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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Filed pursuant to Section 12, 13, or 15(d) of the
Securities Exchange Act OF 1934
Date of Report (Date of earliest event reported): January 22, 1999
INTEGRATED CIRCUIT SYSTEMS, INC.
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(Exact name of issuer as specified in charter)
PENNSYLVANIA 0-19299 23-2000174
(State or Other Jurisdiction Commission (I.R.S. Employer
of Incorporation or file number Identification
Organization) Number)
2435 Boulevard of the Generals, Norristown, Pennsylvania 19403
(Address of principal executive offices)
(610) 630-5300
(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS
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On January 22, 1999, Integrated Circuit Systems, Inc. (the "Company")
issued a press release announcing that the Company had postponed the date of its
Annual Meeting of Shareholders from January 25, 1999 to February 1, 1999 so as
to allow shareholders to receive and have time to consider additional
information concerning the Company's January 20, 1999 merger agreement in order
to make an informed voting decision on the matters to be considered at the
Annual Meeting. A copy of the letter sent to shareholders on January 22, 1999
containing such additional information is being filed as an exhibit to this Form
8-K.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
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(c) Exhibits
99.1 Letter to Shareholders dated January 22, 1999.
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SIGNATURE
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
INTEGRATED CIRCUIT SYSTEMS, INC.
Date: January 22, 1999 By: /s/ Hock E. Tan
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Hock E. Tan
Chief Financial Officer
and Chief Operating Officer
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EXHIBIT INDEX
EXHIBIT
No. DESCRIPTION
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99.1 Letter to Shareholders dated January 22, 1999.
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LETTER TO SHAREHOLDERS
January 22, 1999
Dear Fellow Shareholder:
As you may already be aware, we have postponed the Annual Meeting of
Shareholders to 10:00am on Monday, February 1, 1999, at the Company's
headquarters at 2435 Boulevard of the Generals, Valley Forge, Pennsylvania.
The Company, after consultation with the Securities and Exchange Commission
(SEC), determined that it is appropriate to postpone the meeting to give
shareholders additional time to consider new information concerning the recently
announced $21.25 cash merger agreement with an investor group consisting of its
senior management and affiliates of Bain Capital Inc. and Bear, Stearns & Co.
Inc. so as to be able to make an informed decision before the Annual Meeting.
Instructions to vote by a toll-free telephone call are at the bottom of this
letter.
Shareholders will have an opportunity to vote on the proposed merger at a
Special Meeting ("Special Meeting") of Shareholders expected to take place in
May or June 1999 after a proxy statement providing more details about the
proposed merger is prepared and sent to the shareholders.
You should, however, be aware of the following information concerning the
proposed merger:
. Following is a list of the ICS managers currently included in the investor
group and their positions with the Company:
*Henry Boreen - Vice Chairman and member of the Board of Directors
*Hock Tan - Senior Vice President, Chief Operating Officer and
Chief Financial Officer
Greg Richmond - Vice President, FTG Products
Lewis Eggebrecht - Vice President/Chief Scientist
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Chris Bland - Vice President of Engineering, MicroClock
Barry Olsen - Vice President of Marketing, MicroClock
Paul Lessard - Vice President, Systems Technology
Thomas Gosse - Vice President of Sales
Edward Christiansen Vice President of Manufacturing
Justien Lien - Controller
V. Venkateswaren - Vice President, Engineering Services
Alan Silfies - Director of Quality
* Expected to be a member of Board of Directors following the merger.
. Henry Boreen currently owns approximately 3% of the common stock of the
Company, as well as options to purchase approximately an additional 1% of the
common stock. Hock Tan currently owns common stock and options to purchase
common stock aggregating less than 1% of the common stock. The ICS managers
as a group currently own approximately 6% of the common stock of the Company,
as well as options to purchase approximately an additional 6% of the common
stock. No member of the investor group has entered into any agreement to vote
his or her shares in favor of the merger agreement. After the merger, the ICS
managers are expected to own up to 17% of the common stock of the Company, as
well as options to purchase up to an additional 15% of the common stock. It
is expected that no individual ICS manager will own more than 10% of the
common stock after the merger.
. Bain Capital Inc. and Bear, Stearns & Co. Inc., and their affiliates
collectively own less than 1% of the outstanding ICS common stock.
. The acquisition price will be funded by an equity contribution to be made by
the investor group, debt financing that Credit Suisse First Boston has
committed to provide, and available Company cash. CSFB's commitment to
provide such debt financing will terminate if the transaction has not been
completed by June 30, 1999, and is subject to other customary terms and
conditions.
. The affirmative vote of a majority of votes cast at the Special Meeting is
required to approve the merger.
. The merger agreement requires the Board of Directors to recommend that
shareholders approve the merger at the Special Meeting, subject to the
Board's fiduciary duties.
. The obligations of the Company under the merger agreement, and the fiduciary
duties of the Board of Directors in making determinations relating to the
merger agreement (including any termination of, or recommendation that
shareholders approve, the merger agreement), will be the same whether the
incumbent Directors or the shareholder nominees (or any combination) are
elected to the Board of Directors at the Annual Meeting, rescheduled to be
held on February 1, 1999.
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. The Company has no general right to terminate the merger agreement for any
reason. The merger agreement provides customary termination provisions which
allow the Company to terminate the merger agreement in limited circumstances,
including if the Board receives an offer to acquire the Company, or a tender
offer for the common stock is commenced, either of which is, in the opinion
of the Company's investment bank, more favorable from a financial point of
view to the shareholders, and the Board determines that failure to approve
the new offer and terminate the merger agreement could reasonably be expected
to result in a breach of the Board's fiduciary duties to shareholders. The
foregoing provisions apply regardless of whether the incumbent Directors or
the shareholder nominees (or any combination) are elected to the Board of
Directors at the Annual Meeting.
. If the merger agreement is terminated because (i) the Board accepts another
offer to acquire the Company, (ii) the Board fails to recommend that the
shareholders approve the merger agreement at the Special Meeting or
recommends that shareholders approve another offer to acquire the Company,
(iii) the shareholders do not approve the merger agreement at the Special
Meeting, or (iv) the Company has materially breached the merger agreement,
and within the following year the Company enters into a merger or other
agreement for a business combination or a change of control occurs, the
Company will be required to pay Bain and Bear Stearns a "break-up fee" of $6
million as well as reimburse their expenses up to $3 million. If the merger
agreement is terminated under certain other circumstances, the Company may be
required to reimburse the expenses of Bain and Bear Stearns up to $3 million
but will not be required to pay a break-up fee. More detailed provisions
concerning the termination and break-up fee provisions of the merger
agreement are contained in the merger agreement, which was filed by the
Company with the Securities and Exchange Commission (SEC) as an exhibit to a
Form 8-K on January 20, 1999. The Company's SEC filings are available to the
public on the Internet at http://www.sec.gov.
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. The merger agreement prohibits the Company and its investment banker from:
(i) soliciting any proposals from any persons which could reasonably be
expected to lead to an acquisition of the Company, and (ii) entering into
negotiations with any person for any such acquisition proposal; except that
these limitations do not apply with respect to any persons to whom the
Company or its investment banker had already provided non-public written
information about the Company to facilitate such an acquisition proposal
within the three months prior to the date of the merger agreement. Subject to
certain limitations, the merger agreement permits the Company to negotiate
with any person who makes an unsolicited written bona fide proposal to
acquire the Company if: (i) such acquisition proposal is, in the opinion of
the Company's investment bank, more favorable to the shareholders from a
financial point of view than the merger which is the subject of the January
20, 1999 merger agreement, and (ii) the Board or a Special Committee of the
Board determines that failure to engage in such negotiations would be
reasonably likely to constitute a breach of their fiduciary duties. These
restrictions will apply without regard to
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whether the incumbent Directors or the shareholder nominees (or any
combination) are elected to the Board of Directors at the Annual Meeting.
. Upon completion of the merger, the Company expects to enter into an
employment contract with Hock Tan, currently ICS' Senior Vice President,
Chief Financial Officer and Chief Operating Officer, to become Chief
Executive Officer, and a consulting agreement with Henry Boreen. The specific
terms of the agreements are still under negotiation.
I strongly urge you to support management by signing, dating and returning the
enclosed WHITE proxy card in the postage-paid overnight mail envelope provided..
Very truly yours,
Rudolf Gassner
Chairman of the Board
[Text for letter to shareholders]
IF YOU HAVE ANY QUESTIONS OR REQUIRE ANY ASSISTANCE, PLEASE CONTACT OUR PROXY
SOLICITOR:
INNISFREE M&A INCORPORATED
TOLL FREE -- 1-888-750-5834
501 MADISON AVENUE
20TH FLOOR
NEW YORK, NY 10022
[Alternate text for datagrams sent to shareholders]
If you have any questions, or need any assistance in voting your shares, please
call our proxy solicitor, Innisfree M&A Incorporated, toll-free at 1-888-750-
5834.
PROXYGRAM TELEPHONE VOTING INSTRUCTIONS
Call toll-free 1-800-437-7699 between 8:00 am and Midnight Eastern time.
Tell the operator that you wish to send a collect Proxygram to ID No. ______,
Integrated Circuit Systems, Inc.
State your name, address and telephone number.
State the bank or broker at which your shares are held and your control
number as shown below:
Name:
Broker:
Control number:
Number of shares:
Give the operator your voting preferences, using the proxy text below.
[Text of Management's Proxy Card previously filed with the SEC]
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