appraisal in respect of such
Shares.
You should consult your tax advisors with regard to the particular Federal,
state, local, foreign and other tax consequences to you of exercising your
appraisal rights under Massachusetts law.
23
<PAGE>
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of the Company Common Stock as of the date of this Information
Statement by (i) each person who is known by the Company to own beneficially
more than five percent (5%) of the outstanding Shares, (ii) each of the
Company's directors, (iii) the Chief Executive Officer and each of the four
other most highly compensated executive officers of the Company in fiscal year
1999 (the "Named Executive Officers") and (iv) all directors and officers of the
Company as a group. Unless otherwise indicated, the mailing address of each of
the persons shown is c/o Summit Autonomous Inc., 21 Hickory Drive, Waltham,
Massachusetts 02451.
<TABLE>
<CAPTION>
SHARES PERCENT
BENEFICIALLY BENEFICIALLY
BENEFICIAL OWNER OWNED(1) OWNED(2)
---------------- ------------ ------------
<S> <C> <C>
Alcon Acquisition Corp.
6201 South Freeway
Fort Worth, Texas 76134-2099.............................. 41,944,555(3) 88.9%
Directors
C. Allen Baker............................................ 0(4) *
Gerald D. Cagle........................................... 0(4) *
Randy W. Frey............................................. 0(5) *
Charles E. Miller......................................... 0(4) *
Robert J. Palmisano....................................... 0(5) *
Timothy R.G. Sear......................................... 0(4) *
Richard M. Traskos........................................ 0 *
Named Executive Officers
Menderes Akdag............................................ 0 *
Robert J. Kelly........................................... 0 *
Peter E. Litman........................................... 0 *
D. Verne Sharma........................................... 0 *
All Executive Officers and Directors as a Group (27
persons);................................................. 53,616(4) *
</TABLE>
------------------------
* Less than 1% of the outstanding Company Common Stock.
(1) Except as otherwise noted, the Company believes that the persons named in
the table have sole voting and investment power with respect to the Shares
set forth opposite such persons' name.
(2) Determined on the basis of 47,166,762 Shares outstanding as of August 10,
2000.
(3) As reported on a Schedule TO Tender Offer Statement dated July 7, 2000 as
filed by the Purchaser and Parent.
(4) Does not include 41,944,555 Shares beneficially owned by the Purchaser,
which such Directors of the Company may be deemed to beneficially own by
virtue of their positions with Parent. Each of C. Allen Baker, Gerald D.
Cagle, Charles E. Miller and Timothy R.G. Sear disclaim any such beneficial
ownership
(5) Mr. Frey is an officer of the Company and Mr. Palmisano is the Chief
Executive Officer of the Company.
24
<PAGE>
INTERESTS OF CERTAIN PERSONS IN THE MERGER
Stockholders should be aware that the executive officers and directors of
the Company have interests in the Merger that are in addition to or different
from the interests of stockholders of the Company generally. These interests are
discussed below.
STOCK OPTIONS
The Merger Agreement provides that the Board of Directors (or, if
appropriate, any committee administering the Company Stock Plans (as defined in
the Merger Agreement)) shall adopt such resolutions or take such other actions
as are required to adjust the terms of all outstanding Company Stock Options (as
defined in the Merger Agreement) and all outstanding Company SARs (as defined in
the Merger Agreement), in each case whether vested or unvested, granted before
the date of the Merger Agreement under any Company Stock Plan to provide that
each such Company Stock Option (and any Company SAR related thereto) outstanding
immediately prior to the first acceptance for payment of Shares pursuant to the
Offer shall be canceled in exchange for a cash payment by the Company as soon as
practicable following the first acceptance for payment of Shares pursuant to the
Offer of an amount equal to (i) the excess, if any, of (x) the highest price per
Share to be paid pursuant to the Offer over (y) the exercise price per Share
subject to such Company Stock Option, multiplied by (ii) the number of Shares
issuable pursuant to the unexercised portion of such Company Stock Options.
The Company has agreed to use its best efforts to obtain all consents of the
holders of Company Stock Options as shall be necessary to effectuate the
foregoing. At Parent's request, payment may be withheld in respect of any
Company Stock Option until all necessary consents with respect to such Company
Stock Option are obtained.
The Merger Agreement provides that the Company Stock Plans shall terminate
as of the Effective Time, and the provisions in any other Benefit Plan (as
defined in the Merger Agreement) providing for the issuance, transfer or grant
of any capital stock of the Company or any interest in respect of any capital
stock of the Company shall be deleted as of the Effective Time, and the Company
shall ensure that following the Effective Time no holder of a Company Stock
Option or Company SAR or any participant in any Company Stock Plan or other
Company Benefit Plan shall have any right thereunder to acquire any capital
stock of the Company or the Surviving Corporation in the Merger.
SEVERANCE AGREEMENTS
The Board of Directors has approved severance agreements for its officers
and director-level employees. These severance arrangements become available only
in the event of a "change of control" of the Company and entitle covered
employees to continuation of salary, standard bonuses and benefits in the event
they are terminated without cause after a change of control or terminate their
employment for "good reason" after a change of control. The severance
arrangements would not apply to a termination for "cause" after a change of
control. The arrangements approved by the Board of Directors provide for salary
continuation and continuation of certain benefits for (i) three years for Robert
Palmisano, President and Chief Executive Officer of the Company, (ii) two years
for each of Randy Frey, Executive Vice President and Chief Technology Officer;
Charline Gauthier, Executive Vice President and Chief Operations Officer;
Bernard Haffey, Executive Vice President and Chief Commercial Officer; Robert
Kelly, Executive Vice President, Chief Financial Officer and Treasurer; and
James Lightman, Senior Vice President, General Counsel and Clerk and (iii) one
year for all other Vice Presidents. The severance arrangements also provide that
in the event the severance provisions are triggered, the Company will make
outplacement services available to such individuals for one year, all
outstanding options held by such individuals will become exercisable and such
individuals will be entitled to certain payments to make them whole for taxes
imposed by Section 4999 of the Internal
25
<PAGE>
Revenue Code, the so-called "golden parachute" tax. Menderes Akdag, President of
Lens Express, Inc., has a severance arrangement with Lens Express, Inc. that
provides for salary continuation for two years on the same terms and under the
same circumstances as the severance arrangements set forth above, but which is
triggered upon a change of control of Lens Express, Inc. The cash severance
payable to Mr. Palmisano, assuming his employment is terminated under
circumstances entitling him to severance, would be $1,642,500 (before giving
effect to any payment for golden parachute taxes). The cash severance payable to
the following individuals, assuming such person's employment is terminated under
circumstances entitling him or her to severance (before giving effect to any
payment for golden parachute taxes), would be: Mr. Frey $667,000, Dr. Gauthier
$616,000, Mr. Haffey $616,000, Mr. Kelly $728,000 and Mr. Lightman $557,550. The
cash severance payable to Mr. Akdag, assuming his employment is terminated under
circumstances entitling him to severance, would be $667,800. Payments made under
these severance arrangements will be paid in a lump-sum cash payment within
30 days of termination, or, at the option of the employee entitled to the
severance payment, in monthly installments with interest at the rate of 7% per
annum over a period not to exceed two years.
INDEMNIFICATION AND INSURANCE
Parent and the Purchaser have agreed in the Merger Agreement that Parent
shall, to the fullest extent permitted by law, cause the Company from and after
July 5, 2000 to honor all the Company's obligations to indemnify, defend and
hold harmless (including any obligations to advance funds for expenses) the
current and former directors and officers of the Company and its subsidiaries
against all losses, claims, damages or liabilities arising out of acts or
omissions by any such directors and officers occurring prior to the Effective
Time to the maximum extent that such obligations of the Company exist on the
date of the Merger Agreement, whether pursuant to the Company's charter, the
Company's by-laws, the Massachusetts Business Corporation Law, individual
indemnity agreements or otherwise, and such obligations shall survive the Merger
and shall continue in full force and effect in accordance with the terms of the
Company's charter, the Company's by-laws and such individual indemnity
agreements from the Effective Time until the expiration of the applicable
statute of limitations with respect to any claims against such directors or
officers arising out of such acts or omissions. In the event a current or former
director or officer of the Company or any of its subsidiaries is entitled to
indemnification, such director or officer shall be entitled to reimbursement
from the Company (from and after the Control Date) or the corporation surviving
the Merger (from and after the Effective Time) for reasonable attorney fees and
expenses incurred by such director or officer in pursuing such indemnification,
including payment of such fees and expenses by the Surviving Corporation or the
Company, as applicable, in advance of the final disposition of such action upon
receipt of an undertaking by such current or former director or officer to repay
such payment if it shall be adjudicated that such current or former director or
officer was not entitled to such payment.
The Merger Agreement also provides that from and after the Control Date and
for a period of six years after the Effective Time, Parent shall cause to be
maintained in effect the current policies of directors' and officers' liability
insurance maintained by the Company (provided that Parent may either
(i) substitute therefor policies with reputable and financially sound carriers
or (ii) maintain self insurance or similar arrangements through a financially
sound insurance affiliate of Parent, in each case of at least the same coverage
and amounts containing terms and conditions which are no less advantageous) with
respect to claims arising from or related to facts or events which occurred at
or before the Effective Time; provided, that Parent shall not be obligated to
make annual premium payments for such insurance to the extent such premiums
exceed 200% of the annual premiums paid as of the date hereof by the Company for
such insurance (such 200% amount, the "Maximum Premium"). If such insurance
coverage cannot be obtained at all, or can only be obtained at an annual premium
in excess of the Maximum Premium, Parent shall maintain the most advantageous
policies of directors' and officers' insurance obtainable for an annual premium
equal to the Maximum Premium. In the Merger Agreement, the Company has
represented to Parent that the Maximum Premium is $400,000.
26
<PAGE>
The Company has agreed in the Merger Agreement to maintain, through the
Effective Time, the Company's existing directors' and officers' insurance in
full force and effect without reduction of coverage.
The Merger Agreement also provides that the by-laws of the corporation
surviving the Merger shall contain the provisions that are set forth, as of the
date of the Merger Agreement, in Article VIII of the by-laws of the Company,
which provisions shall not be directly or indirectly (by amending, repealing or
otherwise modifying the Articles of Organization of the Company) amended,
repealed or otherwise modified for a period of six years from the Effective Time
in any manner that would affect adversely the rights thereunder of individuals
who at or at any time prior to the Effective Time were directors, officers,
employees or other agents of the Company. Additionally, if the corporation
surviving the Merger or any of its successors or assigns (i) consolidates with
or merges into any other person and shall not be the continuing or surviving
corporation or entity of such consolidation or merger and the continuing or
surviving entity does not assume the indemnification obligations of the
Surviving Corporation, or (ii) transfers all or substantially all of its
properties and assets to any person, then, and in each such case, proper
provision shall be made so that the successors and assigns of the corporation
surviving the merger assume, as a matter of law or otherwise, the obligations.
Parent has agreed in the Merger Agreement to guarantee that if for any
reason the Company or the Surviving Corporation, as the case may be, shall not
meet its obligations, Parent shall meet such obligations described above in full
when and as such obligations arise.
MISCELLANEOUS
OTHER MATTERS
Management knows of no other business to be presented at the Special
Meeting.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents previously filed by the Company (File
No. 000-16937) with the Commission are incorporated by reference in this
Information Statement:
- The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1999, previously filed with the Commission on March 30, 2000;
- The Company's Quarterly Report on Form 10-Q for the quarterly period ended
March 31, 2000, previously filed with the Commission on May 12, 2000; and
- The Company's Current Reports on Form 8-K, previously filed with the
Commission on March 29, 2000, May 12, 2000, May 30, 2000, May 31, 2000,
June 30, 2000 and July 14, 2000.
All documents filed by the Company with the Commission pursuant to
Section 13(a), 13(c), 14 and 15(d) of the Exchange Act after the date hereof and
prior to the date of the Special Meeting shall be deemed to be incorporated by
reference herein and shall be a part hereof from the date of filing of such
documents. Any statements contained in a document incorporated by reference
herein or contained in this Information Statement shall be deemed to be modified
or superseded for purposes hereof to the extent that a statement contained
herein (or in any other subsequently filed document which also is incorporated
by reference herein) modified or superseded such statement. Any statement so
modified or superseded shall not be deemed to constitute a part hereof except as
so modified or superseded.
This Information Statement incorporates documents by reference that are not
presented in or delivered with this Information Statement. These documents are
available upon request from James A. Lightman, Clerk, Summit Autonomous Inc., 21
Hickory Drive, Waltham, Massachusetts 02451. In order to ensure timely delivery,
any request should be made by August 24, 2000.
27
<PAGE>
AVAILABLE INFORMATION
The Company files annual, quarterly and special reports, proxy statements
and other information with the Securities and Exchange Commission. You may read
and copy any reports, statements or other information the Company files at the
Public Reference Section of the Commission located at 450 Fifth Street, N.W.,
Room 1024, Washington, D.C. 20549 and at the following regional offices of the
Commission: 7 World Trade Center, 13th Floor, Suite 1300, New York, New York
10004; and Suite 1400, Citicorp Center, 500 West Madison Street, Chicago,
Illinois 60661. You may obtain copies of all or any portion of the material by
mail from the Public Reference Section of the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549 at prescribed rates. Please call the Commission at
(800) SEC-0330 for further information on the public reference rooms. The
Company's filings are also available to the public at the web site maintained by
the Commission at (http://www.sec.gov).
28
<PAGE>
ANNEX A
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
CONFORMED COPY
AGREEMENT AND PLAN OF MERGER
Dated as of May 26, 2000,
Among
ALCON HOLDINGS INC.,
ALCON ACQUISITION CORP.
And
SUMMIT AUTONOMOUS INC.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
ARTICLE I
THE OFFER AND THE MERGER
SECTION 1.01. The Offer................................................... 1
SECTION 1.02. Company Actions............................................. 2
SECTION 1.03. The Merger.................................................. 3
SECTION 1.04. Closing..................................................... 3
SECTION 1.05. Effective Time.............................................. 3
SECTION 1.06. Effects..................................................... 4
SECTION 1.07. Articles of Organization and By-laws........................ 4
SECTION 1.08. Directors................................................... 4
SECTION 1.09. Officers.................................................... 4
ARTICLE II
EFFECT ON THE CAPITAL STOCK OF THE CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES
SECTION 2.01. Effect on Capital Stock..................................... 4
SECTION 2.02. Exchange of Certificates.................................... 5
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
SECTION 3.01. Organization, Standing and Power............................ 7
SECTION 3.02. Company Subsidiaries; Equity Interests...................... 7
SECTION 3.03. Capital Structure........................................... 7
SECTION 3.04. Authority; Execution and Delivery; Enforceability........... 8
SECTION 3.05. No Conflicts; Consents...................................... 9
SECTION 3.06. SEC Documents; Undisclosed Liabilities...................... 10
SECTION 3.07. Information Supplied........................................ 10
SECTION 3.08. Absence of Certain Changes or Events........................ 11
SECTION 3.09. Taxes....................................................... 12
SECTION 3.10. Absence of Changes in Benefit Plans......................... 12
SECTION 3.11. ERISA Compliance; Excess Parachute Payments................. 13
SECTION 3.12. Litigation.................................................. 14
SECTION 3.13. Compliance with Applicable Laws............................. 14
SECTION 3.14. Contracts; Debt Instruments................................. 15
SECTION 3.15. Intellectual Property....................................... 15
SECTION 3.16. Brokers; Schedule of Fees and Expenses...................... 16
SECTION 3.17. Opinion of Financial Advisor................................ 16
SECTION 3.18. Lens Express, Inc. Sale..................................... 16
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB
SECTION 4.01. Organization, Standing and Power............................ 16
SECTION 4.02. Sub......................................................... 17
SECTION 4.03. Authority; Execution and Delivery; Enforceability........... 17
SECTION 4.04. No Conflicts; Consents...................................... 17
SECTION 4.05. Information Supplied........................................ 18
SECTION 4.06. Brokers..................................................... 18
SECTION 4.07. Financial Ability to Perform................................ 18
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
ARTICLE V
COVENANTS RELATING TO CONDUCT OF BUSINESS
SECTION 5.01. Conduct of Business......................................... 18
SECTION 5.02. No Solicitation............................................. 20
ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.01. Preparation of Proxy Statement; Stockholders Meeting........ 22
SECTION 6.02. Access to Information; Confidentiality...................... 22
SECTION 6.03. Reasonable Efforts; Notification............................ 23
SECTION 6.04. Stock Options............................................... 24
SECTION 6.05. Benefit Plans............................................... 24
SECTION 6.06. Indemnification............................................. 25
SECTION 6.07. Fees and Expenses........................................... 26
SECTION 6.08. Public Announcements........................................ 26
SECTION 6.09. Transfer Taxes.............................................. 27
SECTION 6.10. Directors................................................... 27
SECTION 6.11. Rights Agreement; Consequences if Rights Triggered.......... 27
SECTION 6.12. Stockholder Litigation...................................... 28
SECTION 6.13. Transfers of Certain Intangible Assets...................... 28
ARTICLE VII
CONDITIONS PRECEDENT
SECTION 7.01. Conditions to Each Party's Obligation To Effect The
Merger...................................................... 28
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
SECTION 8.01. Termination................................................. 29
SECTION 8.02. Effect of Termination....................................... 30
SECTION 8.03. Amendment................................................... 30
SECTION 8.04. Extension; Waiver........................................... 30
SECTION 8.05. Procedure for Termination, Amendment, Extension or
Waiver...................................................... 30
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.01. Nonsurvival of Representations and Warranties............... 31
SECTION 9.02. Notices..................................................... 31
SECTION 9.03. Definitions................................................. 32
SECTION 9.04. Interpretation; Disclosure Letters.......................... 32
SECTION 9.05. Severability................................................ 32
SECTION 9.06. Counterparts................................................ 32
SECTION 9.07. Entire Agreement; No Third-Party Beneficiaries.............. 33
SECTION 9.08. Governing Law............................................... 33
SECTION 9.09. Assignment.................................................. 33
SECTION 9.10. Enforcement................................................. 33
SECTION 9.11. Consents.................................................... 33
EXHIBIT A Conditions of the Offer..................................... A-1
EXHIBIT B Restated Articles of Organization........................... B-1
</TABLE>
<PAGE>
AGREEMENT AND PLAN OF MERGER dated as of May 26, 2000, among ALCON
HOLDINGS INC., a Delaware corporation ("PARENT"), ALCON ACQUISITION CORP., a
Massachusetts corporation ("SUB") and a wholly owned subsidiary of Parent,
and SUMMIT AUTONOMOUS INC., a Massachusetts corporation (the "COMPANY")
(formerly known as Summit Technology, Inc.).
WHEREAS the respective Boards of Directors of Parent, Sub and the Company
have approved the acquisition of the Company by Parent on the terms and subject
to the conditions set forth in this Agreement;
WHEREAS, in furtherance of such acquisition, Parent proposes to cause Sub to
make a tender offer (as it may be amended from time to time as permitted under
this Agreement, the "OFFER") to purchase all the outstanding shares of common
stock, par value $0.01 per share, of the Company (the "COMPANY COMMON STOCK"),
including the associated Company Rights (as defined in Section 3.03), at a price
per share of Company Common Stock (including the associated Company Right) of
$19.00, net to the seller in cash, on the terms and subject to the conditions
set forth in this Agreement;
WHEREAS the respective Boards of Directors of Parent, Sub and the Company
have approved the merger (the "MERGER") of Sub into the Company, or (at the
election of Parent) the Company into Sub, on the terms and subject to the
conditions set forth in this Agreement, whereby each issued share of Company
Common Stock not owned directly by Parent or the Company, other than Appraisal
Shares (as defined in Section 2.01(d)), shall be converted into the right to
receive the highest per share cash consideration paid pursuant to the Offer; and
WHEREAS Parent, Sub and the Company desire to make certain representations,
warranties, covenants and agreements in connection with the Offer and the Merger
and also to prescribe various conditions to the Offer and the Merger.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
THE OFFER AND THE MERGER
SECTION 1.01. THE OFFER. (a) Subject to the conditions of this Agreement,
as promptly as practicable after the date of this Agreement (but in no event
later than five business days after the public announcement of this Agreement),
Sub shall, and Parent shall cause Sub to, commence the Offer within the meaning
of the applicable rules and regulations of the Securities and Exchange
Commission (the "SEC"). The obligation of Sub to, and of Parent to cause Sub to,
commence the Offer and accept for payment, and pay for, any shares of Company
Common Stock tendered pursuant to the Offer are subject to the conditions set
forth in Exhibit A. The initial expiration date of the Offer shall be the 20th
business day following the commencement of the Offer (determined using
Rules 14d-1(g)(3) and 14d-2 promulgated under the Securities Exchange Act of
1934, as amended (the "EXCHANGE ACT")). Sub expressly reserves the right to
waive any condition to the Offer or modify the terms of the Offer, except that,
without the consent of the Company, Sub shall not and Parent shall not permit
Sub to (i) reduce the number of shares of Company Common Stock subject to the
Offer, (ii) reduce the price per share of Company Common Stock to be paid
pursuant to the Offer, (iii) waive or change the Minimum Tender Condition (as
defined in Exhibit A), (iv) modify in any manner adverse to the holders of
Company Common Stock or add to the conditions set forth in Exhibit A,
(v) except as provided in the next sentence, extend the Offer or (vi) change the
form of consideration payable in the Offer. Notwithstanding the foregoing, Sub
may, without the consent of the Company, (A) if at the scheduled or any extended
expiration date of the Offer (whether extended pursuant to this clause (A) or
otherwise) any of the conditions to Sub's obligation to purchase shares of
Company Common Stock are not satisfied or waived, extend the Offer for such
period as Sub determines; PROVIDED that such extension shall be in increments of
not more than five business days if all of the conditions set forth in
Exhibit A other than the Minimum Tender Condition have been satisfied or waived
at such scheduled or extended expiration date, (B) extend the Offer for any
period required by any rule, regulation,
<PAGE>
interpretation or position of the SEC or the staff thereof applicable to the
Offer and (C) if at the scheduled or any extended expiration date of the Offer
less than 90% of the Fully Diluted Shares (as defined in Exhibit A) have been
validly tendered and not withdrawn in the Offer, extend the Offer for a period
of not more than ten business days in the aggregate beyond the latest expiration
date that would otherwise be permitted under clause (A) or (B) of this sentence.
In addition, Sub may make available a "subsequent offering period", in
accordance with Rule 14d-11 of the Exchange Act. In the event that the Minimum
Tender Condition has not been satisfied or waived at the scheduled expiration
date of the Offer, at the request of the Company, Sub shall, and Parent shall
cause Sub to, extend the expiration date of the Offer in such increments as Sub
may determine until the earliest to occur of (w) the satisfaction or waiver of
such condition, (x) Parent reasonably determines that such condition to the
Offer is not capable of being satisfied on or prior to the Outside Date (as
defined in Section 8.01(b)(i)), (y) the termination of this Agreement in
accordance with its terms and (z) the Outside Date. On the terms and subject to
the conditions of the Offer and this Agreement, Sub shall accept for payment and
pay for all shares of Company Common Stock validly tendered and not withdrawn
pursuant to the Offer that Sub becomes obligated to purchase pursuant to the
Offer as soon as practicable after the expiration of the Offer.
(b) On the date of commencement of the Offer, Parent and Sub shall file
with the SEC a Tender Offer Statement on Schedule TO with respect to the Offer,
which shall contain an offer to purchase and a related letter of transmittal and
summary advertisement (such Schedule TO and the documents included therein
pursuant to which the Offer will be made, together with any supplements or
amendments thereto, the "OFFER DOCUMENTS"). Each of Parent, Sub and the Company
shall promptly correct any information provided by it for use in the Offer
Documents if and to the extent that such information shall have become false or
misleading in any material respect, and each of Parent and Sub shall take all
steps necessary to amend or supplement the Offer Documents and to cause the
Offer Documents as so amended or supplemented to be filed with the SEC and to be
disseminated to the Company's stockholders, in each case as and to the extent
required by applicable Federal securities laws. Parent and Sub shall give the
Company and its counsel a reasonable opportunity to review and comment on the
Offer Documents prior to their being filed with the SEC or disseminated to the
stockholders of the Company. Parent and Sub shall provide the Company and its
counsel in writing with any comments Parent, Sub or their counsel may receive
from the SEC or its staff with respect to the Offer Documents promptly after the
receipt of such comments and shall provide the Company and its counsel with a
reasonable opportunity to participate in the response of Parent or Sub to such
comments.
(c) Prior to the expiration of the Offer, Parent shall provide or cause to
be provided to Sub on a timely basis the funds necessary to purchase any shares
of Company Common Stock that Sub becomes obligated to purchase pursuant to the
Offer.
SECTION 1.02. COMPANY ACTIONS. (a) Subject to Section 5.02(b), the
Company hereby approves of and consents to the Offer, the Merger and the other
transactions contemplated by this Agreement (collectively, the "TRANSACTIONS").
(b) On the date the Offer Documents are filed with the SEC, the Company
shall file with the SEC a Solicitation/Recommendation Statement on
Schedule 14D-9 with respect to the Offer, including an information statement
(such Schedule 14D-9, as amended and supplemented from time to time, the
"SCHEDULE 14D-9"), describing the recommendations referred to in
Section 3.04(b), or any permitted withdrawal or modification in accordance with
Section 5.02(b), and shall mail the Schedule 14D-9 (including in the information
statement) to the holders of Company Common Stock. Each of the Company, Parent
and Sub shall promptly correct any information provided by it for use in the
Schedule 14D-9 if and to the extent that such information shall have become
false or misleading in any material respect, and the Company shall take all
steps necessary to amend or supplement the Schedule 14D-9 and to cause the
Schedule 14D-9 as so amended or supplemented to be filed with the
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SEC and disseminated to the Company's stockholders, in each case as and to the
extent required by applicable Federal securities laws. The Company shall provide
Parent and its counsel in writing with any comments the Company or its counsel
may receive from the SEC or its staff with respect to the Schedule 14D-9
promptly after the receipt of such comments.
(c) In connection with the Offer, the Company shall cause its transfer
agent to furnish Sub as promptly as is reasonably practicable with mailing
labels containing the names and addresses of the record holders of Company
Common Stock as of a recent date and of those persons becoming record holders
subsequent to such date, together with copies of all lists of stockholders,
security position listings and computer files and all other information as Sub
may reasonably request in the Company's possession or control regarding the
beneficial owners of Company Common Stock, and shall furnish to Sub such
information and assistance (including updated lists of stockholders, security
position listings and computer files) as Parent may reasonably request in
communicating the Offer to the Company's stockholders. Subject to the
requirements of applicable Law (as defined in Section 3.05), and except for such
steps as are necessary to disseminate the Offer Documents and any other
documents necessary to consummate the Transactions, Parent and Sub shall hold in
confidence pursuant to the Confidentiality Agreement (as defined in
Section 6.02) the information contained in any such labels, listings and files,
shall use such information only for the purpose of communicating the Offer and
disseminating any other documents necessary to consummate the Offer, the Merger
and the other Transactions and, if this Agreement shall be terminated, shall,
upon request, deliver to the Company all copies of such information then in
their possession.
SECTION 1.03. THE MERGER. On the terms and subject to the satisfaction or
waiver of the conditions set forth in this Agreement, and in accordance with the
Massachusetts Business Corporation Law (the "BCL"), Sub shall be merged with and
into the Company at the Effective Time (as defined in Section 1.05). At the
Effective Time, the separate corporate existence of Sub shall cease and the
Company shall continue as the surviving corporation (the "SURVIVING
CORPORATION"). The Surviving Corporation shall possess all the rights,
privileges, immunities, powers and franchises of the Company and Sub, and the
Surviving Corporation shall by operation of law become liable for all of the
debts, liabilities and duties of the Company and Sub. The name of the Surviving
Corporation shall be Summit Autonomous Inc. and the purpose thereof shall be as
set forth in Section 2 of the Articles of Organization of the Surviving
Corporation. Notwithstanding the foregoing, Parent may elect at any time prior
to the Merger, instead of merging Sub into the Company as provided above, to
merge the Company with and into Sub; PROVIDED, HOWEVER, that the Company shall
not be deemed to have breached any of its representations, warranties or
covenants set forth in this Agreement solely by reason of such election. In such
event, the parties shall execute an appropriate amendment to this Agreement to
reflect the foregoing. At the election of Parent, any direct or indirect wholly
owned subsidiary of Parent may be substituted for Sub as a constituent
corporation in the Merger. In such event, the parties shall execute an
appropriate amendment to this Agreement in order to reflect the foregoing.
SECTION 1.04. CLOSING. The closing (the "CLOSING") of the Merger shall
take place at the offices of Cravath, Swaine & Moore, 825 Eighth Avenue, New
York, New York 10019 at 10:00 a.m. on the second business day following the
satisfaction (or, to the extent permitted by Law, waiver by all parties) of the
conditions set forth in Article VII, or at such other place, time and date as
shall be agreed in writing between Parent and the Company. The date on which the
Closing occurs is referred to in this Agreement as the "CLOSING DATE".
SECTION 1.05. EFFECTIVE TIME. Prior to the Closing, Parent shall prepare
and give the Company and its counsel the opportunity to review, and on the
Closing Date or as soon as practicable thereafter Parent shall file with the
Secretary of State of The Commonwealth of Massachusetts, articles of merger or
other appropriate documents (in any such case, the "ARTICLES OF MERGER")
executed in accordance with the relevant provisions of the BCL and shall make
all other filings or recordings required under the
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BCL. The Merger shall become effective at such time as the Articles of Merger is
duly filed with such Secretary of State, or at such other time as Parent and the
Company shall agree and specify in the Articles of Merger (the time the Merger
becomes effective being the "EFFECTIVE TIME").
SECTION 1.06. EFFECTS. The Merger shall have the effects set forth in
Section 80 of the BCL.
SECTION 1.07. ARTICLES OF ORGANIZATION AND BY-LAWS. (a) The Articles of
Organization of the Company shall be amended and restated at the Effective Time
to read in the form of Exhibit B, and, as so amended, such Articles of
Organization shall be the Articles of Organization of the Surviving Corporation
until thereafter changed or amended as provided therein or by applicable Law.
(b) Subject to Section 6.06, the By-laws of Sub as in effect immediately
prior to the Effective Time shall be the By-laws of the Surviving Corporation
until thereafter changed or amended as provided therein or by applicable Law.
SECTION 1.08. DIRECTORS. At the Closing, Parent shall designate the
directors of the Surviving Corporation and such directors shall hold office
until the earlier of their resignation or removal or until their respective
successors are duly elected and qualified, as the case may be.
SECTION 1.09. OFFICERS. At the Closing, Parent shall designate the
officers of the Surviving Corporation and such officers shall hold office until
the earlier of their resignation or removal or until their respective successors
are duly elected or appointed and qualified, as the case may be.
ARTICLE II
EFFECT ON THE CAPITAL STOCK OF THE
CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES
SECTION 2.01. EFFECT ON CAPITAL STOCK. At the Effective Time, by virtue of
the Merger and without any action on the part of the holder of any shares of
Company Common Stock or any shares of capital stock of Sub:
(a) CAPITAL STOCK OF SUB. Each issued and outstanding share of capital
stock of Sub shall be converted into and become a number of fully paid and
nonassessable shares of common stock, par value $0.01 per share, of the
Surviving Corporation ("SURVIVING CORPORATION COMMON STOCK") equal to (i) the
number of shares of Company Common Stock outstanding immediately prior to
Effective Time (excluding any shares of Company Common Stock that are owned by
any subsidiary of the Company or Parent other than Sub) divided by (ii) 1,000;
PROVIDED, HOWEVER, that if the aggregate number of shares of Surviving
Corporation Common Stock into which the capital stock of Sub is to be converted
pursuant to this Section 2.01(a) is not a whole number, such number shall be
rounded up to the next higher whole number.
(b) CANCELATION OF TREASURY STOCK AND PARENT-OWNED STOCK. Each share of
Company Common Stock that is owned directly by the Company, Parent or Sub shall
no longer be outstanding and shall automatically be canceled and retired and
shall cease to exist, and no other consideration shall be delivered or
deliverable in exchange therefor. Each share of Company Common Stock that is
owned by any subsidiary of the Company or Parent (other than Sub) shall
automatically be converted into one fully paid and nonassessable share of
Surviving Corporation Common Stock.
(c) CONVERSION OF COMPANY COMMON STOCK. (1) Subject to Sections 2.01(b) and
2.01(d), each issued share of Company Common Stock shall be converted into the
right to receive in cash the highest price per share of Company Common Stock
paid pursuant to the Offer.
(2) The cash payable upon the conversion of shares of Company Common Stock
pursuant to this Section 2.01(c) is referred to collectively as the "MERGER
CONSIDERATION". As of the Effective Time, all such shares of Company Common
Stock shall no longer be outstanding and shall automatically be
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canceled and retired and shall cease to exist, and each holder of a certificate
representing any such shares of Company Common Stock shall cease to have any
rights with respect thereto, except the right to receive Merger Consideration
upon surrender of such certificate in accordance with Section 2.02, without
interest.
(d) APPRAISAL RIGHTS. Notwithstanding anything in this Agreement to the
contrary, shares ("APPRAISAL SHARES") of Company Common Stock that are
outstanding immediately prior to the Effective Time and that are held by any
person who is entitled to demand and properly demands appraisal of such
Appraisal Shares pursuant to, and who complies in all respects with, Sections 86
through 97 of the BCL (the "APPRAISAL PROVISIONS") shall not be converted into
Merger Consideration as provided in Section 2.01(c), but rather the holders of
Appraisal Shares shall be entitled to payment of the fair value of such
Appraisal Shares in accordance with the Appraisal Provisions; PROVIDED, HOWEVER,
that if any such holder shall fail to perfect or otherwise shall waive, withdraw
or lose the right to appraisal under the Appraisal Provisions, then the right of
such holder to be paid the fair value of such holder's Appraisal Shares shall
cease and such Appraisal Shares shall be deemed to have been converted as of the
Effective Time into, and to have become exchangeable solely for the right to
receive, Merger Consideration as provided in Section 2.01(c). The Company shall
serve prompt notice to Parent of any demands received by the Company for
appraisal of any shares of Company Common Stock, and Parent shall have the right
to participate in and direct all negotiations and proceedings with respect to
such demands. Prior to the Effective Time, the Company shall not, without the
prior written consent of Parent, make any payment with respect to, or settle or
offer to settle, any such demands, or agree to do any of the foregoing.
SECTION 2.02. EXCHANGE OF CERTIFICATES. (a) PAYING AGENT. Prior to the
Effective Time, Parent shall select a bank or trust company in the United
States, reasonably acceptable to the Company, to act as paying agent (the
"PAYING AGENT") for the payment of the Merger Consideration upon surrender of
certificates representing Company Common Stock. Parent shall take all steps
necessary to enable and cause the Surviving Corporation to provide to the Paying
Agent on a timely basis, as and when needed after the Effective Time, cash
necessary to pay for the shares of Company Common Stock converted into the right
to receive cash pursuant to Section 2.01(c) (such cash being hereinafter
referred to as the "EXCHANGE FUND"). If for any reason (including losses) the
Exchange Fund is inadequate to pay the amounts to which holders of shares of
Company Common Stock shall be entitled under this Section 2.02(a), Parent shall
take all steps necessary to enable or cause the Surviving Corporation promptly
to deposit in trust additional cash with the Paying Agent sufficient to make all
payments required under this Agreement, and Parent and the Surviving Corporation
shall in any event be liable for payment thereof. The Exchange Fund shall not be
used for any purpose except as expressly provided in this Agreement.
(b) EXCHANGE PROCEDURES. As soon as reasonably practicable after the
Effective Time, the Surviving Corporation shall cause the Paying Agent to mail
to each holder of record of a certificate or certificates (the "CERTIFICATES")
that immediately prior to the Effective Time represented outstanding shares of
Company Common Stock whose shares were converted into the right to receive
Merger Consideration pursuant to Section 2.01, (i) a letter of transmittal
(which shall specify that delivery shall be effected, and risk of loss and title
to the Certificates shall pass, only upon delivery of the Certificates to the
Paying Agent and shall be in such form and have such other provisions as Parent
may reasonably specify) and (ii) instructions for use in effecting the surrender
of the Certificates in exchange for Merger Consideration. Upon surrender of a
Certificate for cancelation to the Paying Agent, together with such letter of
transmittal, duly executed, and such other documents as may reasonably be
required by the Paying Agent, the holder of such Certificate shall be entitled
to receive in exchange therefor the amount of cash into which the shares of
Company Common Stock theretofore represented by such Certificate shall have been
converted pursuant to Section 2.01, and the Certificate so surrendered shall
forthwith be canceled. In the event of a transfer of ownership of Company
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Common Stock that is not registered in the transfer records of the Company,
payment may be made to a person other than the person in whose name the
Certificate so surrendered is registered, if such Certificate shall be properly
endorsed or otherwise be in proper form for transfer and the person requesting
such payment shall pay any transfer or other taxes required by reason of the
payment to a person other than the registered holder of such Certificate or
establish to the satisfaction of Parent that such tax has been paid or is not
applicable. Until surrendered as contemplated by this Section 2.02, each
Certificate shall be deemed at any time after the Effective Time to represent
only the right to receive upon such surrender the amount of cash, without
interest, into which the shares of Company Common Stock theretofore represented
by such Certificate have been converted pursuant to Section 2.01. If any holder
of shares of Company Common Stock shall be unable to surrender such holder's
Certificates because such Certificates have been lost, mutilated or destroyed,
such holder may deliver in lieu thereof an affidavit and indemnity bond in form
and substance and with surety reasonably satisfactory to the Surviving
Corporation. No interest shall be paid or accrue on the cash payable upon
surrender of any Certificate.
(c) NO FURTHER OWNERSHIP RIGHTS IN COMPANY COMMON STOCK. The Merger
Consideration paid in accordance with the terms of this Article II upon
conversion of any shares of Company Common Stock shall be deemed to have been
paid in full satisfaction of all rights pertaining to such shares of Company
Common Stock, and after the Effective Time there shall be no further
registration of transfers on the stock transfer books of the Surviving
Corporation of shares of Company Common Stock that were outstanding immediately
prior to the Effective Time. If, after the Effective Time, any certificates
formerly representing shares of Company Common Stock are presented to the
Surviving Corporation or the Paying Agent for any reason, they shall be canceled
and exchanged as provided in this Article II.
(d) TERMINATION OF EXCHANGE FUND. Any portion of the Exchange Fund that
remains undistributed to the holders of Company Common Stock for six months
after the Effective Time shall be delivered to Parent, upon demand, and any
holder of Company Common Stock who has not theretofore complied with this
Article II shall thereafter look only to Parent for payment of its claim for
Merger Consideration.
(e) NO LIABILITY. None of Parent, Sub, the Company or the Paying Agent
shall be liable to any person in respect of any cash from the Exchange Fund
delivered to a public official pursuant to any applicable abandoned property,
escheat or similar Law. If any Certificate has not been surrendered prior to
five years after the Effective Time (or immediately prior to such earlier date
on which Merger Consideration in respect of such Certificate would otherwise
escheat to or become the property of any Governmental Entity (as defined in
Section 3.05)), any such shares, cash, dividends or distributions in respect of
such Certificate shall, to the extent permitted by applicable Law, become the
property of the Surviving Corporation, free and clear of all claims or interest
of any person previously entitled thereto.
(f) INVESTMENT OF EXCHANGE FUND. The Paying Agent shall invest any cash
included in the Exchange Fund, as directed by Parent, on a daily basis. Any
interest and other income resulting from such investments shall be paid to
Parent.
(g) WITHHOLDING RIGHTS. Parent shall be entitled to deduct and withhold
from the consideration otherwise payable to any holder of Company Common Stock
pursuant to this Agreement such amounts as may be required to be deducted and
withheld with respect to the making of such payment under the Code (as defined
in Section 3.11), or under any provision of state, local or foreign tax Law.
(h) CHARGES AND EXPENSES. The Surviving Corporation shall pay all charges
and expenses, including those of the Paying Agent, in connection with the
exchange of cash for shares of Company Common Stock.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and Sub as follows:
SECTION 3.01. ORGANIZATION, STANDING AND POWER. Each of the Company and
each of its subsidiaries (the "Company Subsidiaries") is duly organized, validly
existing and in good standing under the laws of the jurisdiction in which it is
organized and has full corporate power and authority and possesses all
governmental franchises, licenses, permits, authorizations and approvals, and
has made all filings, registrations and declarations, in each case whether
domestic or foreign, necessary to enable it to own, lease or otherwise hold its
properties and assets and to conduct its businesses as presently conducted,
including all licenses, approvals and registrations by or with the U.S. Food and
Drug Administration (the "FDA"), and all other Governmental Entities performing
similar functions, necessary for the sale and distribution of its products in
all jurisdictions in which such products are sold or distributed, in each case
other than such franchises, licenses, permits, authorizations, approvals,
filings, registrations and declarations the lack of which, individually and in
the aggregate, has not had and would not reasonably be expected to have a
material adverse effect on the Company and the Company Subsidiaries, taken as a
whole, a material adverse effect on the ability of the Company to perform its
obligations under this Agreement or a material adverse effect on the ability of
the Company to consummate the Offer, the Merger and the other Transactions (a
"COMPANY MATERIAL ADVERSE EFFECT"). The Company and each Company Subsidiary is
duly qualified to do business in each jurisdiction where the nature of its
business or their ownership or leasing of its properties make such qualification
necessary except where the failure to so qualify has not had and would not
reasonably be expected to have a Company Material Adverse Effect. The Company
has made available to Parent true and complete copies of the articles of
organization of the Company, as amended to the date of this Agreement (as so
amended, the "COMPANY CHARTER"), and the by-laws of the Company, as amended to
the date of this Agreement (as so amended, the "COMPANY BY-LAWS"), and the
comparable charter and organizational documents of each Company Subsidiary, in
each case as amended through the date of this Agreement.
SECTION 3.02. COMPANY SUBSIDIARIES; EQUITY INTERESTS. (a) The letter,
dated as of the date of this Agreement, from the Company to Parent and Sub (the
"COMPANY DISCLOSURE LETTER") lists each Company Subsidiary and its jurisdiction
of organization. All the outstanding shares of capital stock of each
"significant subsidiary" (as defined in Regulation S-X of the Federal securities
laws) ("SIGNIFICANT SUBSIDIARY") of the Company have been validly issued and are
fully paid and nonassessable and, except as set forth in the Company Disclosure
Letter, are owned by the Company, by another Significant Subsidiary of the
Company or by the Company and another Significant Subsidiary of the Company,
free and clear of all pledges, liens, charges, mortgages, encumbrances and
security interests of any kind or nature whatsoever (collectively, "LIENS").
(b) Except for its interests in the Company Subsidiaries and except for the
ownership interests set forth in the Company Disclosure Letter, the Company does
not own, directly or indirectly, any capital stock, membership interest,
partnership interest, joint venture interest or other equity interest in any
person.
SECTION 3.03. CAPITAL STRUCTURE. The authorized capital stock of the
Company consists of 100,000,000 shares of Company Common Stock and 5,000,000
shares of preferred stock, par value $0.01 per share (together with the Company
Common Stock, the "COMPANY CAPITAL STOCK"). At the close of business on May 25,
2000, (i) 46,892,798 shares of Company Common Stock were issued and outstanding,
(ii) 164,715 shares of Company Common Stock were held by the Company in its
treasury, (iii) 3,980,328 shares of Company Common Stock were subject to
outstanding Company Stock Options (as defined in Section 6.04) and 2,209,747
additional shares of Company Common Stock were reserved for issuance pursuant to
the Company Stock Plans (as defined in Section 6.04), (iv) 42,471 shares of
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Company Common Stock were subject to outstanding Company Warrants (as defined
below) and (v) 100,000 shares of Series A Preferred Stock, par value $.01 per
share, of the Company were reserved for issuance in connection with the rights
(the "COMPANY RIGHTS") issued pursuant to the Rights Agreement dated as of
March 28, 2000 (as amended from time to time, the "COMPANY RIGHTS AGREEMENT"),
between the Company and Fleet National Bank, as Rights Agent. Except as set
forth above, at the close of business on May 26, 2000, no shares of capital
stock or other voting securities of the Company were issued, reserved for
issuance or outstanding. There are no outstanding Company SARs (as defined in
Section 6.04) that were not granted in tandem with a related Company Stock
Option. All outstanding shares of Company Capital Stock are, and all such shares
that may be issued prior to the Effective Time will be when issued, duly
authorized, validly issued, fully paid and nonassessable and not subject to or
issued in violation of any purchase option, call option, right of first refusal,
preemptive right, subscription right or any similar right under any provision of
the BCL, the Company Charter, the Company By-laws or any Contract (as defined in
Section 3.05) to which the Company is a party or otherwise bound. There are not
any bonds, debentures, notes or other indebtedness of the Company having the
right to vote (or convertible into, or exchangeable for, securities having the
right to vote) on any matters on which holders of Company Common Stock may vote
("VOTING COMPANY DEBT"). Except as set forth above, as of the date of this
Agreement, there are not any options, warrants, rights, convertible or
exchangeable securities, "phantom" stock rights, stock appreciation rights,
stock-based performance units, commitments, Contracts, arrangements or
undertakings of any kind to which the Company or any Company Subsidiary is a
party or by which any of them is bound (i) obligating the Company or any Company
Subsidiary to issue, deliver or sell, or cause to be issued, delivered or sold,
additional shares of capital stock or other equity interests in, or any security
convertible or exercisable for or exchangeable into any capital stock of or
other equity interest in, the Company or of any Company Subsidiary or any Voting
Company Debt, (ii) obligating the Company or any Company Subsidiary to issue,
grant, extend or enter into any such option, warrant, call, right, security,
commitment, Contract, arrangement or undertaking or (iii) that give any person
the right to receive any economic benefit or right similar to or derived from
the economic benefits and rights occurring to holders of Company Capital Stock.
As of the date of this Agreement, there are not any outstanding contractual
obligations of the Company or any Company Subsidiary to repurchase, redeem or
otherwise acquire any shares of capital stock of the Company or any Company
Subsidiary. The Company has delivered to Parent a complete and correct copy of
the Company Rights Agreement, as amended to the date of this Agreement.
"WARRANTS" means warrants to purchase Company Common Stock assumed in connection
with the Company's acquisition of Autonomous Technologies Corporation, a Florida
corporation, on April 29, 1999.
SECTION 3.04. AUTHORITY; EXECUTION AND DELIVERY; ENFORCEABILITY. (a) The
Company has all requisite corporate power and authority to execute and deliver
this Agreement and, subject to the Company Stockholder Approval (as defined
below) with respect to the Merger if required by Law, to consummate the
Transactions. The execution and delivery by the Company of this Agreement and
the consummation by the Company of the Transactions have been duly authorized by
all necessary corporate action on the part of the Company, subject, in the case
of the Merger, to receipt of the Company Stockholder Approval (as defined in
Section 3.04(c)). The Company has duly executed and delivered this Agreement,
and this Agreement constitutes its legal, valid and binding obligation (subject
to the Company Stockholder Approval with respect to the Merger if required by
Law), enforceable against it in accordance with its terms, except to the extent
that enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer or other similar laws of general applicability
relating to or affecting the enforcement of creditors' rights and by the effect
of the principles of equity (regardless of whether enforceability is considered
in a proceeding in equity or at law).
(b) The Board of Directors of the Company (the "COMPANY BOARD"), at a
meeting duly called and held, duly and unanimously adopted resolutions
(i) approving this Agreement, the Offer, the
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Merger and the other Transactions, (ii) determining that the terms of the Offer,
the Merger and the other Transactions are fair to and in the best interests of
the Company and its stockholders, (iii) recommending that the holders of Company
Common Stock accept the Offer and tender their shares of Company Common Stock
pursuant to the Offer and (iv) recommending that the Company's stockholders
approve this Agreement. Such resolutions are sufficient to render inapplicable
to Parent and Sub and this Agreement, the Offer, the Merger and the other
Transactions the provisions of Chapter 110C (assuming the requirement that the
terms of the Offer be furnished to shareholders is satisfied), Chapter 110D and
Chapter 110F of the BCL. To the Company's knowledge, no other state takeover
statute or similar statute or regulation applies or purports to apply to the
Company with respect to this Agreement, the Offer, the Merger or any other
Transaction. The Company has been advised by each of its directors and executive
officers that, as of the date of this Agreement, each such person intends to
tender all shares of Company Common Stock owned by such person pursuant to the
Offer, except to the extent of any restrictions created by Section 16(b) of the
Exchange Act.
(c) The only vote of holders of any class or series of Company Capital
Stock necessary to approve and adopt this Agreement and the Merger is the
approval of this Agreement by the holders of two-thirds of the outstanding
Company Common Stock (the "COMPANY STOCKHOLDER APPROVAL"). The affirmative vote
of the holders of Company Capital Stock, or any of them, is not necessary to
consummate the Offer or any Transaction other than the Merger.
SECTION 3.05. NO CONFLICTS; CONSENTS. (a) Except as set forth in the
Company Disclosure Letter, the execution and delivery by the Company of this
Agreement do not, and the consummation of the Offer, the Merger and the other
Transactions (other than the transactions set forth in Section 6.13) and
compliance with the terms hereof (other than Section 6.13) will not, result in
any violation of or default (with or without notice or lapse of time, or both)
under, or give rise to a right of termination, cancelation or acceleration of
any obligation or to loss of a material benefit under, or to increased,
additional, accelerated or guaranteed rights or entitlements of any person
under, or result in the creation of any Lien upon any of the properties or
assets of the Company or any Company Subsidiary under, any provision of (i) the
Company Charter, the Company By-laws or the comparable charter or organizational
documents of any Company Subsidiary, (ii) any contract, lease, license,
indenture, note, bond, agreement, permit, concession, franchise or other
instrument (a "CONTRACT") to which the Company or any Company Subsidiary is a
party or by which any of their respective properties or assets is bound or
(iii) subject to the filings and other matters referred to in Section 3.05(b),
any judgment, order, injunction or decree, domestic or foreign ("JUDGMENT"), or
statute, law (including common law), legislation, interpretation, ordinance,
rule or regulation, domestic or foreign ("LAW"), applicable to the Company or
any Company Subsidiary or their respective properties or assets, other than, in
the case of clauses (ii) and (iii) above, any such items that, individually and
in the aggregate, have not had and would not reasonably be expected to have a
Company Material Adverse Effect.
(b) No consent, approval, license, permit, order or authorization
("CONSENT") of, or registration, declaration or filing with, any Federal, state,
local or foreign government or any court of competent jurisdiction,
administrative agency or commission or other governmental authority or
instrumentality, domestic or foreign (a "GOVERNMENTAL ENTITY") is required to be
obtained or made by or with respect to the Company or any Company Subsidiary in
connection with the execution, delivery and performance of this Agreement or the
consummation of the Transactions (other than the transactions set forth in
Section 6.13), other than (i) compliance with and filings under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
ACT"), (ii) the filing with the SEC of (A) the Schedule 14D-9, (B) a proxy or
information statement relating to the approval of this Agreement by the
Company's stockholders (the "PROXY STATEMENT"), (C) any information statement
(the "INFORMATION STATEMENT") required under Rule 14f-1 in connection with the
Offer and (D) such reports under Section 13 of the Exchange Act as may be
required in connection with this Agreement, the Offer, the Merger and the other
Transactions, (iii) the filing of the Articles of Merger with the Secretary of
State
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of The Commonwealth of Massachusetts and appropriate documents with the relevant
authorities of the other jurisdictions in which the Company is qualified to do
business, (iv) such filings as may be required in connection with the taxes
described in Section 6.09, (v) compliance with and filings under the Laws of the
European Union, Brazil, Germany, Ireland, Italy, the Netherlands and certain
other foreign jurisdictions, in each case if and to the extent required, and
(vi) such other items that, individually and in the aggregate, have not had and
would not reasonably be expected to have a Company Material Adverse Effect.
(c) The Company and the Company Board have taken all action necessary to
(i) render the Company Rights inapplicable to this Agreement, the Offer, the
Merger and the other Transactions and (ii) ensure that (A) neither Parent nor
any of its stockholders, affiliates or associates is or will become an
"Acquiring Person" (as defined in the Company Rights Agreement) by reason of
this Agreement, the Offer, the Merger or any other Transaction), (B) a
"Distribution Date" (as defined in the Company Rights Agreement) shall not occur
by reason of this Agreement, the Offer, the Merger or any other Transaction and
(C) the Company Rights shall expire immediately prior to the Effective Time.
SECTION 3.06. SEC DOCUMENTS; UNDISCLOSED LIABILITIES. The Company has
filed all reports, schedules, forms, statements and other documents required to
be filed by the Company with the SEC since January 1, 1998 (the "COMPANY SEC
DOCUMENTS"). As of its respective date, each Company SEC Document complied in
all material respects with the requirements of the Exchange Act or the
Securities Act of 1933, as amended (the "Securities Act"), as the case may be,
and the rules and regulations of the SEC promulgated thereunder applicable to
such Company SEC Document, and did not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. As of the date of this Agreement,
the Company's Annual Report on Form 10-K for the fiscal year ended December 31,
1999 (filed on March 30, 2000) (the "1999 FORM 10-K"), its definitive Proxy
Statement with respect to its 2000 Special Meeting (filed on April 19, 2000),
its Quarterly Report on Form 10-Q for the quarter ended March 31, 2000 (filed on
May 12, 2000), and its Current Report on Form 8-K (filed on May 12, 2000)
(collectively, the "2000 SEC DOCUMENTS") taken together do not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading. The
consolidated financial statements of the Company included in the Company SEC
Documents comply as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with respect
thereto, have been prepared in accordance with generally accepted accounting
principles ("GAAP") (except, in the case of unaudited statements, as permitted
by Form 10-Q of the SEC) applied on a consistent basis during the periods
involved (except as may be indicated in the notes thereto) and fairly present
the consolidated financial position of the Company and its consolidated
subsidiaries as of the dates thereof and the consolidated results of their
operations and cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments). Except as set forth
in the Filed Company SEC Documents (as defined in Section 3.08), neither the
Company nor any Company Subsidiary has any liabilities or obligations of any
nature (whether accrued, absolute, contingent or otherwise) required by GAAP to
be set forth on a consolidated balance sheet of the Company and its consolidated
subsidiaries or in the notes thereto, other than liabilities or obligations
incurred in the ordinary course of business consistent with prior practice since
the date of the most recent financial statements included in the Filed Company
SEC Documents.
SECTION 3.07. INFORMATION SUPPLIED. None of the information supplied or to
be supplied by the Company for inclusion or incorporation by reference in
(i) the Offer Documents, the Schedule 14D-9 or the Information Statement will,
at the time such document is filed with the SEC, at any time it is amended or
supplemented or at the time it is first published, sent or given to the
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Company's stockholders, 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, or (ii) the Proxy Statement will, at the
date it is first mailed to the Company's stockholders or at the time of the
Company Stockholders Meeting (as defined in Section 6.01), contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they are made, not misleading. The
Schedule 14D-9, the Information Statement and the Proxy Statement will comply as
to form in all material respects with the requirements of the Exchange Act and
the rules and regulations thereunder, except that no representation is made by
the Company with respect to statements made or incorporated by reference therein
based on information supplied by Parent or Sub for inclusion or incorporation by
reference therein.
SECTION 3.08. ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as disclosed in
the Company SEC Documents filed and publicly available prior to the date of this
Agreement (the "FILED COMPANY SEC DOCUMENTS") or in the Company Disclosure
Letter, from the date of the most recent audited financial statements included
in the Filed Company SEC Documents to the date of this Agreement, the Company
has conducted its business only in the ordinary course, and during such period
there has not been:
(i) any event, change, effect or development that, individually or in
the aggregate, has had or would reasonably be expected to have a Company
Material Adverse Effect;
(ii) any declaration, setting aside or payment of any dividend or other
distribution (whether in cash, stock or property) with respect to any
Company Capital Stock or any repurchase for value by the Company of any
Company Capital Stock;
(iii) any split, combination or reclassification of any Company Capital
Stock or any issuance or the authorization of any issuance of any other
securities in respect of, in lieu of or in substitution for shares of
Company Capital Stock;
(iv) (A) any granting by the Company or any Company Subsidiary to any
current or former director, officer or employee of the Company or any
Company Subsidiary of any increase in compensation, except to the extent
required under employment agreements in effect as of the date of the most
recent audited financial statements included in the Filed Company SEC
Documents or, with respect to employees (other than directors, officers or
key employees) in the ordinary course of business consistent with prior
practice and except for Company Stock Options that are reflected as
outstanding in clause (iii) of Section 3.03, (B) any granting by the Company
or any Company Subsidiary to any such director, officer or employee of any
material increase in severance or termination pay, except as was required
under any employment, severance or termination policy, practice or
agreements in effect as of the date of the most recent audited financial
statements included in the Filed Company SEC Documents or (C) any entry by
the Company or any Company Subsidiary into, or any amendment of, any
employment, severance or termination agreement with any such director,
officer or employee, except for such agreements or amendments with employees
(other than directors, officers or key employees) that are entered into in
the ordinary course of business consistent with prior practice;
(v) any termination of employment or departure of any officer, material
scientist or other key employee of the Company or any Company Subsidiary;
(vi) any change in accounting methods, principles or practices by the
Company or any Company Subsidiary materially affecting the consolidated
assets, liabilities or results of operations of the Company, except insofar
as may have been required by a change in GAAP; or
(vii) any material elections with respect to Taxes (as defined in
Section 3.09) by the Company or any Company Subsidiary or settlement or
compromise by the Company or any Company Subsidiary of any material Tax
liability or refund.
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SECTION 3.09. TAXES. (a) Each of the Company and each Company Subsidiary
has timely filed, or has caused to be timely filed on its behalf, all Tax
Returns required to be filed by it, and all such Tax Returns are true, complete
and accurate, except to the extent any failure to file or any inaccuracies in
any filed Tax Returns, individually and in the aggregate, has not had and would
not reasonably be expected to have a Company Material Adverse Effect. All Taxes
shown to be due on such Tax Returns, or otherwise owed, have been timely paid,
except to the extent that any failure to pay, individually and in the aggregate,
has not had and would not reasonably be expected to have a Company Material
Adverse Effect.
(b) The most recent financial statements contained in the Filed Company SEC
Documents reflect an adequate reserve (in accordance with GAAP) for all Taxes
payable by the Company and the Company Subsidiaries for all Taxable periods and
portions thereof through the date of such financial statements (in addition to
any reserve for deferred Taxes established to reflect timing differences between
book and tax income). No deficiency with respect to any Taxes has been proposed,
asserted or assessed against the Company or any Company Subsidiary, and no
requests for waivers of the time to assess any such Taxes are pending, except to
the extent any such deficiency or request for waiver, individually and in the
aggregate, has not had and would not reasonably be expected to have a Company
Material Adverse Effect.
(c) The Federal income Tax Returns of the Company and each Company
Subsidiary consolidated in such Returns have never been examined by or settled
with the United States Internal Revenue Service. All material assessments for
Taxes due with respect to such completed and settled examinations or any
concluded litigation have been fully paid.
(d) There are no material Liens for Taxes (other than for current Taxes not
yet due and payable) on the assets of the Company or any Company Subsidiary.
Neither the Company nor any Company Subsidiary is bound by any agreement with
respect to Taxes other than agreements between or among the Company and Company
Subsidiaries and no other person.
(e) Note 14 to the Company's consolidated financial statements included in
the 1999 Form 10-K has been prepared in accordance with GAAP.
(f) No claim has been made in the past five years by any authority in a
jurisdiction within which the Company or any Company Subsidiary does not file
Tax Returns that it is, or may be, subject to taxation by that jurisdiction.
(g) Neither the Company nor any Company Subsidiary has constituted either a
"distributing corporation" or a "controlled corporation" (within the meaning of
Section 355(a)(1)(A) of the Code) in a distribution of stock qualifying or
intended to qualify for tax-free treatment under Section 355 of the Code (A) in
the two years prior to the date of this Agreement or (B) in a distribution that
could otherwise constitute part of a "plan" or "series of related transactions"
(within the meaning of Section 355(e) of the Code) in conjunction with the
Merger.
(h) For purposes of this Agreement:
"TAXES" includes all forms of taxation imposed by any Federal, state, local,
foreign or other Governmental Entity, including income, franchise, property,
sales, use, excise, employment, unemployment, payroll, social security,
estimated, value added, ad valorem, transfer, recapture, withholding and other
Taxes of any kind, including all interest, penalties and additions thereto.
"TAX RETURN" means all Federal, state, local, provincial and foreign Tax
returns, declarations, statements, reports, schedules, forms and information
returns and any amended Tax return relating to Taxes.
SECTION 3.10. ABSENCE OF CHANGES IN BENEFIT PLANS. Except as disclosed in
the Filed Company SEC Documents or in the Company Disclosure Letter, from the
date of the most recent audited
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financial statements included in the Filed Company SEC Documents to the date of
this Agreement, there has not been any adoption or amendment in any material
respect by the Company or any Company Subsidiary of any collective bargaining
agreement or any bonus, pension, profit sharing, deferred compensation,
incentive compensation, stock ownership, stock purchase, stock option, phantom
stock, retirement, vacation, severance, disability, death benefit,
hospitalization, medical or other plan or arrangement providing benefits to any
current or former employee, officer or director of the Company or any Company
Subsidiary (collectively, "COMPANY BENEFIT PLANS"). Except as disclosed in the
Filed Company SEC Documents or in the Company Disclosure Letter, as of the date
of this Agreement there are not any employment, consulting, indemnification,
severance or termination agreements or arrangements between the Company or any
Company Subsidiary and any current or former employee, officer or director of
the Company or any Company Subsidiary, nor does the Company or any Company
Subsidiary have any general severance plan or policy.
SECTION 3.11. ERISA COMPLIANCE; EXCESS PARACHUTE PAYMENTS. (a) The
Company Disclosure Letter contains a list and brief description of all material
"employee pension benefit plans" (as defined in Section 3(2) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")) (sometimes
referred to herein as "COMPANY PENSION PLANS"), "employee welfare benefit plans"
(as defined in Section 3(1) of ERISA) and all other Company Benefit Plans
maintained, or contributed to, by the Company or any Company Subsidiary for the
benefit of any current or former employees, officers or directors of the Company
or any Company Subsidiary. The Company has made available to Parent true,
complete and correct copies of (i) each Company Benefit Plan (or, in the case of
any unwritten Company Benefit Plan, a description thereof), (ii) the most recent
annual report on Form 5500 filed with the Internal Revenue Service with respect
to each Company Benefit Plan (if any such report was required), (iii) the most
recent summary plan description for each Company Benefit Plan for which such
summary plan description is required and (iv) each trust agreement and group
annuity contract relating to any Company Benefit Plan, if any.
(b) All Company Benefit Plans are in compliance in all material respects
with applicable Law (including, where applicable, the Code and ERISA). All
Company Pension Plans which are intended to be tax-qualified under
Section 401(a) of the Code have been the subject of determination letters from
the Internal Revenue Service to the effect that such Company Pension Plans are
qualified and their related trusts are exempt from Federal income taxes under
Sections 401(a) and 501(a), respectively, of the Internal Revenue Code of 1986,
as amended (the "CODE"), and no such determination letter has been revoked nor,
to the knowledge of the Company, has revocation been threatened. No such Company
Pension Plan been amended since the date of its most recent determination letter
or application therefor in any respect that would adversely affect its
qualification, nor has any such Company Pension Plan been amended since
December 31, 1998 in any respect that would materially increase its costs.
(c) No Company Pension Plan is a "defined benefit plan" within the meaning
of Section 3(35) of ERISA or is subject to the minimum funding standards of
Section 412 of the Code or Section 302 of ERISA, and neither the Company nor any
Company Subsidiary has any actual or contingent liability under any defined
benefit plan which it (or any affiliate) previously maintained or contributed to
(or was obligated to maintain or contribute to). None of the Company, any
Company Subsidiary, any officer of the Company or any Company Subsidiary or any
of the Company Benefit Plans which are subject to ERISA, including the Company
Pension Plans, any trusts created thereunder or any trustee or administrator
thereof, has engaged in a "prohibited transaction" (as such term is defined in
Section 406 of ERISA or Section 4975 of the Code) or any other breach of
fiduciary responsibility that could subject the Company, any Company Subsidiary
or any officer of the Company or any Company Subsidiary to any material tax or
penalty on prohibited transactions imposed by such Section 4975 or to any
material liability under Section 502(i) or 502(l) of ERISA.
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(d) With respect to any Company Benefit Plan that is an employee welfare
benefit plan, (i) all such Company Benefit Plans are unfunded and no such
Company Benefit Plan is funded through a "welfare benefits fund" (as such term
is defined in Section 419(e) of the Code), (ii) each such Company Benefit Plan
that is a "group health plan" (as such term is defined in Section 5000(b)(1) of
the Code), complies in all material respects with the applicable requirements of
Section 4980B(f) of the Code and (iii) each such Company Benefit Plan (including
any such Plan covering retirees or other former employees) may be amended or
terminated without material liability to the Company and the Company
Subsidiaries on or at any time after the Effective Time, except with respect to
contributions, premiums or benefit claims (actual or contingent) with respect to
the period from the Effective Time to such termination.
(e) Other than payments that may be made to the persons listed in the
Company Disclosure Letter (the "PRIMARY COMPANY EXECUTIVES"), any amount that
could be received (whether in cash or property or the vesting of property) as a
result of the Offer, the Merger or any other Transaction by any employee,
officer or director of the Company or any of its affiliates who is a
"disqualified individual" (as such term is defined in proposed Treasury
Regulation Section 1.280G-1) under any employment, severance or termination
agreement, any other compensation arrangement or any Company Benefit Plan
currently in effect would not be characterized as an "excess parachute payment"
(as defined in Section 280G(b)(1) of the Code). Set forth in the Company
Disclosure Letter is (i) the estimated maximum amount that could be paid to each
Primary Company Executive as a result of the Offer, the Merger and the other
Transactions under all employment, severance and termination agreements, other
compensation arrangements and Company Benefit Plans currently in effect and
(ii) the "base amount" (as defined in Section 280G(b)(3) of the Code) for each
Primary Company Executive calculated as of the date of this Agreement.
SECTION 3.12. LITIGATION. Except as disclosed in the Filed Company SEC
Documents or in the Company Disclosure Letter, there is no suit, action or
proceeding pending or, to the knowledge of the Company, threatened against or
affecting the Company or any Company Subsidiary (and, as of the date of this
Agreement, the Company is not aware of any basis for any such suit, action or
proceeding) that, individually or in the aggregate, has had or would reasonably
be expected to have a Company Material Adverse Effect, other than any action,
suit or proceeding filed or threatened after the date of this Agreement that is
based upon the same or substantially the same facts that serve as the basis for
any suit, action or proceeding disclosed in the Filed Company SEC Documents or
the Company Disclosure Letter, nor is there any Judgment outstanding against the
Company or any Company Subsidiary that has had or would reasonably be expected
to have a Company Material Adverse Effect.
SECTION 3.13. COMPLIANCE WITH APPLICABLE LAWS. Except as disclosed in the
Filed Company SEC Documents or in the Company Disclosure Letter, the Company and
the Company Subsidiaries are in compliance with all applicable Laws, including
those relating to occupational health and safety and the environment, except for
instances of noncompliance that, individually and in the aggregate, have not had
and would not reasonably be expected to have a Company Material Adverse Effect.
Except as set forth in the Filed Company SEC Documents or in the Company
Disclosure Letter, neither the Company nor any Company Subsidiary has received
any written communication during the past two years from a Governmental Entity
that alleges that the Company or a Company Subsidiary is not in compliance in
any material respect with any applicable Law. Except as set forth in the Filed
Company SEC Documents or in the Company Disclosure Letter, the Company and the
Company Subsidiaries are in compliance in all material respects with the U.S.
Federal Food, Drug and Cosmetic Act, as amended (the "FDC ACT"), and applicable
regulations promulgated thereunder, and are in compliance in all material
respects with all FDA regulations, including the FDA's Quality System
Regulation, and any similar Laws applicable to the Company or any Company
Subsidiary, including the European Union Medical Device Directives. The Company
and the Company Subsidiaries have maintained quality assurance/quality control
practices and procedures in compliance in all material respects with good
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manufacturing practices within the meaning of the FDC Act and applicable
regulations promulgated thereunder. This Section 3.13 does not relate to matters
with respect to Taxes, which are the subject of Section 3.09.
SECTION 3.14. CONTRACTS; DEBT INSTRUMENTS. Except as disclosed in the
Filed SEC Documents or the Company Disclosure Letter, there are no contracts or
agreements that are material to the business, assets, condition (financial or
otherwise) or results of operations of the Company and the Company Subsidiaries
taken as a whole. Neither the Company nor any Company Subsidiary is in violation
of or in default under (nor does there exist any condition which upon the
passage of time or the giving of notice or both would cause such a violation of
or default under) any loan or credit agreement, note, bond, mortgage, indenture,
lease, permit, concession, franchise, license or any other contract, agreement,
arrangement or understanding, to which it is a party or by which it or any of
its properties or assets is bound, except for violations or defaults that,
individually and in the aggregate, have not had and would not reasonably be
expected to have a Company Material Adverse Effect.
SECTION 3.15. INTELLECTUAL PROPERTY. (a) The Company and the Company
Subsidiaries own, or are validly licensed or otherwise have the right to use,
all patents, patent rights (including patent applications and licenses),
know-how, trade secrets, trademarks, trademark rights, trade names, trade name
rights, service marks, service mark rights, copyrights and other proprietary
intellectual property rights and computer programs (collectively, "INTELLECTUAL
PROPERTY RIGHTS") which are material to the conduct of the business of the
Company and the Company Subsidiaries taken as a whole and the consummation of
the Transactions (other than the transactions set forth in Section 6.13) will
not conflict with, alter or impair any such Intellectual Property Rights. The
Company Disclosure Letter sets forth a description of all of the following with
respect to the Company and the Company Subsidiaries: material patents, material
patent rights (including patent applications and licenses), material inventions
that have been identified as active patent matters but for which applications
have not yet been filed, registrations and licenses of trademarks, trade names,
service marks and copyrights, and the geographical territories in which the
foregoing are applicable. Except as set forth in the Company Disclosure Letter,
no claims are pending or, to the knowledge of the Company, threatened that
(i) the Company or any of the Company Subsidiaries is infringing or otherwise
adversely affecting the rights of any person with regard to any Intellectual
Property Right or (ii) assert that any Intellectual Property Rights owned by the
Company or any Company Subsidiary ("OWNED INTELLECTUAL PROPERTY RIGHTS") are
invalid or unenforceable. To the knowledge of the Company, except as set forth
in the Filed Company SEC Documents or the Company Disclosure Letter, no person
is infringing the rights of the Company or any of the Company Subsidiaries with
respect to any Owned Intellectual Property Right.
(b) The Company has timely paid, or caused to be timely paid, all
maintenance, renewal and other similar fees, and has timely met any applicable
working requirements with respect to all Owned Intellectual Property Rights
listed in the Company Disclosure Letter or material to the Company and the
Company Subsidiaries taken as a whole, except as set forth in the Company
Disclosure Letter. With respect to Intellectual Property Rights other than Owned
Intellectual Property Rights ("LICENSED INTELLECTUAL PROPERTY RIGHTS") that are
listed in the Company Disclosure Letter or material to the Company and the
Company Subsidiaries taken at a whole, the Company is in compliance in all
material respects with any applicable license or similar agreement.
(c) All Owned Intellectual Property Rights listed in the Company Disclosure
Letter or material to the Company and its Subsidiaries taken as a whole, are
free and clear of any Liens (other than Liens that are not material in amount or
that would not reasonably be expected to materially interfere with such
Intellectual Property Rights) and may be freely transferred, assigned, licensed
or sublicensed except as set forth in the Company Disclosure letter. The
Company's licenses with respect to all Licensed Intellectual Property Rights
that are listed in the Company Disclosure Letter or material to the Company and
the Company Subsidiaries taken as a whole are free and clear of any Liens (other
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than Liens that are not material in amount or that would not reasonably be
expected to materially interfere with such Licensed Intellectual Property
Rights).
SECTION 3.16. BROKERS; SCHEDULE OF FEES AND EXPENSES. No broker,
investment banker, financial advisor or other person, other than Chase
Securities Inc., the fees and expenses of which will be paid by the Company, is
entitled to any broker's, finder's, financial advisor's or other similar fee or
commission in connection with the Offer, the Merger and the other Transactions
based upon arrangements made by or on behalf of the Company. The estimated fees
and expenses incurred and to be incurred by the Company in connection with the
Offer, the Merger and the other Transactions (including the fees of Chase
Securities Inc. and the fees of the Company's legal counsel) are set forth in
the Company Disclosure Letter.
SECTION 3.17. OPINION OF FINANCIAL ADVISOR. The Company has received the
opinion of Chase Securities Inc., dated the date of this Agreement, to the
effect that, as of such date, the consideration to be received in the Offer and
the Merger by the holders of Company Common Stock is fair to such holders from a
financial point of view and a copy of the signed opinion has been provided to
Parent.
SECTION 3.18. LENS EXPRESS, INC. SALE. Following the closing of the sale
pursuant to the Asset Purchase Agreement by and among Lens Express, Inc., the
Company and Strategic Optical Holdings, Inc. dated May 4, 2000 (the "LENS
EXPRESS SALE AGREEMENT"), neither the Company nor any Company Subsidiary will
have any material liabilities or obligations of any nature (whether accrued,
absolute, contingent or otherwise) with respect to the Business (as defined in
the Lens Express Sale Agreement) other than (i) the post-closing purchase price
adjustment provided in Section 3.3 of the Lens Express Sale Agreement, if any,
(ii) liabilities and obligations set forth in Section 2.3 of the Lens Express
Sale Agreement or Schedule 2.3 to the Lens Express Sale Agreement,
(iii) liabilities of Seller (as defined in the Lens Express Sale Agreement)
required to be set forth in Schedule 5.13 to the Lens Express Sale Agreement but
not set forth therein, (iv) the indemnity obligations set forth in Section 12.7
of the Lens Express Sale Agreement, (v) compliance with the post-closing
covenants set forth in the Lens Express Sale Agreement and (vi) liabilities and
obligations set forth in a letter agreement dated May 4, 2000, a true and
complete copy of which has been provided to Parent. To the knowledge of the
Company, except as set forth in the Company Disclosure Letter, no liabilities
that were required to be set forth in Schedule 5.13 were not set forth therein.
Exhibit 4.2 to the Company's Current Report on Form 8-K filed with the SEC on
May 12, 2000, together with the exhibits and schedules thereto that the Company
has provided to Parent and the letter agreement referred to in clause (vi)
above, constitute a true and complete copy of the Lens Express Sale Agreement
and there are no other agreements in effect among the parties thereto relating
to the subject matter thereof.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB
Parent and Sub, jointly and severally, represent and warrant to the Company
as follows:
SECTION 4.01. ORGANIZATION, STANDING AND POWER. Each of Parent and Sub is
duly organized, validly existing and in good standing under the laws of the
jurisdiction in which it is organized and has full corporate power and authority
and possesses all governmental franchises, licenses, permits, authorizations and
approvals in each case whether domestic or foreign necessary to enable it to
own, lease or otherwise hold its properties and assets and to conduct its
businesses as presently conducted, other than such franchises, licenses,
permits, authorizations and approvals the lack of which, individually and in the
aggregate, has not had and would not reasonably be expected to have a material
adverse effect on the ability of Parent or Sub to perform its obligations under
this Agreement or a material adverse effect on the ability of Parent or Sub to
consummate the Offer, the Merger and the other Transactions (a "PARENT MATERIAL
ADVERSE EFFECT").
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SECTION 4.02. SUB. (a) Since the date of its incorporation, Sub has not
carried on any business or conducted any operations other than the execution of
this Agreement, the performance of its obligations hereunder and matters
ancillary thereto. Sub was incorporated solely for the purpose of consummating
the Transactions.
(b) The authorized capital stock of Sub consists of 1,000 shares of common
stock, par value $0.01 per share, all of which have been validly issued, are
fully paid and nonassessable and are owned by Parent free and clear of any Lien.
SECTION 4.03. AUTHORITY; EXECUTION AND DELIVERY; ENFORCEABILITY. Each of
Parent and Sub has all requisite corporate power and authority to execute and
deliver this Agreement and to consummate the Transactions. The execution and
delivery by each of Parent and Sub of this Agreement and the consummation by it
of the Transactions have been duly authorized by all necessary corporate action
on the part of Parent and Sub. Parent, as sole stockholder of Sub, has approved
this Agreement. Each of Parent and Sub has duly executed and delivered this
Agreement, and this Agreement constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms, except to the
extent that enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or other similar laws of general
applicability relating to or affecting the enforcement of creditors' rights and
by the effect of the principles of equity (regardless of whether enforceability
is considered in a proceeding in equity or at law).
SECTION 4.04. NO CONFLICTS; CONSENTS. (a) The execution and delivery by
each of Parent and Sub of this Agreement, do not, and the consummation of the
Offer, the Merger and the other Transactions and compliance with the terms
hereof will not, result in any violation of or default (with or without notice
or lapse of time, or both) under, or give rise to a right of termination,
cancelation or acceleration of any obligation or to loss of a material benefit
under, or to increased, additional, accelerated or guaranteed rights or
entitlements of any person under, or result in the creation of any Lien upon any
of the properties or assets of Parent or any of its subsidiaries under, any
provision of (i) the charter, by-laws or other organizational documents of
Parent or any of its subsidiaries, (ii) any Contract to which Parent or any of
its subsidiaries is a party or by which any of their respective properties or
assets is bound or (iii) subject to the filings and other matters referred to in
Section 4.04(b), any Judgment or Law applicable to Parent or any of its
subsidiaries or their respective properties or assets, other than, in the case
of clauses (ii) and (iii) above, any such items that, individually and in the
aggregate, have not had and would not reasonably be expected to have a Parent
Material Adverse Effect.
(b) No Consent of, or registration, declaration or filing with, any
Governmental Entity is required to be obtained or made by or with respect to
Parent or any of its subsidiaries in connection with the execution, delivery and
performance of this Agreement or the consummation of the Transactions, other
than (i) compliance with and filings under the HSR Act, (ii) the filing with the
SEC of (A) the Offer Documents and (B) such reports under the Exchange Act as
may be required in connection with this Agreement, the Offer, the Merger and the
other Transactions, (iii) the filing of the Articles of Merger with the
Secretary of State of The Commonwealth of Massachusetts, (iv) such filings as
may be required in connection with the taxes described in Section 6.09,
(v) compliance with and filings under the Laws of the European Union, Brazil,
Germany, Ireland, Italy, the Netherlands and certain other foreign
jurisdictions, in each case if and to the extent required, and (vi) such other
items that, individually and in the aggregate, have not had and would not
reasonably be expected to have a Parent Material Adverse Effect.
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SECTION 4.05. INFORMATION SUPPLIED. None of the information supplied or to
be supplied by Parent or Sub for inclusion or incorporation by reference in
(i) the Offer Documents, the Schedule 14D-9 or the Information Statement will,
at the time such document is filed with the SEC, at any time it is amended or
supplemented or at the time it is first published, sent or given to the
Company's stockholders, 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, or (ii) the Proxy Statement will, at the
date it is first mailed to the Company's stockholders or at the time of the
Company Stockholders Meeting, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they are made, not misleading. The Offer Documents will comply as to form in all
material respects with the requirements of the Securities Act and the rules and
regulations thereunder, except that no representation is made by Parent or Sub
with respect to statements made or incorporated by reference therein based on
information supplied by the Company for inclusion or incorporation by reference
therein.
SECTION 4.06. BROKERS. No broker, investment banker, financial advisor or
other person, other than Goldman, Sachs & Co., the fees and expenses of which
will be paid by Parent, is entitled to any broker's, finder's, financial
advisor's or other similar fee or commission in connection with the Offer, the
Merger and the other Transactions based upon arrangements made by or on behalf
of Parent.
SECTION 4.07. FINANCIAL ABILITY TO PERFORM. Parent and Sub will have cash
funds sufficient as and when needed to pay all cash payments for shares of
Company Common Stock and options in the Offer and the Merger and to pay all
related fees and expenses.
ARTICLE V
COVENANTS RELATING TO CONDUCT OF BUSINESS
SECTION 5.01. CONDUCT OF BUSINESS. (a) CONDUCT OF BUSINESS BY THE
COMPANY. Except for matters set forth in the Company Disclosure Letter,
expressly agreed to in writing by Parent or otherwise expressly permitted by
this Agreement, from the date of this Agreement to the earliest to occur of the
date of the termination of this Agreement, the date directors designated by
Parent or Sub have been elected to and shall constitute a majority of the
Company Board (the "CONTROL DATE") or the Effective Time the Company shall, and
shall cause each Company Subsidiary to, conduct the business of the Company and
the Company Subsidiaries taken as a whole in the usual, regular and ordinary
course in substantially the same manner as previously conducted and use all
reasonable efforts to preserve intact its current business organization, keep
available the services of its current officers and employees and keep its
relationships with customers, suppliers, licensors, licensees, distributors and
others having business dealings with them to the end that its goodwill and
ongoing business shall be unimpaired in all material respects at the Effective
Time. In addition, and without limiting the generality of the foregoing, except
for matters set forth in the Company Disclosure Letter, expressly agreed to in
writing by Parent or otherwise expressly permitted by this Agreement, from the
date of this Agreement to the earliest to occur of the date of the termination
of this Agreement, the Control Date or the Effective Time, the Company shall
not, and shall not permit any Company Subsidiary to, do any of the following
without the prior written consent of Parent:
(i) (A) declare, set aside or pay any dividends on, or make any other
distributions in respect of, any of its capital stock, other than dividends
and distributions by a direct or indirect wholly owned subsidiary of the
Company to its parent, (B) split, combine or reclassify any of its capital
stock or issue or authorize the issuance of any other securities in respect
of, in lieu of or in substitution for shares of its capital stock, or
(C) purchase, redeem or otherwise acquire any shares of capital stock of the
Company or any Company Subsidiary or any other securities thereof or any
rights, warrants or options to acquire any such shares or other securities;
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(ii) issue, deliver, sell or grant (A) any shares of its capital stock,
(B) any Voting Company Debt or other voting securities, (C) any securities
convertible into or exchangeable for, or any options, warrants or rights to
acquire, any such shares, Voting Company Debt, voting securities or
convertible or exchangeable securities or (D) any "phantom" stock, "phantom"
stock rights, stock appreciation rights or stock-based performance units,
other than (1) the issuance of Company Common Stock (and associated Company
Rights) upon the exercise of Company Stock Options outstanding on the date
of this Agreement and in accordance with their present terms and (2) the
issuance of Company Common Stock upon the exercise of Company Rights;
(iii) amend its articles of organization, by-laws or other comparable
charter or organizational documents;
(iv) acquire or agree to acquire (A) by merging or consolidating with,
or by purchasing a substantial equity interest in or portion of the assets
of, or by any other manner, any business or any corporation, partnership,
joint venture, association or other business organization or division
thereof or (B) any assets that are material, individually or in the
aggregate, to the Company and the Company Subsidiaries taken as a whole,
except for purchases of inventory in the ordinary course of business
consistent with past practice;
(v) (A) grant to any current or former director, officer or employee of
the Company or any Company Subsidiary any increase in compensation, except
to the extent required under employment agreements in effect as of the date
of the most recent audited financial statements included in the Filed
Company SEC Documents or, with respect to employees (other than directors,
officers or key employees) in the ordinary course of business consistent
with prior practice, (B) grant to any current or former employee, officer or
director of the Company or any Company Subsidiary any increase in severance
or termination pay, except to the extent required under any agreement in
effect as of the date of the most recent audited financial statements
included in the Filed Company SEC Documents, (C) enter into any employment,
consulting, indemnification, severance or termination agreement with any
such employee, officer or director, (D) establish, adopt, enter into or
amend in any material respect any collective bargaining agreement or Company
Benefit Plan or (E) take any action to accelerate any rights or benefits, or
make any material determinations not in the ordinary course of business
consistent with prior practice, under any collective bargaining agreement or
Company Benefit Plan;
(vi) make any change in accounting methods, principles or practices
materially affecting the reported consolidated assets, liabilities or
results of operations of the Company, except insofar as may have been
required by a change in GAAP;
(vii) sell, lease (as lessor), license or otherwise dispose of or
subject to any Lien any material properties or assets, except (A) sales of
obsolete assets in the ordinary course of business consistent with past
practice, (B) sales of inventory in the ordinary course of business
consistent with prior practice and (C) the sale of Lens Express, Inc.
substantially on the terms set forth in the Lens Express Sale Agreement;
(viii) (A) incur any indebtedness for borrowed money or guarantee any
such indebtedness of another person, issue or sell any debt securities or
warrants or other rights to acquire any debt securities of the Company or
any Company Subsidiary, guarantee any debt securities of another person,
enter into any "keep well" or other agreement to maintain any financial
statement condition of another person or enter into any arrangement having
the economic effect of any of the foregoing, except for short-term
borrowings from persons that are not directors, officers or employees of the
Company or any Company Subsidiary incurred in the ordinary course of
business consistent with past practice, or (B) make any loans, advances or
capital contributions to, or investments in, any other person, other than to
or in the Company or any direct or indirect wholly owned subsidiary of the
Company or loans, investments and advances in connection with the sale
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of the products of the Company and the Company Subsidiaries in the ordinary
course of business consistent with prior practice to persons that are not
directors, officers or employees of the Company or any Company Subsidiary,
not to exceed $100,000 individually or $1,000,000 in the aggregate;
(ix) make or agree to make any new capital expenditure or expenditures
that are in excess of $50,000 individually or $250,000 in the aggregate;
(x) make or change any material Tax election or settle or compromise
any material Tax liability or refund, except for liabilities not in excess
of $100,000 individually or $1,000,000 in the aggregate;
(xi) (A) pay, discharge or satisfy any claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise) in excess of $50,000 individually or $500,000 in the aggregate,
other than the payment, discharge or satisfaction, in the ordinary course of
business consistent with past practice or in accordance with their terms, of
liabilities reflected or reserved against in, or contemplated by, the most
recent consolidated financial statements (or the notes thereto) of the
Company included in the Filed Company SEC Documents or incurred in the
ordinary course of business consistent with past practice, (B) cancel any
indebtedness in excess of $50,000 individually or $500,000 in the aggregate
or waive any claims or rights of substantial value or (C) waive the benefits
of, or agree to modify in any manner, any confidentiality, standstill or
similar agreement to which the Company or any Company Subsidiary is a party;
(xii) enter into, renew, extend, amend, modify, waive any material
provision of, or terminate any lease or similar commitment, in each case
providing for payments in excess of $100,000 over the term of such lease or
commitment (or until the date on which such lease or commitment may be
terminated by the Company without penalty); or
(xiii) authorize, or commit or agree to take, any of the foregoing
actions.
(b) OTHER ACTIONS. The Company and Parent shall not, and shall not permit
any of their respective subsidiaries to, take any action that would, or that
would reasonably be expected to, result in (i) any of the representations and
warranties of such party set forth in this Agreement that is qualified as to
materiality becoming untrue, (ii) any of such representations and warranties
that is not so qualified becoming untrue in any material respect or (iii) any
condition to the Offer set forth in Exhibit A, or any condition to the Merger
set forth in Article VII, not being satisfied; PROVIDED, HOWEVER, that the
obligations set forth in this Section 5.01(b) shall not be deemed to have been
breached as a result of actions by the Company expressly permitted under
Section 5.02(b).
(c) ADVICE OF CHANGES. The Company shall promptly advise Parent orally and
in writing of any change or event that has had or would reasonably be expected
to have a Company Material Adverse Effect.
SECTION 5.02. NO SOLICITATION. (a) The Company shall not, nor shall it
authorize or permit any Company Subsidiary to, nor shall it authorize or permit
any officer, director or employee of, or any investment banker, attorney or
other advisor or representative (collectively, "REPRESENTATIVES") of, the
Company or any Company Subsidiary to, (i) directly or indirectly solicit,
initiate or encourage the submission of, any Company Takeover Proposal (as
defined in Section 5.02(e)), (ii) enter into any agreement with respect to any
Company Takeover Proposal or (iii) directly or indirectly participate in any
discussions or negotiations regarding, or furnish to any person any information
with respect to, or take any other action to facilitate any inquiries or the
making of any proposal that constitutes, or may reasonably be expected to lead
to, any Company Takeover Proposal; PROVIDED, HOWEVER, that prior to the first
acceptance for payment of shares of Company Common Stock pursuant to the Offer
the Company may, to the extent necessary to act in a manner consistent with the
fiduciary obligations of the Company Board, as determined in good faith by it
after consultation with outside counsel, in response
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to a Company Takeover Proposal (as defined in Section 5.02(e)) that the Company
Board determines, in good faith after consultation with outside counsel and
Chase Securities Inc. or another nationally recognized independent financial
advisor, is reasonably likely to lead to a Superior Company Proposal (as defined
in Section 5.02(e)), that was not solicited by the Company and that did not
otherwise result from a breach or a deemed breach of this Section 5.02(a), and
subject to compliance with Section 5.02(c),(x) furnish information with respect
to the Company to the person making such Company Takeover Proposal and its
Representatives pursuant to a customary confidentiality agreement and
(y) participate in discussions or negotiations with such person and its
Representatives regarding such Company Takeover Proposal. Without limiting the
foregoing, it is agreed that any violation of the restrictions set forth in the
preceding sentence by any Representative of the Company or any Company
Subsidiary, whether or not such person is purporting to act on behalf of the
Company or any Company Subsidiary or otherwise, shall be deemed to be a breach
of this Section 5.02(a) by the Company.
(b) Unless the Company Board, after consultation with outside counsel,
determines in its good faith judgment that it is necessary to do so in order to
fulfill its fiduciary obligations under applicable Law, neither the Company
Board nor any committee thereof shall (i) withdraw or modify in a manner adverse
to Parent or Sub, or publicly propose to withdraw or modify in a manner adverse
to Parent or Sub, the approval or recommendation by the Company Board or any
such committee of this Agreement, the Offer or the Merger, (ii) approve any
letter of intent, agreement in principle, acquisition agreement or similar
agreement relating to any Company Takeover Proposal or (iii) approve or
recommend, or publicly propose to approve or recommend, any Company Takeover
Proposal. The Company shall not take the actions set forth in clauses (ii) or
(iii) of the preceding sentence unless it has terminated this Agreement pursuant
to Section 8.01(e).
(c) The Company promptly shall advise Parent orally and, within two
business days, in writing of any Company Takeover Proposal or any inquiry with
respect to or that could reasonably be expected to lead to any Company Takeover
Proposal, the material terms and conditions of any such Company Takeover
Proposal (including any changes thereto) and the identity of the person making
any such Company Takeover Proposal or inquiry. The Company shall (i) keep Parent
fully informed of the status and details (including any change to the terms
thereof) of any such Company Takeover Proposal and (ii) provide to Parent as
soon as practicable after receipt or delivery thereof with copies of all
correspondence and other written material sent or provided to the Company by any
third party in connection with any Company Takeover Proposal or sent or provided
by the Company to any third party in connection with any Company Takeover
Proposal.
(d) Nothing contained in this Section 5.02 shall prohibit the Company from
taking and disclosing to its stockholders a position contemplated by
Rule 14e-2(a) promulgated under the Exchange Act or from making any required
disclosure to the Company's stockholders if, in the good faith judgment of the
Company Board, after consultation with outside counsel, failure so to disclose
would be inconsistent with its obligations under applicable law.
(e) For purposes of this Agreement:
"COMPANY TAKEOVER PROPOSAL" means (i) any proposal or offer for a
merger, consolidation, dissolution, recapitalization or other business
combination involving the Company or any Significant Subsidiary of the
Company, (ii) any proposal for the issuance by the Company of over 20% of
its equity securities as consideration for the assets or securities of
another person or (iii) any proposal or offer to acquire in any manner,
directly or indirectly, over 20% of the equity securities or consolidated
total assets of the Company, in each case other than pursuant to the
Transactions.
"SUPERIOR COMPANY PROPOSAL" means any proposal made by a third party to
acquire substantially all the equity securities or assets of the Company,
pursuant to a tender or exchange offer, a merger, a consolidation, a
liquidation or dissolution, a recapitalization or a sale of all or
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substantially all its assets, (i) on terms which the Company Board
determines in good faith to be superior from a financial point of view to
the holders of Company Common Stock to the Transactions (after consultation
with the Company's financial advisor, which shall be Chase Securities Inc.
or another nationally recognized independent financial advisor), taking into
account all the terms and conditions of such proposal and this Agreement
(including any proposal by Parent to amend the terms of the Transactions)
and (ii) that is reasonably capable of being completed, taking into account
all financial, regulatory, legal and other aspects of such proposal.
ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.01. PREPARATION OF PROXY STATEMENT; STOCKHOLDERS MEETING. (a)
The Company shall, as soon as practicable following the expiration of the Offer,
prepare and file with the SEC the Proxy Statement in preliminary form, and each
of the Company, Parent and Sub shall use their best efforts to respond as
promptly as practicable to any comments of the SEC with respect thereto. The
Company shall notify Parent promptly of the receipt of any comments from the SEC
or its staff and of any request by the SEC or its staff for amendments or
supplements to the Proxy Statement or for additional information and shall
supply Parent with copies of all correspondence between the Company or any of
its representatives, on the one hand, and the SEC or its staff, on the other
hand, with respect to the Proxy Statement. If at any time prior to receipt of
the Company Stockholder Approval there shall occur any event that should be set
forth in an amendment or supplement to the Proxy Statement, the Company shall
promptly prepare and mail to its stockholders such an amendment or supplement.
The Company shall not mail any Proxy Statement, or any amendment or supplement
thereto, to which Parent reasonably objects. The Company shall use its best
efforts to cause the Proxy Statement to be mailed to the Company's stockholders
as promptly as practicable after filing with the SEC.
(b) The Company shall, as soon as practicable following the expiration of
the Offer, duly call, give notice of, convene and hold a meeting of its
stockholders (the "COMPANY STOCKHOLDERS MEETING") for the purpose of seeking the
Company Stockholder Approval. Subject to Section 5.02(b), the Company shall,
through the Company Board, recommend to its stockholders that they give the
Company Stockholder Approval. Without limiting the generality of the foregoing,
the Company agrees that its obligations pursuant to the first sentence of this
Section 6.01(b) shall not be affected by the commencement, public proposal,
public disclosure or communication to the Company of any Company Takeover
Proposal. Notwithstanding the foregoing, if Sub or any other subsidiary of
Parent shall acquire at least 90% of the outstanding shares of each series of
Company Capital Stock, the parties shall, at the request of Parent, take all
necessary and appropriate action to cause the Merger to become effective as soon
as practicable after the expiration of the Offer without a stockholders meeting
in accordance with Section 82 of the BCL.
(c) Parent shall cause all shares of Company Common Stock purchased
pursuant to the Offer and all other shares of Company Common Stock owned by
Parent, Sub or any other subsidiary of Parent to be voted in favor of the
approval of this Agreement.
SECTION 6.02. ACCESS TO INFORMATION; CONFIDENTIALITY. The Company shall,
and shall cause each of its subsidiaries to, afford to Parent, and to Parent's
officers, employees, accountants, counsel, financial advisors and other
representatives, upon reasonable notice, reasonable access during normal
business hours during the period prior to the Effective Time to all their
respective properties, books, contracts, commitments, personnel and records and,
during such period, the Company shall, and shall cause each of its subsidiaries
to, furnish promptly to Parent (a) a copy of each report, schedule, registration
statement and other document filed by it during such period pursuant to the
requirements of Federal or state securities laws and (b) all other information
concerning its business, properties and personnel as Parent may reasonably
request; PROVIDED, HOWEVER, that the Company may withhold the
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documents and information described in the Company Disclosure Letter to the
extent required to comply with the terms of a confidentiality agreement with a
third party in effect on the date of this Agreement; PROVIDED FURTHER, that the
Company shall use all reasonable efforts to obtain, as promptly as practicable,
any consent from such third party required to permit the Company to furnish such
documents and information to Parent. All information exchanged pursuant to this
Section 6.02 shall be subject to the confidentiality agreement dated
November 5, 1999, between the Company and Alcon Laboratories, Inc. (the
"CONFIDENTIALITY AGREEMENT").
SECTION 6.03. REASONABLE EFFORTS; NOTIFICATION. (a) Upon the terms and
subject to the conditions set forth in this Agreement, each of the parties shall
use all reasonable efforts to take, or cause to be taken, all reasonable
actions, and to do, or cause to be done, and to assist and cooperate with the
other parties in doing, all things reasonably necessary, proper or advisable to
consummate and make effective, in the most expeditious manner practicable, the
Offer, the Merger and the other Transactions, including (i) the obtaining of all
necessary actions or nonactions, waivers, consents and approvals from
Governmental Entities and the making of all necessary registrations and filings
(including filings with Governmental Entities, if any) and the taking of all
reasonable steps as may be necessary to obtain an approval or waiver from, or to
avoid an action or proceeding by, any Governmental Entity, (ii) the obtaining of
all necessary consents, approvals or waivers from third parties, (iii) the
defending of any lawsuits or other legal proceedings, whether judicial or
administrative, challenging this Agreement or the consummation of the
Transactions, including, when reasonable, seeking to have any stay or temporary
restraining order entered by any court or other Governmental Entity vacated or
reversed and (iv) the execution and delivery of any additional instruments
necessary to consummate the Transactions and to fully carry out the purposes of
this Agreement; PROVIDED, HOWEVER, that the obligations set forth in this
sentence shall not be deemed to have been breached as a result of actions by the
Company expressly permitted under Section 5.02(b). In connection with and
without limiting the foregoing, the Company and the Company Board shall
(i) take all action necessary to ensure that no state takeover statute or
similar statute or regulation is or becomes applicable to any Transaction or
this Agreement and (ii) if any state takeover statute or similar statute or
regulation becomes applicable to this Agreement, take all action necessary to
ensure that the Offer, the Merger and the other Transactions may be consummated
as promptly as practicable on the terms contemplated by this Agreement and
otherwise to minimize the effect of such statute or regulation on the Offer, the
Merger and the other Transactions. Nothing in this Agreement shall be deemed to
require any party to waive any substantial rights or agree to any substantial
limitation on its operations or to dispose of any significant asset or
collection of assets. As promptly as practicable after the consummation of the
Offer, the Company shall use all reasonable efforts to notify Parent of any
actions or nonactions of, waivers, consents and approvals from, and
registrations and filings with, Governmental Entities, and any consents,
approvals or waivers from third parties, that would be required in connection
with the consummation of the Merger in the event that Parent elects pursuant to
Section 1.03 to merge the Company with and into Sub instead of merging Sub into
the Company.
(b) The Company shall give prompt notice to Parent, and Parent or Sub shall
give prompt notice to the Company, of (i) any representation or warranty made by
it contained in this Agreement that is qualified as to materiality becoming
untrue or inaccurate in any respect or any such representation or warranty that
is not so qualified becoming untrue or inaccurate in any material respect or
(ii) the failure by it to comply with or satisfy in any material respect any
covenant, condition or agreement to be complied with or satisfied by it under
this Agreement; PROVIDED, HOWEVER, that no such notification shall affect the
representations, warranties, covenants or agreements of the parties or the
conditions to the obligations of the parties under this Agreement.
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SECTION 6.04. STOCK OPTIONS. (a) As soon as practicable following the date
of this Agreement, the Company Board (or, if appropriate, any committee
administering the Company Stock Plans) shall adopt such resolutions or take such
other actions as are required to adjust the terms of all outstanding Company
Stock Options and all outstanding Company SARs, in each case whether vested or
unvested, heretofore granted under any Company Stock Plan to provide that each
such Company Stock Option (and any Company SAR related thereto) outstanding
immediately prior to the first acceptance for payment of shares of Company
Common Stock pursuant to the Offer shall be canceled in exchange for a cash
payment by the Company as soon as practicable following the first acceptance for
payment of shares of Company Common Stock pursuant to the Offer of an amount
equal to (i) the excess, if any, of (x) the highest price per share of Company
Common Stock to be paid pursuant to the Offer over (y) the exercise price per
share of Company Common Stock subject to such Company Stock Option, multiplied
by (ii) the number of shares of Company Common Stock for which such Company
Stock Option shall not theretofore have been exercised. The Company will be
responsible for any required reporting to Federal, state or local tax
authorities.
(b) All amounts payable pursuant to this Section 6.04 shall be subject to
any required withholding of Taxes or proof of eligibility of exemption therefrom
and shall be paid without interest by the Company as soon as practicable
following the first acceptance for payment of shares of Company Common Stock
pursuant to the Offer. The Company shall use its best efforts to obtain all
consents of the holders of Company Stock Options as shall be necessary to
effectuate the foregoing. Notwithstanding anything to the contrary contained in
this Agreement, payment shall, at Parent's request, be withheld in respect of
any Company Stock Option until all necessary consents with respect to such
Company Stock Option are obtained.
(c) The Company Stock Plans shall terminate as of the Effective Time, and
the provisions in any other Benefit Plan providing for the issuance, transfer or
grant of any capital stock of the Company or any interest in respect of any
capital stock of the Company shall be deleted as of the Effective Time, and the
Company shall ensure that following the Effective Time no holder of a Company
Stock Option or Company SAR or any participant in any Company Stock Plan or
other Company Benefit Plan shall have any right thereunder to acquire any
capital stock of the Company or the Surviving Corporation.
(d) In this Agreement:
"COMPANY STOCK OPTION" means any option to purchase Company Common Stock
granted under any Company Stock Plan.
"COMPANY SAR" means any stock appreciation right linked to the price of
Company Common Stock and granted under any Company Stock Plan.
"COMPANY STOCK PLANS" means the 1992 Stock Option Plan for Outside
Directors, the 1999 Outside Director Compensation Plan, the 1987 Stock
Option Plan, the 1997 Stock Option Plan, the Employee Stock Purchase Plan
and all agreements under which there are outstanding options to purchase
Company Common Stock granted to employees, consultants or any other person.
SECTION 6.05. BENEFIT PLANS. (a) Except as set forth in Section 6.04,
Parent agrees to cause the Surviving Corporation (i) to maintain for a period of
one year after the Effective Time the Company Benefit Plans (other than
equity-based plans) in effect on the date of this Agreement or (ii) to provide
benefits (other than equity-based plans) to each current employee of the Company
and its subsidiaries that are not materially less favorable in the aggregate to
such employees than those benefits in effect for such employees on the date of
this Agreement.
(b) In addition to the agreement set forth in Section 6.05(a), from and
after the Control Date and from and after the Effective Time, Parent shall cause
the Company or the Surviving Corporation, as applicable, to honor in accordance
with their respective terms (as in effect on the date of this Agreement), all
the Company's employment, severance and termination agreements, plans and
policies
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disclosed in the Company Disclosure Letter, including any change in control
provisions contained therein.
(c) With respect to any "employee benefit plan", as defined in
Section 3(3) of ERISA, maintained by Parent or any of its subsidiaries
(including any severance plan), for all purposes, including determining
eligibility to participate and vesting, service with the Company or any Company
Subsidiary shall be treated as service with Parent or any of its subsidiaries;
PROVIDED, HOWEVER, that such service need not be recognized to the extent that
such recognition would result in any duplication of benefits.
SECTION 6.06. INDEMNIFICATION. (a) Parent shall, to the fullest extent
permitted by Law, cause the Company (from and after the Control Date) and the
Surviving Corporation (from and after the Effective Time) to honor all the
Company's obligations to indemnify, defend and hold harmless (including any
obligations to advance funds for expenses) the current and former directors and
officers of the Company and its subsidiaries against all losses, claims, damages
or liabilities arising out of acts or omissions by any such directors and
officers occurring prior to the Effective Time to the maximum extent that such
obligations of the Company exist on the date of this Agreement, whether pursuant
to the Company Charter, the Company By-laws, the BCL, individual indemnity
agreements or otherwise, and such obligations shall survive the Merger and shall
continue in full force and effect in accordance with the terms of the Company
Charter, the Company By-laws, the BCL and such individual indemnity agreements
from the Effective Time until the expiration of the applicable statute of
limitations with respect to any claims against such directors or officers
arising out of such acts or omissions. In the event a current or former director
or officer of the Company or any of its subsidiaries is entitled to
indemnification under this Section 6.06(a), such director or officer shall be
entitled to reimbursement from the Company (from and after the Control Date) or
the Surviving Corporation (from and after the Effective Time) for reasonable
attorney fees and expenses incurred by such director or officer in pursuing such
indemnification, including payment of such fees and expenses by the Surviving
Corporation or the Company, as applicable, in advance of the final disposition
of such action upon receipt of an undertaking by such current or former director
or officer to repay such payment if it shall be adjudicated that such current or
former director or officer was not entitled to such payment.
(b) From and after the Control Date and for a period of six years after the
Effective Time, Parent shall cause to be maintained in effect the current
policies of directors' and officers' liability insurance maintained by the
Company (provided that Parent may either (i) substitute therefor policies with
reputable and financially sound carriers or (ii) maintain self insurance or
similar arrangements through a financially sound insurance affiliate of Parent,
in each case of at least the same coverage and amounts containing terms and
conditions which are no less advantageous) with respect to claims arising from
or related to facts or events which occurred at or before the Effective Time;
PROVIDED, HOWEVER, that Parent shall not be obligated to make annual premium
payments for such insurance to the extent such premiums exceed 200% of the
annual premiums paid as of the date hereof by the Company for such insurance
(such 200% amount, the "MAXIMUM PREMIUM"). If such insurance coverage cannot be
obtained at all, or can only be obtained at an annual premium in excess of the
Maximum Premium, Parent shall maintain the most advantageous policies of
directors' and officers' insurance obtainable for an annual premium equal to the
Maximum Premium. The Company represents to Parent that the Maximum Premium is
$400,000.
(c) The Company will maintain, through the Effective Time, the Company's
existing directors' and officers' insurance in full force and effect without
reduction of coverage.
(d) The By-Laws of the Surviving Corporation shall contain the provisions
that are set forth, as of the date of this Agreement, in Article VIII of the
By-Laws of the Company, which provisions shall not be amended, repealed or
otherwise modified for a period of six years from the Effective Time in any
manner that would affect adversely the rights thereunder of individuals who at
or at any time prior
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<PAGE>
to the Effective Time were directors, officers, employees or other agents of the
Company (and during such period the Articles of Organization of the Company
shall not be amended, repealed or otherwise modified in any manner that would
have the effect of so amending, repealing or otherwise modifying such provisions
of the By-Laws).
(e) If the Surviving Corporation or any of its successors or assigns
(i) consolidates with or merges into any other person and shall not be the
continuing or surviving corporation or entity of such consolidation or merger
and the continuing or surviving entity does not assume the obligations of the
Surviving Corporation set forth in this Section 6.06, or (ii) transfers all or
substantially all of its properties and assets to any person, then, and in each
such case, proper provision shall be made so that the successors and assigns of
the Surviving Corporation assume, as a matter of law or otherwise, the
obligations set forth in this Section 6.06.
(f) Parent guarantees that if for any reason the Company or the Surviving
Corporation, as the case may be, shall not meet its obligations pursuant to this
Section 6.06, it shall meet such obligations in full when and as such
obligations arise.
SECTION 6.07. FEES AND EXPENSES. (a) Except as provided below, all fees
and expenses incurred in connection with the Merger and the other Transactions
shall be paid by the party incurring such fees or expenses, whether or not the
Merger is consummated.
(b) The Company shall pay to Parent a fee of $32.5 million if: (i) this
Agreement is terminated pursuant to Section 8.01(b)(iii) as a result of the
failure of the condition set forth in paragraph (d) of Exhibit A; (ii) the
Company terminates this Agreement pursuant to Section 8.01(e); (iii) Parent
terminates this Agreement pursuant to Section 8.01(d)(i) or 8.01(d)(ii) as a
result of a material breach of Section 5.02; (iv) after the date of this
Agreement, any person makes a Company Takeover Proposal, (A) the Offer shall
have remained open until the scheduled expiration date immediately following the
date such Company Takeover Proposal is made, (B) the Minimum Tender Condition is
not satisfied at such expiration date, (C) this Agreement is terminated pursuant
to Section 8.01(b)(i) or 8.01(b)(iii) (other than as a result of the failure of
the condition set forth in paragraph (d) of Exhibit A) and (D) within 12 months
of such termination the Company enters into a definitive agreement to
consummate, or consummates, the transactions contemplated by a Company Takeover
Proposal; or (v) subject to Section 6.07(c), this Agreement is terminated
pursuant to Section 8.01(c) as a result of a wilful breach by the Company and
within 12 months of such termination the Company enters into a definitive
agreement to consummate, or consummates, the transactions contemplated by a
Company Takeover Proposal. Any fee due under this Section 6.07(b) shall be paid
by wire transfer of same-day funds on the date of termination of this Agreement
(except that in the case of clause (iv) or (v) above such payment shall be made
on the date of execution of such definitive agreement or, if earlier,
consummation of such transactions).
(c) If the Company becomes obligated to pay a fee under Section 6.07(b) as
a result of a termination pursuant to Section 8.01(c), Parent may elect not to
receive the fee and may instead pursue any and all rights, claims and causes of
action it may have under Law with respect to the breach giving rise to such
right of termination. If Parent elects to receive the fee, and the Company pays
the fee as required by Section 6.07(b), the payment by the Company of such fee
shall be Parent's sole remedy with respect to such breach and Parent shall
waive, to the fullest extent permitted by Law, any and all rights, claims and
causes of action (other than claims of, or causes of action arising from, fraud)
it may have against the Company with respect to such breach.
SECTION 6.08. PUBLIC ANNOUNCEMENTS. Parent and Sub, on the one hand, and
the Company, on the other hand, shall consult with each other before issuing,
and provide each other the opportunity to review and comment upon, any press
release or other public statements with respect to the Offer, the Merger and the
other Transactions and shall not issue any such press release or make any such
public statement prior to such consultation, except as may be required by
applicable Law (including foreign
26
<PAGE>
regulations relating to competition), court process or by obligations pursuant
to any listing agreement with any national securities exchange.
SECTION 6.09. TRANSFER TAXES. All stock transfer, real estate transfer,
documentary, stamp, recording and other similar Taxes (including interest,
penalties and additions to any such Taxes) ("TRANSFER TAXES") incurred in
connection with the Transactions shall be paid by the party upon whom the
primary burden for payment is placed by the applicable law. Each party shall
cooperate with the other in preparing, executing and filing any Tax Returns with
respect to such Transfer Taxes and shall use reasonable efforts to avail itself
of any available exemptions from such Transfer Taxes, and shall cooperate in
providing any information and documentation that may be necessary to obtain such
exemptions.
SECTION 6.10. DIRECTORS. Promptly upon the first acceptance for payment
of, and payment by Sub for, any shares of Company Common Stock pursuant to the
Offer, Sub shall be entitled to designate such number of directors on the
Company Board as will give Sub, subject to compliance with Section 14(f) of the
Exchange Act, representation on the Company Board equal to at least that number
of directors, rounded up to the next whole number, which is the product of
(a) the total number of directors on the Company Board (giving effect to the
directors elected pursuant to this sentence) multiplied by (b) the percentage
that (i) such number of shares of Company Common Stock so accepted for payment
and paid for by Sub plus the number of shares of Company Common Stock otherwise
owned by Sub or any other subsidiary of Parent bears to (ii) the number of such
shares outstanding, and the Company shall, at such time, cause Sub's designees
to be so elected; PROVIDED, HOWEVER, that in the event that Sub's designees are
appointed or elected to the Company Board, until the Effective Time the Company
Board shall have at least three directors who are directors on the date of this
Agreement and who are not officers of the Company (the "INDEPENDENT DIRECTORS");
and PROVIDED FURTHER that, in such event, if the number of Independent Directors
shall be reduced below three for any reason whatsoever, any remaining
Independent Directors (or Independent Director, if there shall be only one
remaining) shall be entitled to designate persons to fill such vacancies who
shall be deemed to be Independent Directors for purposes of this Agreement or,
if no Independent Directors then remain, the other directors shall designate
three persons to fill such vacancies who are not officers, stockholders or
affiliates of the Company, Parent or Sub, and such persons shall be deemed to be
Independent Directors for purposes of this Agreement. Subject to applicable Law,
the Company shall take all action requested by Parent necessary to effect any
such election, including mailing to its stockholders the Information Statement
containing the information required by Section 14(f) of the Exchange Act and
Rule 14f-1 promulgated thereunder, and the Company shall make such mailing with
the mailing of the Schedule 14D-9 (provided that Sub shall have provided to the
Company on a timely basis all information required to be included in the
Information Statement with respect to Sub's designees). In connection with the
foregoing, the Company shall promptly, at the option of Sub, either increase the
size of the Company Board or obtain the resignation of such number of its
current directors as is necessary to enable Sub's designees to be elected or
appointed to the Company Board as provided above.
SECTION 6.11. RIGHTS AGREEMENT; CONSEQUENCES IF RIGHTS TRIGGERED. The
Company Board shall take all action requested in writing by Parent in order to
render the Company Rights inapplicable to the Offer, the Merger and the other
Transactions. Except as approved in writing by Parent, the Company Board shall
not (i) amend the Company Rights Agreement, (ii) redeem the Company Rights or
(iii) take any action with respect to, or make any determination under, the
Company Rights Agreement, in each case in a manner adverse to Parent or Sub. If
any Distribution Date, Stock Acquisition Date or Common Stock Event occurs under
the Company Rights Agreement at any time during the period from the date of this
Agreement to the Effective Time, the Company and Parent shall make such
adjustment to the Offer Price as the Company and Parent shall mutually agree so
as to preserve the economic benefits that the Company and Parent each reasonably
expected on the date of
27
<PAGE>
this Agreement to receive as a result of the consummation of the Offer, the
Merger and the other Transactions.
SECTION 6.12. STOCKHOLDER LITIGATION. The Company shall give Parent the
opportunity to participate in the defense or settlement of any stockholder
litigation against the Company and its directors relating to any Transaction;
PROVIDED, HOWEVER, that Parent shall have the right to prevent the Company from
entering into any such settlement without Parent's consent if Parent agrees to
indemnify the Company and each director of the Company for the amount of its,
his or her liability, if any, arising from the underlying claim, net of any
insurance proceeds received by such person, that is in excess of the amount for
which such person would have been liable under such settlement.
SECTION 6.13. TRANSFERS OF CERTAIN INTANGIBLE ASSETS. No later than
simultaneously with the first acceptance for payment of, and payment by Sub for,
at least two-thirds of the Fully Diluted Shares (as defined in Exhibit A)
pursuant to the Offer, (a) the Company shall cause its subsidiary, Autonomous
Technologies Corp., a Delaware corporation ("AUTONOMOUS"), to transfer
(x) certain of the Intellectual Property Rights of Autonomous and its
subsidiaries and (y) certain licenses, approvals and registrations issued by, or
filed with, the FDA, and all other Governmental Entities performing similar
functions, and all rights therein, of Autonomous and its subsidiaries with
respect to any products of Autonomous and its subsidiaries to Alcon
Universal Ltd., a Swiss corporation ("AUL"), in exchange for a cash payment by
AUL equal to the fair market value of the transferred assets, and (b) the
Company shall transfer to AUL all of the outstanding shares of stock in its
subsidiary, Summit Technology Ireland B.V., a Netherlands corporation
("DUTCHCO"), in exchange for a cash payment by AUL equal to the net book value
of DutchCo). If any consent required to transfer an asset pursuant to this
Section 6.13 has not been obtained prior to the time at which such transfer
would otherwise occur, Parent and the Company shall cooperate in any lawful and
reasonable arrangement proposed by Parent under which AUL shall obtain the
economic claims, rights and benefits under such asset until such consent has
been obtained.
ARTICLE VII
CONDITIONS PRECEDENT
SECTION 7.01. CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE
MERGER. The respective obligation of each party to effect the Merger is subject
to the satisfaction or waiver on or prior to the Closing Date of the following
conditions:
(a) STOCKHOLDER APPROVAL. The Company shall have obtained the Company
Stockholder Approval, if required.
(b) ANTITRUST. The waiting period (and any extension thereof) applicable to
the Merger under the HSR Act shall have been terminated or shall have expired.
Any consents, approvals and filings under any other foreign antitrust Law the
absence of which would prohibit the consummation of Merger, shall have been
obtained or made.
(c) NO INJUNCTIONS OR RESTRAINTS. No statute, rule, regulation, executive
order, decree, temporary restraining order, preliminary or permanent injunction
or other order enacted, entered, promulgated, enforced or issued by any
Governmental Entity or other legal restraint or prohibition preventing the
consummation of the Merger or the other Transactions shall be in effect;
PROVIDED, HOWEVER, that prior to asserting this condition each of the parties
shall have used all reasonable efforts to prevent the entry of any such
injunction or other order and to appeal as promptly as possible any such
injunction or other order that may be entered.
(d) ACCEPTANCE OF SHARES PURSUANT TO THE OFFER. Sub shall have accepted
shares of Company Common Stock for payment pursuant to the Offer; PROVIDED, that
the obligation of a party to effect the Merger shall not be conditioned on the
fulfillment of the condition set forth in this clause (d) if the failure of Sub
to accept shares of Company Common Stock for payment pursuant to the Offer shall
have constituted or resulted from a material breach of the Offer or this
Agreement by such party.
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ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
SECTION 8.01. TERMINATION. This Agreement may be terminated at any time
prior to the Effective Time, whether before or after receipt of Company
Stockholder Approval:
(a) by mutual written consent of Parent, Sub and the Company;
(b) by either Parent or the Company:
(i) if the Offer is not consummated on or before November 26, 2000 (the
"OUTSIDE DATE"), unless the failure to consummate the Offer is the result of
a wilful and material breach of this Agreement by the party seeking to
terminate this Agreement;
(ii) if any Governmental Entity issues an order, decree or ruling or
takes any other action permanently enjoining, restraining or otherwise
prohibiting the acceptance for payment of, or payment for, shares of Company
Common Stock pursuant to the Offer or the Merger and such order, decree,
ruling or other action shall have become final and nonappealable;
(iii) if as the result of the failure of any of the conditions set forth
in Exhibit A to this Agreement, the Offer shall have terminated or expired
in accordance with its terms without Sub having accepted shares of Company
Common Stock for payment pursuant to the Offer; PROVIDED, HOWEVER, that the
right to terminate this Agreement pursuant to this clause (iii) shall not be
available to any party whose failure to fulfill any of its obligations under
this Agreement results in the failure of any such condition or if the
failure of such condition results from facts or circumstances that
constitute a wilful breach of any representation or warranty under this
Agreement by such party; or
(iv) if, upon a vote at a duly held meeting to obtain the Company
Stockholder Approval, the Company Stockholder Approval is not obtained;
PROVIDED, that Parent may not terminate this Agreement under this
Section 8.01(b)(iv) if the Company Common Stock owned by Sub, Parent or any
other subsidiary of Parent shall not have been voted in favor of obtaining
the Company Stockholder Approval;
(c) by Parent, if the Company breaches or fails to perform in any material
respect any of its representations, warranties or covenants contained in this
Agreement (other than a breach or failure to perform for which Parent has the
right to terminate this Agreement pursuant to Section 8.01(d)(ii)), which breach
or failure to perform (i) would give rise to the failure of a condition set
forth in Exhibit A, and (ii) cannot be or has not been cured within 30 days
after the giving of written notice to the Company of such breach (provided that
Parent is not then in material breach of any representation, warranty or
covenant contained in this Agreement); or
(d) by Parent prior to the first acceptance of shares of Company Common
Stock for payment pursuant to the Offer:
(i) if the Company Board or any committee thereof withdraws or modifies
in a manner adverse to Parent or Sub, or publicly proposes to withdraw or
modify in a manner adverse to Parent or Sub, its approval or recommendation
of this Agreement, the Offer or the Merger, fails to recommend to the
Company's stockholders that they accept the Offer and give the Company
Stockholder Approval or publicly approves or recommends, or publicly
proposes to approve or recommend, any Company Takeover Proposal; or
(ii) if the Company or any of its officers, directors, employees,
representatives or agents takes any of the actions that would be proscribed
by Section 5.02 but for the exceptions therein allowing certain actions to
be taken pursuant to the proviso in the first sentence of Section 5.02(a);
or
29
<PAGE>
(e) by the Company prior to the first acceptance of shares of Company Common
Stock for payment pursuant to the Offer in accordance with Section 8.05(b);
PROVIDED, HOWEVER, that the Company shall have complied with all provisions
thereof, including the notice provisions therein; or
(f) by the Company prior to the first acceptance of shares of Company Common
Stock for payment pursuant to the Offer, if Parent breaches or fails to perform
in any material respect any of its representations, warranties or covenants
contained in this Agreement, which breach or failure to perform cannot be or has
not been cured within 30 days after the giving of written notice to Parent of
such breach (provided that the Company is not then in material breach of any
representation, warranty or covenant contained in this Agreement).
SECTION 8.02. EFFECT OF TERMINATION. In the event of termination of this
Agreement by either the Company or Parent as provided in Section 8.01, this
Agreement shall forthwith become void and have no effect, without any liability
or obligation on the part of Parent, Sub or the Company, other than
Section 3.16, Section 4.06, the last sentence of Section 6.02, Section 6.07,
this Section 8.02 and Article IX, which provisions shall survive such
termination, and except to the extent that such termination results from the
wilful and material breach by a party of any representation, warranty or
covenant set forth in this Agreement.
SECTION 8.03. AMENDMENT. This Agreement may be amended by the parties at
any time before or after receipt of the Company Stockholder Approval; PROVIDED,
HOWEVER, that after receipt of the Company Stockholder Approval, there shall be
made no amendment that by Law requires further approval by the stockholders of
the Company without the further approval of such stockholders; and PROVIDED,
FURTHER, that after this Agreement is adopted by the Company's stockholders, no
such amendment or modification shall be made that reduces the amount or changes
the form of Merger Consideration or otherwise materially and adversely affects
the rights of the Company's stockholders hereunder, without the further approval
of such stockholders. This Agreement may not be amended except by an instrument
in writing signed on behalf of each of the parties.
SECTION 8.04. EXTENSION; WAIVER. At any time prior to the Effective Time,
the parties may (a) extend the time for the performance of any of the
obligations or other acts of the other parties, (b) waive any inaccuracies in
the representations and warranties contained in this Agreement or in any
document delivered pursuant to this Agreement or (c) subject to the proviso of
Section 8.03, waive compliance with any of the agreements or conditions
contained in this Agreement. Any agreement on the part of a party to any such
extension or waiver shall be valid only if set forth in an instrument in writing
signed on behalf of such party. The failure of any party to this Agreement to
assert any of its rights under this Agreement or otherwise shall not constitute
a waiver of such rights.
SECTION 8.05. PROCEDURE FOR TERMINATION, AMENDMENT, EXTENSION OR
WAIVER. (a) A termination of this Agreement pursuant to Section 8.01, an
amendment of this Agreement pursuant to Section 8.03 or an extension or waiver
pursuant to Section 8.04 shall, in order to be effective, require in the case of
Parent, Sub or the Company, action by its Board of Directors or the duly
authorized designee of its Board of Directors; PROVIDED, that in the case of the
Company, such action shall also require action by a majority of the Independent
Directors.
(b) The Company may terminate this Agreement pursuant to Section 8.01(e)
only if (i) the Company Board has received a Superior Company Proposal, (ii) in
light of such Superior Company Proposal the Company Board shall have determined
in good faith, after consultation with outside counsel, that it is necessary for
the Company Board to withdraw or modify its approval or recommendation of this
Agreement, the Offer or the Merger in order to act in a manner consistent with
its fiduciary duty under applicable Law, (iii) the Company has notified Parent
in writing of the determinations described in clause (ii) above, (iv) at least
three business days following receipt by Parent of the notice referred to in
clause (iii) above, and taking into account any revised proposal made by Parent
since receipt of the notice referred to in clause (iii) above, such Superior
Company
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<PAGE>
Proposal remains a Superior Company Proposal and the Company Board has again
made the determinations referred to in clause (ii) above, (v) the Company is in
compliance with Section 5.02 (other than breaches that, individually and in the
aggregate, are not material and do not prejudice Parent's rights under this
Agreement), (vi) the Company has previously paid the fee due under
Section 6.07, (vii) the Company Board concurrently approves, and the Company
concurrently enters into, a definitive agreement providing for the
implementation of such Superior Company Proposal and (viii) Parent is not at
such time entitled to terminate this Agreement pursuant to Section 8.01(c).
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.01. NONSURVIVAL OF REPRESENTATIONS AND WARRANTIES. Except as
provided in the last sentence of this Section 9.01, none of the representations
and warranties in this Agreement or in any instrument delivered pursuant to this
Agreement shall survive the Effective Time. This Section 9.01 (including any
rights arising out of any breach of such representations and warranties) shall
not limit any covenant or agreement of the parties which by its terms
contemplates performance after the Effective Time.
SECTION 9.02. NOTICES. All notices, requests, claims, demands and other
communications under this Agreement shall be in writing and shall be deemed
given (i) seven days after mailing by certified mail, (ii) when delivered by
hand, (iii) upon confirmation of receipt by telecopy or (iv) one business day
after sending by overnight delivery service, to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice):
(a) if to Parent or Sub, to
Alcon Holdings Inc.
6201 South Freeway
Fort Worth, TX 76134-2099
Attention: Elaine E. Whitbeck, Esq.
Facsimile: (817) 568-7579
with a copy to:
Cravath, Swaine & Moore
825 Eighth Avenue
New York, NY 10019
Attention: Alan C. Stephenson, Esq.
Facsimile: (212) 474-3700
(b) if to the Company, to
Summit Autonomous Inc.
21 Hickory Drive
Waltham, MA 02451
Attention: James A. Lightman, Esq.
Facsimile: (781) 890-6739
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with a copy to:
Ropes & Gray
One International Place
Boston, MA 02110-2624
Attention: Keith F. Higgins, Esq.
Facsimile: (617) 951-7050
SECTION 9.03. DEFINITIONS. For purposes of this Agreement:
An "AFFILIATE" of any person means another person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such first person.
A "KEY EMPLOYEE" means an employee of the Company or any Company Subsidiary
whose total annual compensation (including incentive compensation), after giving
effect to any increase after the date of this Agreement, exceeds $85,000.
A "MATERIAL ADVERSE EFFECT" on a party means a material adverse effect on
the business, assets, condition (financial or otherwise) or results of
operations of such party and its subsidiaries, taken as a whole.
A "PERSON" means any individual, firm, corporation, partnership, company,
limited liability company, trust, joint venture, association, Governmental
Entity or other entity.
A "SUBSIDIARY" of any person means another person, an amount of the voting
securities, other voting ownership or voting partnership interests of which is
sufficient to elect at least a majority of its Board of Directors or other
governing body (or, if there are no such voting interests, 50% or more of the
equity interests of which) is owned directly or indirectly by such first person.
"TO THE KNOWLEDGE" of any specified corporation means to the actual
knowledge of any director or officer of such corporation.
SECTION 9.04. INTERPRETATION; DISCLOSURE LETTERS. When a reference is made
in this Agreement to a Section, such reference shall be to a Section of this
Agreement unless otherwise indicated. The table of contents and headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement. Whenever the words
"include", "includes" or "including" are used in this Agreement, they shall be
deemed to be followed by the words "without limitation". Any matter disclosed in
any section of the Company Disclosure Letter shall be deemed disclosed only for
the purposes of the specific Sections of this Agreement to which such section
relates.
SECTION 9.05. SEVERABILITY. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule or law,
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner to
the end that transactions contemplated hereby are fulfilled to the extent
possible.
SECTION 9.06. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties.
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SECTION 9.07. ENTIRE AGREEMENT; NO THIRD-PARTY BENEFICIARIES. This
Agreement, taken together with the Company Disclosure Letter and the
Confidentiality Agreement, (a) constitute the entire agreement, and supersede
all prior agreements and understandings, both written and oral, among the
parties with respect to the Transactions and (b) except for the provisions of
Article II, Section 6.04 and Section 6.06, are not intended to confer upon any
person other than the parties any rights or remedies.
SECTION 9.08. GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of The Commonwealth of Massachusetts,
regardless of the laws that might otherwise govern under applicable principles
of conflicts of laws thereof.
SECTION 9.09. ASSIGNMENT. Neither this Agreement nor any of the rights,
interests or obligations under this Agreement shall be assigned, in whole or in
part, by operation of law or otherwise by any of the parties without the prior
written consent of the other parties, except that Sub may assign, in its sole
discretion, any of or all its rights, interests and obligations under this
Agreement to Parent or to any direct or indirect wholly owned subsidiary of
Parent, but no such assignment shall relieve Sub of any of its obligations under
this Agreement. Any purported assignment without such consent shall be void.
Subject to the preceding sentences, this Agreement will be binding upon, inure
to the benefit of, and be enforceable by, the parties and their respective
successors and assigns.
SECTION 9.10. ENFORCEMENT. The parties agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any Massachusetts state court or
any Federal court located in The Commonwealth of Massachusetts, this being in
addition to any other remedy to which they are entitled at law or in equity. In
addition, each of the parties hereto (a) consents to submit itself to the
personal jurisdiction of any Massachusetts state court or any Federal court
located in The Commonwealth of Massachusetts in the event any dispute arises out
of this Agreement or any Transaction, (b) agrees that it will not attempt to
deny or defeat such personal jurisdiction by motion or other request for leave
from any such court, (c) agrees that it will not bring any action relating to
this Agreement or any Transaction in any court other than any Massachusetts
state court or any Federal court sitting in The Commonwealth of Massachusetts
and (d) waives any right to trial by jury with respect to any action related to
or arising out of this Agreement or any Transaction.
SECTION 9.11. CONSENTS. Whenever this Agreement requires or permits
consent by or on behalf of any party hereto, such consent shall be given in
writing in a manner consistent with the requirements for a waiver of compliance
as set forth in Sections 8.04 and 8.05. Sub hereby agrees that any consent or
waiver of compliance given by Parent hereunder shall be conclusively binding
upon it, whether given expressly on its behalf or not.
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IN WITNESS WHEREOF, Parent, Sub and the Company have duly executed this
Agreement, all as of the date first written above.
<TABLE>
<S> <C> <C>
ALCON HOLDINGS INC.,
By: /s/ TIMOTHY R. G. SEAR
-----------------------------------------
Name: TIMOTHY R.G. SEAR
Title: CHAIRMAN OF THE BOARD,
CHIEF EXECUTIVE OFFICER
AND PRESIDENT
ALCON ACQUISITION CORP.,
By: /s/ ELAINE E. WHITBECK
-----------------------------------------
Name: ELAINE E. WHITBECK
Title: PRESIDENT
By: /s/ DOUGLAS MACHATTON
-----------------------------------------
NAME: DOUGLAS MACHATTON
Title: TREASURER
SUMMIT AUTONOMOUS INC.,
By: /s/ ROBERT J. PALMISANO
-----------------------------------------
Name: ROBERT J. PALMISANO
Title: PRESIDENT AND
CHIEF EXECUTIVE OFFICER
By: /s/ ROBERT J. KELLY
-----------------------------------------
Name: ROBERT J. KELLY
Title: TREASURER
</TABLE>
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<PAGE>
EXHIBIT A
TO AGREEMENT AND PLAN OF MERGER
CONDITIONS OF THE OFFER
Notwithstanding any other term of the Offer or this Agreement, Sub shall not
be required to accept for payment or, subject to any applicable rules and
regulations of the SEC, including Rule 14e-l(c) under the Exchange Act (relating
to Sub's obligation to pay for or return tendered shares of Company Common Stock
promptly after the termination or withdrawal of the Offer), to pay for any
shares of Company Common Stock tendered pursuant to the Offer unless (i) there
shall have been validly tendered and not withdrawn prior to the expiration of
the Offer that number of shares of Company Common Stock which, together with
that number of shares of Company Common Stock owned by Parent, Sub and Parent's
other subsidiaries, would represent at least two-thirds of the Fully Diluted
Shares (the "MINIMUM TENDER CONDITION") and (ii) any waiting period under the
HSR Act applicable to the purchase of shares of Company Common Stock pursuant to
the Offer shall have expired or been terminated. The term "FULLY DILUTED SHARES"
means all outstanding securities entitled generally to vote in the election of
directors of the Company on a fully diluted basis, after giving effect to the
exercise or conversion of all options, rights and securities exercisable or
convertible into such voting securities. Furthermore, notwithstanding any other
term of the Offer or this Agreement, Sub shall not be required to accept for
payment or, subject as aforesaid, to pay for any shares of Company Common Stock
not theretofore accepted for payment or paid for, and may terminate or amend the
Offer, (A) with the consent of the Company or (B) without the consent of the
Company at any time on or after the date of this Agreement and before the first
acceptance of such shares for payment or the payment therefor when any of the
following conditions exists:
(a) there shall be threatened or pending any suit, action or proceeding
by any Governmental Entity, or pending any suit, action or proceeding with a
reasonable likelihood of success by any other person, (i) challenging the
acquisition by Parent or Sub of any Company Common Stock, seeking to
restrain or prohibit the making or consummation of the Offer or the Merger
or any other Transaction, or seeking to obtain from the Company, Parent or
Sub any damages that are material in relation to the Company and its
subsidiaries taken as a whole, (ii) seeking to prohibit or limit the
ownership or operation by the Company, Parent or any of their respective
subsidiaries of any material portion of the business or assets of the
Company and its subsidiaries taken as whole or Parent and its subsidiaries
taken as a whole, or to compel the Company, Parent or any of their
respective subsidiaries to dispose of or hold separate any material portion
of the business or assets of the Company and its subsidiaries taken as whole
or Parent and its subsidiaries taken as a whole, as a result of the Offer,
the Merger or any other Transaction, (iii) seeking to impose limitations on
the ability of Parent or Sub to acquire or hold, or exercise full rights of
ownership of, any shares of Company Common Stock, including the right to
vote the Company Common Stock acquired by it on all matters properly
presented to the stockholders of the Company or (iv) seeking to prohibit
Parent or any of its subsidiaries from effectively controlling in any
material respect the business or operations of the Company and the Company
Subsidiaries;
(b) any Law or Judgment enacted, entered, enforced, promulgated, amended
or issued with respect to, or deemed applicable to, or any required consent
or approval withheld with respect to, (i) Parent, the Company or any of
their respective subsidiaries or (ii) the Offer, the Merger or any other
Transaction, by any Governmental Entity that is reasonably likely to result,
directly or indirectly, in any of the consequences referred to in
paragraph (a) above;
(c) except as disclosed in the Filed Company SEC Documents or the
Company Disclosure Letter, since the date of the most recent audited
financial statements included in the Filed Company SEC Documents there shall
have occurred any event, change, effect or development that, individually or
in the aggregate, has had or would reasonably be expected to have, a Company
Material Adverse Effect;
<PAGE>
(d) the Company Board or any committee thereof shall have withdrawn or
modified in a manner adverse to Parent or Sub, or publicly proposed to
withdraw or modify in a manner adverse to Parent or Sub, its approval or
recommendation of this Agreement, the Offer or the Merger, failed to
recommend to the Company's stockholders that they accept the Offer and give
the Company Stockholder Approval or approved or recommended, or publicly
proposed to approve or recommend, any Company Takeover Proposal;
(e) any representation and warranty of the Company in this Agreement
that is qualified as to materiality shall not be true and correct or any
such representation and warranty that is not so qualified shall not be true
and correct in any material respect, as of the date of this Agreement and as
of such time, except to the extent such representation and warranty
expressly relates to an earlier date (in which case on and as of such
earlier date);
(f) the Company shall have failed to perform in any material respect any
obligation or to comply in any material respect with any agreement or
covenant of the Company to be performed or complied with by it under this
Agreement, which failure to perform or comply cannot be or has not been
cured within five days after the giving of written notice to the Company of
such breach; or
(g) this Agreement shall have been terminated in accordance with its
terms;
which, in the sole and good faith judgment of Sub or Parent, in any such case,
and regardless of the circumstances giving rise to any such condition (including
any action or inaction by Parent or any of its affiliates), makes it inadvisable
to proceed with such acceptance for payment or payment.
The foregoing conditions are for the sole benefit of Sub and Parent and,
subject to Section 1.01(a), may be asserted by Sub or Parent regardless of the
circumstances giving rise to such condition or may be waived by Sub and Parent
in whole or in part at any time and from time to time in their sole discretion
(subject to the terms of this Agreement). The failure by Parent, Sub or any
other affiliate of Parent 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.
A-2
<PAGE>
EXHIBIT B
TO AGREEMENT AND PLAN OF MERGER
FEDERAL IDENTIFICATION
NO.
<TABLE>
<CAPTION>
<S> <C>
THE COMMONWEALTH OF
------ MASSACHUSETTS
Examiner
WILLIAM FRANCIS GALVIN
Secretary of the Commonwealth
One Ashburton Place, Boston, Massachusetts 02108-1512
RESTATED ARTICLES OF ORGANIZATION
--------- (GENERAL LAWS, CHAPTER 156B, SECTION 74)
Name
Approved
We,
---------------------------------------------------------,
*President /*Vice President,
and
---------------------------------------------------------,
*Clerk /*Assistant Clerk,
of
Summit Autonomous Inc.,
------------------------------------------------------------
(EXACT NAME OF CORPORATION)
located at -------------- [address] --------------,
(STREET ADDRESS OF CORPORATION IN MASSACHUSETTS)
do hereby certify that the following Restatement of the
Articles of Organization was duly adopted at a meeting held
on , 2000by a vote of the directors/or:
--------- shares of --------Common Stock of ---------
shares outstanding,
(TYPE, CLASS & SERIES, IF ANY)
**BEING AT LEAST TWO-THIRDS OF EACH TYPE, CLASS OR SERIES
OUTSTANDING AND ENTITLED TO VOTE THEREON AND OF EACH TYPE,
CLASS OR SERIES OF STOCK WHOSE RIGHTS ARE ADVERSELY AFFECTED
THEREBY:
ARTICLE I
The name of the corporation is:
Summit Autonomous Inc.
C ARTICLE II
/ / The purpose of the corporation is to engage in the following
P business activity(ies):
/ / To engage in research and development, manufacture and sale
M of laser devices for use in any and all fields, and related
/ / components, parts and equipment.
R.A. To carry on any business and engage in any other activity,
/ / whether or not related to those in the foregoing paragraph,
which may be permitted by the laws of the Commonwealth of
Massachusetts to a corporation organized under Chapter 156B
of the General Laws of Massachusetts as the same may be
amended from time to time.
*DELETE THE INAPPLICABLE WORDS. **DELETE THE
INAPPLICABLE CLAUSE.
--------- NOTE: IF THE SPACE PROVIDED UNDER ANY ARTICLE OR ITEM ON
P.C. THIS FORM IS INSUFFICIENT, ADDITIONS SHALL BE SET FORTH ON
SEPARATE 8 1/2 X 11 SHEETS OF PAPER WITH A LEFT MARGIN OF AT
LEAST 1 INCH. ADDITIONS TO MORE THAN ONE ARTICLE MAY BE MADE
ON A SINGLE SHEET SO LONG AS EACH ARTICLE REQUIRING EACH
ADDITION IS CLEARLY INDICATED.
</TABLE>
<PAGE>
ARTICLE III
State the total number of shares and par value, if any, of each class of
stock which the corporation is authorized to issue:
<TABLE>
-----------------------------------------------------------------------------
WITHOUT PAR VALUE WITH PAR VALUE
---------------------------- -----------------------------------------------
TYPE NUMBER OF SHARES TYPE NUMBER OF SHARES PAR VALUE
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
COMMON: NONE COMMON: 100,000,000 $0.01
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
PREFERRED: NONE PREFERRED: 5,000,000 $0.01
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
</TABLE>
ARTICLE IV
If more than one class of stock is authorized, state a distinguishing
designation for each class. Prior to the issuance of any shares of a class, if
shares of another class are outstanding, the corporation must provide a
description of the preferences, voting powers, qualifications, and special or
relative rights or privileges of that class and of each other class of which
shares are outstanding and of each series then established within any class.
Not applicable
ARTICLE V
The restrictions, if any, imposed by the Articles of Organization upon the
transfer of shares of stock of any class are:
None
ARTICLE VI
**Other lawful provisions, if any, for the conduct and regulation of the
business and affairs of the corporation, for its voluntary dissolution, or for
limiting, defining, or regulating the powers of the corporation, or of its
directors or stockholders, or of any class of stockholders:
See Continuation Sheet 6A
**IF THERE ARE NO PROVISIONS STATE "NONE".
NOTE: THE PRECEDING SIX (6) ARTICLES ARE CONSIDERED TO BE PERMANENT AND MAY ONLY
BE CHANGED BY FILING APPROPRIATE ARTICLES OF AMENDMENT.
B-2
<PAGE>
ARTICLE VII
The effective date of the restated Articles of Organization of the corporation
shall be the date approved and filed by the Secretary of the Commonwealth. If a
LATER effective date is desired, specify such date which shall not be more than
THIRTY DAYS after the date of filing.
ARTICLE VIII
THE INFORMATION CONTAINED IN ARTICLE VIII IS NOT A PERMANENT PART OF THE
ARTICLES OF ORGANIZATION.
a. The street address (post office boxes are not acceptable) of the principal
office of the corporation IN MASSACHUSETTS is:
[address]
b. The name, residential address and post office address of each director and
officer of the corporation is as follows:
<TABLE>
<CAPTION>
NAME RESIDENTIAL ADDRESS POST OFFICE ADDRESS
<S> <C> <C> <C>
President: [To be designated by Parent]
Treasurer: [To be designated by Parent]
Clerk: [To be designated by Parent]
Directors: [To be designated by Parent]
</TABLE>
c. The fiscal year (i.e., tax year) of the corporation shall end on the last
day of the month of: December
d. The name and business address of the resident agent, if any, of the
corporation is:
Not applicable
**We further certify that the foregoing Restated Articles of Organization affect
no amendments to the Articles of Organization of the corporation as heretofore
amended, except amendments to the following articles. Briefly describe
amendments below:
Article VI of the Articles of Organization has been amended to read in its
entirety as set forth on Continuation Sheet 6A attached hereto.
SIGNED UNDER THE PENALTIES OF PERJURY, this __ day of __________________________
________________________, 2000_ ,
__________________________________________________, *President /*Vice President,
__________________________ __________________________, *Clerk /*Assistant Clerk.
*DELETE THE INAPPLICABLE WORDS. **IF THERE ARE NO AMENDMENTS,STATE
"NONE'.
B-3
<PAGE>
<TABLE>
<S> <C> <C>
THE COMMONWEALTH OF MASSACHUSETTS
RESTATED ARTICLES OF ORGANIZATION
(GENERAL LAWS, CHAPTER 156B, SECTION 74)
==========================================================
I HEREBY APPROVE THE WITHIN RESTATED ARTICLES OF
ORGANIZATION AND, THE FILING FEE IN THE AMOUNT OF $ HAVING
BEEN PAID, SAID ARTICLES ARE DEEMED TO HAVE BEEN FILED
WITH ME THIS -- DAY OF ------------------------, 19 --.
EFFECTIVE DATE:
---------------------------------------------------------
WILLIAM FRANCES GALVIN
SECRETARY OF THE COMMONWEALTH
TO BE FILLED IN BY CORPORATION
PHOTOCOPY OF DOCUMENT TO BE SENT TO:
[TO BE PROVIDED]
---------------------------------------------------------
---------------------------------------------------------
TELEPHONE:
---------------------------------------------------------
</TABLE>
B-4
<PAGE>
<TABLE>
<S> <C>
Articles of Organization
Continuation Sheet 6A
ONE: The Board of Directors may make, amend or repeal the By-Laws
of the corporation in whole or in part, except with respect
to any provision thereof which by law or the By-Laws
requires action by the stockholders. Any by-law adopted by
the Board of Directors may be amended or repealed by the
stockholders.
TWO: Meetings of the stockholders may be held anywhere in the
United States.
THREE: The corporation may be a partner, either general or limited,
in any business enterprise it would have the power to
conduct by itself.
FOUR: Except as specifically authorized by statute, no stockholder
shall have any right to examine any property or any books,
accounts or other writings of the corporation if there is
reasonable ground for belief that such examination will for
any reason be adverse to the interests of the corporation,
and a vote of the directors refusing permission to make such
examination and setting forth that in the opinion of the
directors such reexamination would be adverse to the
interests of the corporation shall be prima facie evidence
that such examination would be adverse to the interests of
the corporation. Every such examination shall be subject to
such reasonable regulations as the directors may establish
in regard thereto.
FIVE: The Board of Directors may specify the manner in which the
accounts of the corporation shall be kept and may determine
what constitutes net earnings, profits and surplus, what
amounts, if any, shall be reserved for any corporate
purpose, and what amounts, if any, shall be declared as
dividends. All surplus shall be available for any corporate
purpose, including the payment of dividends.
SIX: The purchase or other acquisition or retention by the
corporation of shares of its own capital stock shall not be
deemed a reduction of its capital stock. Upon any reduction
of capital or capital stock, no stockholder shall have any
right to demand any distribution from the corporation,
except as and to the extent that the stockholders shall have
provided at the time of authorizing such reduction.
SEVEN: In the absence of fraud, no contract or transaction between
the corporation and one or more of its directors or
officers, or between the corporation and any other
organization of which one or more of its directors or
officers are directors, trustees or officers, or in which
any of them has any financial or other interest, shall be
void or voidable, or in any way affected, solely for this
reason, or solely because the director or officer is present
at or participates in the meeting of the Board of Directors
or committee thereof which authorizes, approves or ratifies
the contract or transaction, or solely because his/her or
their votes are counted for such purposes, if:
(i) The material facts as to his/her relationship or
interest and as to the contract or transaction are
disclosed or are known to the Board of Directors or
the committee which authorizes, approves or ratifies
the contract or transaction, and the board or
committee in good faith authorizes, approves or
ratifies the contract or transaction by the
affirmative vote of a majority of the disinterested
directors, even though the disinterested directors
be less than a quorum; or
</TABLE>
B-5
<PAGE>
<TABLE>
<S> <C>
(ii) The material facts as to his/her relationship or
interest and as to the contract or transaction are
disclosed or are known to the stockholders entitled
to vote thereon, and the contract or transaction is
specifically authorized, approved or ratified in
good faith by vote of the stockholders; or
(iii) The contract or transaction is fair as to the
corporation as of the time it is authorized,
approved or ratified by the Board of Directors, a
committee thereof, or the stockholders.
Common or interested directors may be counted in determining
the presence of a quorum at a meeting of the Board of
Directors or of a committee thereof which authorizes,
approves or ratifies the contract or transaction. No
director or officer of the corporation shall be liable or
accountable to the corporation or to any of its stockholders
or creditors or to any other person, either for any loss to
the corporation or to any other person or for any gains or
profits realized by such director or officer, by reason of
any contract or transaction as to which clauses (i) or
(ii) or (iii) above are applicable.
EIGHT: No director of the corporation shall be personally liable to
the corporation or its stockholders for monetary damages for
breach of fiduciary duty as a director notwithstanding any
provision of law imposing such liability; provided, however,
that, to the extent required by applicable law, this
provision shall not eliminate or limit the liability of a
director, (i) for any breach of the director's duty of
loyalty to the corporation or its stockholders, (ii) for
acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law,
(iii) under Section 61 or 62 or successor provisions of the
Massachusetts Business Corporation Law, or (iv) for any
transaction from which the director derived an improper
personal benefit. This provision shall not eliminate or
limit the liability of a director for any act or omission
occurring prior to March 18, 1987. No amendment or repeal of
this provision shall apply to or have any effect on the
liability or alleged liability of any director for or with
respect to any acts or omissions of such director occurring
prior to such amendment or repeal.
NINE: Pursuant to a written consent of the sole stockholder of the
corporation dated as of [ ], the directors of the
corporation shall not be classified and the corporation
shall be exempt from the provisions of Chapter 156B,
Section 50A, paragraph (a) of the Massachusetts Business
Corporation Law.
</TABLE>
B-6
<PAGE>
ANNEX B
[LOGO]
CHASE SECURITIES INC.
270 Park Avenue
New York, NY 10017-2070
May 26, 2000
Board of Directors
Summit Autonomous Inc.
21 Hickory Drive
Waltham, Massachusetts 02451
Members of the Board:
You have informed us that Summit Autonomous Inc. (the "Company"), Alcon
Holdings Inc. (the "Acquiror") and Alcon Acquisition Corp., a newly formed,
wholly owned subsidiary of the Acquiror (the "Acquisition Sub"), propose to
enter into an Agreement and Plan of Merger (the "Agreement") pursuant to
which (i) the Acquiror and the Acquisition Sub would commence a tender offer
(the "Tender Offer") for all outstanding shares of the common stock, par
value $0.01 per share, of the Company (the "Company Shares") for $19.00 per
share, net to the seller in cash (the "Consideration"), and (ii) the
Acquisition Sub would be merged with the Company in a merger (the "Merger"),
in which each Company Share not acquired in the Tender Offer, other than
Company Shares held in treasury or owned by any subsidiary of the Company or
by the Acquiror or any subsidiary of the Acquiror, or as to which appraisal
rights have been perfected, would be converted into the right to receive the
Consideration. The Tender Offer and the Merger, taken together, are referred
to as the "Transaction".
You have asked us whether, in our opinion, the Consideration to be
received by the holders of the Company Shares pursuant to the Transaction is
fair, from a financial point of view, to such holders.
In arriving at the opinion set forth below, we have, among other things:
(a) reviewed a draft dated May 26, 2000 of the Agreement;
(b) reviewed certain publicly available business and financial
information we deemed relevant relating to the Company and the
industries in which it operates;
(c) reviewed certain internal non-public financial and operating data and
forecasts provided to us by the management of the Company relating to
its business;
(d) discussed, with members of the senior management of the Company, the
Company's operations, historical financial statements and future
prospects;
<PAGE>
(e) compared the financial and operating performance of the Company with
publicly available information concerning certain other companies we
deemed comparable and reviewed the relevant historical stock prices
of the Company Shares and certain publicly traded securities of such
other companies;
(f) compared the proposed financial terms of the Transaction with the
financial terms of certain other transactions we deemed relevant; and
(g) made such other analyses and examinations as we have deemed necessary
or appropriate.
We have assumed and relied upon, without assuming any responsibility for
verification, the accuracy and completeness of all of the financial and
other information provided to, discussed with or reviewed by or for us, or
publicly available, for purposes of this opinion and have further relied
upon the assurance of the management of the Company that they are not aware
of any facts that would make such information inaccurate or misleading. We
have neither made nor obtained any independent evaluations or appraisals of
the assets or liabilities of the Company, nor have we conducted a physical
inspection of the properties or facilities of the Company. We have assumed
that the financial forecasts provided to or discussed with us by the Company
have been reasonably determined on bases reflecting the best currently
available estimates and judgments of the management of the Company as to the
future financial performance of the Company. We express no view as to such
forecast or projection information or the assumptions on which they were
based.
For purposes of rendering our opinion, we have assumed that, in all
respects material to our analysis, the representations and warranties of
each party contained in the Agreement are true and correct, that each party
will perform all of the covenants and agreements required to be performed by
it under the Agreement and that all conditions to the consummation of the
Tender Offer and the Merger will be satisfied without waiver thereof. We
have also assumed that the definitive Agreement will not differ in any
material respects from the draft thereof furnished to us.
Our opinion herein is necessarily based on market, economic and other
conditions as they exist and can be evaluated on the date of this letter.
Our opinion is limited to the fairness, from a financial point of view, to
the holders of the Company Shares of the Consideration, and we express no
opinion as to the merits of the underlying decision by the Company to engage
in the Transaction. Our opinion does not constitute a recommendation to any
holder of the Company Shares as to whether such holder should tender any
Company Shares pursuant to the Tender Offer or how such holder should vote
on the proposed Merger or any matter related thereto.
Chase Securities Inc., as part of its financial advisory business, is
continually engaged in the valuation of businesses and their securities in
connection with mergers and acquisitions and valuations for estate,
corporate and other purposes. We have acted as financial advisor to the
Company in connection with the Transaction and will receive a fee for our
services, payment of a portion of which is contingent upon delivery of this
letter and payment of a significant portion of which is contingent upon the
consummation of the Tender Offer. In addition, the Company has agreed to
indemnify us for certain liabilities arising out of our engagement. The
Chase Manhattan Corporation and its affiliates, including Chase
Securities Inc., in the ordinary course of business, have from time to time,
provided investment banking services to the Company and commercial banking
services to the Acquiror and its affiliates, for which we received usual and
customary compensation, and in the future may continue to provide such
services. We have acted as financial advisor to the Company in connection
with the pending sale of the Company's contact lens sales
2
<PAGE>
and distribution business. In the ordinary course of business, we or our
affiliates may trade in the debt and equity securities of the Company and
the Acquiror and its affiliates for our own accounts and for the accounts of
our customers and, accordingly, may at any time hold a long or short
position in such securities.
Based upon and subject to the foregoing, we are of the opinion that, as
of the date hereof, the Consideration to be received by the holders of the
Company Shares pursuant to the Transaction is fair, from a financial point
of view, to such holders.
This opinion is for the use and benefit of the Board of Directors of the
Company in its evaluation of the Transaction and, except as set forth below,
shall not be used for any other purpose without the prior written consent of
Chase Securities Inc. This opinion shall not be reproduced, disseminated,
quoted, summarized or referred to at any time, in any manner or for any
purpose, nor shall any public references to Chase Securities Inc. be made by
the Company, without the prior written consent of Chase Securities Inc.,
except that a copy of this opinion may be included in its entirety in any
proxy statement or Solicitation/Recommendation Statement on Schedule 14D-9
with respect to the Transaction.
Very truly yours,
CHASE SECURITIES INC.
3
<PAGE>
ANNEX C
MASSACHUSETTS GENERAL LAWS
BUSINESS CORPORATION LAW CHAPTER 156B
APPRAISAL
SECTION 86 SECTIONS APPLICABLE TO APPRAISAL; PREREQUISITES.
If a corporation proposes to take a corporate action as to which any section
of this chapter provides that a stockholder who objects to such action shall
have the right to demand payment for his shares and an appraisal thereof,
sections eighty-seven to ninety-eight, inclusive, shall apply except as
otherwise specifically provided in any section of this chapter. Except as
provided in sections eighty-two and eighty-three, no stockholder shall have such
right unless (1) he files with the corporation before the taking of the vote of
the shareholders on such corporate action, written objection to the proposed
action stating that he intends to demand payment for his shares if the action is
taken and (2) his shares are not voted in favor of the proposed action.
SECTION 87 STATEMENT OF RIGHTS OF OBJECTING STOCKHOLDERS IN NOTICE OF MEETING;
FORM.
The notice of the meeting of stockholders at which the approval of such
proposed action is to be considered shall contain a statement of the rights of
objecting stockholders. The giving of such notice shall not be deemed to create
any rights in any stockholder receiving the same to demand payment for his
stock, and the directors may authorize the inclusion in any such notice of a
statement of opinion by the management as to the existence or non-existence of
the right of the stockholders to demand payment for their stock on account of
the proposed corporate action. The notice may be in such form as the directors
or officers calling the meeting deem advisable, but the following form of notice
shall be sufficient to comply with this section:
"If the action proposed is approved by the stockholders at the meeting and
effected by the corporation, any stockholder (1) who files with the corporation
before the taking of the vote on the approval of such action, written objection
to the proposed action stating that he intends to demand payment for his shares
if the action is taken and (2) whose shares are not voted in favor of such
action has or may have the right to demand in writing from the corporation (or,
in the case of a consolidation or merger, the name of the resulting or surviving
corporation shall be inserted), within twenty days after the date of mailing to
him of notice in writing that the corporate action has become effective, payment
for his shares and an appraisal of the value thereof. Such corporation and any
such stockholder shall in such cases have the rights and duties and shall follow
the procedure set forth in sections 88 to 98, inclusive, of chapter 156B of the
General Laws of Massachusetts".
SECTION 88 NOTICE OF EFFECTIVENESS OF ACTION OBJECTED TO
The corporation taking such action, or in the case of a merger or
consolidation the surviving or resulting corporation, shall, within ten days
after the date on which such corporate action became effective, notify each
stockholder who filed a written objection meeting the requirements of section
eighty-six and whose shares were not voted in favor of the approval of such
action, that the action approved at the meeting of the corporation of which he
is a stockholder has become effective. The giving of such notice shall not be
deemed to create any rights in any stockholder receiving the same to demand
payment for his stock. The notice shall be sent by registered or certified mail,
addressed to the stockholder at his last known address as it appears in the
records of the corporation.
SECTION 89 DEMAND FOR PAYMENT; TIME FOR PAYMENT
If within twenty days after the date of mailing of a notice under subsection
(e) of section eighty-two, subsection (f) of section eighty-three, or section
eighty-eight, any stockholder to whom the
<PAGE>
corporation was required to give such notice shall demand in writing from the
corporation taking such action, or in the case of a consolidation or merger from
the resulting or surviving corporation, payment for his stock, the corporation
upon which such demand is made shall pay to him the fair value of his stock
within thirty days after the expiration of the period during which such demand
may be made.
SECTION 90 DEMAND FOR DETERMINATION OF VALUE; BILL IN EQUITY; VENUE
If during the period of thirty days provided for in section eighty-nine the
corporation upon which such demand is made and any such objecting stockholder
fail to agree as to the value of such stock, such corporation or any such
stockholder may within four months after the expiration of such thirty-day
period demand a determination of the value of the stock of all such objecting
stockholders by a bill in equity filed in the superior court in the county where
the corporation in which such objecting stockholder held stock had or has its
principal office in the commonwealth.
SECTION 91 PARTIES TO SUIT TO DETERMINE VALUE; SERVICE
If the bill is filed by the corporation, it shall name as parties respondent
all stockholders who have demanded payment for their shares and with whom the
corporation has not reached agreement as to the value thereof. If the bill is
filed by a stockholder, he shall bring the bill in his own behalf and in behalf
of all other stockholders who have demanded payment for their shares and with
whom the corporation has not reached agreement as to the value thereof, and
service of the bill shall be made upon the corporation by subpoena with a copy
of the bill annexed. The corporation shall file with its answer a duly verified
list of all such other stockholders, and such stockholders shall thereupon be
deemed to have been added as parties to the bill. The corporation shall give
notice in such form and returnable on such date as the court shall order to each
stockholder party to the bill by registered or certified mail, addressed to the
last known address of such stockholder as shown in the records of the
corporation, and the court may order such additional notice by publication or
otherwise as it deems advisable. Each stockholder who makes demand as provided
in section eighty-nine shall be deemed to have consented to the provisions of
this section relating to notice, and the giving of notice by the corporation to
any such stockholder in compliance with the order of the court shall be a
sufficient service of process on him. Failure to give notice to any stockholder
making demand shall not invalidate the proceedings as to other stockholders to
whom notice was properly given, and the court may at any time before the entry
of a final decree make supplementary orders of notice.
SECTION 92 DECREE DETERMINING VALUE AND ORDERING PAYMENT; VALUATION DATE
After hearing the court shall enter a decree determining the fair value of
the stock of those stockholders who have become entitled to the valuation of and
payment for their shares, and shall order the corporation to make payment of
such value, together with interest, if any, as hereinafter provided, to the
stockholders entitled thereto upon the transfer by them to the corporation of
the certificates representing such stock if certificated or if uncertificated,
upon receipt of an instruction transferring such stock to the corporation. For
this purpose, the value of the shares shall be determined as of the day
preceding the date of the vote approving the proposed corporate action and shall
be exclusive of any element of value arising from the expectation or
accomplishment of the proposed corporate action.
SECTION 93 REFERENCE TO SPECIAL MASTER
The court in its discretion may refer the bill or any question arising
thereunder to a special master to hear the parties, make findings and report the
same to the court, all in accordance with the usual practice in suits in equity
in the superior court.
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SECTION 94 NOTATION ON STOCK CERTIFICATES OF PENDENCY OF BILL
On motion the court may order stockholder parties to the bill to submit
their certificates of stock to the corporation for the notation thereon of the
pendency of the bill, and may order the corporation to note such pendency in its
records with respect to any uncertificated shares held by such stockholder
parties, and may on motion dismiss the bill as to any stockholder who fails to
comply with such order.
SECTION 95 COSTS; INTEREST
The costs of the bill, including the reasonable compensation and expenses of
any master appointed by the court, but exclusive of fees of counsel or of
experts retained by any party, shall be determined by the court and taxed upon
the parties to the bill, or any of them, in such manner as appears to be
equitable, except that all costs of giving notice to stockholders as provided in
this chapter shall be paid by the corporation. Interest shall be paid upon any
award from the date of the vote approving the proposed corporate action, and the
court may on application of any interested party determine the amount of
interest to be paid in the case of any stockholder.
SECTION 96 DIVIDENDS AND VOTING RIGHTS AFTER DEMAND FOR PAYMENT
Any stockholder who has demanded payment for his stock as provided in this
chapter shall not thereafter be entitled to notice of any meeting of
stockholders or to vote such stock for any purpose and shall not be entitled to
the payment of dividends or other distribution on the stock (except dividends or
other distributions payable to stockholders of record at a date which is prior
to the date of the vote approving the proposed corporate action) unless:
(1) A bill shall not be filed within the time provided in section ninety;
(2) A bill, if filed, shall be dismissed as to such stockholder; or
(3) Such stockholder shall with the written approval of the corporation, or
in the case of a consolidation or merger, the resulting or surviving
corporation, deliver to it a written withdrawal of his objections to and
an acceptance of such corporate action.
Notwithstanding the provisions of clauses (1) to (3), inclusive, said
stockholder shall have only the rights of a stockholder who did not so demand
payment for his stock as provided in this chapter.
SECTION 97 STATUS OF SHARES PAID FOR
The shares of the corporation paid for by the corporation pursuant to the
provisions of this chapter shall have the status of treasury stock, or in the
case of a consolidation or merger the shares or the securities of the resulting
or surviving corporation into which the shares of such objecting stockholder
would have been converted had he not objected to such consolidation or merger
shall have the status of treasury stock or securities.
SECTION 98 EXCLUSIVE REMEDY; EXCEPTION
The enforcement by a stockholder of his right to receive payment for his
shares in the manner provided in this chapter shall be an exclusive remedy
except that this chapter shall not exclude the right of such stockholder to
bring or maintain an appropriate proceeding to obtain relief on the ground that
such corporate action will be or is illegal or fraudulent as to him.
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