<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
SCHEDULE 14D-1
TENDER OFFER STATEMENT
PURSUANT TO SECTION 14(D)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
PRAEGITZER INDUSTRIES, INC.
(Name of Subject Company)
------------------------
TYCO INTERNATIONAL LTD.
SIGMA CIRCUITS, INC.
T MERGER SUB (OR), INC.
(Bidders)
COMMON STOCK
(Title of class of securities)
------------------------
739422103
(CUSIP number of class of securities)
------------------------
MARK H. SWARTZ, EXECUTIVE VICE PRESIDENT
C/O TYCO INTERNATIONAL (US) INC.
ONE TYCO PARK
EXETER, NEW HAMPSHIRE 03833
(603) 778-9700
(Name, address and telephone number of person authorized to
receive notices and communications on behalf of bidders)
------------------------
WITH A COPY TO:
ABBE L. DIENSTAG, ESQ.
KRAMER LEVIN NAFTALIS & FRANKEL LLP
919 THIRD AVENUE
NEW YORK, NEW YORK 10022
TELEPHONE: (212) 715-9100
------------------------
CALCULATION OF FILING FEE
<TABLE>
<CAPTION>
TRANSACTION VALUATION* AMOUNT OF FILING FEE**
<S> <C>
$73,563,330 $14,713
</TABLE>
* For purposes of calculating fee only. Assumes purchase of 13,375,151 shares
of Common Stock of Praegitzer Industries, Inc. at $5.50 per share,
representing 13,129,751 shares outstanding and 245,400 shares reserved for
issuance pursuant to outstanding in the money options.
** 1/50th of 1% of Transaction Valuation.
/ / Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the form
or schedule and the date of its filing.
<TABLE>
<S> <C> <C> <C>
Amount previously paid: Not applicable Filing party: Not applicable.
Form or registration no.: Not applicable. Date filed: Not applicable.
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Exhibit Index is located on Page 8
<PAGE>
SCHEDULE 14D-1
Page 2 of 8 Pages
- --------------------------------------------------------------------------------
(1) Name of Reporting Persons:
Tyco International Ltd.
- --------------------------------------------------------------------------------
(2) Check the appropriate box if a member of a group
(a) / /
(b) / /
- --------------------------------------------------------------------------------
(3) SEC Use Only
- --------------------------------------------------------------------------------
(4) Source of funds
AF
- --------------------------------------------------------------------------------
(5) Check box if disclosure of legal proceedings is required pursuant to Items
2(e) or 2(f)
/ /
- --------------------------------------------------------------------------------
(6) Citizenship or place of organization
Bermuda
- --------------------------------------------------------------------------------
(7) Aggregate amount beneficially owned by each reporting person
See item 6 and item 7
- --------------------------------------------------------------------------------
(8) Check box if the aggregate amount in row (7) excludes certain shares
See item 6 and item 7 / /
- --------------------------------------------------------------------------------
(9) Percent of class represented to amount in row (7):
See item 6 and item 7
- --------------------------------------------------------------------------------
(10) Type of reporting person
CO
- --------------------------------------------------------------------------------
<PAGE>
SCHEDULE 14D-1
Page 3 of 8 Pages
- --------------------------------------------------------------------------------
(1) Name of Reporting Persons:
Sigma Circuits, Inc.
- --------------------------------------------------------------------------------
(2) Check the appropriate box if a member of a group
(a) / /
(b) / /
- --------------------------------------------------------------------------------
(3) SEC Use Only
- --------------------------------------------------------------------------------
(4) Source of funds
AF
- --------------------------------------------------------------------------------
(5) Check box if disclosure of legal proceedings is required pursuant to Items
2(e) or 2(f)
/ /
- --------------------------------------------------------------------------------
(6) Citizenship or place of organization
Delaware
- --------------------------------------------------------------------------------
(7) Aggregate amount beneficially owned by each reporting person
See item 6 and item 7
- --------------------------------------------------------------------------------
(8) Check box if the aggregate amount in row (7) excludes certain shares
See item 6 and item 7 / /
- --------------------------------------------------------------------------------
(9) Percent of class represented to amount in row (7):
See item 6 and item 7
- --------------------------------------------------------------------------------
(10) Type of reporting person
CO
- --------------------------------------------------------------------------------
<PAGE>
SCHEDULE 14D-1
Page 4 of 8 Pages
- --------------------------------------------------------------------------------
(1) Name of Reporting Persons:
T Merger Sub (OR), Inc.
- --------------------------------------------------------------------------------
(2) Check the appropriate box if a member of a group
(a) / /
(b) / /
- --------------------------------------------------------------------------------
(3) SEC Use Only
- --------------------------------------------------------------------------------
(4) Source of funds
AF
- --------------------------------------------------------------------------------
(5) Check box if disclosure of legal proceedings is required pursuant to Items
2(e) or 2(f)
/ /
- --------------------------------------------------------------------------------
(6) Citizenship or place of organization
Oregon
- --------------------------------------------------------------------------------
(7) Aggregate amount beneficially owned by each reporting person
See item 6 and item 7
- --------------------------------------------------------------------------------
(8) Check box if the aggregate amount in row (7) excludes certain shares
See item 6 and item 7 / /
- --------------------------------------------------------------------------------
(9) Percent of class represented to amount in row (7):
See item 6 and item 7
- --------------------------------------------------------------------------------
(10) Type of reporting person
CO
- --------------------------------------------------------------------------------
<PAGE>
This Statement relates to the offer by T Merger Sub (OR), Inc., an Oregon
corporation (the "Purchaser") and a wholly owned subsidiary of Sigma Circuits,
Inc. ("Sigma"), a Delaware corporation and an indirect subsidiary of Tyco
International Ltd., a Bermuda company ("Tyco"), to purchase all outstanding
shares of common stock (the "Shares") of Praegitzer Industries, Inc., an Oregon
corporation (the "Company"), upon the terms and subject to the conditions set
forth in the Offer to Purchase, dated November 1, 1999, annexed hereto as
Exhibit (a)(1) (the "Offer to Purchase"), and in the related Letter of
Transmittal (which, together with any amendments or supplements thereto,
constitute the "Offer"), at a purchase price of $5.50 per Share, net to each
tendering shareholder in cash. Tyco has fully and unconditionally guaranteed the
Offer.
The item numbers below and responses thereto are in accordance with the
requirements of Schedule 14D-1.
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is Praegitzer Industries, Inc., an
Oregon corporation. The address of the Company's principal executive offices is
9801 SW 72(nd) Avenue, Tualatin, OR 97062.
(b) The securities to which this statement relates are the Shares. The
information set forth in the Introduction of the Offer to Purchase is
incorporated herein by reference.
(c) The information set forth in Section 6 ("Price Range of Shares;
Dividends") of the Offer to Purchase is incorporated herein by reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(g) This Statement is being filed by Purchaser, Sigma and Tyco
(collectively, the "Reporting Persons"). Purchaser is a direct wholly owned
subsidiary of Sigma. Sigma is an indirect wholly owned subsidiary of Tyco.
The information set forth in Section 9 ("Certain Information Concerning
Tyco, Parent and Purchaser") and in Annex I, II and III of the Offer to Purchase
is incorporated herein by reference.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
(a)-(b) The information set forth in the Introduction, Section 9 ("Certain
Information Concerning Tyco, Parent and Purchaser"), Section 11 ("Contacts with
the Company; Background of the Offer") and Section 13 ("The Merger Agreement;
Shareholder's Agreement") of the Offer to Purchase is incorporated herein by
reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a) The information set forth in Section 10 ("Source and Amount of Funds")
of the Offer to Purchase is incorporated herein by reference.
(b)-(c) Not applicable.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSAL OF THE BIDDER.
(a)-(g) The information set forth in the Introduction and Sections 7
("Effects of the Offer on the Market for Shares; Stock Quotations; Registration
Under the Exchange Act") and 12 ("Purpose of the Offer; Short Form Merger; Plans
for the Company; Dissenters' Rights; Going Private Transactions") of the Offer
to Purchase is incorporated herein by reference.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
The information set forth in Sections 9 ("Certain Information Concerning
Tyco, Parent and Purchaser") and 13 ("The Merger Agreement; Shareholder's
Agreement") of the Offer to Purchase is incorporated herein by reference.
5
<PAGE>
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
THE SUBJECT COMPANY'S SECURITIES.
The information set forth in the Introduction and Sections 9 ("Certain
Information Concerning Tyco, Parent and Purchaser"), 11 ("Contacts with the
Company; Background of the Offer"), 12 ("Purpose of the Offer; Short Form
Merger; Plans for the Company; Dissenters' Rights; Going Private Transactions")
and 13 ("The Merger Agreement; Shareholder's Agreement") of the Offer to
Purchase is incorporated herein by reference.
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in Sections 17 ("Fees and Expenses") and 18
("Miscellaneous") of the Offer to Purchase is incorporated herein by reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
The information set forth in Section 9 ("Certain Information Concerning
Tyco, Parent and Purchaser") of the Offer to Purchase is incorporated herein by
reference. The incorporation by reference herein of such financial information
does not constitute an admission that such information is material to a decision
by a shareholder of the Company whether to sell, tender or hold the Shares being
sought in the Offer.
ITEM 10. ADDITIONAL INFORMATION.
(a) The information set forth in Section 11 ("Contacts with the Company;
Background of the Offer") and Section 13 ("The Merger Agreement; Shareholder's
Agreement") of the Offer to Purchase is incorporated herein by reference.
(b)-(c) The information set forth in Section 16 ("Certain Legal Matters") of
the Offer to Purchase is incorporated herein by reference.
(d) The information set forth in Sections 7 ("Effects of the Offer on the
Market for Shares; Stock Quotations; Registration Under the Exchange Act") and
16 ("Certain Legal Matters") of the Offer to Purchase is incorporated herein by
reference.
(e) None
(f) The information set forth in the Offer to Purchase and the related
Letter of Transmittal, to the extent not otherwise set forth herein, is
incorporated herein by reference.
ITEM 11. MATERIALS TO BE FILED AS EXHIBITS.
(a)(1) Offer to Purchase, dated November 1, 1999.
(a)(2) Letter of Transmittal.
(a)(3) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and
Nominees.
(a)(4) Letter to Clients for use by Brokers, Dealers, Commercial Banks,
Trust Companies and Nominees.
(a)(5) Notice of Guaranteed Delivery.
(a)(6) Text of Joint Press Release issued October 26, 1999.
(a)(7) Form of Summary Advertisement, dated November 1, 1999.
(a)(8) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(b) Not applicable.
(c)(1) Confidentiality Agreement executed by an affiliate of Tyco on behalf
of the Company, dated May 3, 1999.
(c)(2) Agreement and Plan of Merger, dated as of October 26, 1999, among
Sigma, Purchaser and the Company with the Guarantee of Tyco.
(c)(3) Shareholder's Agreement, dated as of October 26, 1999, among Sigma,
Purchaser and Robert L. Praegitzer.
(d)-(f) Not applicable.
6
<PAGE>
SIGNATURE
After due inquiry and to the best of the undersigned's knowledge and belief,
the undersigned certifies that the information set forth in this statement is
true, complete and correct.
Tyco International Ltd.
By: /s/ MARK H. SWARTZ
Name: Mark H. Swartz
Title: Executive Vice President
and Chief Financial Officer
Dated: November 1, 1999
SIGNATURE
After due inquiry and to the best of the undersigned's knowledge and belief,
the undersigned certifies that the information set forth in this statement is
true, complete and correct.
Sigma Circuits, Inc.
By: /s/ JEFFREY D. MATTFOLK
Name: Jeffrey D. Mattfolk
Title: Vice President
Dated: November 1, 1999
SIGNATURE
After due inquiry and to the best of the undersigned's knowledge and belief,
the undersigned certifies that the information set forth in this statement is
true, complete and correct.
T Merger Sub (OR), Inc.
By: /s/ JEFFREY D. MATTFOLK
Name: Jeffrey D. Mattfolk
Title: Vice President
Dated: November 1, 1999
-7-
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT SEQUENTIALLY
NO. DESCRIPTION NUMBERED PAGE
- ------- ----------- -------------
<S> <C> <C>
(a)(1) Offer to Purchase, dated November 1, 1999
(a)(2) Letter of Transmittal
(a)(3) Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Nominees
(a)(4) Letter to Clients for use by Brokers, Dealers, Commercial
Banks, Trust Companies and Nominees
(a)(5) Notice of Guaranteed Delivery
(a)(6) Text of Joint Press Release issued October 26, 1999
(a)(7) Form of Summary Advertisement, dated November 1, 1999
(a)(8) Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9
(c)(1) Confidentiality Agreement executed by an affiliate of Tyco
on behalf of the Company, dated May 3, 1999
(c)(2) Agreement and Plan of Merger, dated as of October 26, 1999,
among Sigma, Purchaser and the Company with the Guarantee of
Tyco
(c)(3) Shareholder's Agreement, dated as of October 26, 1999, among
Sigma, Purchaser and Robert L. Praegitzer
</TABLE>
-8-
<PAGE>
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
PRAEGITZER INDUSTRIES, INC.
AT
$5.50 NET PER SHARE
BY
T MERGER SUB (OR), INC.,
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
TYCO INTERNATIONAL LTD.
- ---------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON TUESDAY, NOVEMBER 30, 1999, UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
THE OFFER IS BEING MADE FOR ALL OF THE OUTSTANDING SHARES. THE OFFER IS
CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY TENDERED AND NOT
WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER AT LEAST THAT NUMBER OF SHARES
WHICH WOULD CONSTITUTE 51% OF THE OUTSTANDING SHARES ON A DILUTED BASIS. THE
MAJORITY SHAREHOLDER OF THE COMPANY WHO OWNS 8,119,375 SHARES (CONSTITUTING
APPROXIMATELY 53.0% OF THE OUTSTANDING SHARES ON A DILUTED BASIS) HAS AGREED TO
TENDER THESE SHARES IN THE OFFER. IF THE MAJORITY SHAREHOLDER IS UNABLE TO
TENDER 2,656,500 OF THESE SHARES (THE "PLEDGED SHARES") IN THE OFFER
(CONSTITUTING APPROXIMATELY 17.4% OF THE OUTSTANDING SHARES ON A DILUTED BASIS)
BECAUSE THE PLEDGED SHARES ARE NOT RELEASED FROM CERTAIN PLEDGE ARRANGEMENTS
BEFORE THE CONSUMMATION OF THE OFFER, THE MAJORITY SHAREHOLDER HAS AGREED TO
SELL TO THE PURCHASER THE PLEDGED SHARES FOLLOWING CONSUMMATION OF THE OFFER
UPON THE RELEASE OF THE PLEDGED SHARES FROM THE PLEDGE ARRANGEMENTS TO WHICH
THEY ARE SUBJECT.
THE BOARD OF DIRECTORS OF THE COMPANY HAS DETERMINED THAT THE OFFER AND THE
MERGER (AS HEREINAFTER DEFINED) ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE
COMPANY AND ITS SHAREHOLDERS, HAS APPROVED THE MERGER AGREEMENT (AS HEREINAFTER
DEFINED), THE OFFER AND THE MERGER AND RECOMMENDS THAT THE COMPANY'S
SHAREHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER.
<PAGE>
IMPORTANT
ANY SHAREHOLDER DESIRING TO TENDER ALL OR ANY PORTION OF SUCH SHAREHOLDER'S
SHARES SHOULD EITHER (1) COMPLETE AND SIGN THE LETTER OF TRANSMITTAL (OR A
FACSIMILE THEREOF) IN ACCORDANCE WITH THE INSTRUCTIONS IN THE LETTER OF
TRANSMITTAL, MAIL OR DELIVER IT AND ANY OTHER REQUIRED DOCUMENTS TO THE
DEPOSITARY INDICATED THEREON AND EITHER DELIVER THE CERTIFICATE(S) FOR SUCH
TENDERED SHARES TO THE DEPOSITARY ALONG WITH THE LETTER OF TRANSMITTAL OR TENDER
SUCH SHARES PURSUANT TO THE PROCEDURES FOR BOOK-ENTRY TRANSFER SET FORTH IN
SECTION 2 OF THIS OFFER TO PURCHASE, OR (2) REQUEST SUCH SHAREHOLDER'S BROKER,
DEALER, COMMERCIAL BANK, TRUST COMPANY OR OTHER NOMINEE TO EFFECT THE
TRANSACTION FOR THE SHAREHOLDER. SHAREHOLDERS HAVING SHARES REGISTERED IN THE
NAME OF A BROKER, DEALER, COMMERCIAL BANK, TRUST COMPANY OR OTHER NOMINEE MUST
CONTACT SUCH BROKER, DEALER, COMMERCIAL BANK, TRUST COMPANY OR OTHER NOMINEE IF
THEY DESIRE TO TENDER SUCH SHARES.
A SHAREHOLDER WHO DESIRES TO TENDER SHARES AND WHOSE CERTIFICATE(S) FOR
SHARES ARE NOT IMMEDIATELY AVAILABLE, OR WHO CANNOT COMPLY WITH THE PROCEDURES
FOR BOOK-ENTRY TRANSFER ON A TIMELY BASIS, MAY TENDER SUCH SHARES BY FOLLOWING
THE PROCEDURES FOR GUARANTEED DELIVERY SET FORTH IN SECTION 2 OF THIS OFFER TO
PURCHASE.
QUESTIONS AND REQUESTS FOR ASSISTANCE MAY BE DIRECTED TO THE INFORMATION
AGENT AT ITS ADDRESS AND TELEPHONE NUMBER SET FORTH ON THE BACK COVER OF THIS
OFFER TO PURCHASE. REQUESTS FOR ADDITIONAL COPIES OF THIS OFFER TO PURCHASE, THE
LETTER OF TRANSMITTAL AND THE NOTICE OF GUARANTEED DELIVERY MAY BE DIRECTED TO
THE INFORMATION AGENT OR TO BROKERS, DEALERS, COMMERCIAL BANKS OR TRUST
COMPANIES.
------------------------
THE INFORMATION AGENT FOR THE OFFER IS:
[LOGO]
November 1, 1999
2
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
--------
<C> <S> <C>
Introduction..................................................... 4
The Tender Offer................................................. 6
1. Terms of the Offer; Extension of Tender Period; Termination;
Amendments.................................................. 6
2. Procedure for Tendering Shares.............................. 7
3. Withdrawal Rights........................................... 10
4. Acceptance for Payment and Payment of Offer Price........... 10
5. Certain Federal Income Tax Consequences..................... 11
6. Price Range of Shares; Dividends............................ 13
7. Effects of the Offer on the Market for Shares; Stock
Quotations; Registration Under the Exchange Act............. 13
8. Certain Information Concerning the Company.................. 14
9. Certain Information Concerning Tyco and Purchaser........... 16
10. Source and Amount of Funds.................................. 19
11. Contacts with the Company; Background of the Offer.......... 19
12. Purpose of the Offer; Short Form Merger; Plans for the
Company; Dissenters' Rights; Going Private Transactions..... 23
13. The Merger Agreement; Shareholder's Agreement............... 25
14. Dividends and Distributions................................. 36
15. Certain Conditions of the Offer............................. 36
16. Certain Legal Matters....................................... 38
17. Fees and Expenses........................................... 40
18. Miscellaneous............................................... 40
</TABLE>
<TABLE>
<S> <C>
Annex I Certain Information Concerning the Directors and Executive
Officers of Tyco International Ltd.
Annex II Certain Information Concerning the Directors and Executive
Officers of Parent
Annex III Certain Information Concerning the Directors and Executive
Officers of Purchaser
</TABLE>
3
<PAGE>
To The Holders of Common Stock of
PRAEGITZER INDUSTRIES, INC.
INTRODUCTION
T MERGER SUB (OR), Inc., an Oregon corporation ("Purchaser"), a wholly owned
subsidiary of Sigma Circuits, Inc. ("Parent"), a Delaware Corporation and an
indirect wholly owned subsidiary of Tyco International Ltd., a Bermuda company
("Tyco"), hereby offers to purchase all outstanding shares (the "Shares") of
common stock of Praegitzer Industries, Inc., an Oregon corporation (the
"Company"), at $5.50 per Share, net to the seller in cash, upon the terms and
subject to the conditions set forth in this Offer to Purchase and in the related
Letter of Transmittal (which together constitute the "Offer"). Tyco has fully
and unconditionally guaranteed the Offer.
Tendering shareholders will not be obligated to pay brokerage fees or
commissions or, subject to Instruction 6 of the Letter of Transmittal, stock
transfer taxes on the purchase of Shares by Purchaser pursuant to the Offer.
However, any tendering shareholder or other payee who fails to complete and sign
the Substitute Form W-9 that is included in the Letter of Transmittal may be
subject to a required backup federal income tax withholding of 31% of the gross
proceeds payable to such shareholder or other payee pursuant to the Offer. See
Section 2. The Purchaser will pay all charges and expenses of Morrow &
Co., Inc., as Information Agent (the "Information Agent"), and ChaseMellon
Shareholder Services, L.L.C., as Depositary (the "Depositary"), incurred in
connection with the Offer. See Section 17.
The Offer is conditioned upon, among other things, there being validly
tendered and not withdrawn prior to the expiration of the Offer at least that
number of shares which would constitute 51% of the outstanding shares on a
diluted basis ("the Minimum Condition"). The majority shareholder of the Company
who owns 8,119,375 shares (constituting approximately 53.0% of the outstanding
shares on a diluted basis) has agreed to tender these shares in the offer. If
the majority shareholder is unable to tender 2,656,500 of these shares (the
"Pledged Shares") in the offer (constituting approximately 17.4% of the
outstanding shares on a diluted basis) because the Pledged Shares are not
released from certain pledge arrangements before the consummation of the Offer,
the majority shareholder has agreed to sell to the purchaser the Pledged Shares
following consummation of the offer upon the release of the Pledged Shares from
the pledge arrangements to which they are subject. The Offer is also subject to
certain other terms and conditions set forth in Section 15.
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of October 26, 1999 (the "Merger Agreement"), among Parent, Purchaser and the
Company, and the related guarantee of Tyco. The Merger Agreement provides, among
other things, that upon the terms and subject to the conditions therein, as soon
as practicable after the consummation of the Offer, Purchaser will be merged
with and into the Company (the "Merger"), with the Company being the corporation
surviving the Merger (the "Surviving Corporation"). At the effective time of the
Merger (the "Effective Time"), each outstanding Share (other than Shares with
respect to which appraisal rights are properly exercised under the Oregon
Business Corporation Act (the "OBCA") ("Dissenting Shares") or owned by Tyco,
Parent, Purchaser or any other subsidiary of Tyco) will be converted into and
represent the right to receive $5.50 in cash or any higher price that may be
paid per Share in the Offer (the "Per Share Amount"), without interest. See
Section 13.
THE BOARD OF DIRECTORS OF THE COMPANY HAS DETERMINED THAT THE OFFER AND THE
MERGER ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE COMPANY AND ITS
SHAREHOLDERS, HAS APPROVED THE MERGER AGREEMENT, THE OFFER AND THE MERGER AND
RECOMMENDS THAT THE COMPANY'S SHAREHOLDERS ACCEPT THE OFFER AND TENDER THEIR
SHARES PURSUANT TO THE OFFER.
Adams, Harkness & Hill, Inc., one of the Company's financial advisors
("AHH"), has delivered to the Company's Board of Directors its written opinion
that the aggregate consideration to be received by the
4
<PAGE>
shareholders of the Company pursuant to the Merger Agreement is fair to such
shareholders from a financial point of view. A copy of such opinion is contained
in the Company's Solicitation/Recommendation Statement on Schedule 14D-9 which
is being distributed to the Company's shareholders herewith.
The Merger Agreement provides that, promptly upon the purchase of Shares
pursuant to the Offer, Parent will be entitled to designate such number of
directors, rounded up to the next whole number, on the Board of Directors of the
Company as will give Parent, subject to compliance with Section 14(f) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), representation
on the Board of Directors equal to the product of (a) the total number of
directors on the Board of Directors and (b) the percentage that (i) the number
of Shares beneficially owned by Parent or any of its affiliates following
consummation of the Offer bears to (ii) the total number of Shares outstanding.
The Company shall, upon request by Parent, promptly increase the size of the
Board of Directors and/or exercise its reasonable best efforts to secure the
resignations of such number of directors as is necessary to enable Parent's
designees to be elected to the Board of Directors and shall cause Parent's
designees to be so elected. See Section 13.
The Company has informed Purchaser that as of October 22, 1999,
(i) 13,129,751 Shares were issued and outstanding, (ii) no shares of Preferred
Stock were issued or outstanding, (iii) 1,809,550 shares of the Company's common
stock were reserved for future issuance pursuant to outstanding options (561,750
shares at exercise prices below $5.50 per share), (iv) no shares of common stock
were reserved for future issuance pursuant to the Company Stock Purchase Plan,
(v) 46,333 shares of common stock were reserved for future issuance upon
exercise of certain warrants at $12.00 per share, (vi) 1,743,559 shares of
common stock were reserved for future issuance upon exercise of the conversion
rights contained in that certain Deferral Loan and Lease Modification Agreement
dated as of October 12, 1999 among the Company and the lenders and lessors named
therein (the "Deferral Agreement") (these conversion rights cannot be exercised
if the Offer is completed before March 31, 2000) and (vii) 1,381,382 shares of
common stock were reserved for issuance upon the conversion of the Company's 9%
Convertible Subordinated Notes due December 29, 2008 (the "Notes") at a
conversion price of $8.325 per share. As used herein "outstanding shares on a
diluted basis" means the outstanding shares of the Company's common stock on a
fully diluted basis excluding shares issuable upon exercise of conversion rights
pursuant to the Deferral Agreement and options that are not exercisable prior to
March 1, 2000.
If the Minimum Condition is satisfied, Purchaser will have sufficient voting
power to approve the Merger, even if no other shareholder votes in favor of the
Merger. Under the OBCA, if a parent corporation owns at least 90% of the shares
of each class of shares of a subsidiary corporation, the parent can merge with
the subsidiary in a "short form" merger without a vote of shareholders. Assuming
that Purchaser acquires 90% or more of the Shares, Purchaser would be able to
effect the Merger pursuant to the short form merger provisions of the OBCA,
without the action of any other shareholder of the Company.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION AND SHOULD BE READ IN THEIR ENTIRETY BEFORE ANY DECISION
IS MADE WITH RESPECT TO THE OFFER.
5
<PAGE>
THE TENDER OFFER
1. TERMS OF THE OFFER; EXTENSION OF TENDER PERIOD; TERMINATION;
AMENDMENTS. Upon the terms and subject to the conditions of the Offer
(including, if the Offer is extended or amended, the terms and conditions of any
such extension or amendment), Purchaser will accept for payment and pay for all
Shares which are validly tendered on or prior to the Expiration Date (as
hereinafter defined) and not theretofore withdrawn as permitted by Section 3.
The term "Expiration Date" means 12:00 Midnight, New York City time, on Tuesday,
November 30, 1999, unless and until Purchaser (subject to the terms and
conditions of the Merger Agreement) shall have extended the period of time for
which the Offer is open, in which event the term "Expiration Date" shall mean
the latest time and date at which the Offer, as so extended by Purchaser, shall
expire.
The Offer is conditioned upon, among other things, the satisfaction of the
Minimum Condition. Subject to the provisions of the Merger Agreement, Purchaser
reserves the unilateral right (but shall not be obligated) to waive or reduce
the Minimum Condition or to waive any or all of the conditions of the Offer
other than the Minimum Condition. If, by 12:00 Midnight, New York City time, on
Tuesday, November 30, 1999, or any subsequent Expiration Date, any or all of the
conditions to the Offer have not been satisfied or waived, subject to the
provisions of the Merger Agreement, Purchaser may elect to (i) terminate the
Offer and return all tendered Shares to tendering shareholders, (ii) waive all
of the unsatisfied conditions (including, with the consent of the Company, the
Minimum Condition) and, subject to any required extension, purchase all Shares
validly tendered by the Expiration Date and not withdrawn, (iii) extend the
Offer and, subject to the right of shareholders to withdraw Shares until the
adjusted Expiration Date, retain the Shares that have been tendered until the
expiration of the Offer as extended or (iv) delay acceptance for payment of, or
payment for, the Shares, subject to complying with applicable law, until the
satisfaction or waiver of the conditions of the Offer. Purchaser acknowledges
that its reservation of the right to delay payment for Shares that it has
accepted for payment is limited by Rule 14e-1(c) under the Exchange Act, which
requires Purchaser to pay the consideration offered or return the Shares
tendered promptly after the termination or withdrawal of the Offer. See
Section 15.
Under the terms of the Merger Agreement, Purchaser may not, without the
prior written consent of the Company, (i) impose conditions to the Offer in
addition to the Offer Conditions (as defined below), (ii) modify or amend the
Offer Conditions or any other term of the Offer in a manner adverse to the
holders of Shares, (iii) waive or amend the Minimum Condition, (iv) reduce the
number of Shares subject to the Offer, (v) reduce the Per Share Amount,
(vi) except as provided in the following paragraph, extend the Offer, if all of
the Offer Conditions are satisfied or waived, or (vii) change the form of
consideration payable in the Offer.
Notwithstanding the foregoing, Purchaser may, without the consent of the
Company, extend the Offer at any time, and from time to time, (i) if at the then
scheduled expiration date of the Offer any of the conditions to Purchaser's
obligation to accept for payment and pay for Shares (the "Offer Conditions")
shall not have been satisfied or waived, until such time as such conditions are
satisfied or waived; (ii) for any period required by any rule, regulation,
interpretation or position of the Securities and Exchange Commission (the
"Commission") or its staff applicable to the Offer; or (iii) if all Offer
Conditions are satisfied or waived but the number of Shares tendered is less
than 90% of the then outstanding number of Shares, for an aggregate period of
not more than 10 business days (for all such extensions) beyond the latest
expiration date that would be permitted under clause (i) or (ii) of this
sentence.
Subject to the applicable regulations of the Commission and the provisions
of the Merger Agreement, Purchaser also expressly reserves the rights, in its
sole discretion, at any time or from time to time, (i) to extend the Offer and
adjust the Expiration Date, (ii) to terminate the Offer if any of the conditions
referred to in Section 15 have not been satisfied or upon the occurrence of any
of the events specified in Section 15 and (iii) to waive any condition or
otherwise amend the Offer in any respect, in each case by giving oral or written
notice of such extension, termination, waiver or amendment to the Depositary and
by
6
<PAGE>
making a public announcement thereof. If Purchaser accepts for payment any
Shares pursuant to the terms of the Offer, it will accept for payment all Shares
validly tendered prior to the Expiration Date and not withdrawn, and will
promptly pay for all Shares so accepted for payment. Purchaser acknowledges that
notwithstanding anything to the contrary contained in the Offer, Purchaser shall
not be required to pay for the Shares and may terminate or amend the Offer only
if, prior to the Expiration Date, any of the conditions referred to in
Section 15 have not been satisfied or waived, or if any of the events specified
in Section 15 have occurred.
The rights reserved by Purchaser in the preceding paragraph are in addition
to Purchaser's rights pursuant to Section 15. Any extension, delay, termination
or amendment of the Offer will be followed as promptly as practicable by public
announcement thereof, such announcement in the case of an extension to be issued
no later than 9:00 a.m., New York City time, on the next business day after the
previously scheduled Expiration Date, in accordance with the public announcement
requirements of Rule 14e-1(d) under the Exchange Act. Subject to applicable law
(including Rules 14d-4(c) and 14d-6(d) under the Exchange Act, which require
that any material change in the information published, sent or given to
shareholders in connection with the Offer be promptly disseminated to
shareholders in a manner reasonably designed to inform shareholders of such
change), and without limiting the manner in which Purchaser may choose to make
any public announcement, Purchaser shall have no obligation to publish,
advertise or otherwise communicate any such public announcement other than by
making a release to the Dow Jones News Service.
If Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer, or if it waives a material condition of the
Offer (including, subject to the Merger Agreement, the Minimum Condition),
Purchaser will disseminate additional tender offer materials (including by
public announcement as set forth above) and extend the Offer to the extent
required by Rules 14d-4(c), 14d-6(d) and 14e-1 under the Exchange Act. The
minimum period during which an offer must remain open following material changes
in the terms of the Offer, other than a change in price, percentage of
securities sought or inclusion of or change to a dealer's soliciting fee, will
depend upon the facts and circumstances, including the materiality, of the
changes. In the Commission's view, an offer should remain open for a minimum of
five business days from the date the material change is first published, sent or
given to shareholders, and, if material changes are made with respect to
information that approaches the significance of price and share levels, a
minimum of ten business days may be required to allow for adequate dissemination
and investor response. With respect to a change in price or, subject to certain
limitations, a change in the percentage of securities sought or inclusion of or
change to a dealer's soliciting fee, a minimum ten business day period from the
date of such change is generally required to allow for adequate dissemination to
shareholders. Accordingly, if, prior to the Expiration Date, Purchaser decreases
the number of Shares being sought or increases or decreases the consideration
offered pursuant to the Offer, and if the Offer is scheduled to expire at any
time earlier than the period ending on the tenth business day from the date that
notice of such increase or decrease is first published, sent or given to
shareholders, the Offer will be extended at least until the expiration of such
ten business day period. For purposes of the Offer, a "business day" means any
day other than a Saturday, Sunday or a federal holiday and consists of the time
period from 12:01 a.m. through 12:00 midnight, New York City time.
In connection with the Offer, the Company has provided or will provide
Purchaser with the names and addresses of all record holders of Shares and
security position listings of Shares held in stock depositories. This Offer to
Purchase, the related Letter of Transmittal and other relevant materials will be
mailed to registered holders of Shares and will be furnished to brokers,
dealers, commercial banks, trust companies and similar persons whose names, or
the names of whose nominees, appear on the shareholder list or, if applicable,
who are listed as participants in a clearing agency's security position listing,
for subsequent transmittal to beneficial owners of Shares.
2. PROCEDURE FOR TENDERING SHARES. Except as set forth below, in order for
Shares to be validly tendered pursuant to the Offer, the Letter of Transmittal
(or a facsimile thereof), properly completed and
7
<PAGE>
duly executed, together with any required signature guarantees, or an Agent's
Message (as hereinafter defined) in connection with a book-entry transfer of
Shares, and any other documents required by the Letter of Transmittal, must be
received by the Depositary at one of its addresses set forth on the back cover
of this Offer to Purchase on or prior to the Expiration Date, and either
(i) certificates representing tendered Shares must be received by the
Depositary, or such Shares must be tendered pursuant to the procedure for
book-entry transfer set forth below (and confirmation of receipt of such
delivery must be received by the Depositary), in each case on or prior to the
Expiration Date, or (ii) the guaranteed delivery procedures set forth below must
be complied with. No alternative, conditional or contingent tenders will be
accepted.
SIGNATURE GUARANTEES. No signature guarantee is required on the Letter of
Transmittal (i) if such Letter of Transmittal is signed by the registered holder
of the Shares tendered therewith, unless such holder has completed either the
box entitled "Special Delivery Instructions" or the box entitled "Special
Payment Instructions" in the Letter of Transmittal, or (ii) if Shares are
tendered for the account of a firm that is a member in good standing of the
Security Transfer Agent's Medallion Program, the New York Stock Exchange
Medallion Signature Program or the Stock Exchange Medallion Program (each being
hereinafter referred to as an "Eligible Institution"). See Instruction 1 of the
Letter of Transmittal.
If a certificate representing Shares is registered in the name of a person
other than the signatory of the Letter of Transmittal (or a facsimile thereof),
or if payment is to be made, or Shares not accepted for payment or not tendered
are to be returned to a person other than the registered holder, the certificate
must be endorsed or accompanied by an appropriate stock power, in either case
signed exactly as the name(s) of the registered holder(s) appears on the
certificate, with the signature(s) on the certificate or stock power guaranteed
by an Eligible Institution. If the Letter of Transmittal or stock powers are
signed or any certificate is endorsed by trustees, executors, administrators,
guardians, attorneys-in-fact, officers of corporations or others acting in a
fiduciary or representative capacity, such persons should so indicate when
signing and, unless waived by Purchaser, proper evidence satisfactory to
Purchaser of their authority so to act must be submitted. See Instruction 5 of
the Letter of Transmittal.
BOOK-ENTRY TRANSFER. The Depositary will establish accounts with respect to
the Shares at The Depository Trust Company ("DTC") for purposes of the Offer
within two business days after the date of this Offer to Purchase, and any
financial institution that is a participant in DTC's system may make book-entry
delivery of the Shares by causing DTC to transfer such Shares into the
Depositary's account in accordance with DTC's procedure for such transfer.
However, although delivery of Shares may be effected through book-entry transfer
at DTC, a properly completed and duly executed Letter of Transmittal (or
facsimile thereof), with any required signature guarantees, or an Agent's
Message and any other required documents, must, in any case, be transmitted to
and received by the Depositary at one of its addresses set forth on the back
cover of this Offer to Purchase prior to the Expiration Date, or the guaranteed
delivery procedures described below must be complied with. The term "Agent's
Message" means a message transmitted through electronic means by DTC to, and
received by, the Depositary and forming a part of a book-entry confirmation,
which states that DTC has received an express acknowledgment from the
participant in DTC tendering the Shares that such participant has received, and
agrees to be bound by, the terms of the Letter of Transmittal. Delivery of
documents to DTC in accordance with DTC's procedures does not constitute
delivery to the Depositary.
GUARANTEED DELIVERY. If a shareholder desires to tender Shares pursuant to
the Offer and such shareholder's certificates representing Shares are not
immediately available (or the procedures for book-entry transfer cannot be
completed on a timely basis) or time will not permit all required documents to
reach the Depositary prior to the Expiration Date, such Shares may nevertheless
be tendered, provided that all of the following conditions are satisfied:
(a) such tender is made by or through an Eligible Institution;
8
<PAGE>
(b) the Depositary receives, prior to the Expiration Date, a properly
completed and duly executed Notice of Guaranteed Delivery, substantially in
the form provided by Purchaser; and
(c) the certificates representing all tendered Shares in proper form for
transfer (or confirmation of a book-entry transfer of such Shares into the
Depositary's account at DTC), together with a properly completed and duly
executed Letter of Transmittal (or facsimile thereof) with any required
signature guarantees (or, in connection with a book-entry transfer, an
Agent's Message) and any other documents required by the Letter of
Transmittal are received by the Depositary within three trading days after
the date of such Notice of Guaranteed Delivery. A "trading day" is any day
on which The Nasdaq Stock Market is open for business.
The Notice of Guaranteed Delivery may be delivered by hand, or may be
transmitted by telegram, telex, facsimile transmission or mail, to the
Depositary and must include a guarantee by an Eligible Institution in the form
set forth in such Notice of Guaranteed Delivery.
In all cases, payment for Shares tendered and accepted for payment pursuant
to the Offer will be made only after timely receipt by the Depositary of
(i) certificates representing such Shares (or timely confirmation of a
book-entry transfer of such Shares into the Depositary's account at DTC),
(ii) properly completed and duly executed Letter(s) of Transmittal (or
facsimile(s) thereof), together with any required signature guarantees (or, in
connection with a book-entry transfer, an Agent's Message) and (iii) any other
documents required by the Letter of Transmittal.
The method of delivery of all documents, including certificates for Shares,
is at the option and risk of the tendering shareholder, and the delivery will be
deemed made only when actually received by the Depositary. If delivery is by
mail, registered mail with return receipt requested, properly insured, is
recommended. In all cases, sufficient time should be allowed to ensure timely
delivery.
DETERMINATION OF VALIDITY. All questions as to the form of documents and
the validity, eligibility (including time of receipt) and acceptance for payment
of any tendered Shares will be determined by Purchaser in its sole discretion,
and its determination shall be final and binding on all parties. Purchaser
reserves the absolute right to reject any or all tenders of any Shares that it
determines are not in appropriate form or the acceptance for payment of or
payment for which may, in the opinion of Purchaser's counsel, be unlawful.
Purchaser also reserves the absolute right to waive any defect or irregularity
in any tender with respect to any particular Shares or any particular
shareholder, and Purchaser's interpretation of the terms and conditions of the
Offer (including the Letter of Transmittal and the Instructions thereto) will be
final and binding on all parties. No tender of Shares will be deemed to have
been validly made until all defects or irregularities relating thereto have been
expressly waived or cured to the satisfaction of Purchaser. None of Purchaser,
Parent, Tyco, the Depositary, the Information Agent or any other person will be
under any duty to give notification of any defects or irregularities in tenders,
nor shall any of them incur any liability for failure to give any such
notification.
OTHER REQUIREMENTS. By executing the Letter of Transmittal, a tendering
shareholder irrevocably appoints designees of Purchaser as such shareholder's
proxies, in the manner set forth in the Letter of Transmittal, each with full
power of substitution, to the full extent of such shareholder's rights with
respect to the Shares tendered by such shareholder and accepted for payment by
Purchaser (and any and all other Shares or other securities or rights issued or
issuable in respect of such Shares on or after November 1, 1999), effective if,
when and to the extent that Purchaser accepts such Shares for payment pursuant
to the Offer. Upon such acceptance for payment, all prior proxies given by such
shareholder with respect to such Shares or other securities accepted for payment
will, without further action, be revoked, and no subsequent proxies may be given
by such shareholder nor any subsequent written consents executed (and, if given
or executed, will not be deemed effective). Such designees of Purchaser will,
with respect to such Shares and other securities or rights issuable in respect
thereof, be empowered to exercise all voting and other rights of such
shareholder as they, in their sole discretion, may deem proper in respect of any
annual, special or adjourned meeting of the Company's shareholders, action by
written consent in lieu of any such meeting or
9
<PAGE>
otherwise. Purchaser reserves the right to require that, in order for Shares to
be deemed validly tendered, immediately upon Purchaser's acceptance for payment
of such Shares, Purchaser must be able to exercise full voting rights with
respect to such Shares.
Purchaser's acceptance for payment of Shares tendered pursuant to any of the
procedures described above will constitute a binding agreement between the
tendering shareholder and Purchaser upon the terms and subject to the conditions
of the Offer.
To prevent backup withholding of federal income tax on payments made to
shareholders with respect to Shares purchased pursuant to the Offer, each
shareholder must provide the Depositary with his correct taxpayer identification
number ("TIN") and certify that he is not subject to backup withholding of
federal income tax by completing the Substitute Form W-9 included in the Letter
of Transmittal. Non-United States holders must submit a completed Form W-8 to
avoid backup withholding. This form may be obtained from the Depositary. See
Instructions 10 and 11 of the Letter of Transmittal.
3. WITHDRAWAL RIGHTS. Tenders of Shares made pursuant to the Offer will be
irrevocable, except that Shares tendered may be withdrawn at any time prior to
the Expiration Date, and, unless theretofore accepted for payment by Purchaser
as provided herein, may also be withdrawn on or after January 1, 2000.
For a withdrawal of Shares tendered to be effective, a written, telegraphic,
telex or facsimile transmission notice of withdrawal must be timely received by
the Depositary at one of its addresses set forth on the back cover of this Offer
to Purchase. Any notice of withdrawal must specify the name of the person who
tendered the Shares to be withdrawn, the number of Shares to be withdrawn and
the name(s) in which the certificate(s) representing such Shares are registered,
if different from that of the person who tendered such Shares. If certificates
for Shares to be withdrawn have been delivered or otherwise identified to the
Depositary, the name of the registered holder and the serial numbers shown on
the particular certificates evidencing such Shares to be withdrawn must also be
furnished to the Depositary prior to the physical release of the Shares to be
withdrawn. The signature(s) on the notice of withdrawal must be guaranteed by an
Eligible Institution (except in the case of Shares tendered by an Eligible
Institution). If Shares have been tendered pursuant to the procedures for
book-entry transfer set forth in Section 2, any notice of withdrawal must
specify the name and number of the account at DTC to be credited with such
withdrawn Shares and must otherwise comply with DTC's procedures.
If Purchaser extends the Offer, is delayed in its acceptance for payment of
any Shares tendered, or is unable to accept for payment or pay for Shares
tendered pursuant to the Offer, for any reason whatsoever, then, without
prejudice to Purchaser's rights set forth herein, the Depositary may,
nevertheless, on behalf of Purchaser, retain tendered Shares, and such Shares
may not be withdrawn except to the extent that the tendering shareholder is
entitled to and duly exercises withdrawal rights as described in this Section
and as otherwise required by Rule 14e-1(c) under the Exchange Act. Any such
delay will be accompanied by an extension of the Offer to the extent required by
law.
Withdrawals of tenders of Shares may not be rescinded and Shares properly
withdrawn will thereafter be deemed not validly tendered for purposes of the
Offer. However, withdrawn Shares may be retendered by again following the
procedures described in Section 2 at any time prior to the Expiration Date.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by Purchaser, in its sole discretion,
and its determination will be final and binding on all parties. None of
Purchaser, Parent, Tyco, the Depositary, the Information Agent or any other
person will be under any duty to give notification of any defects or
irregularities in any notice of withdrawal, nor shall any of them incur any
liability for failure to give any such notification.
4. ACCEPTANCE FOR PAYMENT AND PAYMENT OF OFFER PRICE. Upon the terms and
subject to the conditions of the Offer (including, if the Offer is extended or
amended, the terms and conditions of any extension or amendment), Purchaser will
accept for payment and will pay for all Shares validly tendered prior to the
Expiration Date (and not properly withdrawn in accordance with Section 3 above)
as soon as practicable
10
<PAGE>
after the latest to occur of (a) the expiration or termination of the waiting
period applicable to the acquisition of the Shares pursuant to the Offer under
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), (b) the Expiration Date, and (c) subject to compliance with
Rule 14e-1(c) under the Exchange Act, the satisfaction or waiver of the
conditions of the Offer set forth in Section 15. Any determination concerning
the satisfaction of such terms and conditions shall be within the sole
discretion of Purchaser, and such determination shall be final and binding on
all tendering shareholders. See Section 15.
Purchaser expressly reserves the right to delay acceptance for payment of,
or payment for, Shares in order to comply in whole or in part with any
applicable law. If Purchaser desires to delay payment for Shares accepted for
payment pursuant to the Offer, and such delay would otherwise be in
contravention of Rule 14e-1(c) of the Exchange Act, Purchaser will formally
extend the Offer. See Section 15. In all cases, payment for Shares accepted for
payment pursuant to the Offer will be made only after timely receipt by the
Depositary of (i) certificates representing such Shares (or a timely
confirmation of a book-entry transfer of such Shares into the Depositary's
account at DTC, as described in Section 2), (ii) a properly completed and duly
executed Letter of Transmittal (or facsimile thereof) with any required
signature guarantees (or, in connection with a book-entry transfer, an Agent's
Message), and (iii) any other documents required by the Letter of Transmittal.
For purposes of the Offer, Purchaser will be deemed to have accepted for
payment, and thereby purchased, tendered Shares when, as and if Purchaser gives
oral or written notice to the Depositary, as agent for the tendering
shareholders, of Purchaser's acceptance for payment of such Shares. Payment for
Shares so accepted for payment will be made by the deposit of the purchase price
therefor with the Depositary, which will act as agent for the tendering
shareholders for the purpose of receiving such payment from Purchaser and
transmitting such payment to tendering shareholders. If, for any reason
whatsoever, acceptance for payment of any Shares tendered pursuant to the Offer
is delayed, or Purchaser is unable to accept for payment Shares tendered
pursuant to the Offer, then, without prejudice to Purchaser's rights under
Section 1, the Depositary may, nevertheless, on behalf of Purchaser, retain
tendered Shares, and such Shares may not be withdrawn, except to the extent that
the tendering shareholders are entitled to withdrawal rights as described in
Section 3 and as otherwise required by Rule 14e-1(c) under the Exchange Act.
Under no circumstances will interest be paid on the purchase price by reason of
any delay in making such payments.
If any tendered Shares are not accepted for payment and paid for,
certificates representing such Shares will be returned (or, in the case of
Shares delivered by book-entry transfer with DTC as permitted by Section 2, such
Shares will be credited to an account maintained with DTC) without expense to
the tendering shareholder as promptly as practicable following the expiration or
termination of the Offer.
If, prior to the Expiration Date, Purchaser increases the consideration to
be paid for Shares pursuant to the Offer, Purchaser will pay such increased
consideration for all Shares accepted for payment pursuant to the Offer, whether
or not such Shares have been tendered or accepted for payment prior to such
increase in the consideration.
Purchaser reserves the right to transfer or assign in whole or in part to
one or more affiliates of Purchaser, Parent or Tyco the right to purchase all or
any portion of the Shares tendered pursuant to the Offer, but any such transfer
or assignment will not relieve Purchaser of its obligations under the Offer and
will in no way prejudice the rights of tendering shareholders to receive payment
for Shares validly tendered and accepted for payment pursuant to the Offer.
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES. The receipt of cash for Shares
pursuant to the Offer (or in the Merger) will be a taxable transaction for
United States federal income tax purposes (and may also be a taxable transaction
under applicable state, local or other tax laws). In general, a shareholder will
recognize gain or loss for such purposes equal to the difference between such
shareholder's adjusted tax basis for the Shares such shareholder sells in such
transaction and the amount of cash received therefor.
11
<PAGE>
Gain or loss must be determined separately for each block of Shares (i.e.,
Shares acquired at the same cost in a single transaction) sold pursuant to the
Offer or converted to cash in the Merger. Such gain or loss will be capital gain
or loss if the Shares are a capital asset in the hands of the shareholder and
will be long term capital gain or loss if the Shares were held for more than one
year on the date of sale (in the case of the Offer) or the effective time of the
Merger (in the case of the Merger). The receipt of cash for Shares pursuant to
the exercise of dissenters' rights, if any, will generally be taxed in the same
manner as described above.
Payments in connection with the Offer or the Merger may be subject to
"backup withholding" at a rate of 31%. Backup withholding generally applies if
the shareholder (a) fails to furnish such shareholder's social security number
or TIN, (b) furnishes an incorrect TIN, or (c) under certain circumstances,
fails to provide a certified statement, signed under penalties of perjury, that
the TIN provided is such shareholder's correct number and that such shareholder
is not subject to backup withholding. Backup withholding is not an additional
tax but merely an advance payment, which may be refunded to the extent it
results in an overpayment of tax. Certain persons generally are entitled to
exemption from backup withholding, including corporations, non-United States
persons and financial institutions. Certain penalties apply for failure to
furnish correct information and for failure to include reportable payments in
income. Each shareholder should consult with his own tax advisor as to such
shareholder's qualification for exemption from backup withholding and the
procedure for obtaining such exemption. Tendering shareholders may be able to
prevent backup withholding by completing the Substitute Form W-9 included in the
Letter of Transmittal.
The foregoing discussion may not be applicable to a shareholder who acquired
Shares pursuant to the exercise of employee stock options or otherwise as
compensation, or to a shareholder who is not a United States person for United
States federal income tax purposes (including a shareholder who is not a citizen
or resident of the United States) or who is otherwise subject to special tax
treatment under the Internal Revenue Code. In addition, the foregoing discussion
does not address the tax treatment of holders of options or warrants to acquire
Shares or of securities convertible into Shares.
The federal income tax discussion set forth above is included for general
information only and is based upon present law. Shareholders are urged to
consult their tax advisors with respect to the specific tax consequences of the
Offer and the Merger to them, including the application and effect of the
alternative minimum tax, and state, local or non-United States income and other
tax laws.
12
<PAGE>
6. PRICE RANGE OF SHARES; DIVIDENDS. Since April 4, 1996, the Shares have
traded on the National Market System of The Nasdaq Stock Market under the symbol
"PGTZ." The following table sets forth, for the periods indicated, the high and
low per Share sales prices on the Nasdaq National Market System as reported by
published financial sources. The Company has not declared or paid any cash
dividends with respect to the Shares for the periods indicated.
<TABLE>
<CAPTION>
HIGH LOW
-------- --------
<S> <C> <C>
FISCAL YEAR ENDED JUNE 30, 1998:
First Quarter............................................. $14.938 $10.500
Second Quarter............................................ 15.000 9.250
Third Quarter............................................. 11.125 8.500
Fourth Quarter............................................ 9.438 5.469
FISCAL YEAR ENDED JUNE 30, 1999:
First Quarter............................................. $ 9.000 $ 5.500
Second Quarter............................................ 9.500 6.375
Third Quarter............................................. 8.750 4.500
Fourth Quarter............................................ 6.063 4.625
FISCAL YEAR ENDING JUNE 30, 2000:
First Quarter............................................. $ 6.125 $ 3.531
Second Quarter (through October 29, 1999)................. 5.375 3.938
</TABLE>
On October 26, 1999, the last trading day prior to the public announcement
of the terms of the Offer and the Merger, the closing per Share sales price on
the Nasdaq National Market System was $4.34. On October 29, 1999, the last
trading day prior to commencement of the Offer, the closing per Share sales
price on the Nasdaq National Market System was $5.34. Shareholders are urged to
obtain a current market quotation for the Shares.
7. EFFECTS OF THE OFFER ON THE MARKET FOR SHARES; STOCK QUOTATIONS;
REGISTRATION UNDER THE EXCHANGE ACT. The purchase of Shares pursuant to the
Offer will reduce the number of holders of Shares and the number of Shares that
might otherwise trade publicly. Consequently, depending upon the number of
Shares purchased and the number of remaining holders of Shares, the purchase of
Shares pursuant to the Offer may adversely affect the liquidity and market value
of the remaining Shares held by the public. Purchaser cannot predict whether the
reduction in the number of Shares that might otherwise trade publicly would have
an adverse or beneficial effect on the market price for, or marketability of,
the Shares or whether it would cause future market prices to be greater or less
than the Offer price.
The Shares are currently listed and traded on the Nasdaq National Market
System, which constitutes the principal trading market for the Shares. Depending
upon the aggregate market value and the number of Shares not purchased pursuant
to the Offer, the Shares may no longer meet the quantitative maintenance
criteria for continued inclusion on the Nasdaq National Market System and may
cease to be authorized for quotation on such market. Pursuant to the maintenance
criteria, issuers on the Nasdaq National Market System are required to have
(i) (A) at least 750,000 publicly held shares, (B) at least 400 holders of round
lots, (C) a market value of publicly held shares of at least $5 million, (D) a
minimum bid price per share of $1, and (E) net tangible assets of at least
$4 million or (ii) (A) at least 1.1 million publicly held shares, (B) at least
400 holders of round lots, (C) a market value of publicly held shares of at
least $15 million, (D) a market capitalization of at least $50 million or total
assets and total revenue of at least $50 million (each for the most recently
completed fiscal year or two of the last three most recently completed fiscal
years), (E) a minimum bid price per share of $5, and (F) at least four
registered and active market makers for the Shares. Shares held directly or
indirectly by directors, officers or beneficial owners of more than 10% of the
Shares outstanding are not considered as being publicly held for this purpose.
If, as a result of the purchase of Shares pursuant to the Offer or
otherwise, the Shares no longer meet the requirements for continued inclusion in
the Nasdaq National Market System or in any other tier of The
13
<PAGE>
Nasdaq Stock Market, and the Shares are no longer included in The Nasdaq
National Market or in any other tier of The Nasdaq Stock Market, the market for
Shares could be adversely affected.
In the event that the Shares no longer meet the requirements for continued
inclusion in any tier of The Nasdaq Stock Market, it is possible that Shares
would continue to trade in the over-the-counter market and that price quotations
would be reported on the Nasdaq bulletin board or by other sources. The extent
of the public market for the Shares and the availability of such quotations
would, however, depend upon the number of holders of Shares remaining at such
time, the interest in maintaining a market in Shares on the part of securities
firms, the possible termination of registration of the Shares under the Exchange
Act, as described below, and other factors.
The Shares are currently registered under the Exchange Act. Such
registration may be terminated upon application of the Company to the Commission
if such Shares are not listed on a national securities exchange and there are
fewer than 300 holders of record of the Shares. The termination of the
registration of the Shares under the Exchange Act would substantially reduce the
information required to be furnished by the Company to its shareholders and to
the Commission, and would make certain of the provisions of the Exchange Act,
such as the short-swing profit recovery provisions of Section 16(b) and the
requirement of furnishing a proxy statement in connection with shareholders'
meetings and the related requirement of an annual report to shareholders, and
the requirements of Rule 13e-3 with respect to going private transactions, no
longer applicable with respect to the Shares or to the Company. Furthermore, if
registration of the Shares under the Exchange Act were terminated, the ability
of "affiliates" of the Company and persons holding "restricted securities" of
the Company to dispose of such securities pursuant to Rule 144 promulgated under
the Securities Act of 1933, as amended, may be impaired or, with respect to
certain persons, eliminated. If the Shares were no longer registered under the
Exchange Act, they would not be eligible for listing on any tier of The Nasdaq
Stock Market or for quotation on the Nasdaq bulletin board. According to the
Company, as of October 29, 1999, there were 1,422 holders of record of the
Shares.
The Shares are currently "margin securities" under the regulations of the
Board of Governors of the Federal Reserve System (the "Federal Reserve Board"),
which has the effect, among other things, of allowing brokers to extend credit
on such Shares as collateral. Depending on factors similar to those described
above regarding listing and market quotations, it is possible the Shares would
no longer constitute "margin securities" for purposes of the Federal Reserve
Board's margin regulations and therefore could no longer be used as collateral
for loans made by brokers. If registration of the Shares under the Exchange Act
were terminated, the Shares would no longer be "margin securities."
8. CERTAIN INFORMATION CONCERNING THE COMPANY. Except as otherwise set
forth herein, the information concerning the Company contained in this Offer to
Purchase, including financial information, has been furnished by the Company or
has been taken from or based upon publicly available documents and records on
file with the Commission and other public sources. Although neither Purchaser,
Parent nor Tyco has any knowledge that would indicate that the statements
contained herein based on such information are untrue, neither Purchaser, Parent
nor Tyco takes any responsibility for the accuracy or completeness of the
information concerning the Company furnished by the Company or contained in such
documents and records or for any failure by the Company to disclose events or
information which may have occurred or may affect the significance or accuracy
of any such information but which are unknown to Purchaser, Parent or Tyco.
The Company was incorporated in the State of Oregon in 1981 under the name
Praegitzer Industries, Inc. The Company's principal executive offices are
located at 19801 SW 72nd Avenue, Tualatin, Oregon 97062 and its telephone number
is (503) 454-6000. The following description of the Company's business has been
taken from the Company's Annual Report on Form 10-K for the year ended June 30,
1999.
14
<PAGE>
"The Company is a leader in providing electronics original equipment
manufacturers ("OEMs") and contract manufacturers with a full range of printed
circuit board ("PCB") and interconnect solutions, including schematic capture
and design, quick-turnaround, prototyping and pre-production, and large volume
production. The Company provides its solutions to four key electronics industry
segments (with corresponding percentages of Company revenue for the fiscal year
ended June 30, 1999): (i) data and telecommunications (40%), (ii) computers and
peripherals (32%), (iii) industrial and instrumentation (22%) and (iv) business
and consumer (6%). The Company's growth has been driven by sales to industry
leaders whose products require increasing complexity and technological
advancement within the electronic interconnect industry. The Company has
obtained ISO 9002 certifications for all of its manufacturing facilities, ISO
9001 certifications for all of its design centers and has received awards from a
number of its customers in recognition of its superior performance in meeting
their PCB needs. In fiscal 1999 the Company served more than 650 customers
worldwide."
Set forth below is a summary of certain consolidated financial information
with respect to the Company and its consolidated subsidiaries, excerpted or
derived from the information contained in the Company's Annual Reports on
Form 10-K and 10-K/A for the fiscal year ended June 30, 1999. More comprehensive
financial information is included in such reports and other documents filed by
the Company with the Commission. The financial information summary set forth
below is qualified in its entirety by reference to such reports and other
documents filed with the Commission and all of the financial information and
related notes contained therein. Such reports and other documents may be
inspected and copies may be obtained from the offices of the Commission in the
manner set forth below.
SELECTED CONSOLIDATED FINANCIAL DATA OF THE COMPANY
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
FISCAL YEAR
ENDED JUNE 30
-------------------
1999 1998
-------- --------
<S> <C> <C>
STATEMENT OF OPERATIONS:
Total revenues.............................................. $217,665 $182,773
Operating income (loss)..................................... (32,370) 10,830
Net income (loss)........................................... (25,539) 5,082
Net income (loss) per share--basic and diluted.............. (1.97) 0.40
BALANCE SHEET DATA:
Working capital............................................. $ 18,794 $ 19,297
Total assets................................................ 143,897 151,494
Notes payable and current portion of long-term
obligations............................................... 12,328 6,394
Long term liabilities net of current portion................ 67,326 73,413
Shareholders' equity........................................ 19,352 43,980
</TABLE>
OTHER INFORMATION. The Shares are registered under the Exchange Act.
Accordingly, the Company is subject to the informational filing requirements of
the Exchange Act and, in accordance therewith, is obligated to file periodic
reports, proxy statements and other information with the Commission relating to
its business, financial condition and other matters. Information, as of
particular dates, concerning the Company's directors and officers, their
remuneration, stock options granted to them, the principal holders of the
Company's securities and any material interest of such persons in transactions
with the Company is required to be disclosed in such proxy statements and
distributed to the Company's shareholders and filed with the Commission. Such
reports, proxy statements and other information should be available for
inspection at the public reference facilities at the Commission's principal
office at 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549, and
at the regional offices of the Commission located at 7 World Trade Center, Suite
1300, New York, New York 10048 and 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. The Commission maintains a site on the World Wide Web, and the
reports, proxy
15
<PAGE>
statements and other information filed by the Company with the Commission may be
accessed electronically on the Web at http://www.sec.gov. Copies of such
material may also be obtained by mail, upon payment of the Commission's
customary fees, from the Commission's principal office at 450 Fifth Street,
N.W., Washington, D.C. 20549.
9. CERTAIN INFORMATION CONCERNING TYCO, PARENT AND PURCHASER. Purchaser is
a newly formed Oregon corporation, a direct wholly-owned subsidiary of Sigma
Circuits, Inc., and an indirect wholly-owned subsidiary of Tyco. To date,
Purchaser has not conducted any business other than incident to its formation,
the execution and delivery of the Merger Agreement and the commencement of the
Offer.
Until immediately prior to the time that Purchaser purchases Shares pursuant
to the Offer, it is not anticipated that Purchaser will have any significant
assets or liabilities or engage in activities other than those incident to its
formation and capitalization and the transactions contemplated by the Offer and
the Merger. Since Purchaser is newly formed and has minimal assets and
capitalization, no meaningful financial information is available. The address of
the principal office of Purchaser is One Tyco Park, Exeter, New Hampshire 03833.
Parent is an indirect wholly owned subsidiary of Tyco and a manufacturer of
multilayer rigid PCB's. Parent was acquired by Tyco in July 1998.
Tyco is a diversified manufacturing and service company that, through its
subsidiaries, (i) designs, manufactures and distributes electrical and
electronic components and designs, manufactures, installs and services undersea
cable communication systems; (ii) designs, manufactures and distributes
disposable medical supplies and other specialty products, and conducts vehicle
auctions and related services; (iii) designs, manufactures, installs and
services fire detection and suppression systems and installs, monitors and
maintains electronic security systems; and (iv) designs, manufactures and
distributes flow control products.
Tyco is a Bermuda company. Its registered and principal executive offices
are located at The Gibbons Building, 10 Queen Street, Suite 301, Hamilton HM 11,
Bermuda, and its telephone number is (441) 292-8674. The executive offices of
Tyco's principal United States subsidiary, Tyco International (US) Inc. ("Tyco
(US)"), are located at One Tyco Park, Exeter, New Hampshire 03833, and its
telephone number is (603) 778-9700.
The following selected consolidated financial data for Tyco reflect the
combined results of operations and financial position of Tyco, United States
Surgical Corporation, which was acquired by Tyco on October 1, 1998, and AMP
Incorporated, which was acquired by Tyco on April 2, 1999, restated for all
periods presented pursuant to the pooling of interests method of accounting.
These combinations are more fully described in Notes 1 and 2 to the audited
Consolidated Financial Statements contained in Tyco's Current Report on
Form 8-K filed on June 3, 1999. The data presented for Tyco for the nine months
ended June 30, 1999 and 1998 are unaudited and, in the opinion of Tyco's
management, include all adjustments, consisting of normal recurring adjustments,
necessary for the fair presentation of such data. The information for Tyco for
the year ended September 30, 1998, the nine months ended September 30, 1997 and
the year ended December 31, 1996 was derived from the audited Consolidated
Financial Statements included in Tyco's Current Report on Form 8-K filed on
June 3, 1999. More comprehensive financial information is included in Tyco's
Annual Report on Form 10-K for the fiscal year ended September 30, 1998, its
Current Report on Form 8-K filed on June 3, 1999, its Quarterly Report on
Form 10-Q for the quarterly period ended June 30, 1999 and other documents filed
by Tyco with the Commission. The following summary is qualified in its entirety
by reference to such reports and other documents and the financial information
(including any related notes) contained therein. Such reports and other
documents should be available for inspection and copies thereof should be
obtainable in the manner set forth in Section 8. Such reports and other
documents should also be available for inspection at the offices of the New York
Stock Exchange, 20 Broad Street, New York, New York 10005, where the common
shares of Tyco are listed for trading.
16
<PAGE>
SELECTED CONSOLIDATED HISTORICAL FINANCIAL DATA OF TYCO
<TABLE>
<CAPTION>
(UNAUDITED)
NINE MONTHS ENDED
JUNE 30, YEAR ENDED NINE MONTHS ENDED YEAR ENDED
--------------------- SEPTEMBER 30, SEPTEMBER 30, DECEMBER 31,
1999(1) 1998(1) 1998(2) 1997(3)(4) 1996(5)(6)
--------- --------- ------------- ----------------- ------------
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENTS OF
OPERATIONS DATA:
Net sales..................... $16,272.0 $13,949.3 $19,061.7 $12,742.5 $14,671.0
Operating income.............. 951.5 1,902.7 1,948.1 125.8 587.4
Income (loss) from continuing
operations.................. 248.3 1,189.2 1,168.6 (348.5) 49.4
Income (loss) from continuing
operations per common
share(7):
Basic....................... 0.15 0.76 0.74 (0.24) 0.02
Diluted..................... 0.15 0.74 0.72 (0.24) 0.02
Cash dividends per common
share(7).................... See (8) below.
CONSOLIDATED BALANCE SHEET
DATA:
Total assets.................. $28,025.8 $23,440.7 $16,960.8 $14,686.2
Long-term debt................ 8,293.0 5,424.7 2,785.9 2,202.4
Shareholders' equity.......... 10,052.8 9,901.8 7,478.7 7,022.6
</TABLE>
- ------------------------
(1) Operating income in the nine months ended June 30, 1999 includes charges of
$1.26 billion for merger, restructuring and other non-recurring charges and
$335.0 million for the impairment of long-lived assets primarily related to
the mergers with US Surgical and AMP and costs associated with AMP's profit
improvement plan. Operating income in the nine months ended June 30, 1998
includes a credit of $21.4 million to restructuring charges representing a
revision of estimates related to AMP's 1996 restructuring activities and a
charge of $12.0 million related to US Surgical's cost cutting objectives.
See Notes 8 and 9 to the unaudited Consolidated Financial Statements
contained in Tyco's Quarterly Report on Form 10-Q for the quarterly period
ended June 30, 1999.
(2) Operating income in the fiscal year ended September 30, 1998 includes
charges of $80.5 million primarily related to costs to exit certain
businesses in US Surgical's operations and restructuring charges of
$12.0 million related to the operations of US Surgical. In addition, Tyco
recorded restructuring charges of $185.8 million in connection with AMP's
profit improvement plan and a credit of $21.4 million to restructuring
charges representing a revision of estimates related to AMP's 1996
restructuring activities. See Note 16 to the Consolidated Financial
Statements contained in Tyco's Current Report on Form 8-K filed on June 3,
1999.
(3) In September 1997, Tyco changed its fiscal year end from December 31 to
September 30. Accordingly, the nine-month transition period ended
September 30, 1997 is presented.
(4) On July 2, 1997, Tyco, formerly called ADT Limited, merged with Tyco
International Ltd., a Massachusetts corporation ("Former Tyco"). On
August 27, 1997 and August 29, 1997, Tyco merged with INBRAND Corporation
and Keystone International, Inc., respectively. These combinations are more
fully described in Notes 1 and 2 to the Consolidated Financial Statements
contained in Tyco's Current Report on Form 8-K filed on June 3, 1999.
Operating income in the nine months ended September 30, 1997 includes
charges related to merger, restructuring and other non-recurring costs of
$917.8 million and impairment of long-lived assets of $148.4 million, each
primarily related to the
17
<PAGE>
mergers and integration of ADT, Former Tyco, Keystone and INBRAND and
charges of $24.3 million for litigation and other related costs and
$5.8 million for restructuring charges in US Surgical's operations. See
Notes 11 and 16 to the Consolidated Financial Statements contained in Tyco's
Current Report on Form 8-K filed on June 3, 1999. The results for the nine
months ended September 30, 1997 also include a charge of $361.0 million for
the write-off of purchased in-process research and development related to
the acquisition of the submarine systems business of AT&T Corp.
(5) Prior to their respective mergers, ADT, Keystone, US Surgical and AMP had
December 31 fiscal year ends and Former Tyco had a June 30 fiscal year end.
The selected consolidated financial data have been combined using a
December 31 fiscal year end for ADT, Keystone, Former Tyco, US Surgical and
AMP for the year ended December 31, 1996.
(6) Operating income in 1996 includes non-recurring charges of $744.7 million
related to the adoption of Statement of Financial Accounting Standards
No. 121, $237.3 million related principally to the restructuring of ADT's
electronic security services business in the United States and the United
Kingdom, $98.0 million to exit various product lines and manufacturing
operations associated with AMP's operations and $8.8 million of fees and
expenses related to ADT's acquisition of Automated Security (Holdings) plc,
a United Kingdom company. See Notes 11 and 16 to the Consolidated Financial
Statements contained in Tyco's Current Report on Form 8-K filed on June 3,
1999.
(7) Per share amounts have been retroactively restated to give effect to the
two-for-one stock splits distributed on October 21, 1999 and October 22,
1997, effected in the form of a stock distribution, the mergers with Former
Tyco, Keystone, INBRAND, US Surgical and AMP and a 0.48133 reverse stock
split effected on July 2, 1997.
(8) Tyco has paid a quarterly dividend of $0.0125 per common share since
July 2, 1997, the date of the Former Tyco/ADT merger. ADT had not paid any
dividends on its common shares since 1992. Prior to the merger with ADT,
Former Tyco paid a quarterly cash dividend of $0.0125 per share of common
stock since January 1992.
On October 21, 1999, Tyco announced revenues for fiscal 1999 of
$22.5 billion and income before extraordinary item, inclusive of acquisition and
other non-recurring charges, of $1.03 billion, or $0.62 per diluted share, after
giving effect to the two-for-one stock split distributed on October 21, 1999.
Except as set forth in this Offer to Purchase, none of Tyco, Parent,
Purchaser or, to the best of their knowledge, any of the persons listed in Annex
I, Annex II or Annex III hereto, (a) has any contract, arrangement,
understanding or relationship with any other person with respect to any
securities of the Company, including, but not limited to, any contract,
arrangement, understanding or relationship concerning the transfer or the voting
of any securities of the Company, joint ventures, loan or option arrangements,
puts or calls, guaranties of loans, guaranties against loss, or the giving or
withholding of proxies, (b) has engaged in contacts, negotiations or
transactions with the Company or its affiliates concerning a merger,
consolidation, acquisition, tender offer or other acquisition of securities,
election of directors or a sale or other transfer of a material amount of assets
or (c) has had any other transaction with the Company or any of its executive
officers, directors or affiliates that would require disclosure under the rules
and regulations of the Commission applicable to the Offer. Other than the rights
arising under the Merger Agreement and the Shareholder's Agreement, neither
Parent, Purchaser nor any of their affiliates beneficially own any Shares or
have effected any transaction in the Shares within the past 60 days.
18
<PAGE>
10. SOURCE AND AMOUNT OF FUNDS. The total amount of funds required by Tyco,
Parent and Purchaser to purchase all Shares pursuant to the Offer and the
Merger, (including amounts payable upon exercise to optionholders) and to pay
related fees and expenses, is estimated to be approximately $80 million. This
does not include approximately $93 million of indebtedness that the Surviving
Corporation will either repay or assume upon consummation of the Offer and the
Merger.
Purchaser will obtain all such funds from Tyco, Parent or their affiliates.
Tyco has sufficient financial resources to satisfy its, Parent's, and
Purchaser's obligations under the Offer and the Merger Agreement, and Tyco has
fully and unconditionally guaranteed the Offer. This Offer is not conditioned
upon any financing arrangements.
11. CONTACTS WITH THE COMPANY; BACKGROUND OF THE OFFER. Certain information
in this section on the background of the Offer regarding the deliberations of
the Company's Board and the actions of the Company's management and financial
advisors is based upon information furnished by the Company to Purchaser. In
this section, references to Tyco are to Tyco's United States subsidiaries and
affiliates including Tyco (US) and Tyco Printed Circuit Group. Tyco, the Bermuda
company, is referred to in this section as Tyco International Ltd.
In April 1999, the Company began to explore strategic alternatives,
including acquisition possibilities. At that time, the Company retained Adams,
Harkness & Hill, Inc. and McDonald Investments Inc. to assist it in this
broad-ranging exploration. McDonald and KeyBank, the Company's principal
creditor, are both wholly owned subsidiaries of KeyCorp. Beginning in late
April 1999, Adams Harkness and McDonald contacted not less than 24 companies to
gauge their interest in potential strategic business relationships and business
combinations with the Company. As a result of these contacts, the Company
entered into discussions with four companies concerning a possible transaction.
On April 27, 1999, McDonald contacted a private equity investment firm
("Equity Investment Company A") to discuss a possible transaction. On April 28,
1999, Adams Harkness contacted another private equity investment firm ("Equity
Investment Company B") and Tyco for the same purpose.
On April 29, 1999, Equity Investment Company A contacted McDonald indicating
interest in pursuing a possible transaction. On the same day, Steve Gardner,
President of Tyco Printed Circuit Group, contacted Adam Harkness, indicated that
Tyco was interested in pursuing a transaction and requested Adam Harkness to
contact Brian Roussell, Vice President of Finance and Administration of Tyco
Printed Circuit Group. Adam Harkness contacted Mr. Roussell on that same day
regarding a possible transaction.
From May 3, 1999 through May 9, 1999, Tyco Printed Circuit Group and the
Company negotiated a confidentiality agreement, which was signed on May 10,
1999, at which time each party commenced due diligence on the other. During the
week of May 3, 1999, Equity Investment Company A and the Company signed
confidentiality agreements and commenced due diligence on each other.
On May 5, 1999, the Company and Equity Investment Company B began
negotiating a confidentiality agreement, which was signed on May 13, 1999.
On May 12, 1999, Equity Investment Company A, the Company and their
respective advisers met at the offices of the Company's legal advisers in
Portland, Oregon to discuss due diligence matters. Additional due diligence
discussions were held on May 14, 1999 and during the weeks of May 16, 1999 and
May 24, 1999.
On May 17, 1999, Equity Investment Company B scheduled a meeting with
Mr. Bergeron to discuss a possible transaction.
On May 19 and 20, 1999, Tyco, the Company and their respective advisers held
meetings at the Company's headquarters offices in Tualatin, Oregon and at the
offices of the Company's legal advisers in Portland, Oregon to continue
discussing a possible business combination. The Company's and Tyco's
19
<PAGE>
respective management and advisers participated in these meetings. The parties
held preliminary discussions about the non-financial aspects of a potential
acquisition of the Company by Tyco, including organization, facilities, products
and customers.
On May 20, 1999, representatives of Equity Investment Company B met with
Mr. Bergeron in Dallas, Oregon and conducted due diligence.
On May 24, 1999, Equity Investment Company B contacted Adams Harkness and
asked for additional due diligence information. On June 1, 1999, Equity
Investment Company B informed Adams Harkness that, although Equity Investment
Company B was interested in pursuing a possible business combination, for
financing and timing reasons it wished to delay discussions for at least three
months.
On June 3, 1999, Tyco presented the Company with a non-binding indication of
interest letter, suggesting a cash price of $7.25 to $8.00 per share for the
acquisition of all shares of the Company's common stock. From June 4, 1999
through June 21, 1999, the parties exchanged additional information and
internally reviewed the potential benefits of a transaction.
Also on June 3, 1999, Equity Investment Company A indicated it was
considering a recapitalization transaction that would value the Company's common
stock at approximately $6.00 per share, but that Equity Investment Company A
required additional due diligence before it would be in the position to finalize
an offer. Equity Investment Company A conducted further due diligence on
June 4, 1999 and during the week of June 6, 1999.
On June 14 and 15, and also from June 21 to June 24, 1999, representatives
of Tyco conducted due diligence at the offices of the Company's legal advisers
in Portland, Oregon.
On June 16, 1999, Equity Investment Company A notified McDonald that Equity
Investment Company A was prepared to enter into a recapitalization transaction
with the Company that would value the Company's common stock at $4.00 per share.
On June 20, 1999, McDonald informed Equity Investment Company A that the Company
had decided to postpone any decision on the proposal for at least two months.
On June 22, 1999, the president of a printed circuit board manufacturer (the
"PCB Company") contacted Mr. Bergeron about a possible business combination.
On June 24, 1999, representatives of the PCB Company and the Company met to
discuss a possible business combination. The PCB Company and the Company entered
into confidentiality agreements and completed due diligence on June 28, 1999.
On June 29, 1999, Richard D. Malloy, Director of Mergers and Acquisitions of
Tyco (US), orally informed the Company that the proposal in its June 3, 1999
letter was no longer feasible due to valuation issues and concern about the
status of the Company's credit arrangements. Mr. Malloy indicated Tyco was still
interested in pursuing a transaction, and suggested postponing further
discussion until the Company's circumstances were clarified.
Also on June 29, 1999, the PCB Company indicated it would submit a business
combination proposal on July 2, 1999, but on July 1, 1999, the PCB Company
informed the Company that no proposal would be forthcoming on July 2, 1999. The
PCB Company requested more time to consider alternatives and to conduct
additional due diligence. On July 21, 1999, the PCB Company informed McDonald
that the PCB Company might be interested only in purchasing one or two of the
Company's manufacturing facilities, but the PCB Company never submitted any
transaction proposal for the Company's consideration.
On August 5, 1999, the Company announced its financial results for the
fourth quarter and fiscal year ended June 30, 1999. For the fourth quarter, the
Company reported a modest increase in revenue from the prior year and a
restructuring that resulted in a pretax charge of $21.4 million. The Company
also reported that at June 30, 1999 it was not in compliance with all the
covenants of its major credit agreements, including its revolving credit
agreement with KeyBank. The Company reported that its business and
20
<PAGE>
financial condition could be materially and adversely effected if it were unable
to reach agreements with its creditors.
On August 31, 1999, Mr. Bergeron asked Adams Harkness to contact Tyco to
recommence transaction discussions. Adams Harkness left a message with Tyco on
September 1, 1999, and on September 2, 1999 Mr. Malloy informed Adams Harkness
that Tyco would consider recommencing discussions.
On September 7, 1999, Mr. Malloy called Mr. T. L. Stebbins, a director of
the Company and a managing director at Adam Harkness, and indicated Tyco was
interested in recommencing discussions with the Company, with the understanding
that Tyco was prepared to offer no more than $5.50 per share for the acquisition
of all shares of the Company common stock until the Company's September 1999
financial statements were available. Upon receipt of this information,
Mr. Bergeron instructed Adams Harkness to cease communications with Tyco.
On September 10, 1999, the Company's commercial lenders requested that the
Company renegotiate its credit arrangements. Following this request, Robert
Praegitzer, Chairman of the Board and Chief Executive Officer of the Company,
and Mr. Bergeron convened a conference call among themselves, Adams Harkness and
McDonald during which Mr. Praegitzer and Mr. Bergeron requested that Adams
Harkness and McDonald contact a number of the original companies who Adams
Harkness and McDonald thought might be interested in purchasing the Company at a
lower price. Mr. Praegitzer and Mr. Bergeron also asked Adams Harkness to
contact Tyco to inform Tyco that the Company was interested in recommencing
transaction discussions at a price per share to be determined after Tyco had
completed its due diligence.
On September 13, 1999, Mr. Stebbins discussed the Company's position with
Mr. Malloy, who requested updated due diligence materials and financial
statements.
On September 15, 1999, Adams Harkness contacted Investment Company Company B
to gauge its interest in recommencing discussions concerning a possible
transaction.
On September 16, 1999, the Company's Board of Directors met to discuss the
status of negotiations with Tyco.
On September 20, 1999, Mr. Malloy indicated Tyco's interest in proceeding
with a transaction to Adams Harkness. Mr. Malloy and Mr. Bergeron arranged
several due diligence meetings at the Company's headquarters offices in
Tualatin, Oregon over the next two weeks.
On September 21, 1999, the management of the Company and its advisers met at
the Company's headquarters offices in Tualatin, Oregon with representatives of
Tyco to discuss a possible business combination. On the same day, Equity
Investment Company B indicated to Adams Harkness that Equity Investment Company
B was interested in pursuing discussions, but that Equity Investment Company B
was now interested only in purchasing certain Company manufacturing facilities
rather than the entire Company.
On September 23, 1999, the Company Board met to approve the delayed filing
with the Commission of its Annual Report on Form 10-K for the year ended
June 30, 1999 and to explore strategic alternatives with McDonald and Adams
Harkness.
On September 29, 1999, Adams Harkness contacted Tyco to discuss the status
of Tyco's expected offer.
In late September 1999, McDonald contacted Equity Investment Company A to
determine Equity Investment Company A's interest in recommencing discussions
concerning a possible transaction with the Company. On October 7, 1999, Equity
Investment Company A, Praegitzer and their respective advisers met at the
Company's headquarters offices in Tualatin, Oregon to discuss a possible
transaction. At that meeting Equity Investment Company A presented the Company
with a letter of interest for the purchase solely of the Company's Dallas and
Fremont manufacturing facilities, conditioned on satisfactory financing
arrangements and additional due diligence.
21
<PAGE>
On October 12, 1999, the Company executed the Deferral Agreement with
substantially all of its lenders and lessors, thereby eliminating the existing
covenant defaults and the prospect of immediate acceleration of the amounts due
to those creditors.
Also on October 12, 1999, Equity Investment Company B informed Adams
Harkness that Equity Investment Company B was no longer interested in pursuing
any acquisition discussions.
On October 13, 1999, the Company filed with the Commission its Annual Report
on Form 10-K for the fiscal year ended June 30, 1999, which had been due to be
filed September 28, 1999.
Also on October 13, 1999, Tyco delivered an acquisition proposal to the
Company. Under the terms of the proposal, Tyco would acquire the Company by
means of a cash tender offer, at a price of $5.50 per share of the Company
common stock. Representatives of Equity Investment Company A completed
additional due diligence on the same day.
On October 15, 1999, the the Company Board met with Adams Harkness at the
Company's headquarters offices in Tualatin, Oregon to review Tyco's proposal and
discuss tender offer procedures.
On October 15, 1999, Tyco International Ltd.'s Board of Directors approved
the acquisition of the Company at a price of $5.50 per share of the Company's
common stock.
On October 16, McDonald contacted Equity Investment Company A to inform
Equity Investment Company A that the Company preferred a transaction pursuant to
which all of the common stock of the Company would be acquired, rather than an
asset purchase of only two of the Company's facilities. McDonald also informed
Equity Investment Company A that the Company was seeking a stock transaction
that valued its common stock at $6.00 per share or greater. On October 17, 1999,
Equity Investment Company A informed McDonald that Equity Investment Company A
was not interested in purchasing all of the stock of the Company, but was only
interested in purchasing the two manufacturing facilities.
On October 18, 1999, Mr. Stebbins informed Tyco that the Company was
entertaining other potential proposals for certain Company assets. Adams
Harkness requested that Tyco propose a transaction either at a higher price per
share or with a different structure. On October 20, 1999, Irving Gutin,
Tyco (US)'s Senior Vice President, and Mr. Malloy declined to modify Tyco's
proposal.
On October 19, 1999, Tyco, the Company and Adams Harkness convened several
conference calls to discuss Tyco's proposal and the transaction schedule.
On October 20, 1999, Mr. Bergeron verbally accepted Tyco's non-binding
written offer on the Company's behalf and requested Mr. Malloy supply a draft
merger agreement, which the Company received from Tyco's legal advisers on
October 22, 1999.
From October 22 through October 26, 1999, Tyco, the Company and their
respective advisers negotiated the terms and provisions of the Merger Agreement
and ancillary documents.
The Company's Board of Directors met on October 25, 1999. At the meeting
- the Company's legal advisers and management updated the Company's Board on
the status of negotiations with Tyco and informed the Board that all
substantive issues had been resolved,
- the Company's legal advisers made a presentation to the Company's Board
regarding the fiduciary duties of the Company's Board,
- the Company's legal advisers reviewed with the Company's Board the terms
of the proposed merger agreement with Tyco and the regulatory filings and
approvals that would be required in connection with the proposed
transaction,
- Adams Harkness made a financial presentation to the Company's Board, and
- Adams Harkness rendered its opinion to the effect that, as of that date,
the Per Share Amount was fair to the Company's shareholders from a
financial point of view.
22
<PAGE>
Afterwards, the Company's Board by a unanimous vote (with Mr. Stebbins
abstaining because he is a managing director of Adams Harkness, which is
entitled to a fee payable in part upon the completion of a transaction such as
that presented by Tyco) determined the Merger was fair to, and in the best
interests of, the Company and its shareholders and
- unanimously approved (again with Mr. Stebbins abstaining) the terms of the
Merger Agreement and the transactions contemplated by the agreement, and
- authorized the execution of the Merger Agreement and recommended that the
Company's shareholders tender all their shares in the Tyco Offer.
On October 25, 1999 the closing price of the Company's common stock was
$4.75 per share.
On October 26, 1999 all documentation, including the disclosure schedules of
the Company, were finalized to the satisfaction of the designated officers, and
all conditions with respect to the execution of the Merger Agreement were
satisfied. Late in the morning of that day, the Company Board met to receive an
update from Mr. Bergeron as to the status of the transaction. That afternoon
- Tyco and the Company executed and delivered the Merger Agreement,
- the majority shareholder of the Company executed and delivered a
shareholder agreement agreeing to tender the shareholder's shares in the
Tyco Offer, and
- Tyco and the Company publicly announced the signing of the Merger
Agreement.
12. PURPOSE OF THE OFFER; SHORT FORM MERGER; PLANS FOR THE COMPANY;
DISSENTERS' RIGHTS; GOING PRIVATE TRANSACTIONS.
PURPOSE OF THE OFFER. The purpose of the Offer is for Purchaser to acquire
control of, and a majority equity interest in, the Company. The purpose of the
Merger is to acquire the remaining equity interest. The acquisition of the
entire common equity interest in the Company has been structured as a cash
tender offer followed by a cash merger in order to provide a prompt and orderly
transfer of ownership of the common equity of the Company from the public
shareholders to Parent and to provide public shareholders with cash for all of
their Shares. Accordingly, upon consummation of the transactions contemplated by
the Merger Agreement, Parent will own the entire equity interest in the Company.
Under the OBCA and the Company's Articles of Incorporation, the approval of
the Board of Directors of the Company and the affirmative vote of a majority of
the holders of outstanding Shares, voting as a single class, are required to
approve and adopt the Merger Agreement and the Merger. The Board of Directors of
the Company has approved the Offer, the Merger and the Merger Agreement and the
transactions contemplated thereby, and, unless the Merger is consummated
pursuant to the short-form merger provisions under the OBCA described below, the
only remaining required corporate action of the Company is the approval and
adoption of the Merger Agreement and the Merger by the affirmative vote of the
holders of a majority of the outstanding Shares. If the Minimum Condition is
satisfied, Purchaser will have sufficient voting power to cause the approval and
adoption of the Merger Agreement and the Merger without the affirmative vote of
any other shareholder.
The Merger Agreement provides that, if approval of the Merger by the
shareholders of the Company is required by law, the Company will, as soon as
possible following payment for Shares in the Offer, duly call and hold a meeting
of shareholders for the purpose of obtaining shareholder approval of the Merger,
and the Company, through its Board of Directors, will recommend to shareholders
that such approval be given.
SHORT FORM MERGER. Under the OBCA, if Purchaser acquires at least 90% of
the outstanding Shares, Purchaser will be able to approve the Merger without a
vote of the Company's other shareholders. The Merger Agreement provides that if
Purchaser, or any other direct or indirect subsidiary of Tyco or Parent,
acquires at least 90% of the outstanding Shares, Parent, Purchaser and the
Company will take all necessary
23
<PAGE>
and appropriate action to cause the Merger to become effective as soon as
practicable after the expiration of the Offer without a meeting of shareholders
of the Company, in accordance with Section 60.491 of the OBCA. If Purchaser
acquires at least 90% of the Shares in the Offer, it will be able to effect the
Merger under Section 60.491 of the OBCA. In the event that all of the conditions
to Purchaser's obligation to purchase Shares in the Offer are satisfied or
waived and the number of Shares tendered is less than 90% of the outstanding
Shares, Purchaser may, subject to the limitations set forth in the Merger
Agreement, extend the Offer for an aggregate period of not more than 10 business
days (for all such extensions) without the consent of the Company. See
Section 1. If Purchaser does not acquire at least 90% of the outstanding Shares,
a significantly longer period of time may be required to effect the Merger,
because a vote of the Company's shareholders would be required under the OBCA.
PLANS FOR THE COMPANY. Except as otherwise set forth in this Offer to
Purchase, it is expected that, initially following the Merger, the business and
operations of the Company will be continued by the Surviving Corporation
substantially as they are currently being conducted, but within Tyco's Printed
Circuit Board Group. The directors of Purchaser will be the initial directors of
the Surviving Corporation, and the officers of the Company will be the initial
officers of the Surviving Corporation. Upon completion of the Offer, Tyco
intends to conduct a detailed review of the Company and its assets, corporate
structure, capitalization, operations, policies, management and personnel. After
such review, Tyco will determine what actions or changes, if any, would be
desirable in light of the circumstances which then exist, and reserves the right
to effect such actions or changes.
Except as described in this Offer to Purchase, none of Tyco, Parent or
Purchaser have any present plans or proposals that would relate to or result in
(i) any extraordinary corporate transaction, such as a merger, reorganization or
liquidation, involving the Company or any of its subsidiaries, (ii) a sale or
transfer of a material amount of assets of the Company or any of its
subsidiaries, (iii) any change in the Company's Board of Directors or
management, (iv) any material change in the Company's capitalization or dividend
policy, (v) any other material change in the Company's corporate structure or
business, (vi) a class of securities of the Company being delisted from a
national securities exchange or ceasing to be authorized to be quoted in an
inter-dealer quotation system of a registered national securities association,
or (vii) a class of equity securities of the Company becoming eligible for
termination of registration pursuant to Section 12(g) of the Exchange Act.
DISSENTERS' RIGHTS. No dissenters' rights are available in connection with
the Offer. Under Oregon law dissenters' rights are not available in a merger to
holders of any shares of stock which, like the Company's common stock, are
listed for quotation on the Nasdaq National Market System. Accordingly, if the
Company's common stock remains listed on the Nasdaq National Market System
following completion of the Offer, the Company's shareholders will have no
dissenters' rights in connection with the Merger. If, however, the Company's
common stock is not quoted on the Nasdaq National Market System on the record
date for determining shareholders eligible to vote on the Merger, shareholders
of the Company may have certain rights under the OBCA to dissent, and demand
appraisal of, and to obtain payment for the fair value of their Shares. Such
rights, if the statutory procedures were complied with, could lead to a judicial
determination of the fair value of the Shares (excluding any element of value
arising from the accomplishment or expectation of the Merger) to be required to
be paid in cash to such dissenting holders for their Shares. In addition, such
dissenting shareholders would be entitled to receive payment of a fair rate of
interest from the date of consummation of the Merger on the amount determined to
be the fair value of their Shares. In determining the fair value of the Shares,
an Oregon court would be required to take into account all relevant factors.
Accordingly, such determination could be based upon considerations other than,
or in addition to, the market value of the Shares. Therefore, the value so
determined in any appraisal proceeding could be different from the price being
paid in the Offer.
GOING PRIVATE TRANSACTIONS. The Merger would have to comply with any
applicable Federal law operative at the time. The Commission has adopted
Rule 13e-3 under the Exchange Act which is applicable to certain "going private"
transactions and which may under certain circumstances be applicable
24
<PAGE>
to the Merger or another business combination following the purchase of Shares
pursuant to the Offer in which Purchaser, Parent or Tyco seeks to acquire the
remaining Shares not held by it. Purchaser believes, however, that Rule 13e-3
will not be applicable to the Merger. If applicable, Rule 13e-3 requires, among
other things, that certain financial information concerning the Company and
certain information relating to the fairness of such transaction and the
consideration offered to minority shareholders in such transaction be filed with
the Commission and disclosed to shareholders prior to the consummation of such
transaction.
13. THE MERGER AGREEMENT; SHAREHOLDER'S AGREEMENT.
THE MERGER AGREEMENT
The following summary of certain provisions of the Merger Agreement, a copy
of which is filed as an exhibit to the Schedule 14D-1 referred to in
Section 18, is qualified in its entirety by reference to the text of the Merger
Agreement. Capitalized terms used in the following summary and not otherwise
defined in this Offer to Purchase shall have the meanings set forth in the
Merger Agreement.
THE MERGER. The Merger Agreement provides that, following the consummation
of the Offer and subject to the terms and conditions thereof, at the effective
time of the Merger (the "Effective Time") Purchaser shall be merged with and
into the Company and, as a result of the Merger, the separate corporate
existence of Purchaser shall cease, and the Company shall continue as the
Surviving Corporation and a direct subsidiary of Parent.
The respective obligations of Parent and Purchaser, on the one hand, and the
Company, on the other hand, to effect the Merger are subject to the satisfaction
or waiver at or prior to the Effective Time of each of the following conditions:
(i) Parent or Purchaser or their affiliates shall have consummated the Offer,
unless such failure to purchase is a result of a breach of Purchaser's
obligations to accept for payment or pay for Shares pursuant to the Offer in
violation of the terms of the Offer or of the Merger Agreement, (ii) the Merger
shall have been approved by the requisite vote of the shareholders, if required
by applicable law, in order to consummate the Merger, (iii) no order, statute,
rule, regulation, executive order, stay, decree, judgment or injunction shall
have been enacted, entered, promulgated or enforced by any court or other
Governmental Authority which prohibits or prevents the consummation of the
Merger which has not been vacated, dismissed or withdrawn prior to the Effective
Time, and (iv) all consents of any Governmental Authority required for the
consummation of the Merger and the transactions contemplated by the Agreement
shall have been obtained, other than where the failure to obtain such consents
is not reasonably likely to have a material adverse effect on the business,
assets, condition (financial or other), liabilities or results of operations of
the Surviving Corporation and its subsidiaries taken as a whole.
At the Effective Time of the Merger, (i) each issued and outstanding Share
(other than Shares that are held by shareholders properly exercising dissenters'
rights under the OBCA and Shares to be cancelled pursuant to clause (ii) below)
will be canceled and extinguished and be converted into the right to receive the
Per Share Amount in cash payable to the holder thereof, without interest, upon
surrender of the certificate representing such Share. From and after the
Effective Time, the holders of certificates evidencing ownership of Shares
outstanding immediately prior to the Effective Time shall cease to have any
rights with respect to such Shares except as otherwise provided for in the
Merger Agreement or by applicable Law, (ii) each Share owned by Tyco, Parent,
Purchaser or any direct or indirect wholly owned subsidiary of Tyco immediately
before the Effective Time shall be cancelled and extinguished, and no payment or
other consideration shall be made with respect thereto and (iii) the shares of
Purchaser common stock outstanding immediately prior to the Merger will be
converted into 1,000 shares of the common stock of the Surviving Corporation,
which shares will constitute all of the issued and outstanding capital stock of
the Surviving Corporation and shall be owned by Parent.
THE COMPANY'S BOARD OF DIRECTORS. The Merger Agreement provides that
promptly upon the purchase by Purchaser of Shares pursuant to the Offer (and
provided that the Minimum Condition has
25
<PAGE>
been satisfied), Parent shall be entitled to designate such number of directors,
rounded up to the next whole number, on the Board of Directors of the Company as
will give Parent, subject to compliance with Section 14(f) of the Exchange Act,
representation on the Board of Directors of the Company equal to at least that
number of directors which equals the product of the total number of directors on
the Board of Directors of the Company (giving effect to the directors appointed
or elected pursuant to this sentence and including current directors serving as
officers of the Company) multiplied by the percentage that the aggregate number
of Shares beneficially owned by Parent or any affiliate of Parent (including
such Shares as are accepted for payment pursuant to the Offer, but excluding
Shares held by the Company) bears to the number of Shares outstanding. At such
time, if requested by Parent, the Company will also cause each committee of the
Board of Directors of the Company to include persons designated by Parent
constituting the same percentage of each such committee as Parent's designees
are of the Board of Directors of the Company. The Company shall, upon request by
Parent, promptly increase the size of the Board of Directors of the Company or
exercise reasonable best efforts to secure the resignations of such number of
directors as is necessary to enable Parent's designees to be elected to the
Board of Directors of the Company in accordance with terms of this section and
to cause Parent's designees so to be elected; provided, however, that, in the
event that Parent's designees are appointed to the Board of Directors of the
Company, until the Effective Time the Board of Directors of the Company shall
have at least two directors who are directors on the date of the Agreement, one
of whom will be Robert Praegitzer and one of whom will be a director who is
neither an officer of the Company nor a designee, shareholder, affiliate or
associate (within the meaning of the federal securities laws) of Tyco (such
directors, the "Independent Directors"). Notwithstanding anything in the Merger
Agreement to the contrary, subsequent to the designation of the directors by
Parent and prior to the Effective Time, the unanimous vote of the Independent
Directors shall be required to (i) amend or terminate the Merger Agreement on
behalf of the Company, (ii) exercise or waive any of the Company's rights or
remedies thereunder, (iii) extend the time for performance of Parent's
obligations thereunder, (iv) take any other action by the Company in connection
with the Merger Agreement required to be taken by the Board of Directors of the
Company or (v) amend the Company's Articles of Incorporation or the Company's
Bylaws, each as in effect on the date of the Merger Agreement.
SHAREHOLDERS' MEETING. Pursuant to the Merger Agreement, the Company will,
if required by applicable law in order to consummate the Merger, duly call, give
notice of, convene and hold a special meeting of its shareholders as promptly as
practicable following the consummation of the Offer for the purpose of voting
upon the Merger. The Merger Agreement provides that the Company will, if
required by applicable law in order to consummate the Merger, prepare and file
with the Commission and, when cleared by the Commission, will mail to
shareholders a proxy statement in connection with a meeting of the Company's
shareholders to vote upon the Company Proposals, or an information statement, as
appropriate, satisfying all requirements of the Securities Exchange Act.
If Purchaser acquires at least a majority of the Shares, it will have
sufficient voting power to approve the Merger, even if no other shareholder
votes in favor of the Merger.
The Merger Agreement provides that in the event that Parent or Purchaser
acquires at least 90% of each class of Shares, Parent, Purchaser and the Company
will 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
meeting of shareholders of the Company, in accordance with Section 60.491 of the
OBCA.
OPTIONS, WARRANTS, CONVERTIBLE SECURITIES AND OTHER RIGHTS. The Merger
Agreement provides that each of the Company and Parent shall take all reasonable
actions necessary to provide that all then outstanding options to purchase
Shares, whether or not then exercisable or vested (each, a "Company Option"),
shall constitute the right to receive an amount in cash equal to the positive
difference, if any, between the Per Share Amount and the exercise price of the
Company Option multiplied by the number of Shares for which the Company Option
was exercisable immediately prior to the Effective Time, subject to reduction
only for any applicable withholding taxes. The Company shall provide a period of
at least 30 days prior to
26
<PAGE>
the Effective Time during which Company Options may be exercised to the extent
exercisable at the Effective Time and, upon the expiration of such period, all
unexercised Company Options shall immediately terminate. The Company may, in its
sole discretion, permit holders of Company Options that are not exercisable
before the Effective Time to exchange such options for cash as described above.
In lieu of exercising Company Options as described above, the holders shall be
given the right, and the Company shall encourage the holders of Company Options
to exercise such right, to exchange such options for cash as described above. In
no event will any Company Options be exercisable after the Effective Time,
except to receive cash.
Each of the warrants of the Company, dated November 17, 1995, to purchase
Shares at a price of $12.00 per share, subject to adjustment (the "Company
Warrants"), shall be exercisable, from and after the Effective Time, for an
amount of cash equal to the Per Share Amount multiplied by the number of Shares
for which such warrant was exercisable immediately prior to the Effective Time.
Except as aforesaid, the exercise of any Company Warrant shall remain subject to
all terms and conditions provided in the applicable Company Warrant and/or
Warrant Agreement. Each of the Company and Parent shall take all action
necessary to provide that, upon consummation of the Merger, all Company Warrants
outstanding immediately prior to the Effective Time shall be exercisable for a
cash amount as aforesaid.
Under the Deferral Agreement, the Company's lenders and equipment lessors
have the right to convert a certain portion of the amounts owed to them under
the Deferral Agreement into shares of the Company's common stock at $5.77 per
share. The maximum number of Shares issuable pursuant to the exercise of the
rights contained in the Deferral Agreement is 1,743,559. This conversion right
cannot be exercised if the Offer is consummated before March 31, 2000. In
addition, the Company's Notes are convertible into shares of the Company's
common stock at $8.325 per share. The maximum number of Shares issuable upon
conversion of the Notes is 1,381,382.
The Company shall take such action as is necessary to cause the ending date
of the then current offering period under the Company's employee stock purchase
plan to be prior to the Effective Time and to terminate such plan as of the
Effective Time.
INTERIM OPERATIONS; COVENANTS. Pursuant to the Merger Agreement, the
Company has agreed that, except as expressly contemplated or provided by the
Merger Agreement or in the Company Disclosure Letter delivered by the Company to
Parent and Purchaser in connection with the Merger Agreement or consented to in
writing by Parent (which consent in the case of certain provisions shall not be
unreasonably denied), prior to the Effective Time, (i) the Company shall
conduct, and it shall cause the Company Subsidiaries to conduct, its or their
businesses in the ordinary course and consistent with past practice, and the
Company shall, and it shall cause the Company Subsidiaries to, use its or their
reasonable best efforts to preserve substantially intact its business
organization, to keep available the services of its present officers and
employees and to preserve the present commercial relationships of the Company
and the Company Subsidiaries with persons with whom the Company or the Company
Subsidiaries do significant business and (ii) without limiting the generality of
the foregoing, neither the Company nor any of the Company Subsidiaries will:
(A) amend or propose to amend its Articles of Incorporation or Bylaws
(or similar organizational documents);
(B) authorize for issuance, issue, grant, sell, pledge, dispose of or
propose to issue, grant, sell, pledge or dispose of any shares of, or any
options, warrants, commitments, subscriptions or rights of any kind to
acquire or sell any shares of, the capital stock or other securities of the
Company or any of the Company Subsidiaries, including, but not limited to,
any securities convertible into or exchangeable for shares of stock of any
class of the Company or any of the Company Subsidiaries, except for (a) the
issuance of shares pursuant to the exercise of Company Options outstanding
on the date of the Merger Agreement in accordance with their present terms,
(b) the issuance of shares pursuant to the Company Stock Purchase Plan as in
effect on the date of the Merger Agreement, (c) the issuance of shares
pursuant to the exercise of Company Warrants outstanding on the date of the
Merger Agreement in accordance with their present terms or (d) the issuance
of shares upon the conversion of the Notes in accordance with the indenture
relating to the Notes on its present terms;
27
<PAGE>
(C) split, combine or reclassify any shares of its capital stock or
declare, pay or set aside any dividend or other distribution (whether in
cash, stock or property or any combination thereof) in respect of its
capital stock, other than dividends to the Company or any Company Subsidiary
(except that in no case may the Company or a Company Subsidiary declare or
pay any cross-border dividends), make or allow any Company subsidiary to
make any cross-border capital contributions, or directly or indirectly
redeem, purchase or otherwise acquire or offer to acquire any shares of its
capital stock or other securities (other than the repurchase of 100,000
Shares from Matthew J. Bergeron, the Company's President and Chief Operating
Officer, pursuant to that certain Stock Purchase Agreement dated
December 22, 1998 between the Company and Mr. Bergeron);
(D) (a) create or incur any indebtedness for borrowed money or issue any
debt securities, except pursuant to the Credit Agreements, or (b) make any
loans or advances, except in the ordinary course of business consistent with
past practice;
(E) (a) sell, pledge, dispose of or encumber any assets of the Company
or of any Company Subsidiary (except for (i) sales of assets in the ordinary
course of business and in a manner consistent with past practice,
(ii) pledges to secure debt permitted under paragraph (D),
(iii) dispositions of obsolete or worthless assets, and (iv) sales of
immaterial assets not in excess of $250,000 in the aggregate); (b) acquire
(by merger, consolidation, or acquisition of stock or assets) any
corporation, partnership or other business organization or division thereof;
(c) authorize any capital expenditures or purchases of fixed assets which
are, in the aggregate, in excess of $250,000 from the date hereof until
February 29, 2000; (d) assume, guarantee (other than guarantees of
obligations of the Company Subsidiaries entered into in the ordinary course
of business) or endorse or otherwise as an accommodation become responsible
for, the obligations of any person, or make any loans or advances, except in
the ordinary course of business consistent with past practice; or
(e) voluntarily incur any material liability or obligation (absolute,
contingent or otherwise) except in the ordinary course of business
consistent with past practice.
(F) increase in any manner the compensation of any of its officers or
employees (other than, except with respect to employees who are executive
officers or directors, in the ordinary course of business reasonably
consistent with past practice) or enter into, establish, amend or terminate
any employment, consulting, retention, change in control, collective
bargaining, bonus or other incentive compensation, profit sharing, health or
other welfare, stock option or other equity, pension, retirement, vacation,
severance, deferred compensation or other compensation or benefit plan,
policy, agreement, trust, fund or arrangement with, for or in respect of,
any shareholder, officer, director, employee, consultant or affiliate other
than, in any such case referred to above, as may be required by Law or as
required pursuant to the terms of agreements in effect on the date of the
Merger Agreement and other than arrangements with new employees (other than
employees who will be officers of the Company) hired in the ordinary course
of business consistent with past practice and providing for compensation
(other than equity-based compensation) and other benefits consistent with
those provided for similarly situated employees of the Company as of the
date hereof;
(G) alter through merger, liquidation, reorganization, restructuring or
in any other fashion the corporate structure or ownership of any Company
Subsidiary or the Company;
(H) except as may be required as a result of a change in law or as
required by the Commission, change any of the accounting principles or
practices used by it;
(I) make any tax election or settle or compromise any income tax
liability;
(J) pay, discharge or satisfy any material claims, liabilities or
obligations (absolute, accrued, asserted or unasserted, contingent or
other), other than the payment, discharge or satisfaction in the ordinary
course of business and consistent with past practice of liabilities
reflected or reserved against in, or contemplated by, the financial
statements (or the notes thereto) of the Company contained in
28
<PAGE>
the Company SEC Filings filed prior to the date of the Merger Agreement or
incurred in the ordinary course of business consistent with past practice;
(K) except to the extent necessary for the exercise of its fiduciary
duties by the Board of Directors of the Company as set forth in, and
consistent with the provisions described under "No Solicitation" below,
waive, amend or allow to lapse any term or condition of any confidentiality
or "standstill" agreement to which the Company or any Company Subsidiary is
a party; or
(L) take, or agree in writing or otherwise to take, any of the foregoing
actions or any action which would make any of the representations or
warranties of the Company contained in the Merger Agreement untrue or
incorrect in any material respect at or prior to the Effective Time.
The Merger Agreement further provides that the Company shall, and the Company
shall cause each of the Company Subsidiaries to, comply with all Laws applicable
to it or any of its properties, assets or business and to maintain in full force
and effect all the Company Permits necessary for such business, except in any
such case for any failure so to comply or maintain that would not reasonably be
expected to result in a Material Adverse Effect.
NO SOLICITATION. Pursuant to the Merger Agreement, the Company shall not,
directly or indirectly, through any officer, director, employee, representative
or agent of the Company or any of the Company Subsidiaries, solicit or encourage
the initiation of (including by way of furnishing information) any inquiries or
proposals regarding any Company Takeover Proposal that if consummated would
constitute an Alternative Transaction (as defined below). The Board of Directors
of the Company is not prevented from (i) furnishing information to a third party
which has made a BONA FIDE Company Takeover Proposal that is a Superior Proposal
(as defined below) not solicited in violation of the Merger Agreement, provided
that such third party has executed an agreement with confidentiality provisions
substantially similar to those then in effect between the Company and an
affiliate of Parent (the "Confidentiality Agreement") or (ii) subject to
compliance with the other terms of the Merger Agreement's "No Solicitation"
provision, considering and negotiating a BONA FIDE Company Takeover Proposal
that is a Superior Proposal not solicited in violation of the Merger Agreement;
PROVIDED THAT, as to each of clauses (i) and (ii), the Board of Directors of the
Company reasonably determines in good faith (after due consultation with
independent counsel, which may be Stoel Rives LLP) that it is or is reasonably
likely to be required to do so in order to discharge properly its fiduciary
duties. For purposes of the Merger Agreement, a "Superior Proposal" means any
proposal made by a party to acquire, directly or indirectly, for consideration
consisting of cash and/or securities, all of the equity securities of the
Company entitled to vote generally in the election of directors or all the
assets of the Company (other than a DE MINIMUS amount of assets not material to
the conduct of the Company's business), on terms which the Board of Directors of
the Company reasonably believes (after consultation with Financial Advisor,
McDonald Investments or another financial advisor of nationally recognized
reputation) to be more favorable from a financial point of view to its
shareholders than the Offer and the Merger taking into account at the time of
determination all factors relating to such proposed transaction deemed relevant
by the Board of Directors of the Company, including, without limitation, the
financing thereof, the proposed timing thereof and all other conditions thereto
and any changes to the financial terms of the Merger Agreement proposed by
Parent and Purchaser. "Alternative Transaction" means any of (i) a transaction
pursuant to which any person (or group of persons) other than Parent or its
affiliates (a "Third Party") acquires or would acquire more than 20% of the
outstanding shares of any class of equity securities of the Company, whether
from the Company or pursuant to a tender offer or exchange offer or otherwise,
(ii) a merger or other business combination involving the Company pursuant to
which any Third Party acquires more than 20% of the outstanding equity
securities of the Company or the entity surviving such merger or business
combination, (iii) any transaction pursuant to which any Third Party acquires or
would acquire control of assets (including for this purpose the outstanding
equity securities of Company Subsidiaries and securities of the entity surviving
any merger or business combination including any of the Company Subsidiaries) of
the Company or any Company Subsidiaries having a fair market value (as
determined by the Board of Directors of the Company in good
29
<PAGE>
faith) equal to more than 20% of the fair market value of all the assets of the
Company and the Company Subsidiaries, taken as a whole, immediately prior to
such transaction, or (iv) any other consolidation, business combination,
recapitalization or similar transaction involving the Company or any of the
Company Subsidiaries, other than the transactions contemplated by this
Agreement; PROVIDED, HOWEVER, that the term Alternative Transaction shall not
include any acquisition of securities by a broker dealer in connection with a
BONA FIDE public offering of such securities. Notwithstanding anything to the
contrary contained in the Merger Agreement, prior to the Effective Time, the
Company may, in connection with a possible Company Takeover Proposal, refer any
third party to the "No Solicitation" and "Fees and Expenses" sections of the
Merger Agreement and make a copy of these sections available to a third party.
The Merger Agreement requires the Company to immediately notify Parent and
Purchaser after receipt of any Company Takeover Proposal, or any modification of
or amendment to any Company Takeover Proposal, or any request for nonpublic
information relating to the Company or any of the Company Subsidiaries in
connection with a Company Takeover Proposal or for access to the properties,
books or records of the Company or any subsidiary by any person or entity that
informs the Board of Directors of the Company or such subsidiary that it is
considering making, or has made, a Company Takeover Proposal. Such notice to
Parent and Purchaser shall be made orally and in writing, and shall indicate the
identity of the person making the Company Takeover Proposal or intending to make
the Company Takeover Proposal or requesting non-public information or access to
the books and records of the Company, the terms of any such Company Takeover
Proposal or modification or amendment to a Company Takeover Proposal, and
whether the Company is providing or intends to provide the person making the
Company Takeover Proposal with access to information concerning the Company as
provided above. The Company shall also immediately notify Parent and Purchaser,
orally and in writing, if it enters into negotiations concerning any Company
Takeover Proposal.
Except as set forth in the Merger Agreement, neither the Board of Directors
of the Company nor any committee thereof shall (i) withdraw or modify, or
indicate publicly its intention to withdraw or modify, in a manner adverse to
Parent, the approval or recommendation by such Board of Directors or such
committee of the Offer or the Merger, (ii) approve or recommend, or indicate
publicly its intention to approve or recommend, any Company Takeover Proposal or
(iii) cause the Company to enter into any letter of intent, agreement in
principle, acquisition agreement or other similar agreement (each, a "Company
Acquisition Agreement") related to any Company Takeover Proposal.
Notwithstanding the foregoing, in the event that prior to the Effective Time the
Board of Directors of the Company determines in good faith, after due
consultation with outside counsel, that the failure to do so constitutes or is
reasonably likely to constitute a breach of its fiduciary duties to the
Company's shareholders under applicable law, the Board of Directors of the
Company may approve or recommend a Superior Proposal and, in connection
therewith, withdraw or modify its approval or recommendation of the Offer or the
Company Proposals, but only at a time that is after the third business day
following Parent's receipt of written notice advising Parent that the Board of
Directors of the Company has received a Superior Proposal and, in the case of
any previously received Superior Proposal that has been materially modified or
amended, such modification or amendment and specifying the material terms and
conditions of such Superior Proposal, modification or amendment.
The Merger Agreement does not restrict the Company from taking and
disclosing to its shareholders a position contemplated by Rule 14e-2(a)
promulgated under the Securities Exchange Act or from making any disclosure to
the Company's shareholders if, in the good faith judgment of the Board of
Directors of the Company, with the advice of outside counsel, failure so to
disclose could be determined to be a breach of its fiduciary duties to the
Company's shareholders under applicable law; PROVIDED, HOWEVER, that neither the
Company nor its Board of Directors nor any committee thereof shall, except as
permitted by the above, withdraw or modify, or indicate publicly its intention
to withdraw or modify, its position with respect to the Offer or the Merger or
approve or recommend, or indicate publicly its intention to approve or
recommend, a Company Takeover Proposal.
30
<PAGE>
The Company shall advise its officers and directors and any investment
banker or attorney retained by the Company in connection with the transactions
contemplated by the Merger Agreement of the restrictions set forth above.
INDEMNIFICATION AND INSURANCE. From and after the Effective Time, the
Surviving Corporation shall indemnify and hold harmless all past and present
officers and directors (the "Indemnified Parties") of the Company and of the
Company Subsidiaries to the full extent such persons may be indemnified by the
Company pursuant to Oregon law, the Company's Articles of Incorporation and
Bylaws, as each is in effect on October 26, 1999, for acts and omissions
(x) arising out of or pertaining to the transactions contemplated by the Merger
Agreement or arising out of the Offer Documents or (y) otherwise with respect to
any acts or omissions occurring or arising at or prior to the Effective Time and
shall advance reasonable litigation expenses incurred by such persons in
connection with defending any action arising out of such acts or omissions,
PROVIDED that such persons provide the requisite affirmations and undertaking,
as set forth in applicable provisions of the OBCA.
In addition, Parent will provide, or cause the Surviving Corporation to
provide, for a period of not less than six years after the Effective Time, the
Company's current directors and officers an insurance and indemnification policy
that provides coverage for events occurring or arising at or prior to the
Effective Time (the "D&O Insurance") that is no less favorable than the existing
policy or, if substantially equivalent insurance coverage is unavailable, the
best available coverage; PROVIDED, HOWEVER, that Parent and the Surviving
Corporation shall not be required to pay an annual premium for the D&O Insurance
in excess of 200% of the annual premium currently paid by the Company for such
insurance, but in such case shall purchase as much such coverage as possible for
such amount.
The Merger Agreement provides that the foregoing provisions are intended to
benefit the Indemnified Parties and shall be binding on all successors and
assigns of Parent, Purchaser, the Company and the Surviving Corporation. Parent
has agreed to guarantee the performance by the Surviving Corporation of the
indemnified obligations set forth above, which guaranty is absolute and
unconditional and shall not be affected by any circumstance whatsoever,
including the bankruptcy or insolvency of the Surviving Corporation or any
person. The Indemnified Parties shall be intended third-party beneficiaries of
the foregoing provisions on indemnification and insurance.
REPRESENTATIONS AND WARRANTIES. Pursuant to the Merger Agreement, the
Company has made customary representations and warranties to Parent and
Purchaser with respect to, among other things, its organization, capitalization,
subsidiaries, authority relative to the Merger Agreement, governmental approvals
with respect to the Merger Agreement, the absence of contractual or legal
violations resulting from the Agreement, securities filings, financial
statements, the absence of material adverse effects on the Company and certain
other events since June 30, 1999, the absence of undisclosed liabilities,
compliance with laws, governmental permits, litigation, material contracts,
employee benefit plans, taxes, intellectual property, disclosure documents,
labor matters, the absence of limitations on conduct of business, title to
property, leased premises, environmental matters, insurance, product liability
and recalls, customers, interested party transactions, finders and investment
bankers, fairness opinion, takeover statutes, full disclosure, year 2000
readiness, absence of rights agreements and absence of certain unlawful
payments.
REASONABLE BEST EFFORTS. Under the Merger Agreement, each of the Company,
Parent and Purchaser has agreed to use reasonable best efforts to take all
actions and to do all things necessary, proper or advisable to consummate and
make effective as promptly as practicable the transactions contemplated by the
Merger Agreement, including, but not limited to, (i) obtaining all consents from
governmental authorities and other third parties required for the consummation
of the Offer and the Merger and the transactions contemplated thereby and
(ii) timely making all necessary filings under the HSR Act. The Company, Parent
and Purchaser have also agreed to use reasonable best efforts to take all
actions and to do all things necessary to satisfy the other conditions of the
closing of the Merger.
31
<PAGE>
PUBLIC ANNOUNCEMENTS. So long as the Merger Agreement is in effect, the
Company, on the one hand, and Parent and Purchaser, on the other, have agreed
not to issue or cause the publication of any press release or any other
announcement with respect to the Offer or the Merger or the transactions
contemplated thereby without the consent of the other party (such consent not to
be unreasonably withheld or delayed), except where such release or announcement
is required by applicable law or pursuant to any applicable listing agreement
with, or rules or regulations of, any stock exchange on which shares of the
capital stock of the Company or Tyco, as the case may be, are listed or the
NASD, or other applicable securities exchange, in which case the parties will
consult prior to making the announcement.
TERMINATION; FEES. The Merger Agreement may be terminated at any time prior
to the Effective Time, whether before or after approval by the shareholders of
the Company of the Merger herein:
(a) by mutual written consent of Parent and the Company;
(b) by either Parent or the Company if any Governmental Authority shall
have issued an order, decree or ruling or taken any other action permanently
enjoining, restraining or otherwise prohibiting the consummation of the
transactions contemplated by the Merger Agreement and such order, decree or
ruling or other action shall have become final and nonappealable;
(c) by Parent if:
(i) the Company shall have breached or failed to perform in any
material respect any of its covenants or other agreements contained in
the Merger Agreement, which breach or failure to perform is incapable of
being cured or has not been cured within five days after the giving of
written notice thereof to the Company (but not later than the expiration
of the 20 business day period provided for the Offer above);
(ii) any representation or warranty of the Company shall not have
been true and correct when made (without for this purpose giving effect
to qualifications of materiality contained in such representation and
warranty), if such failure to be true and correct, individually or in the
aggregate, would reasonably be expected to have a Material Adverse
Effect;
(iii) any representation or warranty of the Company shall cease to be
true and correct at any later date (without for this purpose giving
effect to qualifications of materiality contained in such representation
and warranty) as if made on such date (other than representations and
warranties made as of a specified date) other than as a result of a
breach or failure to perform by the Company of any of its covenants or
agreements under the Merger Agreement if such failure to be true and
correct, individually or in the aggregate, would reasonably be expected
to have a Material Adverse Effect; PROVIDED, HOWEVER, that such
representation or warranty is incapable of being cured or has not been
cured within five days after the giving of written notice thereof to the
Company (but not later than the expiration of the 20 business day period
provided for the Offer above);
PROVIDED, HOWEVER, that the right to terminate the Merger Agreement pursuant
to this clause (c) shall not be available to Parent if Purchaser or any
other affiliate of Parent shall acquire Shares pursuant to the Offer;
(d) by Parent if, whether or not permitted to do so by the Merger
Agreement, (i) the Board of Directors of the Company or any committee
thereof shall have withdrawn or modified in a manner adverse to Parent or
Purchaser its approval or recommendation of the Offer or any of the Company
Proposals; (ii) the Board of Directors of the Company or any committee
thereof shall have approved or recommended to the shareholders of the
Company any Company Takeover Proposal or Alternative Transaction; (iii) the
Board of Directors of the Company or any committee thereof shall have
approved or recommended that the shareholders of the Company tender their
Shares in any tender or exchange offer that is an Alternative Transaction;
(iv) the Board of Directors of the Company or any
32
<PAGE>
committee thereof shall have taken any position or make any disclosures to
the Company's shareholders permitted pursuant to the "No Solicitation"
provisions of the Merger Agreement described above which has the effect of
any of the foregoing; or (v) the Board of Directors of the Company or any
committee thereof shall have resolved to take any of the foregoing actions;
(e) by either Parent or the Company if, as the result of the failure of
the Minimum Condition or any of the other conditions set forth in
Section 15, the Offer shall have terminated or expired in accordance with
its terms without Purchaser having purchased any Shares pursuant to the
Offer, PROVIDED that if the failure to satisfy any conditions set forth in
Section 15 shall be a basis for termination of the Merger Agreement under
any other clause of this section, a termination pursuant to this clause
shall be deemed a termination under such other clause;
(f) by either Parent or the Company if the Offer shall not have been
consummated on or before February 29, 2000, PROVIDED that the right to
terminate the Merger Agreement pursuant to this clause shall not be
available to any party whose failure to perform any of its obligations under
the Merger Agreement results in the failure of the Offer to be consummated
by such time;
(g) by the Company, if Parent or Purchaser shall have breached or failed
to perform in any material respect any of its representations, warranties,
covenants or other agreements contained in the Merger Agreement, which
breach or failure to perform is incapable of being cured or has not been
cured within five days after the giving of written notice thereof to Parent;
or
(h) by the Company, in order to accept a Superior Proposal, PROVIDED
that the Board of Directors of the Company reasonably determines in good
faith (after due consultation with independent counsel, which may be Stoel
Rives LLP), that it is or is reasonably likely to be required to accept such
proposal in order to discharge properly its fiduciary duties; the Company
has given Parent three business days' advance notice of the Company's
intention to accept such Superior Proposal; the Company shall in fact accept
such proposal; the Company shall have paid the fee and expenses contemplated
by the Merger Agreement; and the Company shall have complied in all respects
with the provisions of the section regarding "No Solicitation."
In the event of termination of the Merger Agreement and the abandonment of
the Offer or the Merger, the Merger Agreement (other than certain sections)
shall become void and of no effect with no liability on the part of any party
hereto (or of any of its directors, officers, employees, agents, legal or
financial advisors or other representatives); PROVIDED, HOWEVER, that no such
termination shall relieve any party thereto from any liability for any willful
breach of the Merger Agreement prior to termination. If the Merger Agreement is
terminated as provided herein, each party shall use all reasonable best efforts
to redeliver all documents, work papers and other material (including any copies
thereof) of any other party relating to the transactions contemplated thereby,
whether obtained before or after the execution hereof, to the party furnishing
the same.
The Company agrees that if the Merger Agreement is terminated pursuant to
(i) the provisions described in clause (d) above;
(ii) the provision described in clause (h) above; or
(iii) the provision described in clause (e) or (f) above and, with
respect to this clause (iii), (A) at the time of such termination, there
shall be outstanding a BONA FIDE Company Takeover Proposal which has been
made directly to the shareholders of the Company or has otherwise become
publicly known or there shall be outstanding an announcement by any credible
third party of a BONA FIDE intention to make an Acquisition Proposal (in
each case whether or not conditional and whether or not such proposal shall
have been rejected by the Board of Directors of the Company) or (B) an
Alternative Transaction shall be publicly announced by the Company or any
third party within 12 months following the date of such termination and such
transaction shall at any time thereafter be
33
<PAGE>
consummated on substantially the terms theretofore announced, then the
Company shall pay to Parent the sum of $5 million. Any payment required by
this section shall be made as promptly as practicable but in no event later
than two business days following termination of the Merger Agreement in the
case of clause (i) above, upon termination of the Merger Agreement in the
case of clause (ii) above and, in the case of clause (iii) above, upon
consummation of such Company Takeover Proposal, and shall be made by wire
transfer of immediately available funds to an account designated by Parent.
The Company further agrees that if the Merger Agreement is terminated
pursuant to clause (c)(i) above,
(i) the Company will pay to Parent, as promptly as practicable but in
no event later than two business days following termination of the Merger
Agreement, the amount of all documented and reasonable costs and expenses
incurred by Parent, Purchaser and their affiliates (including but not
limited to fees and expenses of counsel and accountants and out-of-pocket
expenses (but not fees) of financial advisors) in an aggregate amount not to
exceed $500,000 in connection with the Merger Agreement or the transactions
contemplated hereby ("Parent Expenses"); and
(ii) in the event that the Company consummates a Company Takeover
Proposal (whether or not solicited in violation of the Merger Agreement)
which is publicly announced within one year from the date of termination of
the Merger Agreement, the Company will pay to Parent the sum of $5 million,
which payment shall be made not later than two business days following
consummation of such Company Takeover Proposal.
If the Merger Agreement is terminated pursuant to clause (c)(ii), the
Company will pay to Parent, as promptly as practicable but in no event later
than two business days following termination of the Merger Agreement, the Parent
Expenses.
GUARANTEE. Tyco has guaranteed the payment by Purchaser of the Per Share
Amount and any other amounts payable by Purchaser pursuant to the Merger
Agreement and has agreed to cause Purchaser to perform all of its other
obligations under the Merger Agreement in accordance with its terms.
SHAREHOLDER'S AGREEMENT
As an inducement to Parent and the Purchaser entering into the Agreement
with the Company, Robert L. Praegitzer (the "Shareholder"), who owns
approximately 53.0% of the Shares on a diluted basis, has entered into a
Shareholder's Agreement (the "Shareholder's Agreement") with Parent and the
Purchaser.
34
<PAGE>
The following summary of certain provisions of the Shareholder's Agreement,
a copy of which is filed as an exhibit to the Schedule 14D-1, is qualified in
its entirety by reference to the text of the Shareholder's Agreement.
AGREEMENT TO TENDER. The Shareholder has agreed that he shall tender his
Shares in the Offer and that he shall not withdraw any Shares so tendered;
PROVIDED, HOWEVER, that if the Shareholder is unable to tender any Shares that
are pledged to KeyBank National Association ("KeyBank") the Shareholder shall
not be obligated to tender such Shares; PROVIDED FURTHER that the Shareholder
shall sell such Shares to Purchaser, and Purchaser shall purchase such Shares
from the Shareholder, at the Per Share Amount prior to the Effective Time
promptly upon termination of the pledge agreements between the Shareholder and
KeyBank relating to such Shares. Purchaser hereby agrees that, if the Offer is
consummated, it will satisfy the liabilities secured by the pledge of Shares to
KeyBank prior to the Effective Time.
The Shareholder shall tender his Shares (other than the Shares pledged to
KeyBank) not later than fourteen business days following commencement of the
Offer, other than with respect to the Shares subject to the CBL Insured Credit
Facility Agreement (the "CBL Agreement") which shall be tendered not later than
one business day prior to the initially scheduled expiration of the Offer;
PROVIDED, HOWEVER, that if the Shares subject to the CBL Agreement are not
tendered as aforesaid, any damages of Purchaser shall be limited to $5,000,000.
In connection therewith, the Company has agreed with, and covenanted to,
Parent that the Company shall not register the transfer of any certificate
representing any of the Shareholder's Shares, unless such transfer is made to
Parent or the Purchaser or otherwise in compliance with the Shareholder's
Agreement.
GRANT OF IRREVOCABLE PROXY. Subject to the provisions of the pledge
agreements with KeyBank, the Shareholder has irrevocably granted to, and
appointed, Parent and any individual designated by Parent as the Shareholder's
proxy and attorney-in-fact, to vote the Shareholder's Shares, or grant a consent
or approval in respect of the Shares, at any meeting of shareholders of the
Company or in any other circumstances upon which the Shareholder's vote, consent
or other approval is sought, against (i) any merger agreement or merger (other
than the Merger Agreement and the Merger), consolidation, combination, sale of
substantial assets, reorganization, joint venture, recapitalization,
dissolution, liquidation or winding up of or by the Company and (ii) any
amendment of the Company's Articles of Incorporation or Bylaws or other proposal
or transaction (including any consent solicitation to remove or elect any
directors of the Company) involving the Company or any of its subsidiaries,
which amendment or other proposal or transaction would in any manner impede,
frustrate, prevent or nullify, or result in a breach of any covenant,
representation or warranty or any other obligation or agreement of the Company
under or with respect to, the Offer, the Merger, the Merger Agreement or any of
the other transactions contemplated by the Merger Agreement.
REPRESENTATIONS, WARRANTIES, COVENANTS AND OTHER AGREEMENTS. The
Shareholder has made certain representations and warranties in the Shareholder's
Agreement, including with respect to (i) ownership of his Shares, (ii) the
authority to enter into and perform his obligations under the Shareholder's
Agreement and the absence of required consents and statutory or contractual
conflicts or violations, (iii) the absence of liens, claims, security interests,
proxies, voting trusts or other arrangements or any other encumbrances on or in
respect of the Shares, except for those disclosed to Purchaser (iv) finder's
fees, and (v) an acknowledgment of Parent's reliance upon the Shareholder's
execution of the Shareholder's Agreement in entering into, and causing Purchaser
to enter into, the Merger Agreement. In addition, the Shareholder has agreed not
to transfer, or consent to any transfer of any or all of the Shareholder's
Shares or any interest therein (except as contemplated by the Shareholder's
Agreement), enter into any contract, option or other agreement or understanding
with respect to any transfer of any or all of his Shares or any interest
therein, grant any proxy, power-of-attorney or other authorization or consent in
or with respect to the Shares or any interest therein except with respect to
election of directors at the Company's annual meeting, deposit the Shares into a
voting trust or enter into a voting arrangement or agreement with
35
<PAGE>
respect to the Shares or take any other action that would in any way restrict,
limit or interfere with its obligations under the Shareholder's Agreement. The
Shareholder has also agreed, directly or indirectly, not to solicit, initiate or
encourage the submission of any Acquisition Proposal or 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 Acquisition Proposal.
TERMINATION. The Shareholder's Agreement, and all rights and obligations
thereunder, shall terminate upon the earlier of (a) the date upon which the
Merger Agreement is terminated in accordance with its terms or (b) the date that
Parent or Purchaser shall have purchased and paid for the Shares of the
Shareholder pursuant to the terms of the Shareholder's Agreement; PROVIDED,
HOWEVER, that the termination of the Shareholder's Agreement shall not relieve
any party of liability for breach of such agreement prior to its termination.
14. DIVIDENDS AND DISTRIBUTIONS. As discussed in Section 13, the Merger
Agreement provides that the Company will not take certain actions such as paying
dividends on, or making any other distributions in respect of, any of its
capital stock, splitting, combining, or reclassifying any of its capital stock
or purchasing, redeeming, or otherwise acquiring any shares of capital stock of
the Company.
If on or after the date of the Merger Agreement and notwithstanding the
provisions thereof, the Company should (i) split, combine or otherwise change
the Shares or its capitalization, (ii) acquire presently outstanding Shares or
otherwise cause a reduction in the number of outstanding Shares or (iii) issue
or sell any shares of any class or any securities convertible into any such
shares, or any rights, warrants or options to acquire any such shares or
convertible securities (other than Shares issued pursuant to, and in accordance
with the terms in effect on the date of the Merger Agreement of, stock options,
warrants or convertible securities issued prior to such date), then, without
prejudice to Purchaser's rights under the Merger Agreement, Purchaser (subject
to the Merger Agreement), in its sole discretion, may make such adjustments in
the Offer price and other terms of the Offer as it deems appropriate to reflect
such action.
If, on or after the date of the Merger Agreement and notwithstanding the
provisions thereof, the Company should declare or pay any cash, non-cash or
stock dividend or other distribution on, or issue any rights with respect to,
the Shares, payable or distributable to shareholders of record on a date prior
to the transfer to the name of Purchaser or its nominees or transferees on the
Company's stock transfer records of the Shares purchased pursuant to the Offer,
then, without prejudice to Purchaser's rights under the Merger Agreement,
(i) the price per Share payable by Purchaser pursuant to the Offer may, subject
to the provisions of the Merger Agreement, in the sole discretion of Purchaser,
be reduced by the amount of any such cash dividend or distribution and (ii) any
non-cash dividend, distribution or right to be received by the tendering
shareholders will (a) be received and held by the tendering shareholders for the
account of Purchaser and will be required to be promptly remitted and
transferred by each tendering shareholder to the Depositary for the account of
Purchaser, accompanied by appropriate documentation of transfer or (b) at the
direction of Purchaser, be exercised for the benefit of Purchaser, in which case
the proceeds of such exercise will promptly be remitted to Purchaser. Pending
such remittance, Purchaser will be entitled, subject to applicable law, to all
rights and privileges as owner of any such non-cash dividend, distribution or
right or such proceeds and may withhold the entire purchase price or deduct from
the purchase price the amount or value thereof, as determined by Purchaser in
its sole discretion.
15. CERTAIN CONDITIONS OF THE OFFER. Notwithstanding any other term of the
Offer or the Merger Agreement, provided that no Shares have theretofore been
accepted for payment or paid for, Purchaser shall not be required to accept for
payment or pay for, subject to any applicable rules and regulations of the
Commission, including Rule 14e-1(c) of the Exchange Act, any Shares and may
terminate or amend the Offer, if (i) the conditions that there shall be validly
tendered and not withdrawn prior to the expiration of the Offer a number of
Shares which represents at least 51% of the total number of issued and
36
<PAGE>
outstanding Shares on a fully diluted basis (excluding, however, shares of the
Company's common stock issuable (x) upon exercise of conversion rights pursuant
to the Deferral Agreement and (y) upon exercise of Company Options that are not
exercisable prior to March 1, 2000), shall not have been satisfied (the "Minimum
Condition") or (ii) any applicable waiting period under the HSR Act shall not
have expired or been terminated prior to the expiration of the Offer or
(iii) at any time after the date of the Merger Agreement and before the time of
payment for any such Shares (whether or not any Shares have theretofore been
accepted for payment or paid for pursuant to the Offer), any of the following
conditions exists:
(a) there shall be in effect an injunction or other order, decree,
judgment or ruling by a Governmental Authority of competent jurisdiction or
a Law shall have been promulgated, or enacted by a Governmental Authority of
competent jurisdiction which in any such case (i) restrains or prohibits the
making or consummation of the Offer or the consummation of the Merger,
(ii) prohibits or restricts the ownership or operation by Parent (or any of
its affiliates or subsidiaries) of any portion of the Company's business or
assets or Tyco's business or assets related to the printed circuit board
business, which is material to the printed circuit board business of all
such entities taken as a whole or which would substantially deprive Parent
and/or its affiliates or subsidiaries of the benefit of ownership of the
Company's business or assets, or compels Parent (or any of its affiliates or
subsidiaries) to dispose of or hold separate any portion of the Company's
business or assets, or Tyco's business or assets relating to the printed
circuit board business, which is material to the printed circuit board
business of all such entities taken as a whole or which would substantially
deprive Parent and/or its affiliates or subsidiaries of the benefit of
ownership of the Company's business or assets, (iii) imposes material
limitations on the ability of Purchaser effectively to acquire or to hold or
to exercise full rights of ownership of the Shares, including, without
limitation, the right to vote Shares purchased by Purchaser pursuant to the
Offer or the Merger on all matters properly presented to the shareholders of
the Company, or (iv) imposes any material limitations on the ability of
Parent and/or its affiliates or subsidiaries effectively to control in any
material respect the business and operations of the Company, or (v) seeks to
restrict any future business activity by Parent (or any of its affiliates)
relating to the printed circuit board business, including, without
limitation, by requiring the prior consent of any person or entity
(including any Governmental Authority) to future transactions by Parent (or
any of its affiliates); or
(b) there shall have been instituted, pending or threatened an action by
a Governmental Authority seeking to restrain or prohibit the making or
consummation of the Offer or the consummation of the Merger or to impose any
other restriction, prohibition or limitation referred to in the foregoing
paragraph (a); or
(c) the Merger Agreement shall have been terminated by the Company or
Parent in accordance with its terms; or
(d) there shall have occurred (i) any general suspension of, or
limitation on prices for, trading in the Shares on the NASDAQ, (ii) a
declaration of a banking moratorium or any general suspension of payments in
respect of banks in the United States or (iii) in the case of any of the
foregoing existing at the time of the execution of the Merger Agreement, a
material acceleration or worsening thereof; or
(e) Parent and the Company shall have agreed that Purchaser shall amend
the Offer to terminate the Offer or postpone the payment for Shares pursuant
thereto; or
(f) any of the representations and warranties made by the Company in the
Merger Agreement shall not have been true and correct in all material
respects when made, or shall thereafter have ceased to be true and correct
in all material respects as if made as of such later date (other than
representations and warranties made as of a specified date) (in each case
without for this purpose giving effect to qualifications of materiality
contained in such representation and warranty), or the Company shall not in
all material respects have performed each obligation and agreement and
37
<PAGE>
complied with each covenant to be performed and complied with by it under
the Merger Agreement, if such failure to be true and correct or such failure
to perform, individually or in the aggregate, would reasonably be expected
to have a Material Adverse Effect, PROVIDED, HOWEVER, that such breach or
failure to perform is incapable of being cured or has not been cured within
five days after the giving of written notice thereof to the Company,
PROVIDED, HOWEVER, that no such 5-day cure period shall require extension of
the Offer beyond the initial 20 business days provided in the Merger
Agreement; or
(g) the Company's Board of Directors shall have modified or amended its
recommendation of the Offer in any manner adverse to Parent or shall have
withdrawn its recommendation of the Offer, or shall have recommended
acceptance of any Company Takeover Proposal or shall have resolved to do any
of the foregoing; or
(h) (i) any new group shall have been formed which beneficially owns
more than 15% of the outstanding Shares and which does not tender the Shares
beneficially owned by it in the Offer; or (ii) any person/group (other than
Parent or one or more of its affiliates) shall have entered into an
agreement in principle or definitive agreement with the Company with respect
to a tender or exchange offer for any Shares or a merger, consolidation or
other business combination with or involving the Company; or
(i) any change, development, effect or circumstance shall have occurred
or be threatened that would reasonably be expected to have a Material
Adverse Effect with respect to the Company; or
(j) the Company shall commence a case under any chapter of Title XI of
the United States Code or any similar law or regulation; or a petition under
any chapter of Title XI of the United States Code or any similar law or
regulation is filed against the Company which is not dismissed within 2
business days.
The foregoing conditions are for the sole benefit of Parent and Purchaser
and may be asserted by Parent or Purchaser regardless of the circumstances
giving rise to any such condition and may be waived by Parent or Purchaser, in
whole or in part, at any time and from time to time, in the sole discretion of
Parent. The failure by Parent or Purchaser at any time to exercise any of the
foregoing rights shall not be deemed a waiver of any right, the waiver of such
right with respect to any particular facts or circumstances shall not be deemed
a waiver with respect to any other facts or circumstances, and each right shall
be deemed an ongoing right which may be asserted at any time and from time to
time.
Should the Offer be terminated pursuant to the foregoing provisions, all
tendered Shares not theretofore accepted for payment shall forthwith be returned
to the tendering shareholders.
16. CERTAIN LEGAL MATTERS.
GENERAL. Except as described in this Section 16, based on a review of
publicly available filings by the Company with the Commision and other publicly
available information concerning the Company, neither Parent nor Purchaser is
aware of any license or regulatory permit that appears to be material to the
business of the Company and that might be adversely affected by Purchaser's
acquisition of Shares pursuant to the Offer, or of any approval or other action
by any governmental, administrative or regulatory agency or authority, domestic
or foreign, that would be required for the acquisition or ownership of Shares by
Purchaser pursuant to the Offer. Should any such approval or other action be
required, it is presently contemplated that such approval or action would be
sought, except as described below under "State Takeover Laws." While Purchaser
does not currently intend to delay acceptance for payment of Shares tendered
pursuant to the Offer pending the outcome of any such matter, there can be no
assurance that any such approval or other action, if required, would be obtained
without substantial conditions or that adverse consequences would not result to
the Company's business or that certain parts of the Company's business would not
have to be disposed of in the event that such approvals were not obtained or
such other actions were not taken or in order to obtain any such approval or
other action. If certain types of adverse
38
<PAGE>
action are taken with respect to the matters discussed below, Purchaser may
decline to accept for payment or pay for any Shares tendered. See Section 15.
STATE TAKEOVER LAWS. The Company and certain of its subsidiaries conduct
business in a number of states throughout the United States, some of which have
adopted laws and regulations applicable to offers to acquire shares of
corporations that are incorporated or have substantial assets, shareholders
and/or a principal place of business in such states. In EDGAR V. MITE CORP., the
Supreme Court of the United States held that the Illinois Business Takeover
Statute, which involved state securities laws that made the takeover of certain
corporations more difficult, imposed a substantial burden on interstate commerce
and was therefore unconstitutional. In CTS CORP. V. DYNAMICS CORP. OF AMERICA,
however, the Supreme Court of the United States held that a state may, as a
matter of corporate law and, in particular, those laws concerning corporate
governance, constitutionally disqualify a potential acquiror from voting on the
affairs of a target corporation without prior approval of the remaining
shareholders, PROVIDED that such laws were applicable only under certain
conditions, in particular, that the corporation has a substantial number of
shareholders in and is incorporated under the laws of such state.
The Company is incorporated under the laws of the State of Oregon. In
general, Sections 60.825-60.845 of the OBCA ("Section 60.825") prevent an
"interested shareholder" (including a person who owns or has the right to
acquire 15% or more of the corporation's outstanding voting stock) from engaging
in a "business combination" (defined to include mergers and certain other
actions) with an Oregon corporation for a period of three years following the
date such person became an interested shareholder. The Board of Directors of the
Company has taken all appropriate action so that neither Parent nor Purchaser is
an "interested shareholder" pursuant to Section 60.825.
The Company was subject to the Oregon Control Share Act (the "Control Share
Act"). The Control Share Act generally provides that a person (the "Acquiror")
who acquires voting stock of an Oregon corporation in a transaction (other than
a transaction in which voting shares are acquired from the issuing public
corporation) that results in the Acquiror holding more than 20%, 33 1/3% or 50%
of the total voting power of the corporation (a "Control Share Acquisition")
cannot vote the shares it acquires in the Control Share Acquisition except in
certain circumstances. The Company's Board of Directors, at its meeting on
October 25, 1999, amended the Company's Bylaws to provide that the Control Share
Act shall not apply to the Company.
Neither Parent nor Purchaser has determined whether any other state takeover
laws and regulations will by their terms apply to the Offer, and, except as set
forth above, neither Parent nor Purchaser has presently sought to comply with
any state takeover statute or regulation. Parent and Purchaser reserve the right
to challenge the applicability or validity of any state law or regulation
purporting to apply to the Offer or the Merger, and neither anything in this
Offer nor any action taken in connection herewith is intended as a waiver of
such right. In the event it is asserted that one or more state takeover statutes
is applicable to the Offer or the Merger and an appropriate court does not
determine that such statute is inapplicable or invalid as applied to the Offer
or the Merger, Parent or Purchaser might be required to file certain information
with, or to receive approval from, the relevant state authorities, and Purchaser
might be unable to accept for payment or pay for Shares tendered pursuant to the
Offer, or be delayed in consummating the Offer.
ANTITRUST. Under the HSR Act and the rules that have been promulgated
thereunder by the Federal Trade Commission (the "FTC"), certain acquisition
transactions may not be consummated unless certain information has been
furnished to the Antitrust Division of the Department of Justice (the "Antitrust
Division") and the FTC and certain waiting period requirements have been
satisfied. The acquisition of Shares by Purchaser pursuant to the Offer is
subject to such requirements. See Section 15.
Under the provisions of the HSR Act applicable to the purchase of Shares
pursuant to the Offer, purchases may not be consummated until the expiration of
a 15-calendar day waiting period after the filing of certain required
information and documentary material with the Antitrust Division and the FTC
with
39
<PAGE>
respect to the Offer (unless earlier terminated pursuant to a request therefor,
which Parent will make). If, within such 15-day waiting period, either the
Antitrust Division or the FTC requests additional information or documentary
material relevant to the Offer from Parent, the waiting period will be extended
for an additional period of 10 calendar days following the date of substantial
compliance with such request. Only one extension of the waiting period pursuant
to a request for additional information is authorized by the rules promulgated
under the HSR Act. Thereafter, such waiting period may be extended only by court
order or by agreement of Parent. A request for additional information issued to
the Company cannot extend the waiting period. Tyco, as the ultimate parent of
Purchaser, expects to file a Notification and Report Form with respect to the
Offer under the HSR Act on November 2, 1999, and, in such event, the required
waiting period with respect to the Offer will expire at 11:59 p.m., New York
City time, on November 17, 1999, unless Tyco receives a request for additional
information or documentary material or the Antitrust Division or the FTC
terminates the waiting period prior thereto.
The Antitrust Division and the FTC frequently scrutinize the legality under
the antitrust laws of transactions such as the proposed purchase of Shares by
Purchaser pursuant to the Offer. At any time before or after such purchase, the
Antitrust Division or the FTC could take such action under the antitrust laws as
it deems necessary or desirable in the public interest, including seeking to
enjoin the transaction or seeking divestiture of the Shares so acquired or
divestiture of substantial assets of Parent or its subsidiaries. Litigation
seeking similar relief could also be brought by private persons and the state
attorneys general.
Based upon an examination of publicly available information relating to the
businesses in which Tyco and the Company are engaged, Parent and Purchaser do
not believe that consummation of the Offer will result in violation of any
applicable antitrust laws. However, there can be no assurance that a challenge
to the Offer on antitrust grounds will not be made, or, if such a challenge is
made, what the result would be. See Section 15 for certain conditions to the
Offer, including conditions with respect to certain judicial or governmental
actions.
17. FEES AND EXPENSES. Purchaser has retained Morrow & Co., Inc. to act as
the Information Agent and ChaseMellon Shareholder Services, L.L.C. to act as the
Depositary in connection with the Offer. The Information Agent may contact
holders of Shares by mail, telephone, telex, telecopy and personal interview and
may request brokers, dealers and other nominee shareholders to forward the Offer
materials to beneficial owners. The Information Agent and the Depositary will
receive reasonable and customary compensation for services relating to the Offer
and will be reimbursed for certain out-of-pocket expenses. Purchaser and Parent
have also agreed to indemnify the Information Agent and the Depositary against
certain liabilities and expenses in connection with the Offer, including certain
liabilities under the federal securities laws.
Neither Parent nor Purchaser will pay any fees or commissions to any broker
or dealer or any other person (other than to the Information Agent) for
soliciting tenders of Shares pursuant to the Offer. Brokers, dealers, commercial
banks and trust companies will, upon request, be reimbursed by Purchaser for
customary mailing and handling expenses incurred by them in forwarding offering
materials to their customers.
18. MISCELLANEOUS. The Offer is being made to all holders of Shares.
Purchaser is not aware of any jurisdiction where the making of the Offer is
prohibited by administrative or judicial action pursuant to any valid state
statute. If Purchaser becomes aware of any valid state statute prohibiting the
making of the Offer or the acceptance of Shares pursuant thereto, Purchaser will
make a good faith effort to comply with any such state statute or seek to have
such statute declared inapplicable to the Offer. If, after such good faith
effort, Purchaser cannot comply with any such state statute, the Offer will not
be made to (nor will tenders be accepted from or on behalf of) the holders of
Shares in such state. In any jurisdiction where the securities, blue sky or
other laws require the Offer to be made by a licensed broker or dealer, the
Offer will be deemed to be made on behalf of Purchaser by one or more registered
brokers or dealers licensed under the laws of such jurisdiction.
40
<PAGE>
No person has been authorized to give any information or make any
representation on behalf of Parent, Purchaser or the Company not contained in
this Offer to Purchase or in the related Letter of Transmittal and, if given or
made, such information or representation must not be relied upon as having been
authorized.
Parent and Purchaser have filed with the Commission a Tender Offer Statement
on Schedule 14D-1, together with all exhibits thereto, pursuant to Rule 14d-3 of
the General Rules and Regulations under the Exchange Act, furnishing certain
additional information with respect to the Offer. Such Tender Offer Statement
and any amendments thereto, including exhibits, may be inspected and copies may
be obtained from the offices of the Commission in the manner set forth in
Section 8 (except that they will not be available at the regional offices of the
Commission).
T MERGER SUB (OR), INC.
November 1, 1999
41
<PAGE>
ANNEX I
CERTAIN INFORMATION CONCERNING THE DIRECTORS
AND EXECUTIVE OFFICERS OF TYCO INTERNATIONAL LTD.
The following table sets forth the name, current business address, present
principal occupation or employment, and material occupations, positions, offices
or employment for the past five years of each director of Tyco, each executive
officer of Tyco and certain executive officers of Tyco's subsidiaries. Unless
otherwise indicated, positions held shown in the following table are positions
with Tyco. Except as set forth below, each such person is a citizen of the
United States of America. None of the listed persons, during the past five
years, has been convicted in a criminal proceeding (excluding traffic violations
or similar misdemeanors) or was a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction as a result of which such person
was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting activities subject to, federal or state securities
laws or finding any violation of such laws.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL
OCCUPATION OR EMPLOYMENT
NAME AND POSITION HELD CURRENT BUSINESS ADDRESS AND FIVE-YEAR EMPLOYMENT HISTORY
- ---------------------- ------------------------------- ---------------------------------------
<S> <C> <C>
L. Dennis Kozlowski, One Tyco Park Mr. Kozlowski has been Chairman of the
Chairman of the Board, Exeter, NH 03833 Board of Directors, Chief Executive
President and Chief Executive Officer and President of Tyco since
Officer July 1997. He was Chairman of the Board
of Directors of Tyco (US) from January
1993 to July 1997. He has been Chief
Executive Officer of Tyco (US) since
July 1992 and President of Tyco (US)
since 1989.
Michael A. Ashcroft, P.O. Box 1598 Mr. Ashcroft has been Chairman of
Director Belize City, Belize Carlisle Holdings Limited (formerly BHI
Corporation) (services company) since
1987. He was Chairman of the Board of
Directors and Chief Executive Officer
of ADT Limited from 1984 to July 1997.
Mr. Ashcroft is a citizen of Belize.
Joshua M. Berman, 919 Third Avenue Mr. Berman has been counsel to the law
Director and Vice President New York, NY 10022 firm of Kramer Levin Naftalis & Frankel
LLP (counselors at law) since April
1985. He has been Vice President of
Tyco since July 1997.
Richard S. Bodman, 2 Wisconsin Circle Mr. Bodman has been Managing General
Director Suite 610 Partner of AT&T Ventures LLC (venture
Chevy Chase, MD 20815 capital) since May 1996. Previously, he
was Senior Vice President, Corporate
Strategy and Development, of AT&T
Corporation (communications) from
August 1990 to May 1996.
John F. Fort, III, 2003 Milford Street Mr. Fort was Chairman of the Board and
Director Houston, TX 77098 Chief Executive Officer of Tyco (US)
from 1982 to 1992.
</TABLE>
I-1
<PAGE>
<TABLE>
<CAPTION>
PRESENT PRINCIPAL
OCCUPATION OR EMPLOYMENT
NAME AND POSITION HELD CURRENT BUSINESS ADDRESS AND FIVE-YEAR EMPLOYMENT HISTORY
- ---------------------- ------------------------------- ---------------------------------------
<S> <C> <C>
Stephen W. Foss, 380 Lafayette Road Mr. Foss has been Chairman, President
Director Hampton, NH 03842 and Chief Executive Officer of Foss
Manufacturing Company, Inc.
(manufacturer of synthetic fibers and
non-woven fabrics) since 1969.
Philip M. Hampton, 152 West 57th Street Mr. Hampton has been Co-Managing
Director 44th Floor Director of R.H. Arnold & Co.
New York, NY 10022 (investment bank) since April 1997. He
was Chairman of Metzler Corporation
(investment bank) from October 1989 to
March 1997.
James S. Pasman, Jr., 29 The Trillium Mr. Pasman has been Director of CSAM
Director Pittsburgh, PA 15238 Income Fund, Inc. (formerly BEA Income
Fund, Inc.) since 1988. He has been
Director of CSAM Strategic Global
Income Fund, Inc. (formerly BEA
Strategic Global Income Fund, Inc.)
since 1988. He has been Director of BT
Insurance Funds Trust since 1996,
Director of Education Management Corp.
since 1997, and Director of Warburg
Pincus Funds since July 1999.
W. Peter Slusser, One Citicorp Center Mr. Slusser has been the President of
Director Suite 5100 Slusser Associates, Inc. (investment
153 East 53rd Street banking firm) since 1988.
New York, NY 10022
Frank E. Walsh, Jr., 330 South Street Mr. Walsh has been Chairman of the
Director Morristown, NJ 07962-1975 Sandyhill Foundation (charitable
organization) since August 1996.
Previously, he was Chairman of Wesray
Capital Corporation (investment firm)
from October 1989 to January 1996.
Mark A. Belnick, One Tyco Park Mr. Belnick has been Executive Vice
Executive Vice President and Exeter, NH 03833 President and Chief Corporate Counsel
Chief Corporate Counsel of Tyco since September 1998.
Previously, he had been a senior
partner with the international law firm
of Paul, Weiss, Rifkind, Wharton &
Garrison since 1987.
Jerry R. Boggess, Three Tyco Park Mr. Boggess has been President of Tyco
President of Tyco Fire and Exeter, NH 03833 Fire and Security Services since August
Security Services 1993 and Vice President of Tyco (US)
since February 1996.
</TABLE>
I-2
<PAGE>
<TABLE>
<CAPTION>
PRESENT PRINCIPAL
OCCUPATION OR EMPLOYMENT
NAME AND POSITION HELD CURRENT BUSINESS ADDRESS AND FIVE-YEAR EMPLOYMENT HISTORY
- ---------------------- ------------------------------- ---------------------------------------
<S> <C> <C>
Neil R. Garvey, One Tyco Park Mr. Garvey has been President of Tyco
President of Tyco Submarine Exeter, NH 03833 Submarine Systems Ltd. since July 1997.
Systems Ltd. He was President of Simplex
Technologies, a subsidiary of Tyco,
from July 1995 to June 1997. He was
Vice President of Sales and Marketing
of Simplex Technologies, from June 1992
to July 1995,
Robert P. Mead, Three Tyco Park Mr. Mead has been President of the Tyco
President of the Tyco Flow Exeter, NH 03833 Flow Control Products group since May
Control Products group 1993 and Vice President of Tyco (US)
since August 1993.
Richard J. Meelia One Tyco Park Mr. Meelia has been President of Tyco
President of Tyco Healthcare Exeter, NH 03833 Healthcare Group (formerly the Kendall
Group Company) since 1995. He was Group
President of Kendall Healthcare
Products Company from 1991 to 1995.
Mark H. Swartz, One Tyco Park Mr. Swartz has been Executive Vice
Executive Vice President and Exeter, NH 03833 President and Chief Financial Officer
Chief Financial Officer of Tyco since July 1997. He has been
Vice President and Chief Financial
Officer of Tyco (US) since 1995. From
1993 to 1995, he was Tyco (US)'s
Director of Mergers and Acquisitions.
</TABLE>
I-3
<PAGE>
ANNEX II
CERTAIN INFORMATION CONCERNING THE DIRECTORS
AND EXECUTIVE OFFICERS OF PARENT
The following table sets forth the name, current business address, present
principal occupation or employment, and material occupations, positions, offices
or employment for the past five years of each director and executive officer of
Parent. Each such person is a citizen of the United States of America. None of
the listed persons, during the past five years, has been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors) or was a party
to a civil proceeding of a judicial or administrative body of competent
jurisdiction as a result of which such person was or is subject to a judgment,
decree or final order enjoining future violations of, or prohibiting activities
subject to, federal or state securities laws or finding any violation of such
laws.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL
CURRENT BUSINESS OCCUPATION OR EMPLOYMENT
NAME AND POSITION HELD ADDRESS AND FIVE-YEAR EMPLOYMENT HISTORY
- ---------------------- ------------------------ -------------------------------------
<S> <C> <C>
Mark H. Swartz, One Tyco Park *
Director and Vice President Exeter, NH 03833
Irving Gutin, One Tyco Park Mr. Gutin has been Senior Vice
Director and Vice President Exeter, NH 03833 President of Tyco (US) for more than
the past five years
J. Brad McGee One Tyco Park Mr. McGee has been Senior Vice
Director and Vice President Exeter, NH 03833 President-Investor Relations of Tyco
(US) since April 1998. From July 1995
to April 1998 he served as President
of Tyco Specialty Products. From 1991
to 1995 he served as Director of
Financial Planning and Development
for Tyco (US).
Neil R. Garvey, One Tyco Park *
President Exeter, NH 03833
Mark A. Belnick, One Tyco Park *
Vice President Exeter, NH 03833
Steven Gardner, One Tyco Park Mr. Gardner has been President of
Vice President Exeter, NH 03833 Tyco Printed Circuit Group since
1996. Prior to that he was
Vice-President of Sales and Marketing
for Simplex Technologies.
Jeffrey D. Mattfolk, One Tyco Park Mr. Mattfolk has been Senior Vice
Vice President Exeter, NH 03833 President-Finance of Tyco (US) since
April 1999. From 1997 to 1999 he
served as Vice President-Mergers &
Acquisitions of Tyco (US). From 1994
to 1997 he served in various
positions in Tyco (US).
</TABLE>
- ------------------------
* Please see the information set forth in Annex I.
II-1
<PAGE>
ANNEX III
CERTAIN INFORMATION CONCERNING THE DIRECTORS
AND EXECUTIVE OFFICERS OF PURCHASER
The following table sets forth the name, current business address, present
principal occupation or employment, and material occupations, positions, offices
or employment for the past five years of each director and executive officer of
Purchaser. Each such person is a citizen of the United States of America. None
of the listed persons, during the past five years, has been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors) or
was a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction as a result of which such person was or is subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
activities subject to, federal or state securities laws or finding any violation
of such laws.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL
CURRENT BUSINESS OCCUPATION OR EMPLOYMENT
NAME AND POSITION HELD ADDRESS AND FIVE-YEAR EMPLOYMENT HISTORY
- ---------------------- ------------------------ ---------------------------------------
<S> <C> <C>
L. Dennis Kozlowski, One Tyco Park *
Director Exeter, NH 03833
Mark H. Swartz, One Tyco Park *
Director and Vice President Exeter, NH 03833
Irving Gutin, One Tyco Park *
Director and Vice President Exeter, NH 03833
Neil R. Garvey, One Tyco Park *
President Exeter, NH 03833
Steven Gardner, One Tyco Park *
Vice President Exeter, NH 03833
Jeffrey D. Mattfolk, One Tyco Park *
Vice President Exeter, NH 03833
</TABLE>
- ------------------------
* Please see the information set forth in Annex I and Annex II.
III-1
<PAGE>
Manually signed facsimile copies of the Letter of Transmittal will be
accepted. Letters of Transmittal and certificates for Shares should be sent or
delivered by each shareholder of the Company or his broker, dealer, commercial
bank or trust company to the Depositary at one of its addresses set forth below:
THE DEPOSITARY FOR THE OFFER IS:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
<TABLE>
<S> <C> <C> <C>
BY MAIL: BY HAND: BY OVERNIGHT COURIER: BY FACSIMILE:
ChaseMellon Shareholder ChaseMellon Shareholder ChaseMellon Shareholder (For Eligible Institutions
Services, L.L.C. Services, L.L.C. Services, L.L.C Only)
P.O. Box 3301 120 Broadway--3rd Floor 85 Challenger Road-- (201) 329-8936
South Hackensack, NJ 07606 New York, NY 10271 Mail Drop--Reorg. CONFIRM BY TELEPHONE:
Attn.: Reorganization Attn.: Reorganization Ridgefield Park, NJ 07660 (201) 296-4860
Department Department Attn.: Reorganization
Department
</TABLE>
Any questions or requests for assistance may be directed to the Information
Agent at its address and telephone numbers set forth below. Requests for
additional copies of this Offer to Purchase and the Letter of Transmittal may be
directed to the Information Agent or the Depositary. Shareholders may also
contact their brokers, dealers, commercial banks or trust companies for
assistance concerning the Offer.
THE INFORMATION AGENT FOR THE OFFER IS:
[LOGO]
445 Park Avenue, 5th Floor
New York, New York 10022
Call Collect (212) 754-8000
Banks and Brokerage Firms Please Call:
(800) 662-5200
SHAREHOLDERS PLEASE CALL (800) 566-9061
<PAGE>
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
OF
PRAEGITZER INDUSTRIES, INC.
PURSUANT TO THE OFFER TO PURCHASE DATED NOVEMBER 1, 1999
OF
T MERGER SUB (OR), INC.,
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
TYCO INTERNATIONAL LTD.
- ---------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON TUESDAY, NOVEMBER 30, 1999, UNLESS THE OFFER IS EXTENDED
- --------------------------------------------------------------------------------
THE DEPOSITARY FOR THE OFFER IS:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
<TABLE>
<S> <C> <C> <C>
BY MAIL: BY HAND OR BY OVERNIGHT COURIER BY FACSIMILE:
ChaseMellon Shareholder ChaseMellon Shareholder ChaseMellon Shareholder (For Eligible Institutions
Services, L.L.C. Services, L.L.C. Services, L.L.C Only)
P.O. Box 3301 120 Broadway--3rd Floor 85 Challenger Road- (201) 329-8936
South Hackensack, New York, NY 10271 Mail Drop-Reorg. CONFIRM BY TELEPHONE:
NJ 07606 Attn.: Reorganization Department Ridgefield Park, NJ 07660 (201) 296-4860
Attn.: Reorganization Attn.: Reorganization
Department Department
</TABLE>
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE DOES NOT
CONSTITUTE A VALID DELIVERY. YOU MUST SIGN THIS LETTER OF TRANSMITTAL IN
THE APPROPRIATE SPACE THEREFOR PROVIDED BELOW AND COMPLETE THE
SUBSTITUTE FORM W-9 SET FORTH BELOW.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be completed by shareholders either if
certificates representing Shares (as defined below) are to be forwarded herewith
or, unless an Agent's Message (as defined in Instruction 2) is utilized, if
delivery is to be made by book-entry transfer to the account maintained by the
Depositary at The Depository Trust Company ("DTC") pursuant to the procedures
set forth in Section 2 of the Offer to Purchase. Shareholders whose certificates
are not immediately available, or who cannot deliver their certificates or
confirmation of the book-entry transfer of their Shares into the Depositary's
account at DTC ("Book-Entry Confirmation") and all other documents required
hereby to the Depositary on or prior to the Expiration Date (as defined in
Section 1 of the Offer to Purchase), must tender their Shares according to the
guaranteed delivery procedures set forth in Section 2 of the Offer to Purchase.
See Instruction 2. DELIVERY OF DOCUMENTS TO DTC DOES NOT CONSTITUTE DELIVERY TO
THE DEPOSITARY.
<PAGE>
/ / CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
MADE TO THE ACCOUNT MAINTAINED BY THE DEPOSITARY AND COMPLETE THE FOLLOWING:
Name of Tendering Institution: _____________________________________________
Account Number: ____________________________________________________________
Transaction Code Number: ___________________________________________________
/ / CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING:
Name(s) of Registered Holder(s): ___________________________________________
Date of Execution of Notice of Guaranteed Delivery: ________________________
Name of Institution that Guaranteed Delivery: ______________________________
If Delivered by Book-Entry Transfer: _______________________________________
Name of Tendering Institution: _____________________________________________
Account Number: ____________________________________________________________
Transaction Code Number: ___________________________________________________
2
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
DESCRIPTION OF SHARES TENDERED
- ---------------------------------------------------------------------------------------------------------------
CERTIFICATE(S) TENDERED
(ATTACH ADDITIONAL LISTS IF NECESSARY)
-------------------------------------------------------
TOTAL NUMBER OF
SHARES
CERTIFICATE REPRESENTED BY NUMBER OF SHARES
NUMBER(S)* CERTIFICATE(S) TENDERED**
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S)
(PLEASE FILL IN, IF BLANK)
--------------------------------------------
--------------------------------------------
--------------------------------------------
--------------------------------------------
--------------------------------------------
--------------------------------------------
Total Shares
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
* Need not be completed by shareholders tendering by book-entry transfer.
** Unless otherwise indicated, it will be assumed that all Shares represented
by any certificates delivered to the Depositary are being tendered hereby.
See Instruction 4.
The names and addresses of the registered holders should be printed, if not
already printed above, exactly as they appear on the certificates representing
Shares tendered hereby. The certificates and number of Shares that the
undersigned wishes to tender should be indicated in the appropriate boxes.
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
The undersigned hereby tenders to T Merger Sub (OR), Inc., an Oregon
corporation ("Purchaser") and a wholly owned subsidiary of Sigma
Circuits, Inc., a Delaware corporation ("Sigma") and an indirect wholly-owned
subsidiary of Tyco International Ltd., a Bermuda company ("Tyco"), the
above-described shares of common stock (the "Shares"), of Praegitzer
Industries, Inc., an Oregon corporation (the "Company"), pursuant to Purchaser's
offer to purchase all of the outstanding Shares at a price of $5.50 per Share,
net to the tendering shareholder in cash, upon the terms and subject to the
conditions set forth in the Offer to Purchase, dated November 1, 1999 (the
"Offer to Purchase"), receipt of which is hereby acknowledged, and in this
Letter of Transmittal (which together constitute the "Offer"). Tyco fully and
unconditionally guarantees the Offer. Purchaser reserves the right to transfer
or assign, in whole or from time to time in part, to Tyco or to one or more
affiliates of Tyco, the right to purchase Shares tendered pursuant to the Offer.
Subject to, and effective upon, acceptance for payment of and payment for
the Shares tendered herewith in accordance with the terms and subject to the
conditions of the Offer, the undersigned hereby sells, assigns, and transfers
to, or upon the order of, Purchaser all right, title and interest in and to all
of the Shares that are being tendered hereby (and any and all other Shares or
other securities or rights issued or issuable in respect thereof on or after
November 1, 1999) and irrevocably appoints the Depositary the true and lawful
agent and attorney-in-fact of the undersigned with respect to such Shares (and
any such other Shares or securities or rights), with full power of substitution
(such power of attorney being deemed to be an irrevocable power coupled with an
interest), to (a) deliver certificates representing such Shares (and any such
other Shares or securities or rights), or transfer ownership of such Shares (and
any such other Shares or securities or rights) on the account books maintained
by DTC, together in either such case with all accompanying evidences of transfer
and authenticity, to or upon the order of Purchaser upon receipt by the
Depositary, as the undersigned's agent, of the purchase price (adjusted, if
appropriate, as provided in the Offer to Purchase), (b) present such Shares (and
any such other Shares or securities or rights) for registration and transfer on
the books of the Company, and (c) receive all benefits and otherwise exercise
all rights of beneficial ownership of such Shares (and any such other Shares or
securities or rights), all in accordance with the terms of the Offer.
3
<PAGE>
The undersigned hereby irrevocably appoints Mark H. Swartz, Mark A. Belnick
and any other designee of Purchaser, the attorneys and proxies of the
undersigned, each with full power of substitution, to vote in such manner as
each such attorney and proxy or his substitute shall, in his sole discretion,
deem proper, and otherwise act (including pursuant to written consent) with
respect to all the Shares tendered hereby which have been accepted for payment
by Purchaser prior to the time of such vote or action (and any and all other
Shares or securities or rights issued or issuable in respect thereof on or after
November 1, 1999), which the undersigned is entitled to vote at any meeting of
shareholders (whether annual or special and whether or not an adjourned meeting)
of the Company, or consent in lieu of any such meeting, or otherwise. This proxy
and power of attorney is coupled with an interest in the Shares tendered hereby
and is irrevocable and is granted in consideration of, and is effective upon,
the acceptance for payment of such Shares (and any such other Shares or
securities or rights) by Purchaser in accordance with the terms of the Offer.
Such acceptance for payment shall revoke all prior proxies granted by the
undersigned at any time with respect to such Shares (and any such other Shares
or securities or rights) and no subsequent proxies will be given (and if given
will be deemed not to be effective) with respect thereto by the undersigned. The
undersigned acknowledges that in order for Shares to be deemed validly tendered,
immediately upon the acceptance for payment of such Shares, Purchaser or
Purchaser's designee must be able to exercise full voting and other rights of a
record and beneficial holder with respect to such Shares.
The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender, sell, assign and transfer the Shares tendered
hereby (and any and all other Shares or securities or rights issued or issuable
in respect thereof on or after November 1, 1999), and that, when the same are
accepted for payment by Purchaser, Purchaser will acquire good and unencumbered
title thereto, free and clear of all liens, restrictions, charges and
encumbrances and the same will not be subject to any adverse claim. The
undersigned, upon request, will execute and deliver any additional documents
deemed by the Depositary or Purchaser to be necessary or desirable to complete
the sale, assignment and transfer of the Shares tendered hereby (and any such
other Shares or securities or rights).
No authority herein conferred or agreed to be conferred in this Letter of
Transmittal shall be affected by, and all such authority shall survive, the
death or incapacity of the undersigned, and any obligation of the undersigned
hereunder shall be binding upon the successors, assigns, heirs, executors,
administrators and legal representatives of the undersigned. Except as stated in
the Offer to Purchase, this tender is irrevocable.
The undersigned understands that tenders of Shares pursuant to any one of
the procedures described in Section 2 of the Offer to Purchase and in the
instructions hereto will constitute a binding agreement between the undersigned
and Purchaser upon the terms and subject to the conditions of the Offer.
The undersigned recognizes that, under certain circumstances set forth in
the Offer to Purchase, Purchaser may not be required to accept for payment any
of the Shares tendered hereby.
Unless otherwise indicated herein under "Special Payment Instructions,"
please issue the check for the purchase price and/or return any certificates
representing Shares not tendered or accepted for payment in the name(s) of the
registered holder(s) appearing under "Description of Shares Tendered."
Similarly, unless otherwise indicated under "Special Delivery Instructions,"
please mail the check for the purchase price and/or return any certificates
representing Shares not tendered or accepted for payment (and accompanying
documents, as appropriate) to the registered holder(s) appearing under
"Description of Shares Tendered" at the address shown below such registered
holder(s) name(s). In the event that either or both the Special Delivery
Instructions and the Special Payment Instructions are completed, please issue
the check for the purchase price and/or return any certificates representing
Shares not tendered or accepted for payment in the name(s) of, and deliver such
check and/or return such certificates to, the person or persons so indicated.
Shareholders tendering Shares by book entry transfer may request that any Shares
not accepted for payment be returned by crediting such account maintained at DTC
such shareholder may designate by making an appropriate entry under "Special
Payment Instructions." The undersigned recognizes that Purchaser has no
obligation pursuant to the Special Payment Instructions to transfer any Shares
from the name of the registered holder(s) thereof if Purchaser does not accept
for payment any of the Shares so tendered hereby.
4
<PAGE>
- ------------------------------------------------
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if certificates representing Shares not tendered or
not purchased and/or the check for the purchase price of Shares purchased
are to be issued in the name of someone other than the undersigned, or if
Shares tendered by book-entry transfer which are not purchased are to be
returned by credit to an account maintained at DTC other than that account
designated above.
Issue check and/or certificate(s) to:
Name: ______________________________________________________________________
(PLEASE PRINT)
Address: ___________________________________________________________________
____________________________________________________________________________
(INCLUDE ZIP CODE)
__________________________________________________________________________
(TAX IDENTIFICATION OR SOCIAL SECURITY NO.)
Credit unpurchased Shares tendered by book-entry transfer to the DTC account
set forth below.
____________________________________________________________________________
(ACCOUNT NUMBER)
- ------------------------------------------------------------
- ------------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if certificates representing Shares not tendered or
not purchased and/or the check for the purchase price of Shares purchased
are to be sent to someone other than the undersigned, or to the undersigned
at an address other than that shown under "Description of Shares Tendered."
Issue check and/or certificate(s) to:
Name: ______________________________________________________________________
(PLEASE PRINT)
Address: ___________________________________________________________________
____________________________________________________________________________
(INCLUDE ZIP CODE)
-----------------------------------------------------------
5
<PAGE>
- --------------------------------------------------------------------------------
SIGN HERE
____________________________________________________________________________
____________________________________________________________________________
SIGNATURE(S) OF HOLDER(S) OF SHARES
Dated: _____________, 1999
(Must be signed by registered holder(s) exactly as name(s) appear(s) on
stock certificate(s) or on a security position listing or by person(s)
authorized to become registered holder(s) by certificates and documents
transmitted herewith. If signature is by trustees, executors,
administrators, guardians, attorneys-in-fact, agents, officers of
corporations or others acting in a fiduciary or representative capacity,
please set forth the full title and see Instruction 5.)
Name(s) ____________________________________________________________________
____________________________________________________________________________
(PLEASE PRINT)
Capacity (full title) ______________________________________________________
Address ____________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
(INCLUDING ZIP CODE)
(Area Code and Telephone No.) ( )_________________________________________
(Tax Identification or Social Security No.) ________________________________
(PLEASE COMPLETE SUBSTITUTE FORM W-9 ON REVERSE SIDE)
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 5)
FOR USE BY FINANCIAL INSTITUTIONS ONLY
PLACE MEDALLION GUARANTEE IN SPACE BELOW.
Authorized Signature(s) ____________________________________________________
Name _______________________________________________________________________
(PLEASE PRINT)
Title ______________________________________________________________________
Name of Firm _______________________________________________________________
Address ____________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone Number _____________________________________________
Dated: _____________, 1999
- --------------------------------------------------------------------------------
6
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. No signature guarantee on this Letter of
Transmittal is required (i) if this Letter of Transmittal is signed by the
registered holder(s) of the Shares (which term, for purposes of this document,
shall include any participant in DTC whose name appears on a security position
listing as the owner of Shares) tendered herewith, unless such holder has
completed either the box entitled "Special Delivery Instructions" or the box
entitled "Special Payment Instructions" on this Letter of Transmittal, or
(ii) if such Shares are tendered for the account of a firm that is a member in
good standing of the Security Transfer Agent's Medallion Program, the New York
Stock Exchange Medallion Signature Program or the Stock Exchange Medallion
Program (each being hereinafter referred to as an "Eligible Institution"). In
all other cases, all signatures on this Letter of Transmittal must be guaranteed
by an Eligible Institution. See Instruction 5.
2. DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES. This Letter of
Transmittal is to be completed by shareholders either if certificates
representing Shares are to be forwarded herewith to the Depositary or, unless an
Agent's Message (as defined below) is utilized, if tenders of Shares are to be
made pursuant to the procedures for delivery by book-entry transfer set forth in
Section 2 of the Offer to Purchase. Certificates representing all physically
tendered Shares, or any book-entry confirmation of Shares, as the case may be,
together with a properly completed and duly executed Letter of Transmittal (or
facsimile thereof), with any required signature guarantees, or, in connection
with a book-entry transfer, an Agent's Message, and any other documents required
by this Letter of Transmittal, must be received by the Depositary at one of its
addresses set forth herein on or prior to the Expiration Date (as defined in
Section 1 of the Offer to Purchase). If a shareholder's certificate(s)
representing Shares are not immediately available (or the procedure for the
book-entry transfer cannot be completed on a timely basis) or time will not
permit all required documents to reach the Depositary on or prior to the
Expiration Date, such shareholder's Shares may nevertheless be tendered if the
procedures for guaranteed delivery set forth in Section 2 of the Offer to
Purchase are followed. Pursuant to such procedure, (i) such tender must be made
by or through an Eligible Institution, (ii) a properly completed and duly
executed Notice of Guaranteed Delivery, substantially in the form provided by
Purchaser, must be received by the Depositary on or prior to the Expiration
Date, and (iii) the certificates representing all tendered Shares, in proper
form for transfer, or Book-Entry Confirmation of Shares, as the case may be, in
each case together with a properly completed and duly executed Letter of
Transmittal (or facsimile thereof), with any required signature guarantees (or,
in connection with a book-entry transfer, an Agent's Message) and any other
documents required by this Letter of Transmittal, must be received by the
Depositary within three Nasdaq Stock Market trading days after the date of
execution of such Notice of Guaranteed Delivery, all as provided in Section 2 of
the Offer to Purchase. The term "Agent's Message" means a message transmitted
through electronic means by DTC to, and received by, the Depositary and forming
a part of a Book-Entry Confirmation, which states that DTC has received an
express acknowledgment from the DTC participant tendering the Shares that such
participant has received, and agrees to be bound by, this Letter of Transmittal.
THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, THE CERTIFICATE(S)
REPRESENTING SHARES AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH
DTC, IS AT THE OPTION AND SOLE RISK OF THE TENDERING SHAREHOLDER. THE DELIVERY
WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF SUCH
DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY
INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO
INSURE TIMELY DELIVERY.
NO ALTERNATIVE, CONDITIONAL OR CONTINGENT TENDERS WILL BE ACCEPTED, AND NO
FRACTIONAL SHARES WILL BE PURCHASED. ALL TENDERING SHAREHOLDERS, BY EXECUTION OF
THIS LETTER OF TRANSMITTAL (OR FACSIMILE THEREOF), WAIVE ANY RIGHT TO RECEIVE
ANY NOTICE OF THE ACCEPTANCE OF THEIR SHARES FOR PAYMENT.
7
<PAGE>
3. INADEQUATE SPACE. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares should be listed on a separate
signed schedule attached hereto.
4. PARTIAL TENDERS (NOT APPLICABLE TO SHAREHOLDERS WHO TENDER SHARES BY
BOOK-ENTRY TRANSFER). If fewer than all the Shares represented by any
certificate submitted are to be tendered, fill in the number of Shares that are
to be tendered in the box entitled "Number of Shares Tendered." In such case,
new certificate(s) representing the remainder of the Shares that were
represented by the old certificate(s) will be sent to the registered holder(s),
unless otherwise provided in the appropriate box on this Letter of Transmittal,
as soon as practicable after the Expiration Date. All Shares represented by
certificate(s) delivered to the Depositary will be deemed to have been tendered
unless otherwise indicated.
5. SIGNATURES ON LETTER OF TRANSMITTAL, STOCK POWERS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signature(s) must correspond exactly with the name(s) as
written on the face(s) of the certificate(s) without alteration, enlargement or
any change whatsoever. If any of the Shares tendered hereby are owned of record
by two or more joint owners, all such owners must sign this Letter of
Transmittal. If any tendered Shares are registered in different names on several
certificates, it will be necessary to complete, sign and submit as many separate
Letters of Transmittal as there are different registrations of certificates.
IF THIS LETTER OF TRANSMITTAL IS SIGNED BY THE REGISTERED HOLDER(S) OF THE
SHARES LISTED AND TENDERED HEREBY, NO ENDORSEMENTS OF CERTIFICATES OR SEPARATE
STOCK POWERS ARE REQUIRED, UNLESS PAYMENT OR CERTIFICATES FOR SHARES NOT
TENDERED OR ACCEPTED FOR PAYMENT ARE TO BE ISSUED TO A PERSON OTHER THAN THE
REGISTERED HOLDER(S). SIGNATURES ON SUCH CERTIFICATES OR STOCK POWERS MUST BE
GUARANTEED BY AN ELIGIBLE INSTITUTION.
IF THIS LETTER OF TRANSMITTAL OR ANY CERTIFICATES OR STOCK POWERS ARE SIGNED
BY A TRUSTEE, EXECUTOR, ADMINISTRATOR, GUARDIAN, ATTORNEY-IN-FACT, OFFICER OF A
CORPORATION OR OTHER PERSON ACTING IN A FIDUCIARY OR REPRESENTATIVE CAPACITY,
SUCH PERSON SHOULD SO INDICATE WHEN SIGNING, AND PROPER EVIDENCE SATISFACTORY TO
PURCHASER OF SUCH PERSON'S AUTHORITY SO TO ACT MUST BE SUBMITTED.
IF THIS LETTER OF TRANSMITTAL IS SIGNED BY A PERSON OTHER THAN THE
REGISTERED HOLDER(S) OF THE SHARES TENDERED HEREBY, THE CERTIFICATES MUST BE
ENDORSED OR ACCOMPANIED BY APPROPRIATE STOCK POWERS, IN EITHER CASE SIGNED
EXACTLY AS THE NAME(S) OF THE REGISTERED HOLDER(S) APPEAR ON THE CERTIFICATES.
SIGNATURES ON SUCH CERTIFICATES OR STOCK POWERS MUST BE GUARANTEED BY AN
ELIGIBLE INSTITUTION, UNLESS THE SIGNATURE IS THAT OF AN ELIGIBLE INSTITUTION.
6. STOCK TRANSFER TAXES. Except as set forth in this Instruction 6,
Purchaser will pay or cause to be paid any stock transfer taxes with respect to
the transfer and sale of purchased Shares to it or its order pursuant to the
Offer. If, however, payment of the purchase price is to be made to, or if
certificates representing Shares not tendered or accepted for payment are to be
registered in the name of, any person other than the registered holder, or if
tendered certificates are registered in the name of any person other than the
person(s) signing this Letter of Transmittal, the amount of any stock transfer
taxes (whether imposed on the registered holder or such other person) payable on
account of the transfer to such person will be deducted from the purchase price,
unless satisfactory evidence of the payment of such taxes or exemption therefrom
is submitted.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check and/or
certificates representing Shares not tendered or accepted for payment are to be
issued in the name of a person other than the signer of this Letter of
Transmittal or if a check is to be sent and/or such certificates are to be
returned to someone other than the signer of this Letter of Transmittal or to an
address other than that shown above, the appropriate boxes on this Letter of
Transmittal should be completed. Shareholders tendering Shares by book-entry
transfer may request that Shares not accepted for payment be credited to such
account maintained at DTC as such shareholder may designate hereon. If no such
instructions are given, such Shares not accepted for payment will be returned by
crediting the account at DTC designated above.
8
<PAGE>
8. LOST, DESTROYED OR STOLEN CERTIFICATES. If any certificate(s)
representing Shares has been lost, destroyed or stolen, the shareholder should
promptly notify the Depositary. The shareholder will then be instructed as to
the steps that must be taken in order to replace the certificate(s). This Letter
of Transmittal and related documents cannot be processed until the procedures
for replacing lost or destroyed certificates have been followed.
9. WAIVER OF CONDITIONS. The conditions of the Offer may be waived by
Purchaser, in whole or in part, at any time and from time to time in Purchaser's
sole discretion (subject to the provisions of the Merger Agreement referred to
in the Offer to Purchase), in the case of any Shares tendered hereby.
10. SUBSTITUTE FORM W-9. The tendering shareholder is required to provide
the Depositary with a correct Taxpayer Identification Number ("TIN"), generally
the shareholder's social security or federal employer identification number, on
Substitute Form W-9, which is provided below, and to certify whether the
shareholder is subject to backup withholding of United States federal income
tax. If a tendering shareholder is subject to backup withholding, the
shareholder must cross out item (2) of the Certification box of the Substitute
Form W-9. Failure to provide the information on the Substitute Form W-9 may
subject the tendering shareholder to 31% Federal income tax withholding on the
payment of the purchase price. If the tendering shareholder has not been issued
a TIN and has applied for a number or intends to apply for a number in the near
future, the shareholder should write "Applied For" in the space provided for the
TIN in Part I, and sign and date the Substitute Form W-9. If "Applied For" is
written in Part I and the Depositary is not provided with a TIN within 60 days,
the Depositary will withhold 31% on all payments of the purchase price until a
TIN is provided to the Depositary.
11. NON-UNITED STATES HOLDERS. Non-United States holders must submit a
completed IRS Form W-8 or Form W-8BEN to avoid backup withholding. IRS Form W-8
or Form W-8BEN may be obtained by contacting the Depositary at one of the
addresses on the face of this Letter of Transmittal.
12. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Requests for assistance
may be directed to the Information Agent at the address set forth below.
Additional copies of the Offer to Purchase, this Letter of Transmittal, the
Notice of Guaranteed Delivery and the Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 may be obtained from the
Information Agent at the address set forth below or from your broker, dealer,
commercial bank or trust company.
IMPORTANT: This Letter of Transmittal (or a facsimile thereof), together
with certificates representing Shares or confirmation of book-entry transfer and
all other required documents, or the Notice of Guaranteed Delivery, must be
received by the Depositary on or prior to the Expiration Date.
IMPORTANT TAX INFORMATION
Under United States federal income tax law, a shareholder whose tendered
Shares are accepted for payment is required to provide the Depositary (as payer)
with such shareholder's correct Taxpayer Identification Number ("TIN") on
Substitute Form W-9 below. If such shareholder is an individual, the TIN is such
person's social security number. The TIN of a resident alien who does not have
and is not eligible to obtain a social security number is such person's IRS
individual taxpayer identification number. If a tendering shareholder is subject
to backup withholding, the shareholder must cross out item (2) of the
Certification box on the Substitute Form W-9. If the Depositary is not provided
with the correct TIN, the shareholder may be subject to a $50 penalty imposed by
the Internal Revenue Service ("IRS"). In addition, payments that are made to
such shareholder with respect to Shares purchased pursuant to the Offer may be
subject to backup withholding.
9
<PAGE>
CERTAIN SHAREHOLDERS (INCLUDING, AMONG OTHERS, ALL CORPORATIONS AND CERTAIN
NON-UNITED STATES INDIVIDUALS) ARE NOT SUBJECT TO BACKUP WITHHOLDING. IN ORDER
FOR A NON-UNITED STATES INDIVIDUAL TO QUALIFY AS AN EXEMPT RECIPIENT, THAT
SHAREHOLDER MUST SUBMIT TO THE DEPOSITARY A PROPERLY COMPLETED IRS FORM W-8 OR
FORM W-8BEN, SIGNED UNDER PENALTIES OF PERJURY, ATTESTING TO THAT INDIVIDUAL'S
EXEMPT STATUS. SUCH FORMS MAY BE OBTAINED FROM THE DEPOSITARY. EXEMPT
SHAREHOLDERS, OTHER THAN NON-UNITED STATES INDIVIDUALS, SHOULD FURNISH THEIR
TIN, WRITE "EXEMPT" ON THE FACE OF THE SUBSTITUTE FORM W-9 BELOW, AND SIGN, DATE
AND RETURN THE SUBSTITUTE FORM W-9 TO THE DEPOSITARY. SEE THE ENCLOSED
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE
FORM W-9 FOR ADDITIONAL INSTRUCTIONS.
IF BACKUP WITHHOLDING APPLIES, THE DEPOSITARY IS REQUIRED TO WITHHOLD 31% OF
ANY PAYMENTS MADE TO THE SHAREHOLDER. BACKUP WITHHOLDING IS NOT AN ADDITIONAL
TAX. RATHER, THE TAX LIABILITY OF PERSONS SUBJECT TO BACKUP WITHHOLDING WILL BE
REDUCED BY THE AMOUNT OF TAX WITHHELD. IF WITHHOLDING RESULTS IN AN OVERPAYMENT
OF TAXES, A REFUND MAY BE OBTAINED FROM THE IRS.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on payments that are made to a shareholder
with respect to Shares purchased pursuant to the Offer, the shareholder is
required to notify the Depositary of such shareholder's correct TIN by
completing the Substitute Form W-9 below certifying that the TIN provided on
such form is correct (or that such shareholder is awaiting a TIN) and that
(i) such holder is exempt from backup withholding, (ii) such holder has not been
notified by the IRS that such holder is subject to backup withholding as a
result of a failure to report all interest or dividends, or (iii) the IRS has
notified such holder that such holder is no longer subject to backup withholding
(see Part 2 of Substitute Form W-9).
WHAT NUMBER TO GIVE THE DEPOSITARY
The shareholder is required to give the Depositary the social security
number, individual taxpayer identification number, or employer identification
number of the record owner of the Shares. If the Shares are in more than one
name or are not in the name of the actual owner, consult the enclosed Guidelines
for Certification of Taxpayer Identification Number on Substitute Form W-9 for
additional guidelines on which number to report. If the tendering shareholder
has not been issued a TIN and has applied for a number or intends to apply for a
number in the near future, such shareholder should write "Applied For" in the
space provided for in the TIN in Part 1, and sign and date the Substitute
Form W-9. If "Applied For" is written in Part 1 and the Depositary is not
provided with a TIN within 60 days, the Depositary may withhold 31% on all
payments of the purchase price until a TIN is provided to the Depositary.
10
<PAGE>
PAYER'S NAME: CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
<TABLE>
<C> <S> <C>
- -------------------------------------------------------------------------------------------------------------------------
SUBSTITUTE Part 1--PLEASE PROVIDE YOUR TIN Social Security number
FORM W-9 IN THE BOX AT RIGHT AND CERTIFY OR ------------------------
Department of the Treasury BY SIGNING AND DATING BELOW Employer identification number
Internal Revenue Service (If awaiting TIN write "Applied For")
----------------------------------------------------------------------------
Payer's Request for Taxpayer Part 2--For Payees exempt from backup withholding, see the enclosed
Identification Number (TIN) Guidelines for Certification of Taxpayer Identification Number (TIN) on
and Certification Substitute Form W-9 and complete as instructed therein.
- -------------------------------------------------------------------------------------------------------------------------
CERTIFICATION--Under the penalties of perjury, I certify that:
(1) The number shown on this form is my correct Taxpayer Identification Number (or a Taxpayer Identification Number has
not been issued to me and either (a) I have mailed or delivered an application to receive a Taxpayer Identification
Number to the appropriate Internal Revenue Service ("IRS") or Social Security Administration office or (b) I intend
to mail or deliver an application in the near future. I understand that if I do not provide a Taxpayer
Identification Number within sixty (60) days, 31% of all reportable payments made to me thereafter may be withheld
until I provide a number); and
(2) I am not subject to backup withholding because (a) I am exempt from backup withholding, (b) I have not been notified
by the IRS that I am subject to backup withholding as a result of a failure to report all interest or dividends, or
(c) the IRS has notified me that I am no longer subject to backup withholding.
CERTIFICATION INSTRUCTIONS--You must cross out item (2) above if you have been notified by the IRS that you are
currently subject to backup withholding because you have failed to report all interest and dividends on your tax return.
If after being notified by the IRS that you were subject to backup withholding, you received another notification from
the IRS that you are no longer subject to backup withholding, do not cross out item (2). (Also see instructions in the
enclosed Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9).
NAME:
- -------------------------------------------------------------------------------------------------------------------------
(please print)
ADDRESS:
- -------------------------------------------------------------------------------------------------------------------------
(please print)
Signature ___________________ Date ___________, 1999
------------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW
THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL INFORMATION.
THE INFORMATION AGENT FOR THE OFFER IS:
[LOGO]
445 Park Avenue, 5th Floor
New York, NY 10022
Call Collect (212) 754-8000
Banks and Brokerage Firms please call:
(800) 662-5200
SHAREHOLDERS PLEASE CALL: (800) 566-9061
11
<PAGE>
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
PRAEGITZER INDUSTRIES, INC.
AT
$5.50 NET PER SHARE
BY
T MERGER SUB (OR), INC.,
AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF
TYCO INTERNATIONAL LTD.
- ---------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON TUESDAY, NOVEMBER 30, 1999, UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
November 1, 1999
To Brokers, Dealers, Commercial Banks,
Trust Companies And Other Nominees:
We have been appointed by T Merger Sub (OR), Inc., an Oregon corporation
("Purchaser") and a wholly owned subsidiary of Sigma Circuits, Inc., a Delaware
corporation ("Sigma") and an indirect wholly-owned subsidiary of Tyco
International Ltd., a Bermuda company ("Tyco"), to act as Information Agent in
connection with Purchaser's offer to purchase all of the outstanding shares of
common stock (the "Shares"), of Praegitzer Industries, Inc., an Oregon
corporation (the "Company"), at a price of $5.50 per Share, net to the seller in
cash, upon the terms and subject to the conditions set forth in the Offer to
Purchase, dated November 1, 1999 (the "Offer to Purchase"), and the related
Letter of Transmittal (which together constitute the "Offer"), copies of which
are enclosed herewith. Tyco fully and unconditionally guarantees the Offer. The
Offer is being made in connection with the Agreement and Plan of Merger, dated
as of October 26, 1999, among Sigma, Purchaser and the Company and the related
guarantee of Tyco.
Please furnish copies of the enclosed materials to those of your clients for
whose accounts you hold Shares registered in your name or in the name of your
nominee.
THE OFFER IS BEING MADE FOR ALL OF THE OUTSTANDING SHARES. THE OFFER IS
CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY TENDERED AND NOT
WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER AT LEAST THAT NUMBER OF SHARES
WHICH WOULD CONSTITUTE 51% OF THE OUTSTANDING SHARES ON A DILUTED BASIS. THE
MAJORITY SHAREHOLDER OF THE COMPANY WHO OWNS 8,119,375 SHARES (CONSTITUTING
APPROXIMATELY 53.0% OF THE OUTSTANDING SHARES ON A DILUTED BASIS) HAS AGREED TO
TENDER THESE SHARES IN THE OFFER. IF THE MAJORITY SHAREHOLDER IS UNABLE TO
TENDER 2,656,500 OF THESE SHARES (THE "PLEDGED SHARES") IN THE OFFER
(CONSTITUTING APPROXIMATELY 17.4% OF THE OUTSTANDING SHARES ON A DILUTED BASIS)
BECAUSE THE PLEDGED SHARES ARE NOT RELEASED FROM CERTAIN PLEDGE ARRANGEMENTS
BEFORE THE CONSUMMATION OF THE OFFER, THE MAJORITY SHAREHOLDER HAS AGREED TO
SELL TO PURCHASER THE PLEDGED SHARES FOLLOWING CONSUMMATION OF THE OFFER UPON
THE RELEASE OF THE PLEDGED SHARES FROM THE PLEDGE ARRANGEMENTS TO WHICH THEY ARE
SUBJECT.
<PAGE>
For your information and for forwarding to your clients, we are enclosing
the following documents:
1. The Offer to Purchase.
2. The Letter of Transmittal to be used by shareholders of the Company
in accepting the Offer. Facsimile copies of the Letter of Transmittal (with
manual signatures) may be used to tender Shares.
3. A letter to shareholders of the Company from Robert L. Praegitzer,
Chairman of the Board and Chief Executive Officer of the Company, together
with a Solicitation/Recommendation Statement on Schedule 14D-9 filed by the
Company with the Securities and Exchange Commission and mailed to the
shareholders of the Company.
4. A printed form of letter which may be sent to your clients for whose
account you hold Shares in your name or in the name of your nominee with
space provided for obtaining such clients' instructions with regard to the
Offer.
5. The Notice of Guaranteed Delivery to be used to accept the Offer if
certificates representing Shares are not immediately available or if time
will not permit all required documents to reach the Depositary prior to the
Expiration Date (as defined in Section 1 of the Offer to Purchase) or if the
procedures for book-entry transfer cannot be completed on a timely basis.
6. Guidelines of the Internal Revenue Service for Certification of
Taxpayer Identification Number on Substitute Form W-9.
7. A return envelope addressed to ChaseMellon Shareholder Services,
L.L.C., as Depositary.
Your attention is directed to the following:
1. The tender price is $5.50 per Common Share, net to the seller in
cash.
2. THE BOARD OF DIRECTORS OF THE COMPANY HAS DETERMINED THAT THE OFFER
AND THE MERGER (AS DEFINED IN THE OFFER TO PURCHASE) ARE FAIR TO, AND IN THE
BEST INTERESTS OF, THE COMPANY AND ITS SHAREHOLDERS, HAS APPROVED THE MERGER
AGREEMENT, THE OFFER AND THE MERGER, AND RECOMMENDS THAT THE HOLDERS OF
SHARES ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER.
3. The Offer and withdrawal rights will expire at 12:00 Midnight, New
York City time, on Tuesday, November 30, 1999, unless the Offer is extended.
4. The Offer is being made for all of the outstanding Shares. The offer
is conditioned upon, among other things, there being validly tendered and
not withdrawn prior to the expiration of the offer at least that number of
Shares which would constitute 51% of the outstanding Shares on a diluted
basis. The majority shareholder of the Company who owns 8,119,375 Shares
(constituting approximately 53.0% of the outstanding Shares on a diluted
basis) has agreed to tender these Shares in the Offer. If the majority
shareholder is unable to tender 2,656,500 of these Shares (the "Pledged
Shares") in the Offer (constituting approximately 17.4% of the outstanding
Shares on a diluted basis) because the Pledged Shares are not released from
certain pledge arrangements before the consummation of the Offer, the
majority shareholder has agreed to sell to Purchaser the Pledged Shares
following consummation of the Offer upon the release of the Pledged Shares
from the pledge arrangements to which they are subject.
5. Shareholders who tender Shares will not be obligated to pay brokerage
fees, commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, transfer taxes on the purchase of Shares by Purchaser pursuant
to the Offer.
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any such extension or
amendment), Purchaser will accept for payment and pay for all Shares which are
validly tendered on or prior to the Expiration Date and not theretofore
withdrawn pursuant to the Offer to Purchase. In all cases, payment for Shares
accepted for
2
<PAGE>
payment pursuant to the Offer will be made only after timely receipt by the
Depositary of (i) certificates representing such Shares (or a timely
confirmation of a book-entry transfer of such Shares into the Depositary's
account at The Depository Trust Company, pursuant to the procedures described in
Section 2 of the Offer to Purchase), (ii) a properly completed and duly executed
Letter of Transmittal (or facsimile thereof) with any required signature
guarantees (or, in connection with a book-entry transfer, an Agent's Message (as
defined in Section 2 of the Offer to Purchase)), and (iii) all other documents
required by the Letter of Transmittal.
If holders of Shares wish to tender, but it is impracticable for them to
forward their certificates or other required documents prior to the expiration
of the Offer, a tender may be effected by following the guaranteed delivery
procedures specified under Section 2, "Procedure for Tendering Shares," in the
Offer to Purchase.
Purchaser will not pay any fees or commissions to any broker or dealer or to
any other person (other than the Information Agent) in connection with the
solicitation of tenders of Shares pursuant to the Offer. Purchaser will,
however, upon request, reimburse you for customary mailing and handling expenses
incurred by you in forwarding the enclosed materials to your clients. Purchaser
will pay or cause to be paid any transfer taxes payable on the transfer of
Shares to it, except as otherwise provided in Instruction 6 of the enclosed
Letter of Transmittal.
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS
PROMPTLY AS POSSIBLE. PLEASE NOTE THAT THE OFFER AND WITHDRAWAL RIGHTS WILL
EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON TUESDAY, NOVEMBER 30, 1999,
UNLESS THE OFFER IS EXTENDED.
Any inquiries you may have with respect to the Offer should be directed to,
and additional copies of the enclosed materials may be obtained by contacting,
the undersigned at (800) 566-9061 or (212) 754-8000 (call collect). Banks and
brokerage firms please call (800) 662-5200.
Very truly yours,
[LOGO]
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
OR ANY PERSON AS AN AGENT OF PURCHASER, SIGMA, TYCO, THE DEPOSITARY OR THE
INFORMATION AGENT, OR ANY AFFILIATE OF ANY OF THE FOREGOING, OR AUTHORIZE YOU OR
ANY OTHER PERSON TO GIVE ANY INFORMATION OR USE ANY DOCUMENT OR MAKE ANY
STATEMENTS ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE
DOCUMENTS ENCLOSED AND THE STATEMENTS CONTAINED THEREIN.
3
<PAGE>
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
PRAEGITZER INDUSTRIES, INC.
AT
$5.50 NET PER SHARE
BY
T MERGER SUB (OR), INC.,
AN INDIRECT WHOLLY-OWNED SUBSIDIARY OF
TYCO INTERNATIONAL LTD.
---------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON TUESDAY, NOVEMBER 30, 1999, UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
To Our Clients:
Enclosed for your consideration is an Offer to Purchase, dated November 1,
1999 (the "Offer to Purchase"), and the related Letter of Transmittal (which
together constitute the "Offer") relating to the offer by T Merger Sub
(OR), Inc., an Oregon corporation ("Purchaser") and a wholly owned subsidiary of
Sigma Circuits, Inc., a Delaware corporation ("Sigma") and an indirect
wholly-owned subsidiary of Tyco International Ltd., a Bermuda company ("Tyco"),
to purchase all of the outstanding shares of common stock (the "Shares"), of
Praegitzer Industries, Inc., an Oregon corporation (the "Company"), at a price
of $5.50 per Share, net to the seller in cash, upon the terms and subject to the
conditions set forth in the Offer. Tyco fully and unconditionally guarantees the
Offer. The Offer is being made in connection with the Agreement and Plan of
Merger, dated as of October 26, 1999, among Sigma, Purchaser and the Company and
the related guarantee of Tyco.
WE ARE THE HOLDER OF RECORD (DIRECTLY OR INDIRECTLY) OF SHARES FOR YOUR
ACCOUNT. A TENDER OF SUCH SHARES CAN BE MADE ONLY BY US OR OUR NOMINEES AS THE
HOLDER OF RECORD AND PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS
FURNISHED TO YOU FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER
SHARES HELD BY US FOR YOUR ACCOUNT.
We request instructions as to whether you wish to have us tender on your
behalf any or all of the Shares held by us for your account, pursuant to the
terms and conditions set forth in the Offer.
Your attention is directed to the following:
1. The tender price is $5.50 per Share, net to you in cash.
2. THE BOARD OF DIRECTORS OF THE COMPANY HAS DETERMINED THAT THE OFFER AND
THE MERGER (AS DEFINED IN THE OFFER TO PURCHASE) ARE FAIR TO, AND IN THE BEST
INTERESTS OF, THE COMPANY AND ITS SHAREHOLDERS, HAS APPROVED THE MERGER
AGREEMENT, THE OFFER AND THE MERGER, AND RECOMMENDS THAT THE HOLDERS OF SHARES
ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER.
3. The Offer and withdrawal rights will expire at 12:00 Midnight, New York
City time, on Tuesday, November 30, 1999, unless the Offer is extended.
4. The Offer is being made for all of the outstanding Shares. The offer is
conditioned upon, among other things, there being validly tendered and not
withdrawn prior to the expiration of the offer at least that number of Shares
which would constitute 51% of the outstanding Shares on a diluted basis. The
majority shareholder of the company who owns 8,119,375 Shares (constituting
approximately 53.0% of the
<PAGE>
outstanding Shares on a diluted basis) has agreed to tender these Shares in the
Offer. If the majority shareholder is unable to tender 2,656,500 of these Shares
(the "Pledged Shares") in the Offer (constituting approximately 17.4% of the
outstanding Shares on a diluted basis) because the Pledged Shares are not
released from certain pledge arrangements before the consummation of the Offer,
the majority shareholder has agreed to sell to Purchaser the Pledged Shares
following consummation of the Offer upon the release of the Pledged Shares from
the pledge arrangements to which they are subject.
5. Shareholders who tender Shares will not be obligated to pay brokerage
fees, commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, transfer taxes on the purchase of Shares by Purchaser pursuant to
the Offer.
If you wish to have us tender any or all of your Shares, please complete,
sign and return the instruction form set forth below. An envelope to return your
instructions to us is enclosed. If you authorize the tender of your Shares, all
such Shares will be tendered unless otherwise specified on the instruction form
set forth below. PLEASE FORWARD YOUR INSTRUCTIONS TO US AS SOON AS POSSIBLE TO
ALLOW US AMPLE TIME TO TENDER YOUR SHARES ON YOUR BEHALF PRIOR TO THE EXPIRATION
OF THE OFFER.
The Offer is made solely by the Offer to Purchase and the related Letter of
Transmittal and any supplements and amendments thereto. Purchaser is not aware
of any state where the making of the Offer is prohibited by administrative or
judicial action pursuant to any valid state statute. If Purchaser becomes aware
of any valid state statute prohibiting the making of the Offer or the acceptance
of Shares pursuant thereto, Purchaser will make a good faith effort to comply
with any such state statute or seek to have such statute declared inapplicable
to the Offer. If, after such good faith effort, Purchaser cannot comply with any
such state statute, the Offer will not be made to (nor will tenders be accepted
from or on behalf of) the holders of Shares in such state. In any jurisdiction
where the securities, blue sky or other laws require the Offer to be made by a
licensed broker or dealer, the Offer will be deemed to be made on behalf of
Purchaser by one or more registered brokers or dealers licensed under the laws
of such jurisdiction.
2
<PAGE>
INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE
FOR CASH ALL OUTSTANDING SHARES OF COMMON STOCK
OF
PRAEGITZER INDUSTRIES, INC.
The undersigned acknowledge(s) receipt of your letter and the enclosed Offer
to Purchase, dated November 1, 1999, and the related Letter of Transmittal
(which together constitute the "Offer") relating to the offer by T Merger Sub
(OR), Inc., an Oregon corporation ("Purchaser") and a wholly owned subsidiary of
Sigma Circuits, Inc., a Delaware corporation ("Sigma") and an indirect
wholly-owned subsidiary of Tyco International Ltd., a Bermuda company ("Tyco"),
to purchase all of the outstanding Shares of common stock (the "Shares"), of
Praegitzer Industries, Inc., an Oregon corporation (the "Company"), at a price
of $5.50 per Share, net to the seller in cash, upon the terms and subject to the
conditions set forth in the Offer.
This will instruct you to tender to Purchaser the number of Shares indicated
below (or if no number is indicated below, all Shares) held by you for the
account of the undersigned, upon the terms and subject to the conditions set
forth in the Offer.
<TABLE>
<CAPTION>
<S> <C>
Number of Shares to be Tendered:* SIGN HERE
- ------------------- Shares --------------------------------------------
Account Number: --------------------------------------------
- -------------------------------------------- --------------------------------------------
- ------------------------ Signature(s)
Dated , 1999 ---------------------------------------------
Please print name(s) and address(es) here
---------------------------------------------
Area Code and Telephone Number(s)
---------------------------------------------
Tax Identification or Social Security Number
</TABLE>
- ------------------------
* Unless otherwise indicated, it will be assumed that all of your Shares held
by us for your account are to be tendered.
3
<PAGE>
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK
OF
PRAEGITZER INDUSTRIES, INC.
TO
T MERGER SUB (OR), INC.,
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
TYCO INTERNATIONAL LTD.
(Not to be used for Signature Guarantees)
This form, or one substantially equivalent hereto, must be used to accept
the Offer (as defined below) if certificates representing shares of common stock
(the "Shares") of Praegitzer Industries, Inc., an Oregon corporation, are not
immediately available (or if the procedure for book-entry transfer cannot be
completed on a timely basis), or if time will not permit all required documents
to reach the Depositary prior to the Expiration Date (as defined in Section 1 of
the Offer to Purchase). Such form may be delivered by hand or transmitted by
facsimile transmission or mail to the Depositary. See Section 2 of the Offer to
Purchase.
THE DEPOSITARY FOR THE OFFER IS:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
<TABLE>
<S> <C> <C> <C>
BY MAIL: BY HAND: BY OVERNIGHT COURIER: BY FACSIMILE:
ChaseMellon Shareholder ChaseMellon Shareholder ChaseMellon Shareholder (For Eligible Institutions
Services, L.L.C. Services, L.L.C. Services, L.L.C Only)
P.O. Box 3301 120 Broadway--3rd Floor 85 Challenger Road (201) 329-8936
South Hackensack, NJ 07606 New York, NY 10271 Mail Drop--Reorg. CONFIRM BY TELEPHONE:
Attn.: Reorganization Attn.: Reorganization Ridgefield Park, NJ 07660 (201) 296-4860
Department Department Attn.: Reorganization
Department
</TABLE>
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION OTHER
THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
This form is not to be used to guarantee signatures. If a signature on a
Letter of Transmittal is required to be guaranteed by an "Eligible Institution"
under the instructions thereto, such signature guarantee must appear in the
applicable space provided in the signature box on the Letter of Transmittal.
The Eligible Institution that completes this form must communicate the
guarantee to the Depositary and must deliver the Letter of Transmittal or an
Agent's Message (as defined in Section 2 of the Offer to Purchase) and
certificates representing the Shares to the Depositary within the time period
specified herein. Failure to do so could result in a financial loss to the
Eligible Institution.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to T Merger Sub (OR), Inc., an Oregon
corporation and a wholly owned subsidiary of Sigma Circuits, Inc., a Delaware
corporation, and an indirect wholly owned subsidiary of Tyco
International Ltd., a Bermuda company, upon the terms and subject to the
conditions set forth in the Offer to Purchase dated November 1, 1999, (the
"Offer to Purchase") and the related Letter of Transmittal (which together
constitute the "Offer"), receipt of which is hereby acknowledged, the number of
Shares specified below pursuant to the guaranteed delivery procedures set forth
in Section 2 of the Offer to Purchase.
Number of Shares________________________________________________________________
Certificate No(s). (if available)_______________________________________________
Name(s) of Record Holder(s)_____________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please type or Print)
Address(es)_____________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Zip Code)
/ / CHECK BOX IF SHARES WILL BE TENDERED BY BOOK-ENTRY TRANSFER.
Name of Tendering Institution:__________________________________________________
Area Code and Tel. No(s)._______________________________________________________
Account Number__________________________________________________________________
Signature(s)____________________________________________________________________
Dated , 1999
2
<PAGE>
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a member in good standing of the Security Transfer
Agent's Medallion Program, the New York Stock Exchange Medallion Signature
Program or the Stock Exchange Medallion Program (each, an "Eligible
Institution"), (a) represents that the above named person(s) own(s) the Shares
tendered hereby within the meaning of Rule 14e-4 promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
(b) represents that such tender of Shares complies with Rule 14e-4 under the
Exchange Act, and (c) guarantees delivery to the Depositary, at one of its
addresses set forth above, of certificates representing the Shares tendered
hereby in proper form for transfer, or confirmation of book-entry transfer of
such Shares into the Depositary's accounts at The Depository Trust Company, in
each case with delivery of a properly completed and duly executed Letter of
Transmittal (or facsimile thereof) with any required signature guarantees, or
an Agent's Message in the case of a book-entry transfer, and any other
required documents, within three Nasdaq Stock Market trading days after the
date hereof.
<TABLE>
<S> <C>
(Name of Firm) (Authorized signature)
(Address) (Zip code) (Title) (Please Type or Print)
Date , 1999
(Area Code and Tel. No.)
</TABLE>
NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE OF GUARANTEED
DELIVERY. CERTIFICATES REPRESENTING SHARES SHOULD BE SENT WITH YOUR LETTER OF
TRANSMITTAL.
3
<PAGE>
FOR IMMEDIATE RELEASE
CONTACT: CONTACT: CONTACT:
Gina O'Neill Matt Bergeron J. Brad McGee
Director of Investor Relations President and COO Senior Vice President
Praegitzer Industries, Inc. Praegitzer Industries, Inc. Tyco International
(503) 454-6059 (503) 454-6066 (US) Inc.
(603) 778-9700
PRAEGITZER INDUSTRIES, INC. ANNOUNCES CASH ACQUISITION
BY TYCO INTERNATIONAL LTD.
Tualatin, OR and Hamilton, Bermuda, October 26, 1999 - Praegitzer
Industries, Inc. (NASDAQ-PGTZ), a leading designer and manufacturer of complex
printed circuit boards, and Tyco International Ltd. (NYSE-TYC, LSE-TYI,
BSX-TYC), a diversified manufacturing and service company, announced today that
they have entered into a definitive Merger Agreement pursuant to which Tyco will
acquire, for cash, all of the outstanding common shares of Praegitzer at a price
of $5.50 per share.
"After a review of possibilities, the Praegitzer Board of Directors
determined that being acquired by Tyco was the best course of action for our
shareholders, employees and customers," stated Matt Bergeron, president and
chief operating officer of Praegitzer Industries, Inc. Bergeron continued, "Our
operations, enhanced by Tyco's financial strength and breadth of product
offerings, will provide a stable environment and exciting opportunity for
Praegitzer employees, suppliers and customers. In addition, the combination of
Praegitzer Industries and Tyco International will create one of the world's
foremost global printed circuit board design and manufacturing companies.
Together we can provide our customers with a more comprehensive range of
integrated solutions to accommodate the rapid growth of the technological adept
interconnect market on a global basis."
"Praegitzer is an excellent fit with the Tyco Printed Circuit Group
(TPCG). First, the combination of Praegitzer's volume commercial production
facilities with ours creates solid opportunities in the data networking and
telecommunications markets. Second, the addition of Praegitzer's quick-turn
capability clearly positions TPCG as the leader in this attractive market.
Finally, Praegitzer's design centers will enhance our ability to provide
advanced circuit board design support for the newest generation of electronics
from our Tyco Submarine Systems undersea telecommunications business," said
L. Dennis Kozlowski, Tyco's Chairman and Chief Executive Officer. Mr. Kozlowski
also noted that the acquisition will provide an immediate positive contribution
to Tyco's earnings.
<PAGE>
Under the Agreement, a subsidiary of Tyco will shortly commence a
tender offer to purchase all of Praegitzer's 13,129,751 shares of common stock
for $5.50 per share in cash, for a total of approximately $72 million. The
tender offer will be followed by a merger in which each of the remaining shares
of Praegitzer will be exchanged for $5.50 in cash.
The offer will be made pursuant to definitive offering documents to be
filed with the Securities and Exchange Commission. The offer is conditioned on
the tender of the majority of the outstanding shares of common stock on a fully
diluted basis, as well as certain other conditions.
Praegitzer Industries, Inc., founded in 1981, is a leader in providing
electronics original equipment manufacturers and contract manufacturers with a
full range of printed circuit board and interconnect solutions. Praegitzer has
four fabrication facilities, as well as, design centers serving customers in
four key electronics industry segments: data and telecommunications; computer
and peripherals; industrial and instrumentation; and, business and consumer. It
is a publicly traded company with annual sales of over $200 million and more
than 1,700 employees. For more information on Praegitzer Industries, Inc., visit
WWW.PII.COM.
Tyco International Ltd., a diversified manufacturing and service
company, is the world's largest manufacturer and servicer of electrical and
electronic components and undersea telecommunications systems, the world's
largest manufacturer, installer, and provider of fire protection systems and
electronic security services, has strong leadership positions in disposable
medical products, plastics, and adhesives, and is the largest manufacturer of
flow control valves. The Company operates in more than 80 countries around the
world and has expected fiscal 2000 revenues in excess of $25 billion.
FORWARD LOOKING INFORMATION
Comments in this release concerning Tyco's expected fiscal 2000
revenues, expected earnings contribution from the acquisition of Praegitzer, the
growth of the interconnect market and the stability of the environment created
by the acquisition are forward-looking statements, which are based on
management's good faith expectations and belief concerning future developments.
Actual results may materially differ from these expectations as a result of many
factors, relevant examples of which are set forth in Praegitzer's 1999 Annual
Report on Form 10-K and in the "Management Discussion and Analysis" section of
Tyco's 1998 Annual Report to Shareholders and the Tyco's 1998 Annual Report on
Form 10-K.
# # #
<PAGE>
- --------------------------------------------------------------------------------
THIS ANNOUNCEMENT IS NEITHER AN OFFER TO PURCHASE NOR A SOLICITATION OF AN OFFER
TO SELL SHARES. THE OFFER IS MADE SOLELY BY THE OFFER TO PURCHASE, DATED
NOVEMBER 1, 1999, AND THE RELATED LETTER OF TRANSMITTAL AND IS NOT
BEING MADE TO (NOR WILL TENDERS BE ACCEPTED FROM OR ON BEHALF OF)
HOLDERS OF SHARES IN ANY JURISDICTION IN WHICH THE MAKING OF
THE OFFER OR THE ACCEPTANCE THEREOF WOULD NOT BE IN
COMPLIANCE WITH THE LAWS OF SUCH JURISDICTION. IN
ANY JURISDICTION THE SECURITIES LAWS OF WHICH
REQUIRE THE OFFER TO BE MADE BY A LICENSED
BROKER OR DEALER, THE OFFER SHALL BE
DEEMED MADE ON BEHALF OF THE PURCHASER
BY ONE OR MORE REGISTERED BROKERS OR
DEALERS LICENSED UNDER THE LAWS OF
SUCH JURISDICTION.
NOTICE OF OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
PRAEGITZER INDUSTRIES INC.
AT
$5.50 NET PER SHARE
BY
T MERGER SUB (OR), INC.
AN INDIRECT WHOLLY OWNED SUBSIDIARY OF
TYCO INTERNATIONAL LTD.
T Merger Sub (OR), Inc. an Oregon corporation (the "Purchaser") and a
wholly owned subsidiary of Sigma Circuits, Inc. ("Sigma"), a Delaware
corporation and an indirect subsidiary of Tyco International Ltd., a Bermuda
company ("Tyco"), is offering to purchase all outstanding shares of common stock
(the "Shares") of Praegitzer Industries Inc., an Oregon corporation (the
"Company"), at $5.50 per Share, net to the seller in cash (the "Offer Price"),
upon the terms and subject to the conditions set forth in the Offer to Purchase,
dated November 1, 1999, and in the related Letter of Transmittal (which together
constitute the "Offer"). Tyco fully and unconditionally guarantees the Offer.
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON TUESDAY, NOVEMBER 30, 1999, UNLESS EXTENDED.
- --------------------------------------------------------------------------------
The Offer is conditioned upon, among other things, there being validly
tendered and not withdrawn prior to the expiration of the Offer at least that
number of Shares which would constitute 51% of the outstanding Shares on a
diluted basis (the "Minimum Condition"). The majority shareholder of the Company
who owns 8,119,375 Shares (constituting approximately 53.0% of the outstanding
Shares on a diluted basis) has agreed to tender these Shares in the Offer. If
the majority shareholder is unable to tender 2,656,500 of these Shares (the
"Pledged Shares") in the Offer (constituting approximately 17.4% of the
outstanding Shares on a diluted basis) because the Pledged Shares are not
released from certain pledge arrangements before the consummation of the Offer,
the majority shareholder has agreed to sell to the Purchaser the Pledged Shares
following consummation of the Offer upon the release of the Pledged Shares from
the pledge arrangements to which they are subject.
The Offer is being made pursuant to an Agreement and Plan of Merger,
dated as of October 26, 1999 (the "Merger Agreement"), among Sigma, the
Purchaser and the Company and the related guarantee of Tyco, pursuant to which,
following the consummation of the Offer and the satisfaction or waiver of
certain conditions, the Purchaser will be merged with and into the Company (the
"Merger"). At the effective time of the Merger, each outstanding Share (other
than Shares owned by Tyco, Sigma, the Purchaser or any other wholly owned
subsidiary of Tyco or held by shareholders, if any, who are entitled to and who
properly exercise dissenters' rights under Oregon law) will be converted into
the right to receive the Offer Price without interest.
The Board of Directors of the Company has determined that the Offer
and the Merger are fair to, and in the best interests of, the Company and its
shareholders, has approved the Merger Agreement, the Offer and the Merger, and
recommends that the holders of the Shares accept the Offer and tender their
Shares pursuant to the Offer.
For purposes of the Offer, the Purchaser will be deemed to have
accepted for payment, and thereby purchased, Shares properly tendered to the
Purchaser and not withdrawn as, if and when the Purchaser gives oral or written
notice to ChaseMellon Shareholder Services, L.L.C. (the "Depositary") of the
Purchaser's acceptance for payment of such Shares. Upon the terms and subject to
the conditions of the Offer, payment for Shares purchased pursuant to the Offer
will be made by deposit of the purchase price therefor with the Depositary,
which will act as agent for tendering shareholders for the purpose of receiving
payment from the Purchaser and transmitting payment to tendering shareholders.
In all cases, payment for Shares purchased pursuant to the Offer will be made
only after timely receipt by the Depositary of (a) certificates for such Shares
or timely confirmation of book-entry transfer of such Shares into the
Depositary's account at The Depository Trust Company ("DTC") pursuant to the
procedures set forth in Section 2 of the Offer to Purchase, (b) a properly
completed and duly executed Letter of Transmittal (or facsimile thereof) with
any required signature guarantees and (c) any other documents required by the
Letter of Transmittal. Under no circumstances will interest be paid by the
Purchaser on the purchase price of the Shares, regardless of any extension of
the Offer or any delay in making such payment.
The term "Expiration Date" means 12:00 Midnight, New York City time,
on Tuesday, November 30, 1999, unless and until the Purchaser, in its sole
discretion (but subject to the terms of the Merger Agreement), shall have
extended the period of time during which the Offer is open, in which event the
term "Expiration Date" shall mean the latest time and date at which the Offer,
as so extended by the Purchaser, shall expire. The Purchaser expressly reserves
the right, in its sole discretion (but subject to the terms of the Merger
Agreement), at any time or from time to time, and regardless of whether or not
any of the events set forth in Section 15 of the Offer to Purchase shall have
occurred or shall have been determined by the Purchaser to have occurred, to
extend the period of time during which the Offer is open and thereby delay
acceptance for payment of, and the payment for, any Shares, by giving oral or
written notice of such extension to the Depositary. The Purchaser shall not have
any obligation to pay interest on the purchase price for tendered Shares in the
event the Purchaser exercises its right to extend the period of time during
which the Offer is open. There can be no assurance that the Purchaser will
exercise its right to extend the Offer. Any such extension will be followed by a
public announcement thereof no later than 9:00 A.M., New York City time, on the
next business day after the previously scheduled Expiration Date. During any
such extension, all Shares previously tendered and not withdrawn will remain
subject to the Offer, subject to the right of a tendering shareholder to
withdraw such shareholder's Shares.
Except as otherwise provided below, tenders of Shares are irrevocable.
Shares tendered pursuant to the Offer may be withdrawn at any time prior to
12:00 Midnight, New York City time, on Tuesday, November 30, 1999 (or, if the
Purchaser shall have extended the period of time during which the Offer is open,
the latest time and date at which the Offer, as so extended by the Purchaser,
shall expire) and, unless theretofore accepted for payment and paid for by the
Purchaser pursuant to the Offer, may also be withdrawn at any time on or after
January 1, 2000. For a withdrawal to be effective, a written, telegraphic or
facsimile transmission notice of withdrawal must be timely received by the
Depositary at one of its addresses set forth on the back cover of the Offer to
Purchase and must specify the name of the person having tendered the Shares to
be withdrawn, the number of Shares to be withdrawn and the name of the
registered holder of the Shares to be withdrawn, if different from the name of
the person who tendered the Shares. If certificates for Shares have been
delivered or otherwise identified to the Depositary, then, prior to the physical
release of such certificates, the serial numbers shown on such certificates must
be submitted to the Depositary and, unless such Shares have been tendered by an
Eligible Institution (as defined in Section 2 of the Offer to Purchase), the
signatures on the notice of withdrawal must be guaranteed by an Eligible
Institution. If Shares have been delivered pursuant to the procedures for
book-entry transfer as set forth in Section 2 of the Offer to Purchase, any
notice of withdrawal must also specify the name and number of the account at DTC
to be credited with the withdrawn Shares and otherwise comply with DTC's
procedures. Withdrawals of tenders of Shares may not be rescinded, and any
Shares properly withdrawn will thereafter be deemed not validly tendered for
purposes of the Offer. However, withdrawn Shares may be retendered by again
following one of the procedures described in Section 2 of the Offer to Purchase
at any time prior to the Expiration Date.
The Offer to Purchase and the related Letter of Transmittal and other
relevant materials will be mailed to record holders of Shares and furnished to
brokers, dealers, banks, trust companies and similar persons whose names, or the
names of whose nominees, appear on the shareholder lists or, if applicable, who
are listed as participants in a clearing agency's security position listing, for
subsequent transmittal to beneficial owners of Shares.
The information required to be disclosed by Rule 14d-6(e)(1)(vii)
under the Securities Exchange Act of 1934, as amended, is contained in the Offer
to Purchase and is incorporated herein by reference.
THE OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION AND SHOULD BE READ IN THEIR ENTIRETY BEFORE ANY DECISION
IS MADE WITH RESPECT TO THE OFFER.
Requests for copies of the Offer to Purchase and the Letter of
Transmittal may be directed to the Information Agent as set forth below, and
copies will be furnished promptly at the Purchaser's expense.
THE INFORMATION AGENT FOR THE OFFER IS:
MORROW & CO., INC.
445 Park Avenue, 5th Floor
New York, NY 10022
Banks and Brokerage Firms Call: (800) 662-5200
Shareholders Please Call: (800) 566-9061
November 1, 1999
- --------------------------------------------------------------------------------
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER.--Social Security numbers have nine digits separated by two hyphens: i.e.,
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen: i.e., 00-0000000. The table below will help determine the number to
give the payer.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
<C> <S> <C> <C>
FOR THIS TYPE OF ACCOUNT: GIVE THE NAME AND SOCIAL
SECURITY NUMBER OF:
<CAPTION>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
GIVE THE NAME AND
FOR THIS TYPE OF ACCOUNT: EMPLOYER
IDENTIFICATION
NUMBER OF:
- -------------------------------------------------------------------------------
1. Individual The individual
<C> <S> <C> <C>
2. Two or more individuals The actual owner of the
(joint account) account or, if combined
funds, the first
individual on the
account(1)
3. Custodian account of a minor The minor(2)
(Uniform Gift to Minors Act)
4. a. The usual revocable The grantor-trustee(1)
savings trust (grantor is
also trustee)
b. So-called trust account The actual owner(1)
that is not a legal or valid
trust under state law
5. Sole proprietorship The owner(3)
6. Sole proprietorship The owner(3)
7. A valid trust, estate, or The legal entity(4)
pension trust
8. Corporate The corporation
9. Association, club, religious, The organization
charitable, educational
organization or other tax-
exempt organization
10. Partnership The partnership
11. A broker or registered The broker or nominee
nominee
12. Account with the Department The public entity
of Agriculture in the name of
a public entity (such as a
state or local government,
school district, or prison)
that receives agriculture
program payments
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
<C> <S> <C> <C>
- -------------------------------------------------------------------------------
</TABLE>
(1) List first and circle the name of the person whose number you furnish. If
only one person on a joint account has a social security number, that
person's number must be furnished.
(2) Circle the minor's name and furnish the minor's social security number.
(3) You must show your individual name, but you may also enter your business or
"doing business as" name. You may use either your social security number or
your employer identification number (if you have one).
(4) List first and circle the name of the legal trust, estate, or pension trust.
(Do not furnish the tax identification number of the personal representative
or trustee unless the legal entity itself is not designated in the account
title.)
NOTE: If no name is circled when more than one name is listed, the number will
be considered to be that of the first name listed.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number, or Form
SS-4, Application for an Employer Identification Number, at the local office of
the Social Security Administration or the Internal Revenue Service and apply for
a number. United States resident aliens who cannot obtain a social security
number must apply for an ITIN (Individual Taxpayer Identification Number) on
Form W-7.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Even if the payee does not provide a TIN in the manner required, you are NOT
REQUIRED to backup withhold on any payments you make if the payee is:
1. An organization exempt from tax under section 501(a), any IRA, or a
custodial account under section 403(b)(7) if the account satisfies the
requirements of section 401(f)(2).
2. The United States or any of its agencies or instrumentalities.
3. A state, the District of Columbia, a possession of the United States, or any
of their political subdivisions or instrumentalities.
4. A foreign government or any of its political subdivisions, agencies, or
instrumentalities.
5. An international organization or any of its agencies or instrumentalities.
Other payees that MAY BE EXEMPT from backup withholding include:
6. A corporation.
7. A foreign central bank of issue.
8. A dealer in securities or commodities required to register in the United
States, the District of Columbia, or a possession of the United States.
9. A futures commission merchant registered with the Commodity Futures Trading
Commission.
10. A real estate investment trust.
11. An entity registered at all times during the tax year under the Investment
Company Act of 1940.
12. A common trust fund operated by a bank under section 584(a).
13. A financial institution.
14. A middleman known in the investment community as a nominee or who is listed
in the most recent publication of the American Society of Corporate
Secretaries, Inc., Nominee List.
15. A trust exempt from tax under section 664 or described in section 4947.
INTEREST AND DIVIDEND PAYMENTS. All listed payees are exempt except the payee in
item 9.
BROKER TRANSACTIONS. All payees listed in items 1 through 13 are exempt. A
person registered under the Investment Advisors Act of 1940 who regularly acts
as a broker is also exempt.
PAYMENTS EXEMPT FROM BACKUP WITHHOLDING
Payments that are not subject to information reporting also are not subject
to backup withholding.
DIVIDENDS AND PATRONAGE DIVIDENDS that generally are exempt from backup
withholding include:
- Payments to nonresident aliens subject to withholding under section 1441.
- Payments to partnerships not engaged in a trade or business in the United
States and that have at least one nonresident alien partner.
- Payments of patronage dividends not paid in money.
- Payments made by certain foreign organizations.
- Section 404(k) distributions made by an ESOP.
INTEREST PAYMENTS that generally are exempt from backup withholding include:
- Payments of interest on obligations issued by individuals. However, if you
pay $600 or more of interest IN THE COURSE OF YOUR TRADE OR BUSINESS to a
payee, you must report the payment. Backup withholding applies to the
reportable payment if the payee has not provided a TIN or has provided an
incorrect TIN.
- Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
- Payments described in section 6049(b)(5) to nonresident aliens.
- Payments on tax-free covenant bonds under section 1451.
- Payments made by certain foreign organizations.
- Mortgage interest paid to you.
Exempt payees described above should file Form W-9 to avoid possible erroneous
backup withholding.
FILE THE FORM WITH THE PAYER, FURNISH YOUR TAXPAYER IDENTIFICATION NUMBER, WRITE
"EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT TO THE PAYER. IF THE PAYMENTS
ARE INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS, ALSO SIGN AND DATE THE FORM.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you fail
to furnish your correct taxpayer identification number to a requester, you
are subject to a penalty of $50 for each such failure unless your failure is
due to reasonable cause and not to willful neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you
make a false statement with no reasonable basis which results in no
imposition of backup withholding, you are subject to a penalty of $500.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Willfully falsifying
certifications or affirmations may subject you to criminal penalties
including fines and/or imprisonment.
(4) MISUSE OF TAXPAYER IDENTIFICATION NUMBER.--If the requester discloses or
uses taxpayer identification numbers in violation of Federal law, the
requester may be subject to civil and criminal penalties.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE.
<PAGE>
[Letter for Adams, Harkness & Hill, Inc.]
May 3, 1999
PERSONAL & CONFIDENTIAL
Mr. Brian Roussell
Chief Financial Officer
Tyco Printed Circuit Group Inc.
11 Tyco Drive
Stafford Springs, CT 06076[cad 220]0100
Re: Confidentiality Agreement (the "Agreement")
Dear Brian:
1. You have requested information about Praegitzer Industries, Inc., (the
"Company") in connection with your consideration of a possible transaction
with the Company (a "Transaction"). As a condition to our furnishing such
information to you, we are requiring that you agree, as set forth below, to
treat confidentially such information and any other information that the
Company, its agents or its representatives (including attorneys and financial
advisors) furnishes to you or your directors, officers, employees, agents,
advisors, prospective bank or institutional lenders, affiliates or
representatives of your agents, advisors or prospective lenders (all of the
foregoing collectively referred to as "your Representatives"), whether
furnished before or after the date of this letter, whether communicated in
writing or orally or gathered by inspection, and all notes, analyses,
compilations, studies or other documents, whether prepared by you or others,
which contain or otherwise reflect such information and such information
shall include but not be limited to information developed by you or your
Representatives from plant visits or interviews with customers, suppliers or
employees (collectively, the "Evaluation Material").
2. The term "Evaluation Material" does not include information which
(i) becomes generally available to the public other than as a result of a
disclosure by you or your Representatives, (ii) was available to you on a
non-confidential basis prior to its disclosure to you by the Company, its
representatives or its agents, (iii) becomes available to you on a
non[cad 220]confidential basis from a source other than the Company, its
representatives or its agents, provided that such source is not bound by a
confidentiality agreement with the Company, its representatives or its agents
or otherwise prohibited from transmitting the information to you or your
Representatives by a contractual, legal or fiduciary obligation, or (iv) was
independently developed by you without access to or the benefit of the
Evaluation Material.
3. It is understood that you may disclose any of the Evaluation Material
to those of your Representatives who require such material for the purpose of
evaluating a possible Transaction (provided that such Representatives shall
be informed by you of the confidential nature of the Evaluation Material).
You agree that you and your Representatives will keep the Evaluation Material
confidential from any employee of the Company, except with the specific prior
consent of the Company, Adams, Harkness & Hill, Inc. or McDonald Investments,
Inc. or as otherwise permitted by the terms hereof. You further agree that
you and your Representatives will not use any of the Evaluation Material for
any reason or purpose other than to evaluate a possible Transaction.
4. Without the prior written consent of the Company, you and your
Representatives will not disclose to any person (i) the fact that the
Evaluation Material has been made available to you or that you have
<PAGE>
inspected any portion of the Evaluation Material, (ii) the fact that any
discussions or negotiations are taking place concerning a possible
Transaction, or (iii) any of the terms, conditions or other facts with
respect to any possible Transaction, including the status thereof, unless and
only to the extent that such disclosure (after making reasonable efforts to
avoid such disclosure and after advising and consulting with the Company
about your intention to make, and the proposed contents of, such disclosure)
is, in the opinion of your counsel, which shall promptly be provided to the
Company in writing, required by applicable United States securities laws. The
term "person" as used in this letter shall be broadly interpreted to include
without limitation any corporation, company, partnership and individual.
5. In the event that you or any of your Representatives are requested or
required (by oral questions, interrogatories, requests for information or
documents, subpoena, Civil Investigative Demand or similar process) to
disclose any of the Evaluation Material, it is agreed that you or such
Representative, as the case may be, will provide the Company with prompt
notice in writing of such request(s) so that it may seek an appropriate
protective order or other appropriate remedy and/or waive your or such
Representative's compliance with the provisions of this Agreement. In the
event that such protective order or other remedy is not obtained, or that the
Company grants a waiver hereunder, you or such Representative may furnish
that portion (and only that portion) of the Evaluation Material which, in the
written opinion of your counsel, you are legally compelled to disclose and
will exercise your best efforts to obtain reliable assurance that
confidential treatment will be accorded any Evaluation Material so furnished.
6. Without the prior written consent of the Company and except for
communications with Adams, Harkness and Hill, Inc. or McDonald Investments,
Inc., (i) neither you nor those of your Representatives who are aware of the
Evaluation Material and/or the possibility of a Transaction will initiate or
cause to be initiated any communications with any customer, supplier or
employee of the Company concerning the Evaluation Material or any possible
Transaction or any other matter concerning the Company and (ii) none of your
directors, officers or employees who are aware of the Evaluation Material
and/or the possibility of a Transaction will, for the one (1) year period
from the date of this letter agreement, either directly or indirectly solicit
or cause to be solicited the employment of or hire any employee of the
Company, unless such employee is responding to a bona fide advertisement for
employment placed by you in a newspaper or trade publication of general
circulation; provided, however, that the foregoing provision will not prevent
you from employing any person who ceases to be employed by the Company for
the previous three (3) months and that nothing herein shall preclude you from
hiring any such employee who initiates contact with you or responds to any
advertisements or general solicitation that is not specifically targeted at
such person. In addition, the provisions in this Section 6 shall not apply
to the hiring of any Company employee earning less than $20.00 per hour.
7. You will not copy or remove from the Company's premises any data,
documents, reports or other materials without the Company's express approval.
If you determine that you will not proceed with the Transaction or a
Transaction is not consummated by you, or upon the written request of the
Company, you will promptly deliver to the Company all documents or other
materials furnished by the Company to you or your Representatives
constituting Evaluation Material, together with all copies thereof in the
possession of you or your Representatives. In the event of such request, all
other documents, studies, analyses, compilations or other matter reflecting
or constituting Evaluation Material in the possession of you or your
Representatives will be destroyed, with any such destruction confirmed by you
in writing to the Company.
8. You hereby acknowledge that you are aware that the securities of the
Company are traded publicly. You hereby acknowledge that you are aware, and
that you will advise each of your Representatives and such other persons who
are informed by you as to the matters which are the subject of this letter,
that the United States securities laws prohibit any person who has received
material, non-public information from an issuer concerning the matters which
are the subject of this letter from purchasing or selling securities of such
issuer or from communicating such information to any other person under
circumstances in which it is reasonably foreseeable that such person is
likely to purchase or sell such securities.
2
<PAGE>
9. In further consideration of our furnishing you with Evaluation
Material, you also agree that, for a period of two (2) years from the date of
this letter agreement, neither you nor any of your Representatives, without
the prior written consent of the Company, will:
(a) acquire, offer to acquire, or agree to acquire, directly or
indirectly, by purchase or otherwise, any voting securities or direct or
indirect rights to acquire any voting securities of the Company, or of
any successor to or otherwise, any voting securities or direct or
indirect rights to acquire any voting securities of the Company, or of
any successor to or person(s) in control of the Company, other than
voting securities acquired solely for investment purposes totaling less
than one percent (1%) of any such entity's outstanding voting
securities, or any assets of the Company or any subsidiary or division
thereof or of any such successor or controlling person;
(b) make, or in any way participate, directly or indirectly, in any
"solicitation" or "proxies" to vote (as such terms are used in the rules
of the Securities and Exchange Commission), or seek to advise or
influence any person or entity in respect of the voting of any voting
securities of the Company;
(c) make any public announcement in respect of or submit a proposal
for, or offer of (with or without conditions) any extraordinary
transaction involving the Company or its securities or assets;
(d) seek or propose to influence or control the Company's management
or policies; or
(e) form, join or in any way participate in a "group" as defined in
Section 13 (d) (3) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), in connection with any of the foregoing.
You promptly will advise the Company of any inquiry or proposal made to
you in respect of any of the foregoing paragraph 9. You also agree that the
Company will be entitled to equitable relief, including but not limited to
injunctive relief, in the event of any breach of the provisions of these
paragraphs.
If a third party not affiliated with Tyco Printed Circuit Group Inc.
("Tyco") or any of its affiliates shall have (i) acquired or agreed to
acquire beneficial ownership of at least 10% of the outstanding shares of
capital stock of the Company, which acquisition was not induced directly or
indirectly by Tyco or any of its affiliates, and shall have filed a
Schedule 13D under the Exchange Act with the Securities and Exchange
Commission that sets forth a present intent that is other than passive in all
material respects, provided that an acquisition for investment purposes only
shall be deemed passive, or (ii) commenced or publicly announced its
intention to commence a tender or exchange offer for more than 20% of the
outstanding shares of capital stock of the Company, Tyco shall not be bound
by clauses (a) through (e) of this Section 9 unless the foregoing
third party shall have, in the case of clause (i) above, reduced its
beneficial ownership of the outstanding shares of the capital stock to below
10% or, in the case of clause (ii) above, terminated or publicly announced
its intention to terminate the tender offer, or the tender offer has
otherwise expired, without the purchase by such third party of at least 20%
of the outstanding shares of capital stock of the Company.
10. You understand that the Company has endeavored to include in the
Evaluation Material information known to it which it believes to be relevant
for the purpose of your investigation, and you further understand that
neither the Company nor its agents or its representatives makes any
representation or warranty as to the accuracy or completeness of the
Evaluation Material. You agree that neither the Company nor its agents or its
representatives makes any representation or warranty as to the accuracy or
completeness of the Evaluation Material. You agree that neither the Company
nor its agents or its representatives shall have any liability to you or any
of your Representatives resulting from the use of the Evaluation Material by
you or such Representatives. Only those representations and warranties that
may be made to you or your affiliates in a definitive written agreement for a
Transaction, when, as and if executed and subject to such limitations and
restrictions as may be specified therein, shall have any legal effect, and
you agree that if you determine to engage in a Transaction such determination
will be based solely on the terms of such written agreement and on your own
investigation, analysis and assessment of
3
<PAGE>
the business to be acquired. Moreover, unless and until such a definitive
written agreement is entered into, none of the Company, its affiliates or you
will be under any legal obligation of any kind whatsoever with respect to
such a Transaction except for the matters specifically agreed to in this
Agreement. The agreements set forth in this Agreement may be modified or
waived only by a separate writing signed by the Company and you expressly so
modifying or waiving such agreements.
11. You hereby agree to indemnify and hold harmless the Company from any
damage, loss, cost or liability (including legal fees and the cost of
enforcing this indemnity) arising out of or resulting from any unauthorized
use or disclosure by you or your Representatives of the Evaluation Material.
You also acknowledge that money damages would be both incalculable and an
insufficient remedy for any breach of this Agreement by you or your
Representatives and that any such breach would cause the Company irreparable
harm. Accordingly, you also agree that in the event of any breach or
threatened breach of this Agreement, the Company, in addition to any other
remedies at law or in equity it may have, shall be entitled, without the
requirement of posting a bond or other security, to equitable relief,
including injunctive relief and specific performance.
12. It is understood and agreed that no failure or delay by the Company
in exercising any right, power or privilege hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any right, power or
privilege hereunder.
13. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other
provisions of this letter agreement, which shall remain in full force and
effect.
14. The rights and obligations provided by this Agreement shall expire
on the second anniversary of the date first above written.
15. You agree and consent to personal jurisdiction and service and venue
in any federal or state court within the State of Oregon having subject
matter jurisdiction, for the purposes of any action, suit or proceeding
arising out of or relating to this Agreement. This Agreement shall be
governed by and construed in accordance with the laws of the State of Oregon,
without giving effect to the conflict of laws provisions thereof.
16. If you are in agreement with the foregoing, please sign and return
one copy of this letter, which thereupon will constitute our Agreement with
respect to the subject matter hereof.
Very truly yours,
Adams, Harkness & Hill, Inc.
on behalf of Praegitzer Industries, Inc.
/s/ Mark Young
Mark Young
Vice President
Confirmed and agreed to this 3rd
day of May, 1999:
By: /s/ Brian Roussell
-----------------------------------------------------------------
Brian Roussell
Title:
---------------------------------------------------------------
Chief Financial Officer[cad 228]Tyco Printed Circuit Group Inc.
4
<PAGE>
EXHIBIT 99(c)(2)
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
SIGMA CIRCUITS, INC.
and
T MERGER SUB (OR), INC.
and
PRAEGITZER INDUSTRIES, INC.
with the Guarantee of
TYCO INTERNATIONAL LTD.
------------------------------
Dated as of October 26, 1999
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
-----
<S> <C> <C>
ARTICLE I
TENDER OFFER AND MERGER
1.1 The Offer.............................................................................................. 7
1.2 Company Action......................................................................................... 8
1.3 Directors.............................................................................................. 10
1.4 The Merger............................................................................................. 11
1.5 Effective Time......................................................................................... 11
1.6 Conversion of Common Shares............................................................................ 11
1.7 Dissenting Shares...................................................................................... 12
1.8 Surrender of Common Shares............................................................................. 12
1.9 Options, Warrants and Employee Stock Purchase Plan..................................................... 14
1.10 Articles of Incorporation and Bylaws................................................................... 15
1.11 Directors and Officers................................................................................. 15
1.12 Other Effects of Merger................................................................................ 15
1.13 Proxy Statement........................................................................................ 15
1.14 Additional Actions..................................................................................... 16
1.15 Merger Without Meeting of Shareholders................................................................. 16
1.16 Lost, Stolen or Destroyed Certificates................................................................. 16
1.17 Material Adverse Effect................................................................................ 17
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
2.1 Organization and Good Standing......................................................................... 18
2.2 Capitalization......................................................................................... 18
2.3 Subsidiaries........................................................................................... 19
2.4 Authorization; Binding Agreement....................................................................... 19
2.5 Governmental Approvals................................................................................. 20
2.6 No Violations.......................................................................................... 20
2.7 Securities Filings..................................................................................... 20
2.8 Company Financial Statements........................................................................... 21
2.9 Absence of Certain Changes or Events................................................................... 21
2.10 No Undisclosed Liabilities............................................................................. 22
2.11 Compliance with Laws................................................................................... 22
2.12 Permits................................................................................................ 22
2.13 Litigation............................................................................................. 22
2.14 Contracts.............................................................................................. 22
2.15 Employee Benefit Plans................................................................................. 23
2.16 Taxes and Returns...................................................................................... 26
2.17 Intellectual Property.................................................................................. 28
2.18 Disclosure Documents................................................................................... 29
</TABLE>
-2-
<PAGE>
<TABLE>
<CAPTION>
Page
-----
<S> <C> <C>
2.19 Labor Matters.......................................................................................... 29
2.20 Limitation on Business Conduct......................................................................... 30
2.21 Title to Property...................................................................................... 30
2.22 Owned and Leased Premises.............................................................................. 30
2.23 Environmental Matters.................................................................................. 30
2.24 Insurance.............................................................................................. 32
2.25 Product Liability and Recalls.......................................................................... 32
2.26 Customers.............................................................................................. 33
2.27 Interested Party Transactions.......................................................................... 33
2.28 Finders and Investment Bankers......................................................................... 33
2.29 Fairness Opinion....................................................................................... 33
2.30 Takeover Statutes...................................................................................... 33
2.31 Full Disclosure........................................................................................ 33
2.32 Year 2000.............................................................................................. 34
2.33 Rights Agreements...................................................................................... 34
2.34 Absence of Certain Payments............................................................................ 34
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER
3.1 Organization and Good Standing......................................................................... 35
3.2 Authorization; Binding Agreement....................................................................... 35
3.3 Governmental Approvals................................................................................. 35
3.4 No Violations.......................................................................................... 36
3.5 Disclosure Documents................................................................................... 36
3.6 Finders and Investment Bankers......................................................................... 36
3.7 Financing Arrangements................................................................................. 37
3.8 No Prior Activities.................................................................................... 37
ARTICLE IV
ADDITIONAL COVENANTS OF THE COMPANY
4.1 Conduct of Business of the Company and the Company Subsidiaries........................................ 37
4.2 Notification of Certain Matters........................................................................ 40
4.3 Access and Information................................................................................. 40
4.4 Shareholder Approval................................................................................... 40
4.5 Reasonable Best Efforts................................................................................ 41
4.6 Public Announcements................................................................................... 41
4.7 Compliance............................................................................................. 41
4.8 No Solicitation........................................................................................ 41
4.9 SEC and Shareholder Filings............................................................................ 44
4.10 Takeover Statutes...................................................................................... 44
</TABLE>
-3-
<PAGE>
<TABLE>
<CAPTION>
Page
-----
<S> <C> <C>
4.11 Company Options and Stock Purchase Plan ............................................................... 44
ARTICLE V
ADDITIONAL COVENANTS OF PURCHASER AND PARENT
5.1 Reasonable Best Efforts................................................................................ 44
5.2 Public Announcements................................................................................... 45
5.3 Compliance............................................................................................. 45
5.4 Employee Benefit Plans................................................................................. 45
5.5 Indemnification........................................................................................ 46
5.6 Voting of Common Shares................................................................................ 46
5.7 Guarantee of Parent.................................................................................... 46
ARTICLE VI
MERGER CONDITIONS
6.1 Offer.................................................................................................. 47
6.2 Shareholder Approval................................................................................... 47
6.3 No Injunction or Action................................................................................ 47
6.4 Governmental Approvals................................................................................. 47
ARTICLE VII
TERMINATION AND ABANDONMENT
7.1 Termination............................................................................................ 47
7.2 Effect of Termination and Abandonment.................................................................. 49
ARTICLE VIII
MISCELLANEOUS
8.1 Confidentiality........................................................................................ 50
8.2 Amendment and Modification............................................................................. 51
8.3 Waiver of Compliance; Consents......................................................................... 51
8.4 Survival............................................................................................... 51
8.5 Notices................................................................................................ 51
8.6 Binding Effect; Assignment............................................................................. 52
8.7 Expenses............................................................................................... 52
8.8 Governing Law.......................................................................................... 53
8.9 Counterparts........................................................................................... 54
8.10 Interpretation......................................................................................... 54
8.11 Entire Agreement....................................................................................... 54
8.12 Severability........................................................................................... 54
8.13 Specific Performance................................................................................... 55
</TABLE>
-4-
<PAGE>
<TABLE>
<CAPTION>
Page
-----
<S> <C> <C>
8.14 Third Parties.......................................................................................... 55
8.15 Disclosure Letter...................................................................................... 55
8.16 Jurisdiction........................................................................................... 55
8.17 Waiver of Jury Trial................................................................................... 55
GUARANTEE..................................................................................... 58
GLOSSARY OF DEFINED TERMS..................................................................... 59
ANNEX I.......................................................................................A-1
</TABLE>
-5-
<PAGE>
AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger (this "AGREEMENT") is made and
entered into as of October 26, 1999, by and among Sigma Circuits, Inc.,
("PARENT"), a Delaware company and an indirect subsidiary of Tyco International
Ltd., a Bermuda company ("GUARANTOR"), T Merger Sub (OR), Inc., an Oregon
corporation and a direct wholly owned subsidiary of Parent ("PURCHASER"), and
Praegitzer Industries, Inc., an Oregon corporation (the "COMPANY").
W I T N E S S E T H:
WHEREAS, the respective Boards of Directors of the Company,
Purchaser and Parent have approved the acquisition by Purchaser of the Company;
and
WHEREAS, in furtherance thereof, it is proposed that Purchaser
will make a cash tender offer (the "OFFER") to acquire all of the issued and
outstanding shares of common stock of the Company ("COMMON SHARES"), for $5.50
per share, or such higher price as may be paid in the Offer (the "PER SHARE
AMOUNT"), subject to any applicable withholding, net to the seller in cash
without interest; and
WHEREAS, also in furtherance of such acquisition, the
respective Boards of Directors of the Company, Purchaser and Parent have each
approved the merger (the "MERGER") of Purchaser with and into the Company
following the Offer in accordance with the laws of the State of Oregon; and
WHEREAS, concurrently with the execution of this Agreement and
as an inducement to Parent to enter into this Agreement, Parent, Purchaser and
the majority shareholder of the Company are entering into a Shareholder's
Agreement pursuant to which such holder has, among other things, agreed to
tender all of his Common Shares in the Offer, upon the terms and subject to the
conditions set forth in the Shareholder's Agreement; and
WHEREAS, concurrently with the execution and delivery of this
Agreement, and as a condition to the Company's willingness to enter into this
Agreement, Guarantor has agreed fully and unconditionally to guarantee the
representations, warranties, covenants, agreements and other obligations of
Parent and Purchaser in this Agreement (the "GUARANTEE"); and
WHEREAS, the Board of Directors of the Company has approved
and resolved to recommend acceptance of the Offer and the Merger to the holders
of Common Shares and has determined that the consideration to be paid for each
Share in the Offer and the Merger is fair to and in the best interest of the
holders of Common Shares and to recommend that the holders of such Common Shares
accept the Offer and that the holders of Common Shares approve this Agreement
and the transactions contemplated hereby; and
-6-
<PAGE>
WHEREAS, the Company, Purchaser and Parent desire to make
certain representations, warranties and agreements in connection with, and
establish various conditions precedent to, the transactions contemplated hereby;
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements hereinafter set forth, the
parties hereto agree as follows:
ARTICLE I
TENDER OFFER AND MERGER
1.1 THE OFFER. (a) Provided that this Agreement shall not have
been terminated in accordance with SECTION 7.1 hereof and that none of the
events set forth in ANNEX I hereto shall have occurred and be existing,
Purchaser shall commence (within the meaning of Rule 14d-2 under the Securities
Exchange Act of 1934, as amended, and the rules and regulations thereunder (the
"SECURITIES EXCHANGE ACT")) the Offer as promptly as practicable, but in no
event later than five business days following the first public announcement of
the Offer, and shall use reasonable best efforts to consummate the Offer. The
obligation of Purchaser to accept for payment any Common Shares tendered shall
be subject to the satisfaction of only those conditions set forth in ANNEX I
hereto. The Per Share Amount payable in the Offer shall be net to each seller in
cash, subject to reduction only for any applicable withholding or stock transfer
taxes payable by such seller. The Company agrees that no Common Shares held by
the Company or any Company Subsidiaries (as defined below) will be tendered
pursuant to the Offer.
(b) Without the prior written consent of the Company,
Purchaser shall not (i) decrease the Per Share Amount or change the form of
consideration payable in the Offer, (ii) decrease the number of Common Shares
sought in the Offer, (iii) amend or waive satisfaction of the Minimum Condition
(as defined in ANNEX I hereto) or (iv) impose additional conditions to the Offer
or amend any other term of the Offer in any manner adverse to the holders of the
Common Shares. The Offer shall initially expire twenty (20) business days after
the date of its commencement, unless this Agreement is terminated in accordance
with SECTION 7.1 hereof, in which case the Offer (whether or not previously
extended in accordance with the terms hereof) shall expire on such date of
termination. Purchaser agrees that it shall not terminate or withdraw the Offer
or extend the expiration date of the Offer unless at the expiration date of the
Offer the conditions to the Offer described in ANNEX I hereto shall not have
been satisfied or earlier waived. Notwithstanding the foregoing, Purchaser may,
without the consent of the Company, extend the Offer at any time, and from time
to time, (i) if at the then scheduled expiration date of the Offer any of the
conditions to Purchaser's obligation to accept for payment and pay for Common
Shares shall not have been satisfied or waived, until such time as such
conditions are satisfied or waived; (ii) for any period required by any rule,
regulation, interpretation or position of the Securities and Exchange Commission
(the "SEC") or its staff applicable to the Offer; or (iii) if all conditions to
Purchaser's
-7-
<PAGE>
obligation to accept for payment and pay for Common Shares are satisfied or
waived but the number of Common Shares tendered is less than 90% of the then
outstanding number of Common Shares, for an aggregate period of not more than
ten (10) business days (for all such extensions) beyond the latest expiration
date that would be permitted under clause (i) or (ii) of this sentence.
(c) The Offer shall be made by means of an offer to purchase
(the "OFFER TO PURCHASE") having only the conditions set forth in ANNEX I
hereto. As soon as practicable on the date the Offer is commenced, Purchaser
shall file with the SEC a Tender Offer Statement on Schedule 14D-1 (together
with all amendments and supplements thereto, the "SCHEDULE 14D-1") with respect
to the Offer that will comply in all material respects with the provisions of,
and satisfy in all material respects the requirements of, such Schedule 14D-1
and all applicable federal securities laws and will contain (including as an
exhibit) or incorporate by reference the Offer to Purchase and forms of the
related letter of transmittal and summary advertisement (which documents,
together with any supplements or amendments thereto, and any other SEC schedule
or form which is filed in connection with the Offer and related transactions,
are referred to collectively herein as the "OFFER DOCUMENTS"). Each of Parent,
Purchaser and the Company agrees promptly to correct any information provided by
it for use in the Schedule 14D-1 or the Offer Documents if and to the extent
that such information shall have become false or misleading in any material
respect and to supplement the information provided by it specifically for use in
the Schedule 14D-1 or the Offer Documents to include any information that shall
become necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, and Purchaser further
agrees to take all steps necessary to cause the Schedule 14D-1, as so corrected
or supplemented, to be filed with the SEC and the Offer Documents, as so
corrected or supplemented, to be disseminated to holders of Common Shares, in
each case as and to the extent required by applicable federal securities laws.
The Company and its counsel shall be given a reasonable opportunity to review
and comment on any Offer Documents before they are filed with the SEC, and
Parent and Purchaser shall consider any such comments in good faith.
(d) Upon the terms and subject to the conditions of the Offer,
Purchaser shall accept for payment and pay for Common Shares as soon as
permitted under the terms of the Offer and applicable law.
1.2 COMPANY ACTION. (a) The Company hereby approves and
consents to the Offer and represents and warrants that the Board of Directors of
the Company, at a meeting duly called and held on October 25, 1999, at which all
of the Directors was present, duly approved and adopted this Agreement and the
transactions contemplated hereby, including the Offer and the Merger,
recommended that shareholders of the Company accept the Offer, tender their
Common Shares pursuant to the Offer and approve this Agreement and the
transactions contemplated hereby, including the Merger, and determined that this
Agreement and the transactions contemplated hereby, including the Offer and the
Merger, are fair
-8-
<PAGE>
to and in the best interests of the shareholders of the Company. The Company
hereby consents to the inclusion in the Offer Documents of such recommendation
of the Board of Directors of the Company. The Company represents that its Board
of Directors has received the written opinion (the "FAIRNESS OPINION") of Adams,
Harkness & Hill, Inc. (the "FINANCIAL ADVISOR") that the proposed consideration
to be received by the holders of Common Shares pursuant to the Offer and the
Merger is fair to such holders from a financial point of view. The Company has
been authorized by the Financial Advisor to permit, subject to the prior review
and consent by the Financial Advisor (such consent not to be unreasonably
withheld), the inclusion of the Fairness Opinion (or a reference thereto) in the
Offer Documents, the Schedule 14D-9 (as hereinafter defined) and the Proxy
Statement (as hereinafter defined).
(b) The Company shall file with the SEC, as promptly as
practicable after the filing by Parent of the Schedule 14D-1 with respect to the
Offer, a Tender Offer Solicitation/ Recommendation Statement on Schedule 14D-9
(together with any amendments or supplements thereto, the "SCHEDULE 14D-9") that
will comply in all material respects with the provisions of all applicable
federal securities laws. The Company shall mail such Schedule 14D-9 to the
shareholders of the Company as promptly as practicable after the commencement of
the Offer. The Schedule 14D-9 and the Offer Documents shall contain the
recommendations of the Board of Directors of the Company described in SECTION
1.2(a) hereof. The Company agrees promptly to correct the Schedule 14D-9 if and
to the extent that it shall become false or misleading in any material respect
(and each of Parent and Purchaser, with respect to written information supplied
by it specifically for use in the Schedule 14D-9, shall promptly notify the
Company of any required corrections of such information and cooperate with the
Company with respect to correcting such information) and to supplement the
information contained in the Schedule 14D-9 to include any information that
shall become necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, and the Company shall
take all steps necessary to cause the Schedule 14D-9 as so corrected or
supplemented to be filed with the SEC and disseminated to holders of Common
Shares to the extent required by applicable federal securities laws. Purchaser
and its counsel shall be given a reasonable opportunity to review and comment on
the Schedule 14D-9 before it is filed with the SEC, and the Company shall
consider any such comments in good faith.
(c) In connection with the Offer, the Company shall promptly
upon execution of this Agreement furnish Purchaser with mailing labels
containing the names and addresses of all record holders of Common Shares and
security position listings of Common Shares held in stock depositories, each as
of a recent date, and shall promptly furnish Purchaser with such additional
information reasonably available to the Company, including updated lists of
shareholders, mailing labels and security position listings, and such other
information and assistance as Purchaser or its agents may reasonably request for
the purpose of communicating the Offer to the record and beneficial holders of
Common Shares. Subject to the requirements of applicable law and except as
necessary to disseminate the Offer Documents and otherwise for the purpose of
effecting the transactions contemplated hereby,
-9-
<PAGE>
Parent and Purchaser shall hold in confidence the materials furnished pursuant
to this SECTION 1.2(c), use such information only in connection with the Offer,
the Merger and the other transactions contemplated by this Agreement and, if
this Agreement is terminated, as promptly as practicable return to the Company
such materials and all copies thereof in the possession of Parent and Purchaser.
1.3 DIRECTORS. Promptly upon the purchase by Parent of Common
Shares pursuant to the Offer (and provided that the Minimum Condition has been
satisfied), Parent shall be entitled to designate such number of directors,
rounded up to the next whole number, on the Board of Directors of the Company as
will give Parent, subject to compliance with Section 14(f) of the Securities
Exchange Act, representation on the Board of Directors of the Company equal to
at least that number of directors which equals the product of the total number
of directors on the Board of Directors of the Company (giving effect to the
directors appointed or elected pursuant to this sentence and including current
directors serving as officers of the Company) multiplied by the percentage that
the aggregate number of Common Shares beneficially owned by Parent or any
affiliate of Parent (including for purposes of this SECTION 1.3 such Common
Shares as are accepted for payment pursuant to the Offer, but excluding Common
Shares held by the Company) bears to the number of Common Shares outstanding. At
such time, if requested by Parent, the Company will also cause each committee of
the Board of Directors of the Company to include persons designated by Parent
constituting the same percentage of each such committee as Parent's designees
are of the Board of Directors of the Company. The Company shall, upon request by
Parent, promptly increase the size of the Board of Directors of the Company or
exercise reasonable best efforts to secure the resignations of such number of
directors as is necessary to enable Parent's designees to be elected to the
Board of Directors of the Company in accordance with the terms of this SECTION
1.3 and to cause Parent's designees so to be elected; PROVIDED, HOWEVER, that,
in the event that Parent's designees are appointed or elected to the Board of
Directors of the Company, until the Effective Time (as hereinafter defined) the
Board of Directors of the Company shall have at least two directors who are
directors on the date hereof, one of whom will be Robert Praegitzer and one of
whom will be a director who is neither an officer of the Company nor a designee,
shareholder, affiliate or associate (within the meaning of the federal
securities laws) of Guarantor (such directors, the "INDEPENDENT DIRECTORS").
Subject to applicable law, the Company shall promptly take all action necessary
pursuant to Section 14(f) of the Securities Exchange Act and Rule 14f-1
promulgated thereunder in order to fulfill its obligations under this SECTION
1.3 and shall include in the Schedule 14D-9 mailed to shareholders promptly
after the commencement of the Offer (or in an amendment thereof or an
information statement pursuant to Rule 14f-1 if Parent has not theretofore
designated directors) such information with respect to the Company and its
officers and directors as is required under Section 14(f) and Rule 14f-1 in
order to fulfill its obligations under this SECTION 1.3. Parent will supply the
Company, and be solely responsible for, any information with respect to itself
and its nominees, officers, directors and affiliates required by such Section
14(f) and Rule 14f-1. Notwithstanding anything in this Agreement to the
contrary, subsequent to the designation of the directors by Parent referred to
in the first sentence of this
-10-
<PAGE>
Section 1.3 and prior to the Effective Time, the unanimous vote of the
Independent Directors shall be required to (i) amend or terminate this Agreement
on behalf of the Company, (ii) exercise or waive any of the Company's rights or
remedies hereunder, (iii) extend the time for performance of Parent's
obligations hereunder, (iv) take any other action by the Company in connection
with this Agreement required to be taken by the Board of Directors of the
Company or (v) amend the Company's Second Amended and Restated Articles of
Incorporation or the Company's Bylaws, each as in effect on the date of this
Agreement.
1.4 THE MERGER. Upon the terms and subject to the conditions
of this Agreement, the Merger shall be consummated in accordance with the Oregon
Business Corporation Act (the "OREGON CODE"). At the Effective Time (as defined
in SECTION 1.5 hereof), upon the terms and subject to the conditions of this
Agreement, Purchaser shall be merged with and into the Company in accordance
with the Oregon Code and the separate existence of Purchaser shall thereupon
cease, and the Company, as the surviving corporation in the Merger (the
"SURVIVING CORPORATION"), shall continue its corporate existence under the laws
of the State of Oregon as an indirect subsidiary of Parent. The parties shall
prepare and execute articles of merger (the "ARTICLES OF MERGER") that comply in
all respects with the requirements of the Oregon Code and with the provisions of
this Agreement.
1.5 EFFECTIVE TIME. The Merger shall become effective at the
time of the filing of the Articles of Merger with the Secretary of State of
Oregon in accordance with the applicable provisions of the Oregon Code or at
such later time as may be specified in the Articles of Merger. As soon as
practicable after all of the conditions set forth in ARTICLE VI of this
Agreement have been satisfied or waived by the party or parties entitled to the
benefit of the same, the parties hereto shall cause the Merger to become
effective. Parent and the Company shall mutually determine the time of such
filing and the place where the closing of the Merger (the "CLOSING") shall
occur. The time when the Merger shall become effective is herein referred to as
the "EFFECTIVE TIME," and the date on which the Effective Time occurs is herein
referred to as the "CLOSING DATE."
1.6 CONVERSION OF COMMON SHARES. At the Effective Time, by
virtue of the Merger and without any action on the part of Purchaser, the
Company or the holder of any of the securities specified below:
(a) Each Common Share issued and outstanding immediately
before the Effective Time (other than any Dissenting Shares (as hereinafter
defined) and Common Shares to be canceled pursuant to SECTION 1.6(b)) shall be
canceled and extinguished and be converted into the right to receive the Per
Share Amount in cash payable to the holder thereof, without interest, upon
surrender of the certificate representing such Common Share in accordance with
SECTION 1.8 hereof. From and after the Effective Time, the holders of
certificates evidencing ownership of Common Shares outstanding immediately prior
to the Effective Time shall cease to have any rights with respect to such Common
Shares except as otherwise provided for herein or by applicable Law (as defined
below).
-11-
<PAGE>
(b) Each Common Share owned by Guarantor, Parent, Purchaser or
any direct or indirect wholly owned subsidiary of Guarantor immediately before
the Effective Time shall be canceled and extinguished, and no payment or other
consideration shall be made with respect thereto.
(c) The shares of Purchaser common stock outstanding
immediately prior to the Merger shall be converted into 1,000 shares of the
common stock of the Surviving Corporation (the "SURVIVING CORPORATION COMMON
STOCK"), which shares of the Surviving Corporation Common Stock shall constitute
all of the issued and outstanding capital stock of the Surviving Corporation and
shall be owned by Parent.
1.7 DISSENTING SHARES. (a) Notwithstanding any provision of
this Agreement to the contrary, any Common Shares issued and outstanding
immediately prior to the Effective Time and held by a holder who has demanded
and perfected his demand for appraisal of his Common Shares in accordance with
the Oregon Code (including but not limited to Sections 60.561 - 60.581 thereof),
and as of the Effective Time has neither effectively withdrawn nor lost his
right to such appraisal ("DISSENTING SHARES"), shall not be converted into or
represent a right to receive cash pursuant to SECTION 1.6 hereof, but the holder
thereof shall be entitled to only such rights as are granted by the Oregon Code.
(b) Notwithstanding the provisions of SECTION 1.7(a) hereof,
if any holder of Common Shares who demands appraisal of his Common Shares under
the Oregon Code shall effectively withdraw or lose (through failure to perfect
or otherwise) his right to appraisal, then as of the Effective Time or the
occurrence of such event, whichever occurs later, such holder's Common Shares
shall automatically be converted into and represent only the right to receive
cash as provided in SECTION 1.6 hereof, without interest thereon, upon surrender
of the certificate or certificates representing such Common Shares.
(c) The Company shall give Purchaser (i) prompt notice of any
written demands for appraisal or payment of the fair value of any Common Shares,
withdrawals of such demands and any other instruments served pursuant to the
Oregon Code received by the Company after the date hereof and (ii) the
opportunity to direct all negotiations and proceedings with respect to demands
for appraisal under the Oregon Code. The Company shall not voluntarily make any
payment with respect to any demands for appraisal and shall not, except with the
prior written consent of Purchaser, settle or offer to settle any such demands.
1.8 SURRENDER OF COMMON SHARES. (a) Prior to the Effective
Time, Purchaser shall appoint ChaseMellon Shareholder Services, L.L.C. or such
other commercial bank or trust company designated by Purchaser and reasonably
acceptable to the Company to act as exchange agent hereunder (the "EXCHANGE
AGENT") for the payment of the Per Share Amount upon surrender of certificates
representing the Common Shares. All of the fees and
-12-
<PAGE>
expenses of the Exchange Agent shall be borne by Purchaser.
(b) Parent shall cause the Surviving Corporation to provide
the Exchange Agent with cash in amounts necessary to pay for all of the Common
Shares pursuant to SECTION 1.8(c) hereof when and as such amounts are needed by
the Exchange Agent.
(c) On the Closing Date, Purchaser shall instruct the Exchange
Agent to mail to each holder of record of a certificate representing any Common
Shares canceled upon the Merger pursuant to SECTIONS 1.6(a) hereof, within five
business days of receiving from the Company a list of such holders of record,
(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 Exchange 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. Each holder
of a certificate or certificates representing any Common Shares canceled upon
the Merger pursuant to SECTIONS 1.6(a) hereof may thereafter surrender such
certificate or certificates to the Exchange Agent, as agent for such holder, to
effect the surrender of such certificate or certificates on such holder's behalf
for a period ending one year after the Effective Time. Upon the surrender of
certificates representing the Common Shares, Parent shall cause the Exchange
Agent to pay the holder of such certificates in exchange therefor cash in an
amount equal to the Per Share Amount multiplied by the number of Common Shares
represented by such certificate. Until so surrendered, each such certificate
(other than certificates representing Dissenting Shares) shall represent solely
the right to receive the aggregate Per Share Amount relating thereto.
(d) If payment of cash in respect of canceled Common Shares is
to be made to a person other than the person in whose name a surrendered
certificate or instrument is registered, it shall be a condition to such payment
that the certificate or instrument so surrendered shall be properly endorsed or
shall be otherwise in proper form for transfer and that the person requesting
such payment shall have paid any transfer and other taxes required by reason of
such payment in a name other than that of the registered holder of the
certificate or instrument surrendered or shall have established to the
satisfaction of Parent or the Exchange Agent that such tax either has been paid
or is not payable.
(e) At the Effective Time, the stock transfer books of the
Company shall be closed, and no transfer of Common Shares shall be made
thereafter, other than transfers of Common Shares that have occurred prior to
the Effective Time. In the event that, after the Effective Time, certificates
are presented to the Surviving Corporation, they shall be canceled and exchanged
for cash as provided in SECTIONS 1.6(a).
(f) The Per Share Amount paid in the Merger shall be net to
the holder of Common Shares in cash, and without interest thereon subject to
reduction only for any applicable withholding or stock transfer taxes payable by
such holder.
-13-
<PAGE>
(g) Promptly following the date which is one year after the
Effective Time, the Exchange Agent shall deliver to Parent all cash,
certificates and other documents in its possession relating to the transactions
contemplated hereby, and the Exchange Agent's duties shall terminate.
Thereafter, each holder of a certificate representing Common Shares (other than
certificates representing Dissenting Shares and certificates representing Common
Shares held directly or indirectly by Purchaser, Parent or Guarantor) may
surrender such certificate to the Surviving Corporation and (subject to any
applicable abandoned property, escheat or similar law) receive in consideration
therefor the aggregate Per Share Amount relating thereto, without any interest
thereon.
(h) None of the Company, Parent, Purchaser, Guarantor, the
Surviving Corporation or the Exchange Agent shall be liable to any holder of
Common Shares for any cash delivered to a public official pursuant to any
abandoned property, escheat or similar law, rule, regulation, statute, order,
judgment or decree.
1.9 OPTIONS, WARRANTS AND EMPLOYEE STOCK PURCHASE PLAN. (a)
Each option outstanding immediately prior to the Effective Time to purchase
Common Shares (a "COMPANY OPTION") under the Company's 1995 Stock Incentive Plan
or any other stock option plan or agreement of the Company, whether or not then
vested or exercisable, shall constitute the right to receive an amount in cash
equal to the positive difference, if any, between the Per Share Amount and the
exercise price of the Company Option multiplied by the number of Common Shares
for which the Company Option was exercisable immediately prior to the Effective
Time, subject to reduction only for any applicable withholding taxes. The
Company shall provide a period of at least 30 days prior to the Effective Time
during which Company Options may be exercised to the extent exercisable at the
Effective Time and, upon the expiration of such period, all unexercised Company
Options shall immediately terminate. The Company may, in its sole discretion,
permit holders of Company Options that are not exercisable before the Effective
Time to exchange such options for cash as described in the first sentence of
this Section 1.9(a). In lieu of exercising Company Options as described in this
Section 1.9(a), the holders shall be given the right, and the Company shall
encourage the holders of Company Options to exercise such right, to exchange
such options for cash as described in the first sentence of this Section 1.9(a).
In no event will any Company Options be exercisable after the Effective Time,
except to receive cash as provided in the first sentence of this Section 1.9(a).
(b) Each of the warrants of the Company, dated November 17,
1995, to purchase Common Shares at a price of $12.00 per share, subject to
adjustment (the "COMPANY WARRANTS"), shall be exercisable, from and after the
Effective Time, for an amount of cash equal to the Per Share Amount multiplied
by the number of Common Shares for which such warrant was exercisable
immediately prior to the Effective Time. Except as aforesaid, the exercise of
any Company Warrant shall remain subject to all terms and conditions provided in
the applicable Company Warrant and/or Warrant Agreement. Each of the Company and
Parent shall take all action necessary to provide that, upon consummation
-14-
<PAGE>
of the Merger, all Company Warrants outstanding immediately prior to the
Effective Time shall be exercisable for a cash amount as aforesaid.
(c) The Company shall take such action as is necessary to
cause the ending date of the then current offering period under the Company's
employee stock purchase plan (the "COMPANY STOCK PURCHASE PLAN") to be prior to
the Effective Time and to terminate such plan as of the Effective Time.
1.10 ARTICLES OF INCORPORATION AND BYLAWS. Subject to SECTION
5.5 hereof, unless otherwise determined by Parent prior to the Effective Time,
at and after the Effective Time (a) the Second Amended and Restated Articles of
Incorporation of the Company, as in effect immediately prior to the Effective
Time, shall be the Articles of Incorporation of the Surviving Corporation until
thereafter amended as provided by the Oregon Code and such Articles of
Incorporation; PROVIDED, HOWEVER, that (i) Article II shall be amended and
restated in its entirety to provide that the capital stock of the Surviving
Corporation shall consist solely of 1,000 shares of common stock; and (b) the
Bylaws of the Surviving Corporation shall be the Bylaws of Purchaser in effect
at the Effective Time (subject to any subsequent amendments).
1.11 DIRECTORS AND OFFICERS. At and after the Effective Time,
the directors of Purchaser immediately prior to the Effective Time shall be the
initial directors of the Surviving Corporation, and the officers of the Company
immediately prior to the Effective Time shall be the initial officers of the
Surviving Corporation, in each case until their successors are duly elected or
appointed and qualified.
1.12 OTHER EFFECTS OF MERGER. The Merger shall have all
further effects as specified in the applicable provisions of the Oregon Code.
1.13 PROXY STATEMENT. (a) Following the consummation of the
Offer and if required by the Securities Exchange Act because of action by the
Company's shareholders necessary in order to consummate the Merger, the Company
shall prepare and file with the SEC and, when cleared by the SEC, shall mail to
shareholders, a proxy statement in connection with a meeting of the Company's
shareholders to vote upon the adoption of this Agreement and the Merger and the
transactions contemplated hereby and thereby (the "COMPANY PROPOSALS"), or an
information statement, as appropriate, satisfying all requirements of the
Securities Exchange Act (such proxy or information statement in the form mailed
by the Company to its shareholders, together with any and all amendments or
supplements thereto, is herein referred to as the "PROXY STATEMENT").
(b) Parent will furnish the Company with such information
concerning Parent and its subsidiaries as is necessary in order to cause the
Proxy Statement, insofar as it relates to Parent and its subsidiaries, to comply
with applicable Law. Parent agrees promptly to advise the Company if, at any
time prior to the meeting of shareholders of the Company
-15-
<PAGE>
referenced herein, any Parent Information (as defined below) in the Proxy
Statement is or becomes incorrect or incomplete in any material respect and to
provide the Company with the information needed to correct such inaccuracy or
omission. Parent will furnish the Company with such supplemental information as
may be necessary in order to cause the Proxy Statement, insofar as it relates to
Guarantor and its subsidiaries, to comply with applicable Law after the mailing
thereof to the shareholders of the Company.
(c) The Company and Parent agree to cooperate in making any
preliminary filings of the Proxy Statement with the SEC, as promptly as
practicable, pursuant to Rule 14a-6 or Rule 14c-5, as applicable, under the
Securities Exchange Act.
(d) The Company shall provide Parent for its review a copy of
the Proxy Statement prior to each filing thereof, with reasonable time and
opportunity for such review. Parent authorizes the Company to utilize in the
Proxy Statement the information concerning Parent and its subsidiaries provided
to the Company in connection with, or contained in, the Proxy Statement.
1.14 ADDITIONAL ACTIONS. If, at any time after the Effective
Time, the Surviving Corporation shall consider or be advised that any deeds,
bills of sale, assignments, assurances or any other actions or things are
necessary or desirable to vest, perfect or confirm of record or otherwise in the
Surviving Corporation its right, title or interest in, to or under any of the
rights, properties or assets of Purchaser or the Company or otherwise to carry
out this Agreement, the officers and directors of the Company and Purchaser
shall be authorized to execute and deliver, in the name and on behalf of
Purchaser or the Company, all such deeds, bills of sale, assignments and
assurances and to take and do, in the name and on behalf of Purchaser or the
Company, all such other actions and things as may be necessary or desirable to
vest, perfect or confirm any and all right, title and interest in, to and under
such rights, properties or assets in the Surviving Corporation or otherwise to
carry out this Agreement.
1.15 MERGER WITHOUT MEETING OF SHAREHOLDERS. Notwithstanding
the foregoing provisions of this ARTICLE I, in the event that Purchaser, or any
other direct or indirect subsidiary of Parent, shall acquire at least 90 percent
of the outstanding Common Shares, the parties hereto agree to 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 meeting of shareholders
of the Company, in accordance with Section 60.491 of the Oregon Code.
1.16 LOST, STOLEN OR DESTROYED CERTIFICATES. In the event any
certificates representing shares of Common Shares shall have been lost, stolen
or destroyed, the Exchange Agent shall make such payment in exchange for such
lost, stolen or destroyed certificates upon the making of an affidavit of that
fact by the holder thereof; PROVIDED, HOWEVER, that Parent may, in its
discretion and as a condition precedent to the issuance
-16-
<PAGE>
thereof, require the owner of such lost, stolen or destroyed certificates to
deliver a bond in such sum as it may reasonably direct as indemnity against any
claim that may be made against Parent or the Exchange Agent with respect to the
certificates alleged to have been lost, stolen or destroyed.
1.17 MATERIAL ADVERSE EFFECT. (a) When used in connection with
the Company or any Company Subsidiaries (as defined below) or Parent, Guarantor
or any of their respective subsidiaries, as the case may be, the term "MATERIAL
ADVERSE EFFECT" means any change, effect or circumstance that, individually or
when taken together with all other similar changes, effects or circumstances
that have occurred during the period relevant to the determination of such
Material Adverse Effect, is or is reasonably likely to be materially adverse to
the business, assets (including intangible assets), financial condition or
results of operations of the Company and any Company Subsidiaries or Parent,
Guarantor and their respective subsidiaries, as the case may be, in each case
taken as a whole; PROVIDED, HOWEVER, that effects of changes that are applicable
to or arise on account of (A) any changes in economic, regulatory, or political
conditions generally, (B) the United States securities markets, (C) this
Agreement or the transactions contemplated by this Agreement and (D) the effect
of the public announcement of the transactions contemplated hereby, including
any effect on customers or employees of the Company, shall be excluded from the
definition of "Material Adverse Effect" and from any determination as to whether
a Material Adverse Effect has occurred or may occur.
(b) The failure of a representation or warranty to be true and
correct, either individually or together with the failure of other
representations or warranties to be true and correct, shall be deemed to have a
Material Adverse Effect if (x) the business, assets (including intangible
assets), financial condition, results of operations, or prospects of the Company
and its subsidiaries or Parent or Guarantor and their subsidiaries, as the case
may be, in each case taken as a whole, are or would reasonably be expected to be
materially worse than if such representation or warranty had been true and
correct, (y) in the case of the Company, such representation or warranty
materially misstates the capitalization of the Company and/or its subsidiaries
or (z) the failure of such representation or warranty to be true and correct
materially and adversely affects the ability of the Company or Parent, as the
case may be, to timely consummate the transactions contemplated by this
Agreement.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and Purchaser
that, except as set forth in the correspondingly numbered Sections of the
letter, dated the date hereof, from the Company to Parent (the "COMPANY
DISCLOSURE LETTER"):
-17-
<PAGE>
2.1 ORGANIZATION AND GOOD STANDING. The Company and each of
the Company Subsidiaries is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction of its incorporation and has
all requisite corporate power and authority to own, lease and operate its
properties and to carry on its business as now being conducted. The Company and
each of the Company Subsidiaries is duly qualified or licensed and in good
standing to do business in each jurisdiction in which the character of the
property owned, leased or operated by it or the nature of the business conducted
by it makes such qualification or licensing necessary, except where the failure
to be so duly qualified or licensed and in good standing would not reasonably be
expected to have a Material Adverse Effect. The Company has heretofore made
available to Parent accurate and complete copies of the Articles of
Incorporation and Bylaws, as currently in effect, of the Company. For purposes
of this Agreement, the term "COMPANY SUBSIDIARY" shall mean any "subsidiary" (as
such term is defined in Rule 1-02 of Regulation S-X of the SEC) of the Company.
2.2 CAPITALIZATION. As of the date hereof, the authorized
capital stock of the Company consists of (A) 50,000,000 Common Shares and (B)
500,000 shares of preferred stock (the "PREFERRED SHARES"). As of October 22,
1999, (i) 13,129,751 Common Shares were issued and outstanding, (ii) no shares
of Preferred Shares were issued and outstanding, (iii) 1,809,550 Common Shares
were reserved for future issuance pursuant to outstanding Company Options, of
which 752,431 shares are or will be exercisable before March 1, 2000 and 546,750
shares become exercisable on or after that date at prices below $5.50 per share,
(iv) no Common Shares were reserved for future issuance pursuant to the Company
Stock Purchase Plan, (v) 46,333 shares of Common Shares were reserved for future
issuance upon exercise of Company Warrants, (vi) 1,743,559 Common Shares were
reserved for future issuance upon exercise of the conversion rights contained in
that certain Deferral Loan and Lease Modification Agreement dated as of October
12, 1999 among the Company and the lenders and lessors named therein (the
"Deferral Agreement") (as of the date of this Agreement the Company has received
no notice of intent to exercise such conversion rights) and (vii) 1,381,382
Common Shares reserved for issuance upon the conversion of the Company's 9%
Convertible Subordinated Notes due December 29, 2008 (the "NOTES"). No material
change in the capitalization of the Company has occurred between October 22,
1999 and the date hereof. No other capital stock of the Company is authorized or
issued. All issued and outstanding Common Shares are duly authorized, validly
issued, fully paid and non-assessable. Except as set forth in the Company
Securities Filings (as hereinafter defined) filed prior to the date of this
Agreement or as otherwise contemplated by this Agreement, as of the date hereof,
there are no outstanding rights, subscriptions, warrants, puts, calls,
unsatisfied preemptive rights, options or other agreements of any kind relating
to any of the outstanding, authorized but unissued shares of the capital stock
or any other security of the Company, and there is no authorized or outstanding
security of any kind convertible into or exchangeable for any such capital stock
or other security. Except as disclosed in the Company Securities Filings filed
prior to the date of this Agreement, there are no obligations, contingent or
other, of the Company or any Company Subsidiary to repurchase, redeem or
otherwise acquire any shares of Common Shares or the capital stock of any
Company
-18-
<PAGE>
Subsidiary or to provide funds to or make any investment (in the form of a loan,
capital contribution or otherwise) in any such Company Subsidiary or any other
entity.
2.3 SUBSIDIARIES. Section 2.3 of the Company Disclosure Letter
sets forth the name and jurisdiction of incorporation of each Company
Subsidiary, each of which is wholly owned by the Company except as otherwise
indicated in said Section 2.3 of the Company Disclosure Letter. Except as set
forth in Section 2.3 of the Company Disclosure Letter, all of the capital stock
and other interests of the Company Subsidiaries so held by the Company are owned
by it or a Company Subsidiary as indicated in said Section 2.3 of the Company
Disclosure Letter, free and clear of any claim, lien, encumbrance or security
interest with respect thereto. All of the outstanding shares of capital stock of
each of the Company Subsidiaries directly or indirectly held by the Company are
duly authorized, validly issued, fully paid and non-assessable and were issued
free of preemptive rights and in compliance with applicable Laws. No equity
securities or other interests of any of the Company Subsidiaries are or may
become required to be issued or purchased by reason of any options, warrants,
rights to subscribe to, puts, calls or commitments of any character whatsoever
relating to, or securities or rights convertible into or exchangeable for,
shares of any capital stock of any Company Subsidiary, and there are no
contracts, commitments, understandings or arrangements by which any Company
Subsidiary is bound to issue additional shares of its capital stock, or options,
warrants or rights to purchase or acquire any additional shares of its capital
stock or securities convertible into or exchangeable for such shares. Except as
set forth in the Company Securities Filings filed prior to the date of this
Agreement or Section 2.3 of the Company Disclosure Letter, the Company does not
directly or indirectly own any equity or similar interest in, or any interest
convertible into or exchangeable or exercisable for any equity or similar
interest in, any corporation, partnership, joint venture or other business
association or entity, with respect to which interest the Company has invested
or is required to invest $50,000 or more, excluding securities in any publicly
traded company held for investment by the Company and comprising less than five
percent of the outstanding stock of such company.
2.4 AUTHORIZATION; BINDING AGREEMENT. The Company has all
requisite corporate power and authority to execute and deliver this Agreement
and to consummate the transactions contemplated hereby. The execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby, including, but not limited to, the Merger, have been duly and validly
authorized by the Company's Board of Directors, and no other corporate
proceedings on the part of the Company or any Company Subsidiary are necessary
to authorize the execution and delivery of this Agreement or to consummate the
transactions contemplated hereby (other than adoption of this Agreement by the
holders of Common Shares with voting power equal to a majority of the voting
power of all outstanding Common Shares, if required, in accordance with the
Oregon Code). This Agreement has been duly and validly executed and delivered by
the Company and constitutes the legal, valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms, except to
the extent that enforceability thereof may be limited by applicable
-19-
<PAGE>
bankruptcy, insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and by principles of equity regarding
the availability of remedies (the "ENFORCEABILITY EXCEPTIONS").
2.5 GOVERNMENTAL APPROVALS. No consent, approval, waiver or
authorization of, notice to or declaration or filing with ("CONSENT") any nation
or government, any state or other political subdivision thereof or any entity,
authority or body exercising executive, legislative, judicial or regulatory
functions of or pertaining to government, including, without limitation, any
governmental or regulatory authority, agency, department, board, commission or
instrumentality, any court, tribunal or arbitrator and any self-regulatory
organization ("GOVERNMENTAL AUTHORITY"), on the part of the Company or any of
the Company Subsidiaries is required in connection with the execution or
delivery by the Company of this Agreement or the consummation by the Company of
the transactions contemplated hereby other than (i) the filing of the Articles
of Merger with the Secretary of State of Oregon in accordance with the Oregon
Code, (ii) filings with the SEC, (iii) filings under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, and the rules and regulations
promulgated thereunder (the "HSR ACT"), (iv) filings pursuant to the rules and
regulations of The NASDAQ Stock Market ("NASDAQ") and (v) those Consents that,
if they were not obtained or made, would not reasonably be expected to have a
Material Adverse Effect.
2.6 NO VIOLATIONS. Except as set forth in Section 2.6 of the
Company Disclosure Letter, the execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby and compliance by the
Company with any of the provisions hereof will not (i) conflict with or result
in any breach of any provision of the Second Amended and Restated Articles of
Incorporation or Bylaws of the Company or similar documents of any of the
Company Subsidiaries, (ii) require any Consent under or result in a violation or
breach of, or constitute (with or without notice or lapse of time or both) a
default (or give rise to any right of termination, cancellation or acceleration)
under any of the terms, conditions or provisions of, any Company Material
Contract (as defined below ), (iii) result in the creation or imposition of any
lien or encumbrance of any kind upon any of the assets of the Company or any
Company Subsidiary or (iv) subject to obtaining the Consents from Governmental
Authorities referred to in SECTION 2.5 hereof, violate any applicable provision
of any statute, law, rule or regulation or any order, decision, injunction,
judgment, award or decree ("LAW") to which the Company or any Company Subsidiary
or its assets or properties are subject, except, in the case of each of clauses
(ii), (iii) and (iv) above, for any deviations from the foregoing which would
not reasonably be expected to have a Material Adverse Effect.
2.7 SECURITIES FILINGS. The Company has made available to
Parent true and complete copies of (i) its Annual Report on Form 10-K and 10-K/A
for the Fiscal Year ended June 30, 1999, as filed with the SEC, (ii) its proxy
statements relating to all of the meetings of shareholders (whether annual or
special) of the Company since July 1, 1996 as filed with
-20-
<PAGE>
the SEC, and (iii) all other reports, statements and registration statements and
amendments thereto (including, without limitation, Annual Reports on Form 10-K,
Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, in each case as
amended) filed by the Company with the SEC since July 1, 1996. The reports and
statements set forth in clauses (i) through (iii) above, and those subsequently
provided or required to be provided pursuant to this SECTION 2.7, are referred
to collectively herein as the "COMPANY SECURITIES FILINGS." Except as set forth
in Section 2.7 of the Company Disclosure Letter, as of their respective dates,
or as of the date of the last amendment thereof, if amended after filing, the
Company Securities Filings (i) were prepared in all material respects in
accordance with the requirements of the Securities Act of 1933, as amended (the
"SECURITIES ACT") and the rules and regulations promulgated thereunder, or the
Securities Exchange Act, as the case may be, and none of the Company Securities
Filings contained or, as to the Company Securities Filings subsequent to the
date hereof, will contain, any untrue statement of a material fact or omitted
or, as to the Company Securities Filings subsequent to the date hereof, will
omit, to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading.
2.8 COMPANY FINANCIAL STATEMENTS. The audited consolidated
financial statements and unaudited interim financial statements of the Company
included in the Company Securities Filings (the "COMPANY FINANCIAL STATEMENTS")
have been prepared in accordance with generally accepted accounting principles
applied on a consistent basis (except as may be indicated therein or in the
notes thereto) and present fairly, in all material respects, the financial
position of the Company and the Company Subsidiaries as at the dates thereof and
the results of their operations and cash flows for the periods then ended,
subject, in the case of the unaudited interim financial statements, to normal
year-end audit adjustments, any other adjustments described therein and the fact
that certain information and notes have been condensed or omitted in accordance
with the Securities Exchange Act.
2.9 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set forth
in the Company Securities Filings filed prior to the date of this Agreement or
Section 2.9 of the Company Disclosure Letter, from June 30, 1999, through the
date of this Agreement, there has not been: (i) any event that has had or would
reasonably be expected to have a Material Adverse Effect; (ii) any declaration,
payment or setting aside for payment of any dividend or other distribution or
any redemption or other acquisition of any shares of capital stock or securities
of the Company by the Company; (iii) any material damage or loss to any material
asset or property, whether or not covered by insurance; (iv) any change by the
Company in accounting principles or practices; (v) any material revaluation by
the Company of any of its assets, including writing down the value of inventory
or writing off notes or accounts receivable other than in the ordinary course of
business; (vi) any sale of a material amount of property of the Company, except
in the ordinary course of business; or (vii) any other action or event,
involving an amount exceeding $250,000, that would have required the consent of
Parent pursuant to SECTION 4.1 hereof had such action or event occurred after
the date of this Agreement.
-21-
<PAGE>
2.10 NO UNDISCLOSED LIABILITIES. Except as set forth in the
Company Securities Filings filed prior to the date of this Agreement or Section
2.10 of the Company Disclosure Letter, neither the Company nor any Company
Subsidiary has any liabilities (absolute, accrued, contingent or other), except
liabilities (a) adequately provided for in the Company's audited balance sheet
(including any related notes thereto) for the fiscal year ended June 30, 1999
included in the Company's 1999 Annual Report on Form 10-K and 10-K/A (the "1999
BALANCE SHEET"), (b) incurred in the ordinary course of business and not
required under generally accepted accounting principles to be reflected on the
1999 Balance Sheet, (c) incurred since June 30, 1999 in the ordinary course of
business consistent with past practice, (d) incurred in connection with this
Agreement or (e) which would not reasonably be expected to have a Material
Adverse Effect.
2.11 COMPLIANCE WITH LAWS. Except as set forth in Section 2.11
of the Company Disclosure Letter, the business of the Company and each of the
Company Subsidiaries has been operated in compliance with all Laws applicable
thereto, except for any non-compliance which would not reasonably be expected to
have a Material Adverse Effect.
2.12 PERMITS. Except as set forth in Section 2.12 of the
Company Disclosure Letter, (i) the Company and the Company Subsidiaries have all
permits, certificates, licenses, approvals and other authorizations from
Governmental Authorities required in connection with the operation of their
respective businesses (collectively, "COMPANY PERMITS"), (ii) neither the
Company nor any Company Subsidiary is in violation of any Company Permit and
(iii) no proceedings are pending or, to the knowledge of the Company,
threatened, to revoke or limit any Company Permit, except, in the case of each
of clauses (i), (ii) and (iii) above, those the absence or violation of which
would not reasonably be expected to have a Material Adverse Effect.
2.13 LITIGATION. Except as disclosed in the Company Securities
Filings filed prior to the date of this Agreement or Section 2.13 of the Company
Disclosure Letter, there is no suit, action or proceeding ("LITIGATION") pending
or, to the knowledge of the Company, threatened against the Company or any of
the Company Subsidiaries which, individually or in the aggregate, would
reasonably be expected to have a Material Adverse Effect, nor is there any
judgment, decree, injunction, rule or order of any Governmental Authority
outstanding against the Company or any Company Subsidiary which, individually or
in the aggregate, would reasonably be expected to have a Material Adverse
Effect.
2.14 CONTRACTS. Section 2.14 of the Company Disclosure Letter
includes, as of the date hereof, a list of the Company's material contracts (the
"COMPANY MATERIAL CONTRACTS") which includes (i) all loan agreements,
indentures, mortgages, pledges, conditional sale or title retention agreements,
security agreements, guaranties, standby letters of credit, equipment leases or
lease purchase agreements, each in an amount equal to or exceeding $250,000 to
which the Company or any Company subsidiary is a party or by which
-22-
<PAGE>
any of them is bound; (ii) all contracts, agreements, commitments or other
understandings or arrangements other than those addressed in Section 2.15 to
which the Company or any of its subsidiaries is a party or by which any of them
or any of their respective properties or assets are bound or affected, but
excluding contracts, agreements, commitments or other understandings or
arrangements entered into in the ordinary course of business and involving, in
the case of any such contact, agreement, commitment, or other understanding or
arrangement, individual payments or receipts by the Company or any Company
Subsidiary of less than $250,000 over the term of such contract, commitment,
agreement, or other understanding or arrangement; and (iii) all agreements which
are required to be filed as "material contracts" with the SEC pursuant to the
requirements of the Securities Exchange Act but have not been so filed with the
SEC. The Company is not a party to any agreements to acquire in the future the
stock or substantially all the assets of another person. Except as disclosed in
Section 2.14 of the Company Disclosure Letter or in the Company Securities
Filings filed prior to the date of this Agreement, all such Company Material
Contracts are valid and binding and are in full force and effect and enforceable
against the Company or such Company Subsidiary in accordance with their
respective terms, subject to the Enforceability Exceptions, and neither the
Company nor any Company Subsidiary is in violation or breach of or default under
any such Company Material Contract, except where the failure to be in full force
and effect or where such violation or breach would not reasonably be expected to
have a Material Adverse Effect. To the knowledge of the Company, no party (other
than the Company or Company Subsidiaries) is in default, violation or breach of
any Company Material Contract where such violation or breach would reasonably be
expected to have a Material Adverse Effect.
2.15 EMPLOYEE BENEFIT PLANS. (a) Section 2.15(a) of the
Company Disclosure Letter lists all employee pension benefit plans (as defined
in Section 3(2) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA")), all employee welfare benefit plans (as defined in Section
3(1) of ERISA) and all other bonus, stock option, stock purchase, incentive,
deferred compensation, supplemental retirement, severance and other similar
fringe or employee benefit plans, programs or arrangements, and any employment,
executive compensation or severance agreements, written or otherwise, as
amended, modified or supplemented, for the benefit of, or relating to, any
former or current employee, officer or consultant who is an individual or an
individual doing business in a corporate form (or any of their beneficiaries) of
the Company or any other entity (whether or not incorporated) or which is under
common control with the Company (an "ERISA AFFILIATE") within the meaning of
Section 414(b), (c), (m) or (o) of the Internal Revenue Code of 1986, as
amended, and the regulations thereunder (the "CODE") or Section 4001(a)(14) or
(b) of ERISA, or any Company Subsidiary, with respect to which the Company has
or could have any current (actual or contingent) material liability (together
for purposes of this SECTION 2.15, the "EMPLOYEE PLANS"). Prior to the date of
this Agreement, the Company has provided or made available to Parent copies of
(i) each such written Employee Plan (or a written description of any Employee
Plan which is not written) and all related trust agreements, insurance and other
contracts (including policies), summary plan descriptions, summaries of
-23-
<PAGE>
material modifications and any material communications to plan participants,
(ii) the three most recent annual reports on Form 5500 series, with accompanying
schedules and attachments, filed with respect to each Employee Plan required to
make such a filing, and (iii) the most recent favorable determination letters
issued for each Employee Plan and related trust which is intended to qualify
under Section 401(a) of the Code (and, if an application for such determination
is pending, a copy of the application for such determination).
(b) (i) None of the Employee Plans promises or provides
retiree medical or other retiree welfare benefits to any person (other than in
accordance with Section 4980B of the Code or Part 6 of Subtitle B of Title I of
ERISA), and none of the Employee Plans is a "multiemployer plan" as such term is
defined in Section 3(37) of ERISA; (ii) to the knowledge of the Company, no
"party in interest" or "disqualified person" (as defined in Section 3(14) of
ERISA and Section 4975 of the Code) has at any time engaged in a transaction
with respect to any Employee Plan which could subject the Company or any ERISA
Affiliate, directly or indirectly, to a tax, penalty or other liability for
prohibited transactions under ERISA or Section 4975 of the Code, except for any
such tax, penalty or liability that would not reasonably be expected to result
in a Material Adverse Effect; (iii) to the knowledge of the Company, no
fiduciary of any Employee Plan has breached any of the responsibilities or
obligations imposed upon fiduciaries under Title I of ERISA, except where such
breach would not reasonably be expected to result in a Material Adverse Effect;
(iv) all Employee Plans have been established and maintained substantially in
accordance with their terms and have operated in compliance with the
requirements prescribed by any and all statutes (including ERISA and the Code),
orders, or governmental rules and regulations currently in effect with respect
thereto (including all applicable requirements for notification to participants
or the Department of Labor, the Internal Revenue Service (the "IRS") or the
Secretary of the Treasury), except where failure to do so would not reasonably
be expected to result in a Material Adverse Effect; and the Company and each
Company Subsidiary have performed all obligations required to be performed by
them under, are not in default under or in violation of any Employee Plan except
where failure to do so would not reasonably be expected to result in a Material
Adverse Effect, and have no knowledge of any default or violation by any other
party to, any of the Employee Plans; (v) each Employee Plan which is subject to
Parts 1, 2 and 4 of Subtitle B of ERISA is the subject of a favorable
determination letter from the IRS, and to the knowledge of the Company nothing
has occurred which mayreasonably be expected to impair such determination; (vi)
all contributions required to be made with respect to any Employee Plan pursuant
to the terms of the Employee Plan have been made on or before their due dates
except for any failure to make contributions that would not reasonably be
expected to result in a Material Adverse Effect; (vii) no facts exist or have
existed under which the Company or any ERISA Affiliate could incur any liability
under Title IV of ERISA; and (viii) there are no complaints, charges or claims
against the Company pending or to the Company's knowledge threatened to be
brought by or filed with any governmental authority based on, arising out of, in
connection with or otherwise relating to the classification of any individual by
the Company as an independent contractor or "leased employee" (within the
meaning of section 414(n) of the Code) rather than as an employee.
-24-
<PAGE>
(c) Section 2.15(c) of the Company Disclosure Letter sets
forth a true and complete list of each current or former employee, officer or
director of the Company or any Company Subsidiary who holds (i) any option to
purchase Common Shares as of the date hereof, together with the number of shares
of Common Shares subject to such option, the option price of such option (to the
extent determined as of the date hereof), whether such option is intended to
qualify as an incentive stock option within the meaning of Section 422(b) of the
Code (an "ISO"), and the expiration date of such option; (ii) any shares of
Common Shares that are restricted as a result of an agreement with or stock plan
of the Company; and (iii) any other right, directly or indirectly, to receive
Common Shares, except as otherwise disclosed in Section 2.15 of the Company
Disclosure Letter, together with the number of shares of Company Stock subject
to such right. Section 2.15(c) of the Company Disclosure Letter also sets forth
the total number of any such ISOs and any such nonqualified options and other
such rights.
(d) Unless otherwise disclosed in Section 2.15(a) of the
Company Disclosure Letter, Section 2.15(d) of the Company Disclosure Letter sets
forth a true and complete list of (i) all employment agreements with officers of
the Company or any of the Company Subsidiaries; (ii) all agreements with
consultants who are individuals obligating the Company or any of the Company
Subsidiaries to make annual cash payments in an amount exceeding $250,000; (iii)
all agreements which individually or in the aggregate are or could be material
with respect to the services of independent contractors or leased employees who
are individuals or individuals doing business in a corporate form whether or not
they participate in any of the Employee Plans; (iv) all officers of the Company
or any of the Company Subsidiaries who have executed a non-competition agreement
with the Company or any of the Company Subsidiaries; (v) all severance
agreements, programs and policies of the Company or any of the Company
Subsidiaries with or relating to its employees, in each case with outstanding
commitments exceeding $250,000, excluding programs and policies required to be
maintained by law; and (vi) all plans, programs, agreements and other
arrangements of the Company which contain change in control provisions.
(e) (i) Except as set forth in Section 2.15(e) of the Company
Disclosure Letter, no Employee Plan is an employee stock ownership plan (within
the meaning of Section 4975(e)(7) of the Code) or otherwise invests in Company
Stock; and (ii) the consummation of the transactions contemplated by this
Agreement will not result in an increase in the amount of compensation or
benefits or accelerate the vesting or timing of payment of any benefits or
compensation payable in respect of any employee except as otherwise provided in
SECTION 1.9 hereof or disclosed in Section 2.15(e) of the Company Disclosure
Letter or except where such increase or acceleration would not reasonably be
expected to result in a Material Adverse Effect. The Company will take all
actions within its control to ensure that all actions required to be taken by a
fiduciary of any Employee Plan in order to effectuate the transaction
contemplated by this Agreement shall comply with the terms of such Plan, ERISA
and other applicable laws. The Company will take all actions
-25-
<PAGE>
within its control to ensure that all actions required to be taken by a
trustee of any Employee Plan that owns Company Stock shall have been duly
authorized by the appropriate fiduciaries of such Plan and shall comply with
the terms of such Plan, ERISA and other applicable laws.
(f) Except as set forth in Section 2.15(f) of the Company
Disclosure Letter, the Company maintains no Employee Plan covering non-U.S.
employees.
(g) The Company has fiduciary liability insurance of at least
$500,000 in effect covering the fiduciaries of the Employee Plans (including the
Company) with respect to whom the Company may have liability.
2.16 TAXES AND RETURNS. (a) The Company and each of the
Company Subsidiaries has timely filed, or caused to be timely filed, all
material Tax Returns (as hereinafter defined) required to be filed by it, and
all such tax returns are true, complete and correct in all material respects,
and has timely paid, collected or withheld, or caused to be paid, collected or
withheld, all material amounts of Taxes (as hereinafter defined) required to be
paid, collected or withheld, other than such Taxes for which adequate reserves
in the Company Financial Statements have been established and which are being
contested in good faith. Except as set forth in Section 2.16 of the Company
Disclosure Letter, there are no material claims or assessments pending against
the Company or any of the Company Subsidiaries for any alleged deficiency in any
Tax, and the Company has not been notified in writing of any proposed Tax claims
or assessments against the Company or any of the Company Subsidiaries (other
than in each case, claims or assessments for which adequate reserves in the
Company Financial Statements have been established and which are being contested
in good faith or claims or assessments which are immaterial in amount). Neither
the Company nor any of the Company Subsidiaries has executed any waivers or
extensions of any applicable statute of limitations to assess any material
amount of Taxes. There are no outstanding requests by the Company or any of the
Company Subsidiaries for any extension of time within which to file any material
Tax Return or within which to pay any material amounts of Taxes shown to be due
on any Tax Return. The statute of limitations period for assessment of federal
income taxes has not expired for any taxable year from the taxable year
ended June 30, 1996, the Company's first taxable year as a C corporation. To the
best knowledge of the Company, there are no liens for material amounts of Taxes
on the assets of the Company or any of the Company Subsidiaries except for
statutory liens for current Taxes not yet due and payable. There are no
outstanding powers of attorney enabling any party to represent the Company or
any of the Company Subsidiaries with respect to Tax matters.
(b) For purposes of this Agreement, the term "TAX" shall mean
any federal, state, local, foreign or provincial income, gross receipts,
property, sales, use, license, excise, franchise, employment, payroll,
alternative or add-on minimum, ad valorem, transfer or excise tax, or any other
tax, custom, duty, governmental fee or other like assessment or charge of any
kind whatsoever, together with any interest or penalty imposed by any
Governmental Authority. The term "TAX RETURN" shall mean a report, return or
other
-26-
<PAGE>
information (including any attached schedules or any amendments to such report,
return or other information) required to be supplied to or filed with a
governmental entity with respect to any Tax, including an information return,
claim for refund, amended return or declaration or estimated Tax.
(c) Except as set forth in Section 2.16 of the Company
Disclosure Letter, (i) neither the Company nor any of the Company Subsidiaries
has been a member of an affiliated group within the meaning of Section 1504 of
the Code or filed or been included in a combined, consolidated or unitary Tax
Return, other than of the Company and the Company Subsidiaries; (ii) other than
with respect to the Company and the Company Subsidiaries, neither the Company
nor any of the Company Subsidiaries is currently liable for Taxes of any other
person, or is currently under any contractual obligation to indemnify any person
with respect to Taxes (except for customary agreements to indemnify lenders or
securityholders in respect of taxes other than income taxes), or is a party to
any tax sharing agreement or any other agreement providing for payments by the
Company or any of the Company Subsidiaries with respect to Taxes; (iii) neither
the Company nor any of the Company Subsidiaries is a party to any joint venture,
partnership or other arrangement or contract which could be treated as a
partnership for federal income tax purposes; (iv) neither the Company nor any of
the Company Subsidiaries has entered into any sale leaseback or any leveraged
lease transaction that fails to satisfy the requirements of Revenue Procedure
75-21 (or similar provisions of foreign law); (v) neither the Company nor any of
the Company Subsidiaries has agreed or is required, as a result of a change in
method of accounting or otherwise, to include any adjustment under Section 481
of the Code (or any corresponding provision of state, local or foreign law) in
taxable income; (vi) neither the Company nor any of the Company Subsidiaries is
a party to any agreement, contract, arrangement or plan that would result
(taking into account the transactions contemplated by this Agreement),
separately or in the aggregate, in the payment of any "excess parachute
payments" within the meaning of Section 280G of the Code; (vii) the prices for
any property or services (or for the use of property) provided by the Company or
any of the Company Subsidiaries to any other subsidiary or to the Company have
been arm's length prices, determined using a method permitted by the Treasury
Regulations under Section 482 of the Code; (viii) neither the Company nor any of
the Company Subsidiaries is liable with respect to any indebtedness the interest
of which is not deductible for applicable federal, foreign, state or local
income tax purposes; (ix) neither the Company nor any of the Company
Subsidiaries is a "consenting corporation" under Section 341(f) of the Code or
any corresponding provision of state, local or foreign law; (x) the Company and
each Company Subsidiary have complied with all applicable laws, rules, and
regulations relating to the withholding and payment of Taxes except where the
amount of taxes involved is not material; and (xi) none of the assets owned by
the Company or any of the Company Subsidiaries is property that is required to
be treated as owned by any other person pursuant to Section 168(g)(8) of the
Internal Revenue Code of 1954, as amended, as in effect immediately prior to the
enactment of the Tax Reform Act of 1986, or is "tax-exempt use property" within
the meaning of Section 168(h) of the Code.
-27-
<PAGE>
(d) The amount of net operating losses (as defined in Section
172 of the Code) of the Company and the Company Subsidiaries as of the end of
the fiscal year ended June 30, 1999 is as set forth in the Company's financial
statements for such year.
2.17 INTELLECTUAL PROPERTY. (a) Section 2.17(a) of the Company
Disclosure Letter sets forth a list of (i) all patents and patent applications
owned by the Company and/or each of the Company Subsidiaries worldwide; (ii) all
trademark and service mark registrations and all trademark and service mark
applications, material common law trademarks, material trade dress and material
slogans, and all trade names owned by the Company and/or each of its
subsidiaries worldwide; (iii) all copyright registrations and copyright
applications owned by the Company and/or each of the Company Subsidiaries
worldwide; and (iv) all licenses in which the Company and/or any of the Company
Subsidiaries is (A) a licensor with respect to any of the patents, trademarks,
service marks, trade names or copyrights listed in Section 2.17 of the Company
Disclosure Letter which are material to the Company or (B) a licensee of any
other person's patents, trade names, trademarks, service marks or copyrights
material to the Company except for any licenses of software programs that are
commercially available "off the shelf."
(b) The Company or the Company Subsidiaries own, or are
licensed or otherwise possess legal enforceable rights to use, all patents,
trademarks, trade names, service marks, trade dress, slogans, copyrights and any
applications therefor, technology, know-how, trade secrets, computer software
programs or applications, domain names and tangible or intangible proprietary
information or materials that are used in the respective businesses of the
Company and the Company Subsidiaries as currently conducted (the "COMPANY
INTELLECTUAL PROPERTY RIGHTS"), except for any such failures to own, be licensed
or possess that would not reasonably be expected to have a Material Adverse
Effect.
(c) Except as disclosed in Section 2.17(c) of the Company
Disclosure Letter, the Company and/or each Company Subsidiary has made all
necessary filings and recordations for the patents, patent applications,
trademark and service mark registrations, trademark and service mark
applications, copyright registrations and copyright applications set forth in
Section 2.17(a) of the Company Disclosure Letter, except where the failure to
make such filings or recordations would not reasonably be expected to have a
Material Adverse Effect. There are not currently pending, and to the Knowledge
of the Company there are no valid grounds for, any bona fide claims (i) that the
business of the Company or any of the Company Subsidiaries infringes on any
copyright, patent, trademark, service mark or trade secret; (ii) against the use
by the Company or any of the Company Subsidiaries of any trademarks, trade
names, trade secrets, copyrights, patents, technology, know-how or computer
software programs and applications used in the business of the Company or any of
the Company Subsidiaries as currently conducted or as proposed to be conducted;
(iii) challenging the ownership, validity or effectiveness of any of the Company
Intellectual Property Rights; or (iv) challenging the license or legally
enforceable right to use of any third-party patents, trademarks, service marks
and copyrights by the Company or any of the
-28-
<PAGE>
Company Subsidiaries, except, in the case of each of clauses (i), (ii), (iii)
and (iv) above, for matters that, if determined adversely to the Company, would
not reasonably be expected to have a Material Adverse Effect.
(d) Except as set forth in the Company Securities Filings
filed prior to the date of this Agreement or Section 2.17 of the Company
Disclosure Letter, to the Knowledge of the Company, there is no material
unauthorized use, infringement or misappropriation of any of the Company
Intellectual Property by any third party, including any employee or former
employee of the Company or any of the Company Subsidiaries.
(e) KNOWLEDGE OF THE COMPANY DEFINED. For purposes of this
Section 2.17, the parties acknowledge and agree that the phrase "to the
Knowledge of the Company": (i) will be limited to the knowledge of the officers
and employees of the Company identified in Paragraph 2.17(e) of the Company
Disclosure Letter and (ii) will not be deemed to impose any obligation on the
Company to conduct a patent, trademark or copyright search.
2.18 DISCLOSURE DOCUMENTS. The Proxy Statement will comply in
all material respects with the applicable requirements of the Securities
Exchange Act except that no representation or warranty is being made by the
Company with respect to the Parent Information included in the Proxy Statement.
The Proxy Statement will not, at the time the Proxy Statement is filed with the
SEC or first sent to shareholders or at the time of the Company's shareholders'
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 were made,
not misleading except that no representation or warranty is being made by the
Company with respect to the Parent Information (as defined below) included in
the Proxy Statement. The Schedule 14D-9 will comply in all material respects
with the Securities Exchange Act except that no representation or warranty is
being made by the Company with respect to the Parent Information included in the
Schedule 14D-9. Neither the Schedule 14D-9 nor any of the information relating
to the Company or its affiliates provided by or on behalf of the Company
specifically for inclusion in the Schedule 14D-1 or the Offer Documents will, at
the respective times the Schedule 14D-9, the Schedule 14D-1 and the Offer
Documents are filed with the SEC and are first published, sent or given to
shareholders of the Company, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements made therein, in light of the circumstances under
which they were made, not misleading.
2.19 LABOR MATTERS. Except as set forth in the Company
Securities Filings filed prior to the date of this Agreement or Section 2.19 of
the Company Disclosure Letter, (i) there are no controversies pending or, to the
knowledge of the Company or any of the Company Subsidiaries, threatened, between
the Company or any of the Company Subsidiaries and any of their respective
employees, which controversies would reasonably be expected to have a Material
Adverse Effect; (ii) neither the Company nor any of the Company
-29-
<PAGE>
Subsidiaries is a party to any collective bargaining agreement or other labor
union contract applicable to persons employed by the Company or the Company
Subsidiaries, nor, as of the date of this Agreement, does the Company or any of
the Company Subsidiaries know of any activities or proceedings of any labor
union to organize any such employees; and (iii) neither the Company nor any of
the Company Subsidiaries has any knowledge of any strikes, slowdowns, work
stoppages, lockouts, or threats thereof, by or with respect to any employees of
the Company or any of the Company Subsidiaries which would reasonably be
expected to have a Material Adverse Effect.
2.20 LIMITATION ON BUSINESS CONDUCT. Except as set forth in
the Company Securities Filings filed prior to the date of this Agreement,
neither the Company nor any of the Company Subsidiaries is a party to, or has
any obligation under, any contract or agreement, written or oral, which contains
any covenants currently or prospectively limiting in any material respect the
freedom of the Company or any of the Company Subsidiaries to engage in any line
of business or to compete with any entity.
2.21 TITLE TO PROPERTY. Except as set forth in the Company
Securities Filings filed prior to the date of this Agreement or Section 2.21 of
the Company Disclosure Letter, each of the Company and each of the Company
Subsidiaries owns the properties and assets that it purports to own free and
clear of all liens, charges, mortgages, security interests or encumbrances of
any kind ("LIENS"), except for Liens which arise in the ordinary course of
business and do not materially impair the Company's or the Company Subsidiaries'
ownership or use of such properties or assets, Liens for taxes not yet due or
delinquent or being contested in good faith by appropriate proceedings for which
reserves have been established in accordance with GAAP and Liens securing
obligations under the Company's credit agreements, loan agreements and equipment
leases (the "CREDIT AGREEMENTS"). Except as set forth in Schedule 2.21 of the
Company Disclosure Letter, with respect to the property and assets it leases,
the Company, the Company Subsidiaries, and to the best of the Company's
knowledge each of the other parties thereto, is in material compliance with such
leases, and the Company or the Company Subsidiaries, as the case may be, hold a
valid leasehold interest free of any Liens, except those referred to above. The
rights, properties and assets presently owned, leased or licensed by the Company
and the Company Subsidiaries include all rights, properties and assets necessary
to permit the Company and the Company Subsidiaries to conduct their business in
all material respects in the same manner as their businesses have been conducted
prior to the date hereof.
2.22 OWNED AND LEASED PREMISES. Each of the buildings,
structures and premises leased by the Company or any of the Company Subsidiaries
is in reasonably good repair and operating condition, except as would not
reasonably be expected to have a Material Adverse Effect.
2.23 ENVIRONMENTAL MATTERS. Except as set forth in the Company
Securities Filings filed prior to the date of this Agreement or Section 2.23 of
the Company Disclosure
-30-
<PAGE>
Letter:
(a) The Company and the Company Subsidiaries are in material
compliance with the Environmental Laws (as defined below), which compliance
includes the possession by the Company and the Company Subsidiaries of all
material permits and governmental authorizations required under applicable
Environmental Laws, and compliance in all material respects with the terms and
conditions thereof, except in each case where such non-compliance would not
reasonably be expected to have a Material Adverse Effect. Neither the Company
nor any of the Company Subsidiaries has received any communication (written or
oral), whether from a governmental authority, citizens group, employee or
otherwise, that alleges that the Company or any of the Company Subsidiaries is
not in such material compliance, and there are no circumstances that may prevent
or interfere with such compliance in the future, except where such
non-compliance would not reasonably be expected to have a Material Adverse
Effect.
(b) There are no Environmental Claims (as defined below),
including claims based on "arranger liability," pending or, to the best
knowledge of the Company, threatened against the Company or any of the Company
Subsidiaries or against any person or entity whose liability for any
Environmental Claim the Company or any of the Company Subsidiaries has retained
or assumed either contractually or by operation of law, except for such
Environmental Claims that would not reasonably be expected to have a Material
Adverse Effect.
(c) To the knowledge of the Company, there are no past or
present actions, inactions, activities, circumstances, conditions, events or
incidents, including the release, emission, discharge, presence or disposal of
any Material of Environmental Concern (as hereinafter defined), that would form
the basis of any Environmental Claim against the Company or any of the Company
Subsidiaries or against any person or entity whose liability for any
Environmental Claim the Company or any of the Company Subsidiaries have retained
or assumed either contractually or by operation of law, except for such
Environmental Claims that would not reasonably be expected to have a Material
Adverse Effect.
(d) The Company is in compliance in all material respects with
Environmental Laws as they relate to (i) any on-site or off-site locations where
the Company or any of the Company Subsidiaries has stored, disposed or arranged
for the disposal of Materials of Environmental Concern for itself (but not on
behalf of others) or (ii) any underground storage tanks located on property
owned or leased by the Company or any of the Company Subsidiaries. To the
knowledge of Company, there is no asbestos contained in or forming part of any
building, building component, structure or office space owned or leased by the
Company or any of the Company Subsidiaries. To the knowledge of Company, no
polychlorinated biphenyls (PCB's) or PCB-containing items are used or stored at
any property owned or leased by the Company or any of the Company Subsidiaries.
-31-
<PAGE>
(e) For purposes of this Agreement:
(i) "ENVIRONMENTAL CLAIM" means any written claim, action,
cause of action, investigation or notice by any person or entity
alleging potential liability (including potential liability for
investigatory costs, cleanup costs, governmental response costs,
natural resources damages, property damages, personal injuries, or
penalties) arising out of, based on or resulting from (x) the presence,
or release into the environment, of any Material of Environmental
Concern at any location, whether or not owned or operated by the
Company or any of the Company Subsidiaries, or (y) circumstances
forming the basis of any violation, or alleged violation, of any
Environmental Law.
(ii) "ENVIRONMENTAL LAWS" means all Federal, state, local and
foreign laws or regulations relating to pollution or protection of
human health and the environment (including ambient air, surface water,
ground water, land surface or sub-surface strata), including laws and
regulations relating to emissions, discharges, releases or threatened
releases of Materials of Environmental Concern, or otherwise relating
to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Materials of Environmental Concern.
(iii) "MATERIALS OF ENVIRONMENTAL CONCERN" means chemicals,
pollutants, contaminants, hazardous materials, hazardous substances and
hazardous wastes, toxic substances, petroleum and petroleum products
that are regulated under the Environmental Laws.
2.24 INSURANCE. The Company maintains insurance that provides
adequate coverage for normal risks incident to the business of the Company and
the Company Subsidiaries and their respective properties and assets and in
character and amount comparable to that carried by persons engaged in similar
businesses. The insurance polices maintained by the Company are with reputable
insurance carriers and have no premium delinquencies.
2.25 PRODUCT LIABILITY AND RECALLS. (a) Except as disclosed in
the Company SEC Filings filed prior to the date of this Agreement or Section
2.25 of the Company Disclosure Letter, to the Company's knowledge, there is no
claim, pending or overtly threatened, against the Company or any Company
Subsidiaries for injury to person or property of employees or any third parties
suffered as a result of the sale of any product or performance of any service by
the Company or any Company Subsidiaries, including claims arising out of the
defective or unsafe nature of its products or services, which would reasonably
be expected, individually or in the aggregate, to have a Material Adverse
Effect.
(b) Except as disclosed in the Company SEC Filings filed prior
to the date of this Agreement or Section 2.25 of the Company Disclosure Letter,
there is no pending or, to the knowledge of the Company, overtly threatened
recall or investigation of any product
-32-
<PAGE>
sold by the Company or any Company Subsidiaries, which recall or investigation
would reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect.
2.26 CUSTOMERS. Section 2.26 of the Company Disclosure Letter
sets forth a list of the Company's ten (10) largest customers (detailed, in the
case of government agencies, by separate government agency) in terms of gross
sales for the fiscal year ended June 30, 1999. Except as set forth in Section
2.26 of the Company Disclosure Letter, since June 30, 1999, there have not been
any changes in the business relationships of the Company with any of the
customers named therein that would constitute a Material Adverse Effect. Except
as set forth in Section 2.26 of the Company Disclosure Letter, no customer of
the Company accounted for more than 5% of the revenues of the Company and the
Company Subsidiaries, taken as whole, for the fiscal year ended June 30, 1999.
2.27 INTERESTED PARTY TRANSACTIONS. Except as set forth in
Section 2.27 of the Company Disclosure Letter or in the Company Securities
Filings filed prior to the date of this Agreement, since the date of the
Company's proxy statement dated October 25, 1999, no event has occurred that
would be required to be reported pursuant to Item 404 of Regulation S-K
promulgated by the SEC.
2.28 FINDERS AND INVESTMENT BANKERS. Neither the Company nor
any of its officers or directors has employed any broker, finder or financial
advisor or otherwise incurred any liability for any brokerage fees, commissions,
or financial advisors' or finders' fees in connection with the transactions
contemplated hereby, other than pursuant to agreements with McDonald
Investments, Inc. and Adams, Harkness & Hill, Inc., the terms of which have been
disclosed to Parent.
2.29 FAIRNESS OPINION. The Company's Board of Directors has
received from the Financial Advisor a written opinion addressed to it for
inclusion in the Schedule 14D-9 and the Proxy Statement to the effect that the
consideration to be received by the shareholders of the Company pursuant to each
of the Offer and the Merger is fair to the Company's shareholders from a
financial point of view.
2.30 TAKEOVER STATUTES. Assuming Parent and its "associates"
and "affiliates" (as defined in Section 60.825 of the Oregon Code) collectively
beneficially own and have beneficially owned at all times during the three-year
period prior to the date hereof less than fifteen percent (15%) of the Company
Stock outstanding, Sections 60.825 - 60.845 of the Oregon Code is, and shall be,
inapplicable to the acquisition of Common Shares pursuant to the Offer and the
Merger.
2.31 FULL DISCLOSURE. No statement contained in any
certificate or schedule, including, without limitation, the Company Disclosure
Letter, furnished or to be furnished by the Company or the Company Subsidiaries
to Parent or Purchaser in, or pursuant to the provisions of, this Agreement
contains or shall contain any untrue statement of a material fact
-33-
<PAGE>
or omits or will omit to state any material fact necessary, in the light of the
circumstances under which it was made, in order to make the statements herein or
therein not misleading.
2.32 YEAR 2000. Except as would not reasonably be expected to
have a Material Adverse Effect on the Company:
(a) None of the computer software, computer firmware, computer
hardware (whether general or special purpose) or other similar or related items
of automated, computerized or software systems that are used or relied on by
Company or by any of the Company Subsidiaries in the conduct of their respective
businesses will malfunction, will cease to function, will generate incorrect
data or will produce incorrect results that are caused by processing, providing
or receiving (i) date-related data from, into and between the twentieth and
twenty-first centuries or (ii) date-related data in connection with any valid
date in the twentieth and twenty-first centuries.
(b) None of the products and services sold, licensed,
rendered, or otherwise provided by the Company or by any of the Company
Subsidiaries in the conduct of their respective businesses will malfunction,
will cease to function, will generate incorrect data or will produce incorrect
results that are caused by processing, providing or receiving (i) date-related
data from, into and between the twentieth and twenty-first centuries or (ii)
date-related data in connection with any valid date in the twentieth and
twenty-first centuries.
(c) Neither the Company nor any of the Company Subsidiaries
has made any other representations or warranties regarding the ability of any
product or service sold, licensed, rendered, or otherwise provided by the
Company or by any of the Company Subsidiaries in the conduct of their respective
businesses to operate without malfunction, to operate without ceasing to
function, to generate correct data or to produce correct results when
processing, providing or receiving (i) date-related data from, into and between
the twentieth and twenty-first centuries and (ii) date-related data in
connection with any valid date in the twentieth and twenty-first centuries.
2.33 RIGHTS AGREEMENTS. There are no "rights agreements",
"poison pills" or similar defensive installments, arrangements or agreements
that would prevent or interfere with the consummation of the transactions
contemplated by this Agreement.
2.34 ABSENCE OF CERTAIN PAYMENTS. None of the Company, any
Company Subsidiaries or any of their respective affiliates, officers, directors,
employees or agents or other people acting on behalf of any of them have (i)
engaged in any activity prohibited by the United States Foreign Corrupt
Practices Act of 1977 or any other similar law, regulation, decree, directive or
order of any other country and (ii) without limiting the generality of the
preceding clause (i), used any corporate or other funds for unlawful
contributions, payments, gifts or entertainment, or made any unlawful
expenditures relating to political activity to government officials or others.
None of the Company, the Company Subsidiaries or any of
-34-
<PAGE>
their respective affiliates, directors, officers, employees or agents of other
persons acting on behalf of any of them, has accepted or received any unlawful
contributions, payments, gifts or expenditures.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER
Parent and Purchaser jointly and severally represent and
warrant to the Company that:
3.1 ORGANIZATION AND GOOD STANDING. Each of Guarantor, Parent
and Purchaser is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation and has all
requisite corporate power and authority to own, lease and operate its properties
and to carry on its business as now being conducted.
3.2 AUTHORIZATION; BINDING AGREEMENT. Parent, Purchaser and
Guarantor have all requisite corporate power and authority to execute and
deliver this Agreement or the Guarantee, as the case may be, and to consummate
the transactions contemplated hereby and thereby. The execution and delivery of
this Agreement and the Guarantee and the consummation of the transactions
contemplated hereby and thereby, including, but not limited to, the Merger, have
been duly and validly authorized by the respective Boards of Directors of
Parent, Purchaser and Guarantor, as appropriate, and no other corporate
proceedings on the part of Parent, Purchaser, Guarantor or any other subsidiary
of Guarantor are necessary to authorize the execution and delivery of this
Agreement or the Guarantee, as applicable, or to consummate the transactions
contemplated hereby and thereby (other than the requisite approval by the sole
shareholder of Purchaser of this Agreement and the Merger). This Agreement has
been duly and validly executed and delivered by each of Parent and Purchaser and
constitutes the legal, valid and binding agreement of Parent and Purchaser,
enforceable against each of Parent and Purchaser in accordance with its terms,
subject to the Enforceability Exceptions. The Guarantee has been duly and
validly executed and delivered by Guarantor, and constitutes the legal, valid
and binding agreement of Guarantor enforceable against Guarantor in accordance
with its terms, subject to the Enforceability Exceptions.
3.3 GOVERNMENTAL APPROVALS. No Consent from or with any
Governmental Authority on the part of Parent, Purchaser or Guarantor is required
in connection with the execution or delivery by Parent, Purchaser and Guarantor
of this Agreement or the Guarantee, as the case may be, or the consummation by
Parent, Purchaser and Guarantor of the transactions contemplated hereby or
thereby other than (i) the filing of the Articles of Merger with the Secretary
of State of Oregon in accordance with the Oregon Code, (ii) filings with the
SEC, (iii) filings under the HSR Act (iv) filings pursuant to the rules and
regulations of NASDAQ or the New York Stock Exchange and (v) those Consents
that, if they were not obtained or made, would not reasonably be expected to
have a Material Adverse Effect.
-35-
<PAGE>
3.4 NO VIOLATIONS. The execution and delivery of this
Agreement, the consummation of the transactions contemplated hereby and
compliance by Parent or Purchaser with any of the provisions hereof will not (i)
conflict with or result in any breach of any provision of the Memorandum of
Association and Bye-Laws or other governing instruments of Guarantor or similar
documents of any subsidiary of Guarantor, including Parent and Purchaser, (ii)
require any Consent under or result in a violation or breach of, or constitute
(with or without notice or lapse of time or both) a default (or give rise to any
right of termination, cancellation or acceleration) under any of the terms,
conditions or provisions of, any material note, bond, mortgage, indenture,
contract, lease, license, agreement or instrument to which Guarantor or any
subsidiary of Guarantor, including Parent, is a party or by which any of them or
any of their respective assets or property is subject, (iii) result in the
creation or imposition of any material lien or encumbrance of any kind upon any
of the assets of Guarantor or any subsidiary of Guarantor, including Parent, or
(iv) subject to obtaining the Consents from Governmental Authorities referred to
in SECTION 3.3 hereof, violate any Law to which Guarantor or any subsidiary of
Guarantor, including Parent, or its assets or properties are subject, except in
any such case for any such conflicts, violations, breaches, defaults or other
occurrences that would not prevent or delay consummation of the Offer or the
Merger, or otherwise materially and adversely affect the ability of Parent or
Purchaser to perform their respective obligations under this Agreement.
3.5 DISCLOSURE DOCUMENTS. None of the information supplied by
Parent, or Purchaser or their respective officers, directors, representatives,
agents or employees (the "PARENT INFORMATION") for inclusion in the Proxy
Statement will, at the time the Proxy Statement is filed with the SEC or first
mailed to the Company's shareholders, at the time of the Company's shareholders'
meeting, contain any untrue statement of a material fact, or will omit to state
any material fact necessary in order to make the statements therein, in light of
the circumstances in which they were made not misleading or necessary to correct
any statement in any earlier communication with respect to the solicitation of
proxies for such shareholders' meeting which has become false or misleading.
Neither the Schedule 14D-1 or the Offer Documents or any amendments thereof or
supplements thereto nor any of the Parent Information provided specifically for
inclusion in the Schedule 14D-9 will, at the respective times the Schedule
14D-1, the Offer Documents or the Schedule 14D-9 are filed with the SEC or first
published, sent or given to the Company's shareholders, contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. Notwithstanding the foregoing, neither Parent
nor Purchaser makes any representation or warranty with respect to any
information that has been supplied by the Company or its accountants, counsel or
other authorized representatives for use in any of the foregoing documents. The
Schedule 14D-1 and the Offer Documents will comply as to form in all material
respects with the provisions of the Securities Exchange Act.
3.6 FINDERS AND INVESTMENT BANKERS. Neither Parent, Guarantor,
Purchaser nor any of their respective officers or directors has employed any
broker, finder or financial
-36-
<PAGE>
advisor or otherwise incurred any liability for any brokerage fees, commissions
or financial advisors' or finders' fees in connection with the transactions
contemplated hereby.
3.7 FINANCING ARRANGEMENTS. Parent (including for this purpose
one or more other subsidiaries of Guarantor ), has funds available to it
sufficient to enable the Purchaser to purchase the Common Shares in accordance
with the terms of this Agreement and to pay all amounts due (or which will, as a
result of the transactions contemplated hereby, become due) in respect of any
indebtedness of the Company for money borrowed.
3.8 NO PRIOR ACTIVITIES. Except for obligations or liabilities
incurred in connection with its incorporation or organization or the negotiation
and consummation of this Agreement and the transactions contemplated hereby
(including any financing in connection therewith), Purchaser has not incurred
any obligations or liabilities and has not engaged in any business or activities
of any type or kind whatsoever or entered into any agreements or arrangements
with any person or entity.
ARTICLE IV
ADDITIONAL COVENANTS OF THE COMPANY
The Company covenants and agrees as follows:
4.1 CONDUCT OF BUSINESS OF THE COMPANY AND THE COMPANY
SUBSIDIARIES. (a) Unless Parent shall otherwise consent in writing (which
consent, in the case of paragraphs (D), (E), (F), (G), (H), (I), or (J) below,
shall not be unreasonably withheld) and except as expressly contemplated by this
Agreement or in the Company Disclosure Letter, during the period from the date
of this Agreement to the Effective Time, (i) the Company shall conduct, and it
shall cause the Company Subsidiaries to conduct, its or their businesses in the
ordinary course and consistent with past practice, and the Company shall, and it
shall cause the Company Subsidiaries to, use its or their reasonable best
efforts to preserve substantially intact its business organization, to keep
available the services of its present officers and employees and to preserve the
present commercial relationships of the Company and the Company Subsidiaries
with persons with whom the Company or the Company Subsidiaries do significant
business and (ii) without limiting the generality of the foregoing, neither the
Company nor any of the Company Subsidiaries will:
(A) amend or propose to amend its Articles of
Incorporation or Bylaws (or similar organizational documents);
(B) authorize for issuance, issue, grant, sell,
pledge, dispose of or propose to issue, grant, sell, pledge or dispose of any
shares of, or any options, warrants, commitments, subscriptions or rights of any
kind to acquire or sell any shares of, the capital stock or other securities of
the Company or any of the Company Subsidiaries, including, but not limited to,
any securities convertible into or exchangeable for shares of stock of any class
of the Company or any of the Company Subsidiaries, except for (a) the issuance
of shares
-37-
<PAGE>
pursuant to the exercise of Company Options outstanding on the date of this
Agreement in accordance with their present terms, (b) the issuance of shares
pursuant to the Company Stock Purchase Plans as in effect on the date of this
Agreement, (c) the issuance of shares upon the exercise of Company Warrants
outstanding on the date of this Agreement in accordance with their present
terms, or (d) the issuance of shares upon the conversion of the Notes in
accordance with the indenture relating to the Notes on its present terms;
(C) split, combine or reclassify any shares of its
capital stock or declare, pay or set aside any dividend or other distribution
(whether in cash, stock or property or any combination thereof) in respect of
its capital stock, other than dividends or distributions to the Company or a
Company Subsidiary (except that in no case may the Company or a Company
Subsidiary declare or pay any cross-border dividends), make or allow any Company
Subsidiary to make any cross-border capital contributions, or directly or
indirectly redeem, purchase or otherwise acquire or offer to acquire any shares
of its capital stock or other securities (other than the repurchase of 100,000
Common Shares from Matthew J. Bergeron pursuant to that certain Stock Purchase
Agreement dated December 22, 1998 between the Company and Mr. Bergeron);
(D) (a) create or incur any indebtedness for borrowed
money or issue any debt securities, except pursuant to the Credit Agreements, or
(b) make any loans or advances, except in the ordinary course of business
consistent with past practice;
(E) (a) sell, pledge, dispose of or encumber any
assets of the Company or any of Company Subsidiaries (except for (i) sales of
assets in the ordinary course of business and in a manner consistent with past
practice, (ii) pledges to secure debt permitted under paragraph (D), (iii)
dispositions of obsolete or worthless assets, and (iv) sales of immaterial
assets not in excess of $250,000 in the aggregate); (b) acquire (by merger,
consolidation, or acquisition of stock or assets) any corporation, partnership
or other business organization or division thereof; (c) authorize any capital
expenditures or purchases of fixed assets which are, in the aggregate, in excess
of $250,000 from the date hereof until February 29, 2000; (d) assume, guarantee
(other than guarantees of obligations of the Company Subsidiaries entered into
in the ordinary course of business) or endorse or otherwise as an accommodation
become responsible for, the obligations of any person, or make any loans or
advances, except in the ordinary course of business consistent with past
practice; or (e) voluntarily incur any material liability or obligation
(absolute, contingent or otherwise) except in the ordinary course of business
consistent with past practice.
(F) increase in any manner the compensation of any of
its officers or employees (other than, except with respect to employees who are
executive officers or directors, in the ordinary course of business reasonably
consistent with past practice) or enter into, establish, amend or terminate any
employment, consulting, retention, change in control, collective bargaining,
bonus or other incentive compensation, profit sharing, health or other welfare,
stock option or other equity, pension, retirement, vacation, severance, deferred
-38-
<PAGE>
compensation or other compensation or benefit plan, policy, agreement, trust,
fund or arrangement with, for or in respect of, any shareholder, officer,
director, employee, consultant or affiliate other than, in any such case
referred to above, as may be required by Law or as required pursuant to the
terms of agreements in effect on the date of this Agreement and other than
arrangements with new employees (other than employees who will be officers of
the Company) hired in the ordinary course of business consistent with past
practice and providing for compensation (other than equity-based compensation)
and other benefits consistent with those provided for similarly situated
employees of the Company as of the date hereof;
(G) alter through merger, liquidation,
reorganization, restructuring or in any other fashion the corporate structure or
ownership of any Company Subsidiary or the Company;
(H) except as may be required as a result of a change
in law or as required by the SEC, change any of the accounting principles or
practices used by it;
(I) make any tax election or settle or compromise any
income tax liability;
(J) pay, discharge or satisfy any material claims,
liabilities or obliga- tions (absolute, accrued, asserted or unasserted,
contingent or other), other than the payment, discharge or satisfaction in the
ordinary course of business and consistent with past practice of liabilities
reflected or reserved against in, or contemplated by, the financial statements
(or the notes thereto) of the Company contained in the Company SEC Filings filed
prior to the date of this Agreement or incurred in the ordinary course of
business consistent with past practice;
(K) except to the extent necessary for the exercise
of its fiduciary duties by the Board of Directors of the Company as set forth
in, and consistent with the provisions of, SECTION 4.8 hereof, waive, amend or
allow to lapse any term or condition of any confidentiality or "standstill"
agreement to which the Company or any Company Subsidiary is a party; or
(L) take, or agree in writing or otherwise to take,
any of the foregoing actions or any action which would make any of the
representations or warranties of the Company contained in this Agreement untrue
or incorrect in any material respect at or prior to the Effective Time.
(b) The Company shall, and the Company shall cause
each of the Company Subsidiaries to, comply with all Laws applicable to it or
any of its properties, assets or business and to maintain in full force and
effect all the Company Permits necessary for such business, except in any such
case for any failure so to comply or maintain that would not
-39-
<PAGE>
reasonably be expected to result in a Material Adverse Effect.
4.2 NOTIFICATION OF CERTAIN MATTERS. The Company shall give
prompt notice to Parent if any of the following occur after the date of this
Agreement: (i) receipt of any notice or other communication in writing from any
third party alleging that the Consent of such third party is or may be required
in connection with the transactions contemplated by this Agreement; (ii) receipt
of any material notice or other communication from any Governmental Authority
(including, but not limited to, the National Association of Securities Dealers
("NASD"), NASDAQ or any other securities exchange) in connection with the
transactions contemplated by this Agreement; (iii) the occurrence of an event
which would be reasonably likely (A) to have a Material Adverse Effect or (B) to
cause any condition set forth in ANNEX I hereto to be unsatisfied in any
material respect at any time prior to the consummation of the Offer; or (iv) the
commencement or threat of any Litigation involving or affecting the Company or
any of the Company Subsidiaries, or any of their respective properties or
assets, or, to the Company's knowledge, any employee, agent, director or
officer, in his or her capacity as such, of the Company or any of the Company
Subsidiaries which, if pending on the date hereof, would have been required to
have been disclosed pursuant to this Agreement or which relates to the
consummation of the Offer or the Merger.
4.3 ACCESS AND INFORMATION. Between the date of this Agreement
and the Effective Time, and without intending by this SECTION 4.3 to limit any
of the other obligations of the parties under this Agreement, the Company will
give, and shall direct its accountants and legal counsel to give, Parent and its
authorized representatives (including, without limitation, its financial
advisors, accountants and legal counsel), at reasonable times and without undue
disruption to or interference with the normal conduct of the business and
affairs of the Company, access as reasonably required in connection with the
transactions provided for in this Agreement to all offices and other facilities
and to all contracts, agreements, commitments, books and records of or
pertaining to the Company and the Company Subsidiaries and will furnish Parent
with (a) such financial and operating data and other information with respect to
the business and properties of the Company and the Company Subsidiaries as
Parent may from time to time reasonably request in connection with such
transactions and (b) a copy of each material report, schedule and other document
filed or received by the Company or any of the Company Subsidiaries pursuant to
the requirements of applicable securities laws, the NASD or NASDAQ.
4.4 SHAREHOLDER APPROVAL. As soon as practicable following the
consummation of the Offer, the Company will take all steps necessary to duly
call, give notice of, convene and hold a meeting of its shareholders for the
purpose of voting upon the Company Proposals and for such other purposes as may
be necessary or desirable in connection with effectuating the transactions
contemplated hereby, if such meeting is required. Except as otherwise
contemplated by this Agreement, the Board of Directors of the Company will
recommend to the shareholders of the Company that they approve the Company
Proposals.
-40-
<PAGE>
4.5 REASONABLE BEST EFFORTS. Subject to the terms and
conditions herein provided, the Company agrees to use reasonable best efforts to
take, or cause to be taken, all actions and to do, or cause to be done, all
things necessary, proper or advisable to consummate and make effective as
promptly as practicable the transactions contemplated by this Agreement,
including, but not limited to, (i) obtaining all Consents from Governmental
Authorities and other third parties required for the consummation of the Offer
and the Merger and the transactions contemplated thereby and (ii) timely making
all necessary filings under the HSR Act. Upon the terms and subject to the
conditions hereof, the Company agrees to use reasonable best efforts to take, or
cause to be taken, all actions and to do, or cause to be done, all things
necessary to satisfy the other conditions of the Closing set forth herein.
4.6 PUBLIC ANNOUNCEMENTS. So long as this Agreement is in
effect, the Company shall not, and shall use reasonable best efforts to cause
its affiliates not to, issue or cause the publication of any press release or
any other announcement with respect to the Offer or the Merger or the
transactions contemplated hereby without the consent of Parent (such consent not
to be unreasonably withheld or delayed), except where such release or
announcement is required by applicable Law or pursuant to any applicable listing
agreement with, or rules or regulations of, the NASD or NASDAQ, in which case
the Company, prior to making such announcement, will consult with Parent
regarding the same.
4.7 COMPLIANCE. In consummating the transactions contemplated
hereby, the Company shall comply in all material respects with the provisions of
the Securities Exchange Act and the Securities Act and shall comply, and cause
the Company Subsidiaries to comply or to be in compliance, in all material
respects, with, all other applicable Laws.
4.8 NO SOLICITATION. (a) The Company shall not, directly or
indirectly, through any officer, director, employee, representative or agent of
the Company or any of the Company Subsidiaries, solicit or encourage the
initiation of (including by way of furnishing information) any inquiries or
proposals regarding any merger, sale of assets, sale of shares of capital stock
(including without limitation by way of a tender offer) or similar transactions
involving the Company or any Company Subsidiaries that if consummated would
constitute an Alternative Transaction (as defined below) (any of the foregoing
inquiries or proposals being referred to herein as a "COMPANY TAKEOVER
PROPOSAL"). Nothing contained in this Agreement shall prevent the Board of
Directors of the Company from (i) furnishing information to a third party which
has made a BONA FIDE Company Takeover Proposal that is a Superior Proposal (as
defined below) not solicited in violation of this Agreement, provided that such
third party has executed an agreement with confidentiality provisions
substantially similar to those then in effect between the Company and an
affiliate of Parent (the "CONFIDENTIALITY AGREEMENT") or (ii) subject to
compliance with the other terms of this SECTION 4.8, considering and negotiating
a bona fide Company Takeover Proposal that is a Superior Proposal not solicited
in violation of this Agreement; provided that, as to each of clauses (i) and
(ii), the Board of Directors of the Company reasonably determines in good faith
(after
-41-
<PAGE>
due consultation with independent counsel, which may be Stoel Rives LLP) that it
is or is reasonably likely to be required to do so in order to discharge
properly its fiduciary duties. For purposes of this Agreement, a "SUPERIOR
PROPOSAL" means any proposal made by a party to acquire, directly or indirectly,
for consideration consisting of cash and/or securities, all of the equity
securities of the Company entitled to vote generally in the election of
directors or all the assets of the Company (other than a de minimus amount of
assets not material to the conduct of the Company's business), on terms which
the Board of Directors of the Company reasonably believes (after due
consultation with a financial advisor of nationally recognized reputation, which
may be the Financial Advisor or McDonald Investments) to be more favorable from
a financial point of view to its shareholders than the Offer and the Merger
taking into account at the time of determination all factors relating to such
proposed transaction deemed relevant by the Board of Directors of the Company,
including, without limitation, the financing thereof, the proposed timing
thereof and all other conditions thereto and any changes to the financial terms
of this Agreement proposed by Parent and Purchaser. "ALTERNATIVE TRANSACTION"
means any of (i) a transaction pursuant to which any person (or group of
persons) other than Parent or its affiliates (a "THIRD PARTY") acquires or would
acquire more than 20% of the outstanding shares of any class of equity
securities of the Company, whether from the Company or pursuant to a tender
offer or exchange offer or otherwise, (ii) a merger or other business
combination involving the Company pursuant to which any Third Party acquires
more than 20% of the outstanding equity securities of the Company or the entity
surviving such merger or business combination, (iii) any transaction pursuant to
which any Third Party acquires or would acquire control of assets (including for
this purpose the outstanding equity securities of Company Subsidiaries and
securities of the entity surviving any merger or business combination including
any of the Company Subsidiaries) of the Company or any Company Subsidiaries
having a fair market value (as determined by the Board of Directors of the
Company in good faith) equal to more than 20% of the fair market value of all
the assets of the Company and the Company Subsidiaries, taken as a whole,
immediately prior to such transaction, or (iv) any other consolidation, business
combination, recapitalization or similar transaction involving the Company or
any of the Company Subsidiaries, other than the transactions contemplated by
this Agreement; PROVIDED, HOWEVER, that the term Alternative Transaction shall
not include any acquisition of securities by a broker dealer in connection with
a BONA FIDE public offering of such securities. Notwithstanding anything to the
contrary contained in this SECTION 4.8 or elsewhere in this Agreement, prior to
the Effective Time, the Company may, in connection with a possible Company
Takeover Proposal, refer any third party to this SECTION 4.8 and SECTION 8.7 and
make a copy of this SECTION 4.8 and SECTION 8.7 available to a third party.
(b) The Company shall immediately notify Parent and Purchaser
after receipt of any Company Takeover Proposal, or any modification of or
amendment to any Company Takeover Proposal, or any request for nonpublic
information relating to the Company or any of the Company Subsidiaries in
connection with a Company Takeover Proposal or for access to the properties,
books or records of the Company or any subsidiary by any person or entity that
informs the Board of Directors of the Company or such subsidiary that it is
considering
-42-
<PAGE>
making, or has made, a Company Takeover Proposal. Such notice to Parent and
Purchaser shall be made orally and in writing, and shall indicate the identity
of the person making the Company Takeover Proposal or intending to make the
Company Takeover Proposal or requesting non-public information or access to the
books and records of the Company, the terms of any such Company Takeover
Proposal or modification or amendment to a Company Takeover Proposal, and
whether the Company is providing or intends to provide the person making the
Company Takeover Proposal with access to information concerning the Company as
provided in SECTION 4.8(a). The Company shall also immediately notify Parent and
Purchaser, orally and in writing, if it enters into negotiations concerning any
Company Takeover Proposal.
(c) Except as set forth in this SECTION 4.8, neither the Board
of Directors of the Company nor any committee thereof shall (i) withdraw or
modify, or indicate publicly its intention to withdraw or modify, in a manner
adverse to Parent, the approval or recommendation by such Board of Directors or
such committee of the Offer or the Company Proposals, (ii) approve or recommend,
or indicate publicly its intention to approve or recommend, any Company Takeover
Proposal or (iii) cause the Company to enter into any letter of intent,
agreement in principle, acquisition agreement or other similar agreement (each,
a "COMPANY ACQUISITION AGREEMENT") related to any Company Takeover Proposal.
Notwithstanding the foregoing, in the event that prior to the Effective Time the
Board of Directors of the Company determines in good faith, after due
consultation with outside counsel, that the failure to do so constitutes or is
reasonably likely to constitute a breach of its fiduciary duties to the
Company's shareholders under applicable law, the Board of Directors of the
Company may (subject to this and the following sentences) approve or recommend a
Superior Proposal and, in connection therewith, withdraw or modify its approval
or recommendation of the Offer or the Company Proposals, but only at a time that
is after the third business day following Parent's receipt of written notice
advising Parent that the Board of Directors of the Company has received a
Superior Proposal and, in the case of any previously received Superior Proposal
that has been materially modified or amended, such modification or amendment and
specifying the material terms and conditions of such Superior Proposal,
modification or amendment.
(d) Nothing contained in this SECTION 4.8 shall prohibit the
Company from taking and disclosing to its shareholders a position contemplated
by Rule 14e-2(a) promulgated under the Securities Exchange Act or from making
any disclosure to the Company's shareholders if, in the good faith judgment of
the Board of Directors of the Company, with the advice of outside counsel,
failure so to disclose could be determined to be a breach of its fiduciary
duties to the Company's shareholders under applicable law; PROVIDED, HOWEVER,
that neither the Company nor its Board of Directors nor any committee thereof
shall, except as permitted by SECTION 4.8(c), withdraw or modify, or indicate
publicly its intention to withdraw or modify, its position with respect to the
Offer or the Company Proposals or approve or recommend, or indicate publicly its
intention to approve or recommend, a Company Takeover Proposal.
-43-
<PAGE>
(e) The Company shall advise its officers and directors and
any investment banker or attorney retained by the Company in connection with the
transactions contemplated by this Agreement of the restrictions set forth in
this SECTION 4.8.
4.9 SEC AND SHAREHOLDER FILINGS. The Company shall send to
Parent a copy of all material public reports and materials as and when it sends
the same to its shareholders, the SEC or any state or foreign securities
commission.
4.10 TAKEOVER STATUTES. If any "fair price," "moratorium,"
"control share acquisition" or other similar anti-takeover statute or regulation
enacted under state or federal laws in the United States (each a "TAKEOVER
STATUTE"), including, without limitation, Sections 60.825 - 60.845 of the Oregon
Code, is or may become applicable to the Offer or the Merger, the Company will
use reasonable best efforts to grant such approvals and take such actions as are
necessary so that the transactions contemplated by this Agreement and the
Company Proposals may be consummated as promptly as practicable on the terms
contemplated hereby and otherwise act so as to eliminate or minimize the effects
of any Takeover Statute on any of the transactions contemplated hereby.
4.11 COMPANY OPTIONS AND STOCK PURCHASE PLAN. (a) Prior to the
consummation of the Offer, the Company shall take all action necessary in order
to effectuate the provisions of Section 1.9(a) relating to Company Options.
(b) The Company will not accelerate the exercisability of any
Company Option that by its terms is not exercisable prior to March 1, 2000.
ARTICLE V
ADDITIONAL COVENANTS OF PURCHASER AND PARENT
Parent and Purchaser covenant and agree as follows:
5.1 REASONABLE BEST EFFORTS. Subject to the terms and
conditions herein provided, Parent and Purchaser agree to use reasonable best
efforts to take, or cause to be taken, all actions and to do, or cause to be
done, all things necessary, proper or advisable to consummate and make effective
as promptly as practicable the transactions contemplated by this Agreement,
including, but not limited to, (i) obtaining all Consents from Governmental
Authorities and other third parties required for the consummation of the Offer
and the Merger and the transactions contemplated thereby and (ii) timely making
all necessary filings under the HSR Act. Upon the terms and subject to the
conditions hereof, Parent and Purchaser agree to use reasonable best efforts to
take, or cause to be taken, all actions and to do, or cause to be done, all
things necessary to satisfy the other conditions of the Closing set forth
herein.
-44-
<PAGE>
5.2 PUBLIC ANNOUNCEMENTS. So long as this Agreement is in
effect, Parent and Purchaser shall not, and shall use reasonable best efforts to
cause their affiliates not to, issue or cause the publication of any press
release or any other announcement with respect to the Offer or the Merger or the
transactions contemplated hereby without the consent of the Company (such
consent not to be unreasonably withheld or delayed), except where such release
or announcement is required by applicable Law or pursuant to any applicable
listing agreement with, or rules or regulations of, any stock exchange on which
shares of Guarantor's capital stock are listed or the NASD, or other applicable
securities exchange, in which case Parent, prior to making such announcement,
will consult with the Company regarding the same.
5.3 COMPLIANCE. In consummating the transactions contemplated
hereby, Parent and Purchaser shall comply in all material respects with the
provisions of the Securities Exchange Act and the Securities Act and shall
comply, and cause their subsidiaries to comply or to be in compliance, in all
material respects, with all other applicable Laws.
5.4 EMPLOYEE BENEFIT PLANS. (a) As of the Effective Time,
Parent shall cause the Surviving Corporation to honor and satisfy all
obligations and liabilities with respect to the Employee Plans. Notwithstanding
the foregoing, the Surviving Corporation shall not be required to continue any
particular Employee Plan after the Effective Time, and any Employee Plan may be
amended or terminated in accordance with its terms and applicable Law. To the
extent that any Employee Plan is terminated or amended after the Effective Date
so as to eliminate the future benefits that are being provided with respect to
participants thereunder, Parent shall arrange for each individual who is then a
participant in such terminated or amended plan to participate in a Parent
Benefit Plan ("PARENT BENEFIT PLAN"), to the extent similarly situated employees
of the Parent participate in such Parent Benefit Plan, in accordance with the
eligibility criteria thereof, provided that (i) such participant shall receive
full credit for years of service with the Company or any of the Company
Subsidiaries prior to the Effective Time for all purposes for which such service
was recognized under the applicable Employee Plan, including, but not limited
to, recognition of service for eligibility, vesting (including acceleration
thereof pursuant to the terms of the applicable Employee Plan), entitlement to
commence benefits and, to the extent not duplicative of benefits received under
such Employee Plan, the amount of benefits, (ii) Parent shall cause any and all
pre-existing condition limitations (to the extent such limitations did not apply
to a pre-existing condition under the Employee Plans) and eligibility waiting
periods under any group health plans to be waived with respect to such
participant and his or her eligible dependents and (iii) Parent shall cause the
Parent Benefit Plans that are group welfare plans to provide such participant
with credit towards any applicable deductibles, co-payments and similar
exclusions for expenses incurred prior to the Effective Time.
(b) The provisions of this SECTION 5.4 are not intended to and
do not create rights of third party beneficiaries.
-45-
<PAGE>
5.5 INDEMNIFICATION. (a) From and after the Effective Time,
the Surviving Corporation shall indemnify and hold harmless all past and present
officers and directors (the "INDEMNIFIED PARTIES") of the Company and of the
Company Subsidiaries to the full extent such persons may be indemnified by the
Company pursuant to Oregon law, the Company's Second Amended and Restated
Articles of Incorporation and Bylaws, as each is in effect on the date of this
Agreement, for acts and omissions (x) arising out of or pertaining to the
transactions contemplated by this Agreement or arising out of the Offer
Documents or (y) otherwise with respect to any acts or omissions occurring or
arising at or prior to the Effective Time and shall advance reasonable
litigation expenses incurred by such persons in connection with defending any
action arising out of such acts or omissions, PROVIDED that such persons provide
the requisite affirmations and undertaking, as set forth in Section 60.397 of
the Oregon Code.
(b) In addition, Parent will provide, or cause the Surviving
Corporation to provide, for a period of not less than six years after the
Effective Time, the Company's current directors and officers an insurance and
indemnification policy that provides coverage for events occurring or arising at
or prior to the Effective Time (the "D&O INSURANCE") that is no less favorable
than the existing policy or, if substantially equivalent insurance coverage is
unavailable, the best available coverage; PROVIDED, HOWEVER, that Parent and the
Surviving Corporation shall not be required to pay an annual premium for the D&O
Insurance in excess of 200% of the annual premium currently paid by the Company
for such insurance, but in such case shall purchase as much such coverage as
possible for such amount.
(c) This SECTION 5.5 is intended to benefit the Indemnified
Parties and shall be binding on all successors and assigns of Parent, Purchaser,
the Company and the Surviving Corporation. Parent hereby guarantees the
performance by the Surviving Corporation of the indemnified obligations pursuant
to this SECTION 5.5, which guaranty is absolute and unconditional and shall not
be affected by any circumstance whatsoever, including the bankruptcy or
insolvency of the Surviving Corporation or any other person. The Indemnified
Parties shall be intended third-party beneficiaries of this SECTION 5.5.
5.6 VOTING OF COMMON SHARES. At any meeting of the Company's
shareholders held for the purpose of voting upon the Company Proposals, all of
the Common Shares then owned by Parent, Purchaser or any other subsidiaries of
Parent shall be voted in favor of the Company Proposals.
5.7 GUARANTEE OF PARENT. Parent hereby guarantees the payment
by Purchaser of the Per Share Amount and any other amounts payable by Purchaser
pursuant to this Agreement and will cause Purchaser to perform all of its other
obligations under this Agreement in accordance with their terms.
-46-
<PAGE>
ARTICLE VI
MERGER CONDITIONS
The respective obligations of each party to effect the Merger
shall be subject to the fulfillment or waiver at or prior to the Effective Time
of the following conditions:
6.1 OFFER. The Offer shall have been consummated; PROVIDED
that this condition shall be deemed to have been satisfied with respect to the
obligation of Parent and Purchaser to effect the Merger if Purchaser fails to
accept for payment or pay for Common Shares pursuant to the Offer in violation
of the terms of the Offer or of this Agreement.
6.2 SHAREHOLDER APPROVAL. If required, the Company Proposals
shall have been approved at or prior to the Effective Time by the requisite vote
of the shareholders of the Company in accordance with the Oregon Code.
6.3 NO INJUNCTION OR ACTION. No order, statute, rule,
regulation, executive order, stay, decree, judgment or injunction shall have
been enacted, entered, promulgated or enforced by any court or other
Governmental Authority which prohibits or prevents the consummation of the
Merger which has not been vacated, dismissed or withdrawn prior to the Effective
Time. The Company and Parent shall use all reasonable best efforts to have any
of the foregoing vacated, dismissed or withdrawn by the Effective Time.
6.4 GOVERNMENTAL APPROVALS. All Consents of any Governmental
Authority required for the consummation of the Merger and the transactions
contemplated by this Agreement shall have been obtained, except for those
Consents the failure to obtain which will not have a material adverse effect on
the business, assets, condition (financial or other), liabilities or results of
operations of the Surviving Corporation and its subsidiaries taken as a whole.
ARTICLE VII
TERMINATION AND ABANDONMENT
7.1 TERMINATION. This Agreement may be terminated at any time
prior to the Effective Time, whether before or after approval of the
shareholders of the Company described herein:
(a) by mutual written consent of Parent and the Company;
(b) by either Parent or the Company if any Governmental
Authority shall have issued an order, decree or ruling or taken any
other action permanently enjoining, restraining or otherwise
prohibiting the consummation of the transactions contemplated by this
Agreement and such order, decree or ruling or other action shall have
become final and nonappealable;
(c) by Parent if:
-47-
<PAGE>
(i) the Company shall have breached or failed to perform in
any material respect any of its covenants or other agreements contained
in this Agreement, which breach or failure to perform is incapable of
being cured or has not been cured within five (5) days after the giving
of written notice thereof to the Company (but not later than the
expiration of the twenty (20) business day period provided for the
Offer under SECTION 1.1(b) hereof);
(ii) any representation or warranty of the Company shall not
have been true and correct when made (without for this purpose giving
effect to qualifications of materiality contained in such
representation and warranty), if such failure to be true and correct,
individually or in the aggregate, would reasonably be expected to have
a Material Adverse Effect;
(iii) any representation or warranty of the Company shall
cease to be true and correct at any later date (without for this
purpose giving effect to qualifications of materiality contained in
such representation and warranty) as if made on such date (other than
representations and warranties made as of a specified date) other than
as a result of a breach or failure to perform by the Company of any of
its covenants or agreements under this Agreement if such failure to be
true and correct, individually or in the aggregate, would reasonably be
expected to have a Material Adverse Effect; PROVIDED, HOWEVER, that
such representation or warranty is incapable of being cured or has not
been cured within five (5) days after the giving of written notice
thereof to the Company (but not later than the expiration of the twenty
(20) business day period provided for the Offer under SECTION 1.1(b)
hereof); PROVIDED, HOWEVER, that the right to terminate this Agreement
pursuant to this SECTION 7.1(c) shall not be available to Parent if
Purchaser or any other affiliate of Parent shall acquire shares of
Common Shares pursuant to the Offer;
(d) by Parent if, whether or not permitted to do so by this
Agreement, (i) the Board of Directors of the Company or any committee
thereof shall have withdrawn or modified in a manner adverse to Parent
or Purchaser its approval or recommendation of the Offer or any of the
Company Proposals; (ii) the Board of Directors of the Company or any
committee thereof shall have approved or recommended to the
shareholders of the Company any Company Takeover Proposal or
Alternative Transaction; (iii) the Board of Directors of the Company or
any committee thereof shall have approved or recommended that the
shareholders of the Company tender their Common Shares in any tender or
exchange offer that is an Alternative Transaction; (iv) the Board of
Directors of the Company or any committee thereof shall have taken any
position or make any disclosures to the Company's shareholders
permitted pursuant to SECTION 4.8(e) which has the effect of any of the
foregoing; (v) the Board of Directors of the Company or any committee
thereof shall have resolved to take any of the foregoing actions;
-48-
<PAGE>
(e) by either Parent or the Company if, as the result of the
failure of the Minimum Condition or any of the other conditions set
forth in Annex I hereto, the Offer shall have terminated or expired in
accordance with its terms without Purchaser having purchased any Common
Shares pursuant to the Offer, PROVIDED that if the failure to satisfy
any conditions set forth in Annex I shall be a basis for termination of
this Agreement under any other clause of this Section 7.1, a
termination pursuant to this clause (e) shall be deemed a termination
under such other clause;
(f) by either Parent or the Company if the Offer shall not
have been consummated on or before February 29, 2000, PROVIDED that the
right to terminate this Agreement pursuant to this SECTION 7.1(f) shall
not be available to any party whose failure to perform any of its
obligations under this Agreement results in the failure of the Offer to
be consummated by such time;
(g) by the Company, if Parent or Purchaser shall have breached
or failed to perform in any material respect any of its
representations, warranties, covenants or other agreements contained in
this Agreement, which breach or failure to perform is incapable of
being cured or has not been cured within five (5) days after the giving
of written notice thereof to Parent; or
(h) by the Company, in order to accept a Superior Proposal,
PROVIDED that the Board of Directors of the Company reasonably
determines in good faith (after due consultation with independent
counsel, which may be Stoel Rives LLP), that it is or is reasonably
likely to be required to accept such proposal in order to discharge
properly its fiduciary duties; the Company has given parent three
business days' advance notice of the Company's intention to accept such
Superior Proposal; the Company shall in fact accept such proposal; the
Company shall have paid the fee and expenses contemplated by SECTION
8.7 hereof; and the Company shall have complied in all respects with
the provisions of Section 4.8.
The party desiring to terminate this Agreement pursuant to the preceding
paragraphs shall give written notice of such termination to the other party in
accordance with SECTION 8.5 hereof.
7.2 EFFECT OF TERMINATION AND ABANDONMENT. In the event of
termination of this Agreement and the abandonment of the Offer or the Merger
pursuant to this ARTICLE VII, this Agreement (other than SECTIONS 7.2, 8.1, 8.3,
8.5, 8.6, 8.7, 8.8, 8.10, 8.11, 8.12, 8.14 and 8.15 hereof) shall become void
and of no effect with no liability on the part of any party hereto (or of any of
its directors, officers, employees, agents, legal or financial advisors or other
representatives); PROVIDED, HOWEVER, that no such termination shall relieve any
party hereto from any liability for any willful breach of this Agreement prior
to termination. If this Agreement is terminated as provided herein, each party
shall use all reasonable best efforts to
-49-
<PAGE>
redeliver all documents, work papers and other material (including any copies
thereof) of any other party relating to the transactions contemplated hereby,
whether obtained before or after the execution hereof, to the party furnishing
the same.
ARTICLE VIII
MISCELLANEOUS
8.1 CONFIDENTIALITY. (a) Unless (i) otherwise expressly
provided in this Agreement, (ii) required by applicable Law or any listing
agreement with, or the rules and regulations of, the NASDAQ or any other
applicable securities exchange or the NASD, (iii) necessary to secure any
required Consents as to which the other party has been advised or (iv) consented
to in writing by Parent and the Company, all information (whether oral or
written) and documents furnished in connection herewith together with analyses,
compilations, studies or other documents prepared by such party which contain or
otherwise reflect such information shall be kept strictly confidential by the
Company, Parent, Purchaser and their respective officers, directors, employees
and agents. Prior to any disclosure permitted pursuant to the preceding
sentence, the party intending to make such disclosure shall consult with the
other party regarding the nature and extent of the disclosure. Nothing contained
herein shall preclude disclosures to the extent necessary to comply with
accounting, SEC and other disclosure obligations imposed by applicable Law. In
the event the transactions contemplated by this Agreement are not consummated,
each party shall return to the other any documents furnished by the other and
all copies thereof that any of them may have made and will hold in confidence
any information obtained from the other party except to the extent (a) such
party is required to disclose such information by Law or such disclosure is
necessary or desirable in connection with the pursuit or defense of a claim, (b)
such information was known by such party prior to such disclosure (and PROVIDED
that, except with respect to information referred to in the following clause
(c), such party shall have advised the other party of such knowledge upon or
promptly after its receipt of such information) or was thereafter developed or
obtained by such party independent of such disclosure or (c) such information is
or becomes generally available to the public other than by breach of this
SECTION 8.1 (or, to such party's knowledge, breach of a confidentiality
agreement with the other party). Prior to any disclosure of information pursuant
to the exception in clause (a) of the preceding sentence, the party intending to
disclose the same shall so notify the party which provided the same in order
that such party may seek a protective order or other appropriate remedy should
it choose to do so.
(b) The Parent and the Company further acknowledge that
certain of the business and activities of each of them is competitive with
business and activities of the other party, and each of them therefore agrees
that it will not use, or seek to obtain any competitive or other business
advantage as a result of, the information or documents so received by it in
connection herewith, such party acknowledging that such use would be unfair and
materially detrimental to the other party, PROVIDED that the provisions of this
SECTION 8.1(b) shall not apply to information referred to in clause (c) of
SECTION 8.1(a) hereof.
-50-
<PAGE>
8.2 AMENDMENT AND MODIFICATION. This Agreement may be amended,
modified or supplemented only by a written agreement among the Company, Parent
and Purchaser.
8.3 WAIVER OF COMPLIANCE; CONSENTS. Any failure of the Company
on the one hand, or Parent and Purchaser on the other hand, to comply with any
obligation, covenant, agreement or condition herein may be waived by Parent on
the one hand, or the Company on the other hand, only by a written instrument
signed by the party granting such waiver, but such waiver or failure to insist
upon strict compliance with such obligation, covenant, agreement or condition
shall not operate as a waiver of, or estoppel with respect to, any subsequent or
other failure. 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 this
SECTION 8.3.
8.4 SURVIVAL. The respective representations, warranties,
covenants and agreements of the Company and Parent contained herein or in any
certificates or other documents delivered prior to or at the Closing shall
survive the execution and delivery of this Agreement, notwithstanding any
investigation made or information obtained by the other party, but shall
terminate at the Effective Time, except for those contained in SECTIONS 1.7,
1.8, 1.9, 1.14, 5.4, 5.5, 5.7 and 8.8 hereof and this SECTION 8.4, which shall
survive beyond the Effective Time.
8.5 NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given when delivered
in person, by facsimile, receipt confirmed, or on the next business day when
sent by overnight courier or on the second succeeding business day when sent by
registered or certified mail (postage prepaid, return receipt requested) to the
respective parties at the following addresses (or at such other address for a
party as shall be specified by like notice):
(i) if to the Company, to:
PRAEGITZER INDUSTRIES INC.
19801 S.W. 72nd Avenue
Tualatin, OR 97052
Attention: Matthew J. Bergeron
Telecopy: (503) 454-6266
Confirm: (503) 454-6066
with a copy to:
Stoel Rives LLP
900 S.W. Fifth Avenue
-51-
<PAGE>
Suite 2600
Portland, Oregon 97204-1268
Attention: Robert J. Moorman
Telecopy: (503) 220-2480
Confirm: (503) 220-3380
(ii) if to Parent or Purchaser, to:
SIGMA CIRCUITS, INC.
c/o Tyco International (US) Inc.
One Tyco Park
Exeter, NH 03833
Attention: General Counsel
Telecopy: (603) 778-7360
Confirm: (603) 778-9700
with a copy to:
Kramer Levin Naftalis & Frankel LLP
919 Third Avenue
New York, New York 10022
Attention: Abbe L. Dienstag, Esq.
Telecopy: (212) 715-8000
Confirm: (212) 715-9100
8.6 BINDING EFFECT; ASSIGNMENT. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns. Neither this
Agreement nor any of the rights, interests or obligations hereunder shall be
assigned by any of the parties hereto prior to the Effective Time without the
prior written consent of the Company, in the case of a proposed assignment by
Parent or Purchaser, or by Parent, in the case of a proposed assignment by the
Company, except that any Parent and Purchaser may assign its rights, interest
and obligations hereunder to any other wholly owned direct or indirect
subsidiary of Guarantor.
8.7 FEES AND EXPENSES. (a) Except as provided in SECTION
8.7(b) or 8.7(c) hereof, all costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the party
incurring such costs or expenses.
(b) The Company agrees that if this Agreement is terminated
pursuant to
(i) SECTION 7.1(d);
(ii) SECTION 7.1(h); or
-52-
<PAGE>
(iii) SECTION 7.1(e) OR 7.1(f) and, with respect to this
clause (iii), (A) at the time of such termination, there shall be
outstanding a BONA FIDE Company Takeover Proposal which has been made
directly to the shareholders of the Company or has otherwise become
publicly known or there shall be outstanding an announcement by any
credible third party of a BONA FIDE intention to make an Acquisition
Proposal (in each case whether or not conditional and whether or not
such proposal shall have been rejected by the Board of Directors of the
Company) or (B) an Alternative Transaction shall be publicly announced
by the Company or any third party within 12 months following the date
of such termination and such transaction shall at any time thereafter
be consummated on substantially the terms theretofore announced
then the Company shall pay to Parent the sum of (a) $5 million. Any payment
required by this SECTION 8.7(b) shall be made as promptly as practicable but in
no event later than two business days following termination of this Agreement in
the case of clause (i) above, upon termination of this Agreement in the case of
clause (ii) above and, in the case of clause (iii) above, upon consummation of
such Company Takeover Proposal, and shall be made by wire transfer of
immediately available funds to an account designated by Parent.
(c) The Company further agrees that if this Agreement is
terminated pursuant to SECTION 7.1(c)(i) hereof,
(i) the Company will pay to Parent, as promptly as practicable
but in no event later than two business days following termination of
this Agreement, the amount of all documented and reasonable costs and
expenses incurred by Parent, Purchaser and their affiliates (including
but not limited to fees and expenses of counsel and accountants and
out-of-pocket expenses (but not fees) of financial advisors) in an
aggregate amount not to exceed $500,000 in connection with this
Agreement or the transactions contemplated hereby ("PARENT EXPENSES");
and
(ii) in the event that the Company consummates a Company
Takeover Proposal (whether or not solicited in violation of this
Agreement) which is publicly announced within one year from the date of
termination of this Agreement, the Company will pay to Parent the sum
of $5 million, which payment shall be made not later than two business
days following consummation of such Company Takeover Proposal.
(d) The Company further agrees that if this Agreement is
terminated pursuant to SECTION 7.1(c)(ii) hereof, the Company will pay to
Parent, as promptly as practicable but in no event later than two business days
following termination of this Agreement, the Parent Expenses.
8.8 GOVERNING LAW. This Agreement shall be deemed to be made
in, and
-53-
<PAGE>
in all respects shall be interpreted, construed and governed by and in
accordance with the laws of, the State of New York.
8.9 COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
8.10 INTERPRETATION. The article and section headings
contained in this Agreement are solely for the purpose of reference, are not
part of the agreement of the parties and shall not in any way affect the meaning
or interpretation of this Agreement. As used in this Agreement, (i) the term
"PERSON" shall mean and include an individual, a partnership, a joint venture, a
corporation, a limited liability company, a trust, an association, an
unincorporated organization, a Governmental Authority and any other entity, (ii)
unless otherwise specified herein, the term "AFFILIATE," with respect to any
person, shall mean and include any person controlling, controlled by or under
common control with such person and (iii) the term "SUBSIDIARY" of any specified
person shall mean any corporation 50 percent or more of the outstanding voting
power of which, or any partnership, joint venture, limited liability company or
other entity 50 percent or more of the total equity interest of which, is
directly or indirectly owned by such specified person.
8.11 ENTIRE AGREEMENT. This Agreement and the documents or
instruments referred to herein including, but not limited to, the Annex(es)
attached hereto and the Company Disclosure Letter referred to herein, which
Annex(es) and Company Disclosure Letter are incorporated herein by reference,
embody the entire agreement and understanding of the parties hereto in respect
of the subject matter contained herein. There are no restrictions, promises,
representations, warranties, covenants, or undertakings other than those
expressly set forth or referred to herein. This Agreement supersedes all prior
agreements and understandings among the parties with respect to such subject
matter. Notwithstanding the foregoing provisions of this SECTION 8.11, the
Confidentiality Letter shall remain in effect in accordance with its terms.
8.12 SEVERABILITY. (a) In case any provision in this Agreement
shall be held invalid, illegal or unenforceable in a jurisdiction, such
provision shall be modified or deleted, as to the jurisdiction involved, only to
the extent necessary to render the same valid, legal and enforceable, and the
validity, legality and enforceability of the remaining provisions hereof shall
not in any way be affected or impaired thereby nor shall the validity, legality
or enforceability of such provision be affected thereby in any other
jurisdiction.
(b) Parent and the Company agree that the payments to Parent
provided in SECTION 8.7 are fair and reasonable in the circumstances,
considering not only the consideration payable to the holders of Common Shares
in the Offer and the Merger but also the outstanding funded indebtedness
(including capital leases) of the Company and the Company Subsidiaries and
Parent's anticipated costs, including lost opportunity costs, if the
-54-
<PAGE>
Offer and Merger are not consummated. If a court of competent jurisdiction shall
nonetheless, by a final, non-appealable judgment, determine that the amount of
such payments exceed the maximum amount permitted by law, then the amount of
such payments shall be reduced to the maximum amount permitted by law in the
circumstances, as determined by such court of competent jurisdiction.
8.13 SPECIFIC PERFORMANCE. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. Accordingly, the parties further agree that each party shall
be entitled to an injunction or restraining order to prevent breaches of this
Agreement and to enforce specifically the terms and provisions hereof in any
court of the United States or any state having jurisdiction, this being in
addition to any other right or remedy to which such party may be entitled under
this Agreement, at law or in equity.
8.14 THIRD PARTIES. Nothing contained in this Agreement or in
any instrument or document executed by any party in connection with the
transactions contemplated hereby shall create any rights in, or be deemed to
have been executed for the benefit of, any person that is not a party hereto or
thereto or a successor or permitted assign of such a party; PROVIDED HOWEVER,
that the parties hereto specifically acknowledge that the provisions of SECTION
5.5 hereof are intended to be for the benefit of, and shall be enforceable by,
the Indemnified Parties.
8.15 DISCLOSURE LETTER. Parent acknowledges that the Company
Disclosure Letter (i) relates to certain matters concerning the disclosures
required and transactions contemplated by this Agreement, (ii) is qualified in
its entirety by reference to specific provisions of this Agreement, (iii) is not
intended to constitute and shall not be construed as indicating that any such
matter is required to be disclosed, nor shall such disclosure be construed as an
admission that such information is material with respect to the Company, except
to the extent required by this Agreement.
8.16 JURISDICTION. Each of the parties hereto submits to the
non-exclusive jurisdiction of the state and federal courts of the United States
located in the City of New York, Borough of Manhattan with respect to any claim
or cause of action arising out of this Agreement or the transactions
contemplated hereby.
8.17 WAIVER OF JURY TRIAL. PARENT, PURCHASER AND THE COMPANY
HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, ALL RIGHTS TO
-55-
<PAGE>
TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM (WHETHER BASED UPON
CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY
OF THE TRANSACTIONS CONTEMPLATED HEREBY.
[SIGNATURE PAGE FOLLOWS]
-56-
<PAGE>
IN WITNESS WHEREOF, Parent, Purchaser and the Company have
caused this Agreement to be signed and delivered by their respective duly
authorized officers as of the date first above written.
SIGMA CIRCUITS, INC.
By: /s/ Jeffrey D. Mattfolk
---------------------------------
Name: Jeffrey D. Mattfolk
Title: Vice President
T MERGER SUB (OR), INC..
By: /s/ Jeffrey D. Mattfolk
---------------------------------
Name: Jeffrey D. Mattfolk
Title: Vice President
PRAEGITZER INDUSTRIES, INC.
By: /s/ Matthew J. Bergeron
---------------------------------
Name: Matthew J. Bergeron
Title: President and Chief Operating
Officer
-57-
<PAGE>
GUARANTEE
Guarantor guarantees each and every representation, warranty, covenant,
agreement and other obligation of Parent and Purchaser, and/or any of their
respective permitted assigns (and where any such representation or warranty is
made to the knowledge of Parent or Purchaser, such guarantee shall be deemed
made to the knowledge of Guarantor), and the full and timely performance of
their respective obligations under the provisions of the foregoing Agreement.
This is a guarantee of payment and performance, and not of collection, and
Guarantor acknowledges and agrees that this guarantee is unconditional, and no
release or extinguishment of Parent's and Purchaser's obligations or liabilities
(other than in accordance with the terms of the Agreement), whether by decree in
any bankruptcy proceeding or otherwise, shall affect the continuing validity and
enforceability of this guarantee, as well as any provision requiring or
contemplating performance by Guarantor.
The provisions of SECTIONS 8.2, 8.3, 8.5, 8.6, 8.8, 8.9, 8.10, 8.11,
8.12, 8.13, 8.14, 8.16 and 8.17 of the Agreement are incorporated herein,
MUTATIS MUTANDIS, except that notices and other communications hereunder to
Guarantor shall be delivered to Tyco International Ltd., The Gibbons Building,
10 Queen Street, Suite 301, Hamilton, Bermuda HM11, Attention: Secretary,
Telecopy No. (441) 295-9647, Confirm No. (441) 292-8674 (with a copy as provided
therefor in Section 8.5).
We understand that the Company is relying on this guarantee in entering
into the Agreement and may enforce this guarantee as if Guarantor were a party
thereto.
TYCO INTERNATIONAL LTD.
By: /s/ Byron S. Kalogerou
----------------------------------
Name: Byron S. Kalogerou
Title: Vice President and Assistant Secretary
-58-
<PAGE>
GLOSSARY OF DEFINED TERMS
<TABLE>
<CAPTION>
Section
Term Where Defined
- ---- -------------
<S> <C>
"1999 Balance Sheet" 2.10
"affiliate" 8.10
"Agreement" the recitals
"Alternative Transaction" 4.8(a)
"arranger liability" 2.23(b)
"Articles of Merger" 1.4
"Closing" 1.5
"Closing Date" 1.5
"Code" 2.15(a)
"Common Option" 1.9(a)
"Common Shares" the recitals
"Company" the recitals
"Company Acquisition Agreement" 4.8(c)
"Company Disclosure Letter" Article II
"Company Financial Statements" 2.8
"Company Intellectual Property Rights" 2.17(b)
"Company Material Contracts" 2.14
"Company Permits" 2.12
"Company Proposals" 1.13(a)
"Company Securities Filings" 2.7
"Company Stock Purchase Plan" 1.9(c)
"Company Subsidiary" 2.1
"Company Takeover Proposal" 4.8(a)
"Company Warrants" 1.9(b)
"Confidentiality Agreement" 4.8(a)
"Consent" 2.5
"Credit Agreements" 2.21
"D&O Insurance" 5.5(b)
"Deferral Agreement" 2.2
"Oregon Code" 1.4
"disqualified person" 2.15(b)
"Dissenting Shares" 1.7(a)
"Effective Time" 1.5
"Employee Plans" 2.15(a)
"Enforceability Exceptions" 2.4
"Environmental Claim" 2.23(e)(i)
"Environmental Laws" 2.23(e)(ii)
"ERISA" 2.15(a)
</TABLE>
-59-
<PAGE>
<TABLE>
<CAPTION>
Section
Term Where Defined
- ----- -------------
<S> <C>
"ERISA Affiliate" 2.15(a)
"excess parachute payments" 2.16(c)
"Exchange Agent" 1.8(a)
"Fairness Opinion" 1.2(a)
"Financial Advisor" 1.2(a)
"Governmental Authority" 2.5
"group" paragraph (h) of Annex I
"Guarantee" the recitals
"Guarantor" the recitals
"HSR Act" 2.5
"Indemnified Parties" 5.5(a)
"Independent Directors" 1.3
"IRS" 2.15(b)
"ISO" 2.15(c)
"Law" 2.6
"leased employee" 2.15(b)
"Liens" 2.21
"Litigation" 2.13
"Material Adverse Effect" 1.17(a)
"Materials of Environmental Concern" 2.23(e)(iii)
"Merger" the recitals
"Minimum Condition" the introductory paragraph
of Annex I
"multiemployer plan" 2.15(b)
"NASD" 4.2
"NASDAQ" 2.5
"Notes" 2.2
"Offer" the recitals
"Offer Documents" 1.1(c)
"Offer to Purchase" 1.1(c)
"Oregon Code" 1.4
"Parent" the recitals
"Parent Benefit Plan" 5.4(a)
"Parent Expenses" 8.7(c)(i)
"Parent Information" 3.5
"party in interest" 2.15(b)
"Per Share Amount" the recitals
"person" 8.10
"person/group" paragraph (h) of Annex I
"Preferred Shares" 2.2
"Proxy Statement" 1.13(a)
</TABLE>
-60-
<PAGE>
<TABLE>
<CAPTION>
Section
Term Where Defined
- ---- --------------
<S> <C>
"Purchaser" the recitals
"SEC" 1.1(b)
"Securities Act" 2.7
"Securities Exchange Act" 1.1(a)
"Schedule 14D-1" 1.1(c)
"Schedule 14D-9" 1.2(b)
"subsidiary" 8.10
"Superior Proposal" 4.8(a)
"Surviving Corporation" 1.4
"Surviving Corporation Common Stock" 1.6(c)
"Takeover Statute" 4.10
"Tax" 2.16(b)
"tax-exempt use property" 2.16(c)
"Tax Return" 2.16(b)
"Third Party" 4.8(a)
</TABLE>
-61-
<PAGE>
ANNEX I
CONDITIONS TO THE OFFER. Notwithstanding any other provision
of the Offer, Purchaser shall not be required to accept for payment or, subject
to any applicable rules and regulations of the SEC, including Rule 14e-1(c)
promulgated under the Securities Exchange Act (relating to Purchaser's
obligation to pay for or return tendered Common Shares promptly after
termination or withdrawal of the Offer), pay for, and (subject to any such rules
or regulations) may delay the acceptance for payment of any tendered Common
Shares and (except as provided in this Agreement) amend or terminate the Offer
as to any Common Shares not then paid for if (i) the condition that there shall
be validly tendered and not withdrawn prior to the expiration of the Offer a
number of Common Shares which represents at least 51% of the total number of
issued and outstanding Common Shares on a fully diluted basis (excluding,
however, shares of common stock issuable (x) upon exercise of conversion rights
pursuant to the Deferral Agreement and (y) upon exercise of Company Options that
are not exercisable prior to March 1, 2000), shall not each have been satisfied
(the "MINIMUM CONDITION") or (ii) any applicable waiting period under the HSR
Act shall not have expired or been terminated prior to the expiration of the
Offer or (iii) at any time after the date of this Agreement and before the time
of payment for any Common Shares (whether or not any Common Shares have
theretofore been accepted for payment or paid for pursuant to the Offer), any of
the following conditions exists:
(a) there shall be in effect an injunction or other order,
decree, judgment or ruling by a Governmental Authority of competent jurisdiction
or a Law shall have been promulgated, or enacted by a Governmental Authority of
competent jurisdiction which in any such case (i) restrains or prohibits the
making or consummation of the Offer or the consummation of the Merger, (ii)
prohibits or restricts the ownership or operation by Parent (or any of its
affiliates or subsidiaries) of any portion of the Company's business or assets,
or Guarantor's business or assets relating to the printed circuit board
business, which is material to the printed circuit board of all such entities
taken as a whole or which would substantially deprive Parent and/or its
affiliates or subsidiaries of the benefit of ownership of the Company's business
or assets, or compels Parent (or any of its affiliates or subsidiaries) to
dispose of or hold separate any portion of the Company's business or assets, or
Guarantor's business or assets relating to the printed circuit board business,
which is material to the printed circuit board business of all such entities
taken as a whole or which would substantially deprive Parent and/or its
affiliates or subsidiaries of the benefit of ownership of the Company's business
or assets, (iii) imposes material limitations on the ability of Purchaser
effectively to acquire or to hold or to exercise full rights of ownership of the
Common Shares, including, without limitation, the right to vote Common Shares
purchased by Purchaser pursuant to the Offer or the Merger on all matters
properly presented to the shareholders of the Company, or (iv) imposes any
material limitations on the ability of Parent and/or its affiliates or
subsidiaries effectively to control in any material respect the business and
operations of the Company, or (v) seeks to materially restrict any future
business activity by Guarantor (or any of its affiliates) relating to the
printed circuit board business, including,
A-1
<PAGE>
without limitation, by requiring the prior consent of any person or entity
(including any Governmental Authority) to future transactions by Guarantor (or
any of its affiliates); or
(b) there shall have been instituted, pending or threatened an
action by a Governmental Authority seeking to restrain or prohibit the making or
consummation of the Offer, the consummation of the Merger or to impose any other
restriction, prohibition or limitation referred to in the foregoing paragraph
(a); or
(c) this Agreement shall have been terminated by the Company
or Parent in accordance with its terms; or
(d) there shall have occurred (i) any general suspension of,
or limitation on prices for, trading in the Common Shares on NASDAQ, (ii) a
declaration of a banking moratorium or any general suspension of payments in
respect of banks in the United States or (iii) in the case of any of the
foregoing existing at the time of the execution of this Agreement, a material
acceleration or worsening thereof; or
(e) Parent and the Company shall have agreed that Purchaser
shall amend the Offer to terminate the Offer or postpone the payment for Common
Shares pursuant thereto; or
(f) any of the representations and warranties made by the
Company in the Merger Agreement shall not have been true and correct when made,
or shall thereafter have ceased to be true and correct as if made as of such
later date (other than representations and warranties made as of a specified
date) (in each case without for this purpose giving effect to qualifications of
materiality contained in such representation and warranty), or the Company shall
not have performed each obligation and agreement and complied with each covenant
to be performed and complied with by it under this Agreement, if such failure to
be true and correct or such failure to perform, individually or in the
aggregate, would reasonably be expected to have a Material Adverse Effect,
PROVIDED, however, that such breach or failure to perform is incapable of being
cured or has not been cured within 5 days after the giving of written notice
thereof to the Company, PROVIDED, however, that no such 5-day cure period shall
require extension of the Offer beyond the twenty (20) business days provided
under SECTION 1.1(b) of the Agreement; or
(g) the Company's Board of Directors shall have modified or
amended its recommendation of the Offer in any manner adverse to Parent or shall
have withdrawn its recommendation of the Offer, or shall have recommended
acceptance of any Company Takeover Proposal or shall have resolved to do any of
the foregoing; or
(h) (i) any corporation, entity or "group" (as defined in
Section 13(d)(3) of the Securities Exchange Act) ("PERSON/GROUP"), other than
Parent and Purchaser and any person/group identified in the Company's Proxy
Statement dated October 25, 1999), shall
A-2
<PAGE>
have acquired beneficial ownership of more than 15% of the outstanding Common
Shares, or shall have been granted any options or rights, conditional or
otherwise, to acquire a total of more than 15% of the outstanding Common Shares
and which, in each case, does not tender the Common Shares beneficially owned by
it in the Offer; (ii) any new group shall have been formed which beneficially
owns more than 15% of the outstanding Common Shares and which does not tender
the Common Shares beneficially owned by it in the Offer; or (iii) any
person/group (other than Parent or one or more of its affiliates) shall have
entered into an agreement in principle or definitive agreement with the Company
with respect to a tender or exchange offer for any Common Shares or a merger,
consolidation or other business combination with or involving the Company; or
(i) any change, development, effect or circumstance shall have
occurred or be threatened that would reasonably be expected to have a Material
Adverse Effect with respect to the Company; or
(j) the Company shall commence a case under any chapter of
Title XI of the United States Code or any similar law or regulation; or a
petition under any chapter of Title XI of the United States Code or any similar
law or regulation is filed against the Company which is not dismissed within 2
business days.
The foregoing conditions are for the sole benefit of Parent
and Purchaser and may be asserted by Parent or Purchaser regardless of the
circumstances giving rise to any such condition and may be waived by Parent or
Purchaser, in whole or in part, at any time and from time to time, in the sole
discretion of Parent. The failure by Parent or Purchaser at any time to exercise
any of the foregoing rights shall not be deemed a waiver of any right, the
waiver of such right with respect to any particular facts or circumstances shall
not be deemed a waiver with respect to any other facts or circumstances, and
each right shall be deemed an ongoing right which may be asserted at any time
and from time to time.
Should the Offer be terminated pursuant to the foregoing
provisions, all tendered Common Shares not theretofore accepted for payment
shall forthwith be returned to the tendering shareholders.
A-3
<PAGE>
Exhibit 99(c)(3)
SHAREHOLDER'S AGREEMENT
THIS SHAREHOLDER'S AGREEMENT is made and entered into as of this 26th
day of October 1999, among SIGMA CIRCUITS, INC., Inc., a Delaware corporation
("PARENT"), T MERGER SUB (OR), INC., an Oregon corporation and a wholly owned
subsidiary of Parent ("PURCHASER"), and ROBERT L. PRAEGITZER (the
"SHAREHOLDER").
WHEREAS the Shareholder desires that PRAEGITZER INDUSTRIES INC., Inc.,
an Oregon corporation (the "COMPANY"), Parent and Purchaser enter into an
Agreement and Plan of Merger dated as of the date hereof (as the same may be
amended or supplemented, the "MERGER AGREEMENT") with respect to the merger of
Purchaser with and into the Company (the "MERGER"); and
WHEREAS the Shareholder is executing this Agreement as an inducement to
Parent to enter into and execute, and to cause Purchaser to enter into and
execute, the Merger Agreement.
NOW, THEREFORE, in consideration of the execution and delivery by
Parent and Purchaser of the Merger Agreement and the mutual covenants,
conditions and agreements contained herein and therein, the parties agree as
follows:
SECTION 1. REPRESENTATIONS AND WARRANTIES. The Shareholder represents
and warrants to Parent and Purchaser as follows:
(a) The Shareholder is the record and beneficial owner of the
number of shares of Common Stock of the Company (the "COMPANY COMMON STOCK"),
separately identified as such, set forth opposite the Shareholder's name in
SCHEDULE A hereto (as may be adjusted from time to time pursuant to Section 5,
the Shareholder's "SHARES"). Except for the Shareholder's Shares and any other
shares of Company Common Stock subject hereto, the Shareholder is not the record
or beneficial owner of any shares of Company Common Stock.
(b) This Agreement has been duly authorized, executed and
delivered by the Shareholder and constitutes the legal, valid and binding
obligation of the Shareholder, enforceable against the Shareholder in accordance
with its terms, except as limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of creditors' rights generally. Neither the execution and delivery
of this Agreement nor the consummation by the Shareholder of the transactions
contemplated hereby will result in a violation of, or a default under, or
conflict with, any contract, trust, commitment, agreement, understanding,
arrangement or restriction of any kind to which the Shareholder is a party or
bound or to which the Shareholder's Shares are subject. To the best of the
Shareholder's knowledge, consummation by the Shareholder of the
1
<PAGE>
transactions contemplated hereby will not violate, or require any consent,
approval, or notice under, any provision of any judgment, order, decree,
statute, law, rule or regulation applicable to the Shareholder or the
Shareholder's Shares.
(c) The Shareholder's Shares and the certificates representing
such Shares are now and at all times during the term hereof will be held by the
Shareholder, or by a nominee or custodian for the benefit of the Shareholder,
free and clear of all liens, claims, security interests, proxies, voting trusts
or agreements, understandings or arrangements or any other encumbrances
whatsoever, except for any such encumbrances or proxies arising hereunder or as
listed on Annex I annexed hereto.
(d) Except for fees payable to Adams, Harkness & Hill, Inc.
and McDonald Investments, Inc., no broker, investment banker, financial adviser
or other person is entitled to any broker's, finder's, financial adviser's or
other similar fee or commission from Parent, Purchaser or the Company in
connection with the transactions contemplated hereby based upon arrangements
made by or on behalf of the Shareholder.
(e) The Shareholder understands and acknowledges that Parent
is entering into, and causing Purchaser to enter into, the Merger Agreement in
reliance upon the Shareholder's execution and delivery of this Agreement. The
Shareholder acknowledges that the irrevocable proxy set forth in Section 4 is
granted in consideration for the execution and delivery of the Merger Agreement
by Parent and Purchaser.
SECTION 2. AGREEMENT TO TENDER OR SELL. (a) The Shareholder hereby
agrees that it shall tender his Shares into the Offer (as defined in the Merger
Agreement) and that it shall not withdraw any Shares so tendered (it being
understood that the obligation contained in this sentence is unconditional);
PROVIDED, HOWEVER, that if the Shareholder is unable to tender any Shares that
are pledged to KeyBank National Association ("KEYBANK"), as set forth on
Annex I, the Shareholder shall not be obligated to tender such Shares; PROVIDED
FURTHER that the Shareholder shall sell such Shares to Purchaser, and Purchaser
shall purchase such Shares from Shareholder at the Per Share Amount prior to the
Effective Time promptly upon termination of the pledge agreements between the
Shareholder and KeyBank relating to such Shares. Purchaser hereby agrees that,
if the Offer is consummated, it will satisfy the liabilities secured by the
pledge of Shares to KeyBank prior to the Effective Time.
(b) The Shareholder shall tender his Shares (other than the Shares
pledged to KeyBank) not later than fourteen business days following commencement
of the Offer, other than with respect to the Shares subject to the CBL Insured
Credit Facility Agreement (the "CBL AGREEMENT") referred to on Annex I which
shall be tendered not later than one business day prior to the initially
scheduled expiration of the Offer; PROVIDED, HOWEVER, that if the Shares subject
to the CBL Agreement are not tendered as aforesaid, any damages of Purchaser
shall be limited to $5,000,000.
2
<PAGE>
SECTION 3. COVENANTS. The Shareholder agrees with, and covenants to,
Parent and Purchaser as follows:
(a) The Shareholder shall not, except as contemplated by the
terms of this Agreement, (i) transfer (the term "TRANSFER" shall include,
without limitation, for the purposes of this Agreement, any sale, gift, pledge
or other disposition), or consent to any transfer of, any or all of the
Shareholder's Shares or any interest therein, (ii) enter into any contract,
option or other agreement or understanding with respect to any transfer of any
or all of such Shares or any interest therein, (iii) grant any proxy,
power-of-attorney or other authorization or consent in or with respect to such
Shares except with respect to election of directors at the Company's annual
meeting, (iv) deposit such Shares into a voting trust or enter into a voting
agreement or arrangement with respect to such Shares or (v) take any other
action that would in any way restrict, limit or interfere with the performance
of its obligations hereunder or the transactions contemplated hereby.
(b) Subject to Section 8, the Shareholder shall not, nor shall
it permit any investment banker, attorney or other adviser or representative of
the Shareholder to, directly or indirectly, (i) solicit, initiate or encourage
the submission of, any Acquisition Proposal (as defined in the Merger Agreement)
or (ii) 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 Acquisition Proposal. Without limiting
the foregoing, it is understood that any violation of the restrictions set forth
in the preceding sentence by an investment banker, attorney or other adviser or
representative of the Shareholder, whether or not such person is purporting to
act on behalf of the Shareholder or otherwise, shall be deemed to be a violation
of this Section 3(b) by the Shareholder.
SECTION 4. GRANT OF IRREVOCABLE PROXY; APPOINTMENT OF PROXY.
(a) Subject to the provisions of the pledge agreements with
Keybank, the Shareholder hereby irrevocably grants to, and appoints, Parent and
Mark A. Belnick, and any other individual who shall hereafter be designated by
Parent, the Shareholder's proxy and attorney-in-fact (with full power of
substitution), for and in the name, place and stead of the Shareholder, to vote
the Shareholder's Shares, or grant a consent or approval in respect of such
Shares, at any meeting of shareholders of the Company or at any adjournment
thereof or in any other circumstances upon which their vote, consent or other
approval is sought, against (i) any merger agreement or merger (other than the
Merger Agreement and the Merger), consolidation, combination, sale of
substantial assets, reorganization, joint venture, recapitalization,
dissolution, liquidation or winding up of or by the Company and (ii) any
amendment of the Company's Articles of Incorporation or By-laws or other
proposal or transaction (including any consent solicitation to remove or elect
any directors of the Company) involving the Company or any of its subsidiaries
which amendment or other proposal or transaction would in any manner impede,
frustrate, prevent or nullify, or result in
3
<PAGE>
a breach of any covenant, representation or warranty or any other obligation or
agreement of the Company under or with respect to, the Offer, the Merger, the
Merger Agreement or any of the other transactions contemplated by the Merger
Agreement (each of the foregoing in clause (i) or (ii) above, a "COMPETING
TRANSACTION").
(b) Subject to the provisions of the pledge agreements with
KeyBank, the Shareholder represents that any proxies heretofore given in respect
of the Shareholder's Shares are not irrevocable, and that any such proxies are
hereby revoked.
(c) The Shareholder hereby affirms that the irrevocable proxy
set forth in this Section 4 is given in connection with the execution of the
Merger Agreement, and that such irrevocable proxy is given to secure the
performance of the duties of the Shareholder under this Agreement. The
Shareholder hereby further affirms that the irrevocable proxy is coupled with an
interest and may under no circumstances be revoked. The Shareholder hereby
ratifies and confirms all that such irrevocable proxy may lawfully do or cause
to be done by virtue hereof. Such irrevocable proxy is executed and intended to
be irrevocable in accordance with the provisions of Section 60.231 of the Oregon
Business Corporation Act (the "CORPORATION LAW").
SECTION 5. CERTAIN EVENTS. The Shareholder agrees that this Agreement
and the obligations hereunder shall attach to the Shareholder's Shares and shall
be binding upon any person or entity to which legal or beneficial ownership of
such Shares shall pass, whether by operation of law or otherwise, including
without limitation the Shareholder's heirs, guardians, administrators or
successors. In the event of any stock split, stock dividend, merger,
reorganization, recapitalization or other change in the capital structure of the
Company affecting the Company Common Stock, or the acquisition of additional
shares of Company Common Stock or other securities or rights of the Company by
any Shareholder, the number of Shares listed on Schedule A beside the name of
the Shareholder shall be adjusted appropriately and this Agreement and the
obligations hereunder shall attach to any additional shares of Company Common
Stock or other securities or rights of the Company issued to or acquired by the
Shareholder.
SECTION 6. STOP TRANSFER. The Company agrees with, and covenants to,
Parent that the Company shall not register the transfer of any certificate
representing any Shareholder's Shares, unless such transfer is made to Parent or
Purchaser or otherwise in compliance with this Agreement.
SECTION 7. VOIDABILITY. If prior to the execution hereof, the Board of
Directors of the Company shall not have duly and validly authorized and approved
by all necessary corporate action the acquisition of Company Common Stock by
Parent and Purchaser and the other transactions contemplated by this Agreement
and the Merger Agreement, so that by the execution and delivery hereof Parent or
Purchaser would become, or could reasonably be expected to become, an
"Interested shareholder" with whom the Company would be
4
<PAGE>
prevented for any period pursuant to Section 60.825 - 60.845 of the Corporation
Law from engaging in any "Affiliated transaction" (as such terms are defined in
Section 60.825 of the Corporation Law) then this Agreement shall be void and
unenforceable until such time as such authorization and approval shall have been
duly and validly obtained.
SECTION 8. SHAREHOLDER CAPACITY. The Shareholder does not make any
agreement or understanding in his capacity as director or officer of the
Company. The Shareholder signs solely in his capacity as the record holder and
beneficial owner of Shareholder's Shares and nothing herein shall limit or
affect any actions taken by the Shareholder in his capacity as an officer or
director of the Company to the extent specifically permitted by the Merger
Agreement.
SECTION 9. FURTHER ASSURANCES. The Shareholder shall, upon request of
Parent or Purchaser execute and deliver any additional documents and take such
further actions as may reasonably be deemed by Parent or Purchaser to be
necessary or desirable to carry out the provisions hereof and to vest the power
to vote the Shareholder's Shares as contemplated by Section 4 in Parent and the
other irrevocable proxies described therein.
SECTION 10. TERMINATION. This Agreement, and all rights and obligations
of the parties hereunder, shall terminate upon the earlier of (a) the date upon
which the Merger Agreement is terminated in accordance with its terms or (b) the
date that Parent or Purchaser shall have purchased and paid for the Shares of
the Shareholder pursuant to Section 2; PROVIDED, HOWEVER, that the termination
of this Agreement shall not relieve any party of liability for breach of this
Agreement prior to termination.
SECTION 11. PUBLIC ANNOUNCEMENTS. The Shareholder will consult with
Parent before issuing, and provide Parent with the opportunity to review and
comment upon, any press release or other public statements with respect to the
transactions contemplated by this Agreement and the Merger Agreement, 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, court process or by
obligations pursuant to any listing agreement with any national securities
exchange.
SECTION 12. MISCELLANEOUS.
(a) Capitalized terms used and not otherwise defined in this
Agreement shall have the respective meanings assigned to such terms in the
Merger Agreement.
(b) All notices, requests, claims, demands and other
communications under this Agreement shall be in writing and shall be deemed
given if delivered personally or sent by overnight courier (providing proof of
delivery) to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice): (i) if to Parent or
Purchaser, to the address set forth in Section 8.5 of the Merger Agreement; and
(ii) if to a
5
<PAGE>
Shareholder, to the address set forth on Schedule A hereto, or such other
address as may be specified in writing by the Shareholder.
(c) The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
(d) This Agreement may be executed in two 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
Parent, Purchaser and the Shareholder and delivered to Parent, Purchaser and the
Shareholder.
(e) This Agreement (including the documents and instruments
referred to herein) constitutes the entire agreement, and supersedes all prior
agreements and understandings, both written and oral, among the parties with
respect to the subject matter hereof.
(f) This Agreement shall be governed by, and construed in
accordance with, the laws of the New York and, to the extent expressly provided
herein, the Corporation Law, regardless of the laws that might otherwise govern
under applicable principles of conflicts of laws thereof.
(g) 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 by laws of descent. Any assignment in
violation of the foregoing shall be void.
(h) If any term, provision, covenant or restriction herein, or
the application thereof to any circumstance, shall, to any event, be held by a
court of competent jurisdiction to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions herein and the
application thereof to any other circumstances, shall remain in full force and
effect, shall not in any way be affected, impaired or invalidated, and shall be
enforced to the fullest extent permitted by law.
(i) The Shareholder agrees that irreparable damage would occur
and that Parent and Purchaser would not have any adequate remedy at law 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 Parent and Purchaser shall be entitled to an injunction
or injunctions to prevent breaches by any Shareholder of this Agreement and to
enforce specifically the terms and provisions of this Agreement. Each of the
parties hereto (i) consents to submit such party to the personal jurisdiction of
any Federal court located in the State of New York in the event any dispute
arises out of this Agreement or any of the transactions contemplated hereby, and
(ii) agrees that such party will not attempt to deny or defeat such personal
jurisdiction by motion or other request for leave from any such court.
6
<PAGE>
The prevailing party in any judicial action shall be entitled to receive from
the other party reimbursement for the prevailing party's reasonable attorneys'
fees and disbursements, and court costs.
(j) No amendment, modification or waiver in respect of this
Agreement shall be effective against any party unless it shall be in writing and
signed by such party.
7
<PAGE>
IN WITNESS WHEREOF, Parent, Purchaser and the Shareholder have
caused this Agreement to be duly executed and delivered as of the date first
written above.
/s/ Robert L. Praegitzer
------------------------
Robert L. Praegitzer,
Shareholder
SIGMA CIRCUITS, INC.
By: /s/ Jeffrey D. Mattfolk
-----------------------
Name: Jeffrey D. Mattfolk
Title: Vice President
T MERGER SUB (OR), INC.
By: /s/ Jeffrey D. Mattfolk
-----------------------
Name: Jeffrey D. Mattfolk
Title: Vice President
ACKNOWLEDGED AND AGREED
TO AS TO SECTION 6:
PRAEGITZER INDUSTRIES INC.
By: /s/ Matthew J. Bergeron
---------------------------------------
Name: Matthew J. Bergeron
Title: President and Chief Operating Officer
8
<PAGE>
SCHEDULE A
Robert L. Praegitzer 8,119,375 shares outstanding
19801 SW 72nd Avenue 125,000 shares issuable upon
Tualatin, Oregon 97062 exercise of options
9
<PAGE>
ANNEX I TO
SHAREHOLDER'S AGREEMENT
1. An aggregate of 2,656,500 shares of Company Common Stock have been pledged to
Keybank National Association ("Keybank") pursuant to two Pledge Agreements dated
June 11, 1999 between Mr. Praegitzer and Keybank.
2. 2,900,000 shares of Company Common Stock are subject to the CBL Insured
Credit Facility Agreement dated April 21, 1998 between Mr. Praegitzer and Credit
Bancorp Limited.
3. 700,000 shares of Company Common Stock are subject to a margin account
agreement with Merrill Lynch.
4. 1,619,875 shares of Company Common Stock are subject to a margin account
agreement with EVEREN Securities.
10
