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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT NO. 1
TO
SCHEDULE 14D-1
Tender Offer Statement Pursuant to Section
14(d)(1) of the Securities Exchange Act of 1934
and
SCHEDULE 13D
under the Securities Exchange Act of 1934
(Amendment No. 4)
Molecular Dynamics, Inc.
(Name of Subject Company)
APB Acquisition Corp.
(Bidder)
Amersham Pharmacia Biotech Inc.
Amersham Pharmacia Biotech Ltd
Nycomed Amersham plc
(Co-Bidders)
Common Stock, $0.01 Par Value Per Share
(Title of Class of Securities)
608514 10 5
(CUSIP Number)
Andrew D. Rackear
APB Acquisition Corp.
c/o Amersham Pharmacia Biotech Inc.
800 Centennial Avenue
P.O. Box 1327
Piscataway, NJ 08855-1327
Telephone: 732-457-8000
(Name, Address and Telephone Number of
Person Authorized to Receive Notices
and Communications on Behalf of Bidder)
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Copies to:
John W. Buttrick
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Telephone: (212) 450-4000
August 14, 1998
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Date Tender Offer First Published, Sent or Given to Security Holder
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CUSIP No. 608514 10 5
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- ------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS APB Acquisition Corp.
S.S. or I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
- ------------------------------------------------------------------------------
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 None
- ------------------------------------------------------------------------------
8 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7)
EXCLUDES CERTAIN SHARES [ ]
- ------------------------------------------------------------------------------
9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7) N/A
- ------------------------------------------------------------------------------
10 TYPE OF REPORTING PERSON CO
- ------------------------------------------------------------------------------
- -------------------------
CUSIP No. 608514 10 5
- -------------------------
- ------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS Amersham Pharmacia Biotech Inc.
S.S. or I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
- ------------------------------------------------------------------------------
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 1,002,000
- ------------------------------------------------------------------------------
8 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7)
EXCLUDES CERTAIN SHARES [ ]
- ------------------------------------------------------------------------------
9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7) 8.0
- ------------------------------------------------------------------------------
10 TYPE OF REPORTING PERSON CO
- ------------------------------------------------------------------------------
- -------------------------
CUSIP No. 608514 10 5
- -------------------------
- ------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS Amersham Pharmacia Biotech Inc.
S.S. or I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
- ------------------------------------------------------------------------------
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 England, United Kingdom
- ------------------------------------------------------------------------------
7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
REPORTING PERSON 1,002,000
- ------------------------------------------------------------------------------
8 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7)
EXCLUDES CERTAIN SHARES [ ]
- ------------------------------------------------------------------------------
9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7) 8.0
- ------------------------------------------------------------------------------
10 TYPE OF REPORTING PERSON CO
- ------------------------------------------------------------------------------
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CUSIP No. 608514 10 5
- -------------------------
- ------------------------------------------------------------------------------
1 NAMES OF REPORTING PERSONS Nycomed Amersham plc
S.S. or I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
- ------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [ ]
- ------------------------------------------------------------------------------
3 SEC USE ONLY
- ------------------------------------------------------------------------------
4 SOURCE OF FUNDS BK
- ------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(e) OR 2(f) [ ]
- ------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION England, United Kingdom
- ------------------------------------------------------------------------------
7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH
REPORTING PERSON 1,002,000
- ------------------------------------------------------------------------------
8 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7)
EXCLUDES CERTAIN SHARES [ ]
- ------------------------------------------------------------------------------
9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7) 8.0
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10 TYPE OF REPORTING PERSON CO
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This Amendment No. 1 amends and supplements the Tender Offer
Statement on Schedule 14D-1 (the "Schedule 14D-1") dated August 14, 1998 filed
by Amersham Pharmacia Biotech Ltd ("APB Ltd"), an English company, Amersham
Pharmacia Biotech Inc., ("APB Inc.") a Delaware company and wholly-owned
subsidiary of APB Ltd, and APB Acquisition Corp., a wholly-owned subsidiary
of APB Inc. (together with APB Ltd and APB Inc., the "Bidders") relating to
the Bidders' offer to purchase all outstanding shares of Common Stock, $0.01
par value of Molecular Dynamics, Inc. (the "Company"), at $20.50 per Share,
net to the seller in cash, upon the terms and subject to the conditions set
forth in the Offer to Purchase and the related Letter of Transmittal, copies
of which are attached as Exhibits (a)(1) and (a)(2) to the Schedule 14D-1
(which are herein referred to as the "Offer").
Capitalized terms not separately defined herein shall have the
meanings specified in the Schedule 14D-1.
Item 2. Identify and Background.
(a) Item 2 of the Schedule 14D-1 is herby amended by adding
the words "Nycomed Amersham plc" before the word "Purchaser."
Item 10. Additional Information.
(a) Item 10(f) of the Schedule 14D-1 is hereby amended by
deleting the words "October 31, 1998" from the first sentence in the first
paragraph of Section 16 "Certain Conditions of the Offer" of the Offer to
Purchase and replacing them with the words "the Expiration Date". Such change
is reflected in the revised Offer to Purchase attached as exhibit (a)(1)
hereto.
(b) Item 10(f) of the Schedule 14D-1 is hereby amended by
deleting Schedule I to the Offer to Purchase and substituting therefor the
revised Schedule I included in the revised Offer to Purchase attached as
exhibit (a)(1) hereto.
(c) On September 14, 1998, the Bidders and the Company issued
the joint press release attached hereto as Exhibit (a)(8). The information
set forth in the press release is incorporated herein by reference.
Item 11. Material to be Filed as Exhibits.
(a)(1) Revised Offer to Purchase, dated as of August 14, 1998
(a)(8) Joint Press Release, dated September 14, 1998
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: September 14, 1998
APB Acquisition Corp.
By: /s/ David Dally
----------------------------------
Name: David Dally
Title: President
Amersham Pharmacia Biotech Inc.
By: /s/ Philip G. Douglas
----------------------------------
Name: Philip G. Douglas
Title: President
Amersham Pharmacia Biotech Ltd
By: /s/ Giles F. B. Kerr
----------------------------------
Name: Giles F. B. Kerr
Title: Director
Nycomed Amersham plc
By: /s/ Giles F. B. Kerr
----------------------------------
Name: Giles F. B. Kerr
Title: Director
EXHIBIT INDEX
Exhibit Sequentially
Number Description Numbered Page
- ------- ----------- -------------
(a)(1) Offer to Purchase, dated August 14, 1998.............
(a)(2) Letter of Transmittal (including Guidelines for
Certification of Taxpayer Identification Number
on Substitute Form W-9)(*).........................
(a)(3) Notice of Guaranteed Delivery(*).....................
(a)(4) Letter to Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees(*)..............
(a)(5) Letter to Clients for use by Brokers, Dealers,
Commercial Banks, Trust Companies and Other
Nominees(*)........................................
(a)(6) Text of Press Release issued by Nycomed Amersham
plc, dated August 10, 1998(*)......................
(a)(7) Form of summary advertisement dated August 14,
1998(*)............................................
(a)(8) Joint Press Release, dated September 14, 1998........
(b) Commitment Letter dated as of August 12, 1998 from
Nycomed Amersham plc to Amersham Pharmacia
Biotech Ltd(*).....................................
(c)(1) Agreement and Plan of Merger dated as of August 9,
1998, among the Company, Parent and Purchaser(*)...
(c)(2) Stockholder Agreement dated as of August 9, 1998,
among Purchaser, Parent, James M. Schlater and
Jay T. Flatley(*)..................................
(c)(3) Letter Agreement dated as of August 9, 1998 between
the Company and Jay T. Flatley(*)..................
(d) None.................................................
(e) None.................................................
(f) None.................................................
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(*) Previously filed
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
(Including the Associated Rights to Purchase
Series A Junior Participating Preferred Stock)
of
Molecular Dynamics, Inc.
at
$20.50 Net Per Share
by
APB Acquisition Corp.
a wholly-owned subsidiary of
Amersham Pharmacia Biotech Inc.
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THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON FRIDAY, SEPTEMBER 11, 1998, UNLESS THE OFFER IS EXTENDED.
- ------------------------------------------------------------------------------
THE BOARD OF DIRECTORS OF MOLECULAR DYNAMICS, INC. (THE
"COMPANY") HAS UNANIMOUSLY APPROVED THE OFFER AND THE MERGER DESCRIBED HEREIN,
UNANIMOUSLY DETERMINED THAT THE OFFER AND THE MERGER ARE FAIR TO, AND IN THE
BEST INTERESTS OF, THE COMPANY'S STOCKHOLDERS (OTHER THAN PARENT AND ITS
AFFILIATES), AND UNANIMOUSLY RECOMMENDS THAT THE COMPANY'S STOCKHOLDERS ACCEPT
THE OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER.
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THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING
VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER A
NUMBER OF SHARES OF COMMON STOCK, PAR VALUE $0.01 PER SHARE, AND ASSOCIATED
RIGHTS (AS DEFINED BELOW) (REFERRED TO HEREIN COLLECTIVELY AS THE "SHARES"),
OF THE COMPANY WHICH, TOGETHER WITH THE SHARES THEN OWNED BY AMERSHAM
PHARMACIA BIOTECH INC. AND ITS AFFILIATES, WOULD REPRESENT AT LEAST A MAJORITY
OF THE TOTAL NUMBER OF OUTSTANDING SHARES ON A FULLY DILUTED BASIS.
Vector Securities International, Inc., financial advisor to the
Company, has delivered to the Board of Directors of the Company its written
opinion to the effect that, as of the date of the Merger Agreement (as
hereinafter defined), the $20.50 in cash to be received by the holders (other
than Parent and its Affiliates) of Shares in the Offer and the Merger is fair
to such holders from a financial point of view.
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IMPORTANT
Any stockholder desiring to tender all or any portion of his or
her Shares should either (1) complete and sign the Letter of Transmittal (or
facsimile thereof) in accordance with the instructions in the Letter of
Transmittal and deliver it with the certificate(s) representing tendered
Shares and all other required documents to the Depositary or tender such
Shares pursuant to the procedures for book-entry transfer set forth in Section
2 or (2) request his or her broker, dealer, commercial bank, trust company or
other nominee to effect the transaction for him or her. A stockholder having
Shares registered in the name of a broker, dealer, commercial bank, trust
company or other nominee must contact such person if he or she desires to
tender such Shares.
Any stockholder who desires to tender Shares and cannot deliver
the certificate(s) representing such Shares and all other required documents
to the Depositary by the expiration of the Offer or who cannot comply with the
procedures for book-entry transfer on a timely basis must tender such Shares
pursuant to the guaranteed delivery procedure set forth in Section 2.
Questions and requests for assistance may be directed to the
Information Agent or the Dealer Manager at their respective addresses and
telephone numbers set forth on the back cover of this Offer to Purchase.
Additional copies of this Offer to Purchase, the Letter of Transmittal and the
Notice of Guaranteed Delivery may also be obtained from the Information Agent,
brokers, dealers, commercial banks or trust companies.
---------------
The Dealer Manager for the Offer is:
MORGAN STANLEY DEAN WITTER
August 14, 1998
TABLE OF CONTENTS
Page
----
INTRODUCTION.................................................................1
1. Terms of the Offer.....................................................2
2. Procedure for Tendering Shares.........................................3
3. Withdrawal Rights......................................................5
4. Acceptance for Payment and Payment.....................................5
5. Certain Federal Tax Considerations.....................................6
6. Price Range of Shares; Dividends.......................................7
7. Certain Information Concerning the Company.............................7
8. Certain Information Concerning Purchaser, Parent, Amersham
Pharmacia Biotech Ltd and Nycomed Amersham plc......................9
9. Source and Amount of Funds............................................11
10. Background of the Offer; Past Contacts, Transactions or
Negotiations with the Company......................................12
11. The Merger Agreement; The Stockholder Agreement; Other Arrangements..14
12. Purpose of the Offer; Plans for the Company..........................24
13. Effect of the Offer on the Market for Shares; Stock Quotations;
Registration under the Exchange Act................................25
14. Dividends and Distributions..........................................26
15. Extension of Tender Period; Termination; Amendment...................27
16. Certain Conditions of the Offer......................................27
17. Certain Legal Matters; Regulatory Approvals..........................29
18. Fees and Expenses....................................................30
19. Miscellaneous........................................................30
Schedule I Information Concerning Directors and Executive
Officers of Parent, Purchaser, Amersham Pharmacia
Biotech Ltd and Nycomed Amersham plc.......................I-1
INTRODUCTION
To the Holders of Common Stock of
Molecular Dynamics, Inc.:
APB Acquisition Corp., a Delaware corporation ("Purchaser") and
a wholly-owned subsidiary of Amersham Pharmacia Biotech Inc., a Delaware
corporation ("Parent"), hereby offers to purchase all outstanding shares of
Common Stock, $.01 par value (the "Common Stock"), of Molecular Dynamics,
Inc., a Delaware corporation (the "Company"), and the associated rights to
purchase shares of Series A Junior Participating Preferred Stock (the
"Rights") issued pursuant to the Rights Agreement between the Company and
Harris Trust and Savings Bank, as Rights Agent, dated as of November 23, 1994
(the "Rights Agreement") (the Rights and the Shares are referred to herein
collectively as the "Shares"), at $20.50 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"). Tendering stockholders will not be obligated to pay brokerage
fees or commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, transfer taxes on the purchase of Shares pursuant to the Offer.
Parent will pay all charges and expenses of Morgan Stanley & Co. Incorporated
(the "Dealer Manager"), Harris Trust Company of New York (the "Depositary")
and Georgeson & Company Inc. (the "Information Agent") incurred in connection
with the Offer. See Section 18.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING
VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION DATE (AS
HEREINAFTER DEFINED) A NUMBER OF SHARES WHICH, TOGETHER WITH THE SHARES THEN
OWNED BY PARENT AND ITS AFFILIATES, WOULD REPRESENT AT LEAST A MAJORITY OF THE
TOTAL NUMBER OF OUTSTANDING SHARES ON A FULLY DILUTED BASIS (THE "MINIMUM
CONDITION"). SEE SECTION 16.
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED
THE OFFER AND THE MERGER DESCRIBED HEREIN, UNANIMOUSLY DETERMINED THAT THE
OFFER AND THE MERGER ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE COMPANY'S
STOCKHOLDERS (OTHER THAN PARENT AND ITS AFFILIATES), AND UNANIMOUSLY
RECOMMENDS THAT THE COMPANY'S STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR
SHARES PURSUANT TO THE OFFER.
VECTOR SECURITIES INTERNATIONAL, INC., FINANCIAL ADVISOR TO THE
COMPANY, HAS DELIVERED TO THE BOARD OF DIRECTORS OF THE COMPANY ITS WRITTEN
OPINION TO THE EFFECT THAT, AS OF THE DATE OF THE MERGER AGREEMENT (AS
HEREINAFTER DEFINED), THE $20.50 IN CASH TO BE RECEIVED BY THE HOLDERS (OTHER
THAN PARENT AND ITS AFFILIATES) OF SHARES IN THE OFFER AND THE MERGER IS FAIR
TO SUCH HOLDERS FROM A FINANCIAL POINT OF VIEW. The full text of the written
opinion of Vector Securities International, Inc. containing the assumptions
made, the matters considered and the scope of the review undertaken in
rendering such opinion as well as the limitations of such opinion is included
with the Company's Solicitation/Recommendation Statement on Schedule 14D-9,
which is being mailed to stockholders concurrently herewith. Stockholders are
urged to read the full text of such opinion in conjunction with this Offer.
The Offer is being made pursuant to an Agreement and Plan of
Merger dated as of August 9, 1998 (the "Merger Agreement") among the Company,
Parent and Purchaser. The Merger Agreement provides, among other things, that
as soon as practicable after the consummation of the Offer, Purchaser will be
merged with and into the Company (the "Merger"), with the Company continuing
as the surviving corporation (the "Surviving Corporation"). Pursuant to the
Merger, each outstanding Share (other than Shares held by Parent or any
subsidiary of Parent and Shares held by stockholders properly exercising
appraisal rights under Delaware law) will be converted into a right to receive
$20.50 in cash, without interest. See Section 11. For a discussion of the
treatment of stock options in the Merger, see Section 11.
The Merger Agreement provides that effective upon acceptance
for payment pursuant to the Offer of a number of Shares that satisfies the
Minimum Condition, Parent shall be entitled to designate the number of
directors, rounded up to the next whole number, on the Company's Board of
Directors that equals the product of (i) the total number of directors on the
Company's Board of Directors multiplied by (ii) the percentage that the number
of Shares beneficially owned by Parent (including Shares accepted for payment)
bears to the total number of Shares outstanding. See Section 11.
Based upon information provided by the Company, as of July 5,
1998, there were outstanding 10,278,300 Shares and stock options to purchase
an aggregate of 2,211,991 Shares. Based upon the foregoing, as of July 5,
1998, there were 12,490,291 Shares outstanding on a fully diluted basis.
Parent beneficially owns 1,002,000 Shares, or approximately 8% of the Shares
on a fully diluted basis. Accordingly, Purchaser believes that the Minimum
Condition would be satisfied if approximately 5,240,000 Shares are validly
tendered pursuant to the Offer and not withdrawn. James M. Schlater, Chairman
of the Boards of Directors of the Company, and Jay T. Flatley, President and
Chief Executive Officer of the Company, have entered into an agreement (the
"Stockholder Agreement") with Parent and Purchaser pursuant to which Messrs.
Schlater and Flatley have agreed to tender any Shares beneficially owned by
them in the Offer, and under certain circumstances, to exercise their vested
options to acquire Shares and to tender the Shares received upon such exercise
in the Offer. Messrs. Schlater and Flatley collectively own 131,280 Shares
(approximately 1% of the Shares on a fully diluted basis) and vested options to
purchases 484,770 Shares (approximately 3.8% of the Shares on a fully diluted
basis). See Section 11.
Under the General Corporation Law of Delaware ("Delaware Law")
and the Company's Certificate of Incorporation, the Merger requires the
approval of the holders of a majority of the outstanding Shares. If the
Minimum Condition is satisfied, Purchaser would have sufficient voting power
to approve the Merger without the affirmative vote of any other stockholder of
the Company. However, there can be no assurance that Purchaser will acquire
at least a majority of the outstanding Shares.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL
CONTAIN IMPORTANT INFORMATION AND SHOULD BE READ IN THEIR ENTIRETY BEFORE ANY
DECISION IS MADE WITH RESPECT TO THE OFFER.
1. Terms of the Offer.
Upon the terms and subject to the conditions set forth in the
Offer, Purchaser will accept for payment and pay for all Shares that are
validly tendered by the Expiration Date and not withdrawn as provided in
Section 3. The term "Expiration Date" shall mean 12:00 Midnight, New York
City time, on Friday, September 11, 1998, unless Purchaser shall have extended
the period of time for which the Offer is open, in which event the term
"Expiration Date" shall mean the latest time and date at which the Offer, as
so extended by Purchaser, shall expire.
The Offer is subject to certain conditions set forth in Section
16, including satisfaction of the Minimum Condition and expiration or
termination of the waiting period applicable to Purchaser's acquisition of
Shares pursuant to the Offer under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act"). If any such condition
is not satisfied prior to the Expiration Date, Purchaser may (i) terminate the
Offer and return all tendered Shares to tendering stockholders, (ii) extend
the Offer and, subject to withdrawal rights as set forth in Section 3, retain
all such Shares until the expiration of the Offer as so extended, (iii) waive
such condition and, subject to any requirement to extend the period of time
during which the Offer is open, purchase all Shares validly tendered by the
Expiration Date and not withdrawn or (iv) delay acceptance for payment or
payment for Shares, subject to applicable law, until satisfaction or waiver of
the conditions to the Offer.
Purchaser may, with the consent of the Company, waive the
Minimum Condition or any of the other conditions to the Offer and make any
change in the terms or conditions of the Offer and expressly reserves its right
to do so. For a description of the conditions to the Offer, Purchaser's right
to extend the period of time during which the Offer is open and to amend,
delay or terminate the Offer, see Sections 15 and 16.
The Company has provided Purchaser with the Company's
stockholder list and security position listings for the purpose of
disseminating the Offer to holders of Shares. This Offer to Purchase and the
related Letter of Transmittal will be mailed to record holders of Shares and
will be furnished to brokers, banks and similar persons whose names, or the
names of whose nominees, appear on the stockholder list or, if applicable, who
are listed as participants in a clearing agency's security position listing
for subsequent transmittal to beneficial owners of Shares.
2. Procedure for Tendering Shares.
To tender Shares pursuant to the Offer, either (a) a properly
completed and duly executed Letter of Transmittal (or facsimile thereof)
together with any required signature guarantees, or in the case of a book-entry
transfer, an Agent's Message (as hereinafter defined), and any other required
documents, must be received by the Depositary at one of its addresses set
forth on the back cover of this Offer to Purchase and either certificates for
the Shares to be tendered must be received by the Depositary at one of such
addresses or such Shares must be delivered pursuant to the procedures for
book-entry transfer described below (and a Book Entry Confirmation (as
hereinafter defined) received by the Depositary), in each case by the
Expiration Date, or (b) the guaranteed delivery procedure described below must
be complied with.
The term "Agent's Message" means a message, transmitted by the
Book-Entry Transfer Facility (as hereinafter defined) to and received by the
Depositary and forming a part of a Book-Entry Confirmation (as hereinafter
defined) which states that the Book-Entry Transfer Facility has received an
express acknowledgment from the participant tendering the Shares that such
participant has received and agrees to be bound by the terms of the Letter of
Transmittal and that the Company may enforce such agreement against such
participant.
Book-Entry Transfer. The Depositary will establish an account
with respect to the Shares at The Depository Trust Company (the "Book-Entry
Transfer Facility") for purposes of the Offer within two business days after
the date of this Offer to Purchase. Any financial institution that is a
participant in the system of the Book-Entry Transfer Facility may make
delivery of Shares by causing the Book-Entry Transfer Facility to transfer
such Shares into the Depositary's account in accordance with the procedures of
the Book-Entry Transfer Facility. However, although delivery of Shares may be
effected through book-entry transfer, the Letter of Transmittal (or facsimile
thereof), properly completed and duly executed, together with any required
signature guarantees, or an Agent's Message, and any other required documents
must, in any case, be received by the Depositary at one of its addresses set
forth on the back cover of this Offer to Purchase by the Expiration Date, or
the guaranteed delivery procedure described below must be complied with. The
confirmation of a book-entry transfer of Shares into the Depositary's account
at the Book-Entry Transfer Facility as described above is referred to herein
as a "Book-Entry Confirmation". Delivery of documents to the Book-Entry
Transfer Facility in accordance with the Book-Entry Transfer Facility's
procedures does not constitute delivery to the Depositary.
Signature Guarantees. Except as otherwise provided below, all
signatures on a Letter of Transmittal must be guaranteed by an Eligible
Institution. "Eligible Institution" means a financial institution (including
most commercial banks, savings and loan associations and brokerage houses)
which is a member of a recognized Medallion Program approved by The Securities
Transfer Association Inc., including the Securities Transfer Agents Medallion
Program (STAMP), the Stock Exchange Medallion Program (SEMP) and the New York
Stock Exchange, Inc. Medallion Signature Program (MSP). Signatures on a
Letter of Transmittal need not be guaranteed (a) if the Letter of Transmittal
is signed by the registered holder(s) of the Shares tendered therewith and such
holder has not completed the box entitled "Special Payment Instructions" or
the box entitled "Special Delivery Instructions" on the Letter of Transmittal
or (b) if such Shares are tendered for the account of an Eligible Institution.
See Instructions 1 and 5 of the Letter of Transmittal.
Guaranteed Delivery. If a stockholder desires to tender Shares
pursuant to the Offer and cannot deliver certificate(s) representing such
Shares and all other required documents to the Depositary by the Expiration
Date, or such stockholder cannot complete the procedure for delivery by
book-entry transfer on a timely basis, such Shares may nevertheless be
tendered if all of the following conditions are met:
(i) such tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of
Guaranteed Delivery substantially in the form provided by Purchaser is received
by the Depositary (as provided below) by the Expiration Date; and
(iii) the certificates for such Shares (or a Book-Entry
Confirmation), together with a properly completed and duly executed Letter of
Transmittal (or facsimile thereof) with any required signature guarantees, or
an Agent's Message, and any other required documents, are received by the
Depositary within three National Association of Securities Dealers, Inc.
Automated Quotation ("Nasdaq") National Market System trading days after the
date of execution of the Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand or
transmitted by telegram, telex, facsimile transmission or mail to the
Depositary and must include a guarantee by an Eligible Institution in the
form set forth in such Notice of Guaranteed Delivery.
The method of delivery of Shares and all other required
documents, including through the Book-Entry Transfer Facility, is at the
option and risk of the tendering stockholder and the delivery will be deemed
made only when actually received by the Depositary. If certificates for
Shares are sent by mail, registered mail with return receipt requested,
properly insured, is recommended. In all cases, sufficient time should be
allowed to ensure timely delivery.
By executing a Letter of Transmittal, a tendering stockholder
irrevocably appoints designees of Purchaser as such stockholder's proxies in
the manner set forth in the Letter of Transmittal to the full extent of such
stockholder's rights with respect to the Shares tendered by such stockholder
and accepted for payment by Purchaser (and any and all other Shares or other
securities issued or issuable in respect of such Shares on or after August 14,
1998). All such proxies shall be irrevocable and coupled with an interest in
the tendered Shares. Such appointment is effective only upon the acceptance
for payment of such Shares by Purchaser. Upon such acceptance for payment,
all prior proxies and consents granted by such stockholder with respect to
such Shares and other securities will, without further action, be revoked, and
no subsequent proxies may be given nor subsequent written consents executed by
such stockholder (and, if given or executed, will not be deemed to be
effective). Such designees of Purchaser will be empowered to exercise all
voting and other rights of such stockholder as they, in their sole discretion,
may deem proper at any annual, special or adjourned meeting of the Company's
stockholders, by written consent or otherwise. Purchaser reserves the right
to require that, in order for Shares to be validly tendered, immediately upon
Purchaser's acceptance for payment of such Shares, Purchaser is able to
exercise full voting rights with respect to such Shares and other securities
(including voting at any meeting of stockholders then scheduled or acting by
written consent without a meeting).
The tender of Shares pursuant to any one of the procedures
described above will constitute the tendering stockholder's acceptance of the
Offer, as well as the tendering stockholder's representation and warranty that
(a) such stockholder owns the Shares being tendered within the meaning of Rule
14e-4 promulgated under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), (b) the tender of such Shares complies with Rule 14e-4, and
(c) such stockholder has the full power and authority to tender and assign the
Shares tendered, as specified in the Letter of Transmittal. Purchaser's
acceptance for payment of Shares tendered pursuant to the Offer will
constitute a binding agreement between the tendering stockholder and Purchaser
upon the terms and subject to the conditions of the Offer.
All questions as to the form of documents and the validity,
eligibility (including time of receipt) and acceptance for payment of any
tender of Shares will be determined by Purchaser, in its sole discretion, which
determination shall be final and binding. Purchaser reserves the absolute
right to reject any or all tenders of Shares determined by it not to be in
proper form or the acceptance for payment of or payment for which may, in the
opinion of Purchaser's counsel, be unlawful. Purchaser also reserves the
absolute right to waive any defect or irregularity in any tender of Shares,
whether or not similar defects or irregularities are waived in the case of
other Shares. None of Parent, Purchaser, the Dealer Manager, the Depositary,
the Information Agent or any other person will be under any duty to give
notification of any defect or irregularity in tenders or incur any liability
for failure to give any such notification.
Under the federal income tax laws, the Depositary will be
required to withhold 31% of the amount of any payments made to certain
stockholders pursuant to the Offer. In order to avoid such backup
withholding, each tendering stockholder must provide the Depositary with such
stockholder's correct taxpayer identification number and certify that such
stockholder is not subject to such backup withholding by completing the
Substitute Form W-9 included in the Letter of Transmittal. If a stockholder
is a non-resident alien or foreign entity not subject to back up withholding,
the stockholder must give the Depositary a completed Form W-8 Certificate of
Foreign Status prior to receipt of any payment.
3. Withdrawal Rights.
Tenders of Shares made pursuant to the Offer may be withdrawn
at any time prior to the Expiration Date. Thereafter, such tenders are
irrevocable, except that they may be withdrawn after October 14, 1998 unless
theretofore accepted for payment as provided in this Offer to Purchase. If
Purchaser extends the period of time during which the Offer is open, is
delayed in accepting for payment or paying for Shares or is unable to accept
for payment or pay for Shares pursuant to the Offer for any reason, then,
without prejudice to Purchaser's rights under the Offer, the Depositary may,
on behalf of Purchaser, retain all Shares tendered, and such Shares may not
be withdrawn except as otherwise provided in this Section 3.
To be effective, a written, telegraphic, telex or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
one of its addresses set forth on the back cover of this Offer to Purchase and
must specify the name of the person who tendered the Shares to be withdrawn
and the number of Shares to be withdrawn and the name of the registered holder
of Shares, if different from that of the person who tendered such Shares. If
the Shares to be withdrawn have been delivered to the Depositary, a signed
notice of withdrawal with (except in the case of Shares tendered by an
Eligible Institution) signatures guaranteed by an Eligible Institution must be
submitted prior to the release of such Shares. In addition, such notice must
specify, in the case of Shares tendered by delivery of certificates, the name
of the registered holder (if different from that of the tendering stockholder)
and the serial numbers shown on the particular certificates evidencing the
Shares to be withdrawn or, in the case of Shares tendered by book-entry
transfer, the name and number of the account at the Book-Entry Transfer
Facility to be credited with the withdrawn Shares. Withdrawals may not be
rescinded, and Shares withdrawn will thereafter be deemed not validly tendered
for purposes of the Offer. However, withdrawn Shares may be retendered by
again following one of the procedures described in Section 2 at any time prior
to the Expiration Date.
All questions as to the form and validity (including time of
receipt) of any notice of withdrawal will be determined by Purchaser, in its
sole discretion, which determination shall be final and binding. None of
Parent, Purchaser, the Dealer Manager, the Depositary, the Information Agent
or any other person will be under any duty to give notification of any defect
or irregularity in any notice of withdrawal or incur any liability for failure
to give any such notification.
4. Acceptance for Payment and Payment.
Upon the terms and subject to the conditions of the Offer,
Purchaser will accept for payment and pay for all Shares validly tendered by
the Expiration Date and not withdrawn pursuant to Section 3 as soon as
practicable after the Expiration Date. In addition, Purchaser reserves the
right, in its sole discretion and subject to applicable law, to delay the
acceptance for payment or payment for Shares in order to comply in whole or in
part with any applicable law. For a description of Purchaser's right to
terminate the Offer and not accept for payment or pay for Shares or to delay
acceptance for payment or payment for Shares, see Sections 15 and 16.
For purposes of the Offer, Purchaser shall be deemed to have
accepted for payment tendered Shares when, as and if Purchaser gives oral or
written notice to the Depositary of its acceptance of the tenders of such
Shares. Payment for Shares accepted for payment pursuant to the Offer will be
made by deposit of the purchase price with the Depositary, which will act as
agent for the tendering stockholders for the purpose of receiving payments from
Purchaser and transmitting such payments to tendering stockholders. In all
cases, payment for Shares accepted for payment pursuant to the Offer will be
made only after timely receipt by the Depositary of certificates for such
Shares (or a Book-Entry Confirmation), a properly completed and duly executed
Letter of Transmittal (or facsimile thereof) or, in the case of a book-entry
transfer, an Agent's Message, and any other required documents. See Section
2. Accordingly, payment may be made to tendering stockholders at different
times if delivery of the Shares and other required documents occur at
different times. Under no circumstances will interest be paid by Purchaser on
the consideration paid for Shares pursuant to the Offer, regardless of any
delay in making such payment.
If Purchaser increases the consideration to be paid for Shares
pursuant to the Offer, Purchaser will pay such increased consideration for all
Shares purchased pursuant to the Offer.
Purchaser reserves the right to transfer or assign, in whole or
from time to time in part, to one or more of its affiliates the right to
purchase Shares tendered pursuant to the Offer, but any such transfer or
assignment will not relieve Purchaser of its obligations under the Offer or
prejudice the rights of tendering stockholders to receive payment for Shares
validly tendered and accepted for payment.
If any tendered Shares are not purchased pursuant to the Offer
for any reason, or if certificates are submitted for more Shares than are
tendered, certificates for such unpurchased or untendered Shares will be
returned (or, in the case of Shares tendered by book-entry transfer, such
Shares will be credited to an account maintained at one of the Book-Entry
Transfer Facilities), without expense to the tendering stockholder, as
promptly as practicable following the expiration or termination of the Offer.
Purchaser acknowledges that (i) Rule 14e-1(c) under the
Exchange Act requires Purchaser to pay the consideration offered or return the
Shares tendered promptly after the termination or withdrawal of the Offer, and
(ii) unless otherwise permitted by law, Purchaser may not delay acceptance for
payment of, or payment for, any Shares upon the occurrence of any of the
conditions specified in Section 16 without extending the period of time during
which the Offer is open.
5. Certain Federal Income Tax Considerations.
Sales of Shares by stockholders of the Company pursuant to the
Offer will be taxable transactions for federal income tax purposes and may
also be taxable transactions under applicable state and local and other tax
laws.
In general, a stockholder will recognize gain or loss equal to
the difference between the tax basis of his or her Shares and the amount of
cash received in exchange therefor. Such gain or loss will be capital gain or
loss if the Shares are capital assets in the hands of the stockholder and will
be long-term gain or loss if the holding period for the Shares is more than
one year as of the date of the sale of such Shares.
The foregoing discussion may not apply to stockholders who
acquired their Shares pursuant to the exercise of stock options or other
compensation arrangements with the Company or who are not citizens or
residents of the United States or who are otherwise subject to special tax
treatment under the Internal Revenue Code of 1986, as amended (the "Code").
In addition, gain recognized by a sale of Shares by a stockholder who owns or
has previously owned (actually or constructively, taking into account certain
stock ownership attribution rules) more than 5% by value of the Company's
stock could be treated as ordinary income if the Company were determined to be
a "collapsible corporation" under Section 341(a) of the Code. Payments
received by holders of Company options upon cancellation thereof in connection
with the Merger will constitute ordinary compensation income to such holders
subject to applicable income and employment tax withholding at the time of
payment.
THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED
FOR GENERAL INFORMATION ONLY AND IS BASED UPON PRESENT LAW. DUE TO THE
INDIVIDUAL NATURE OF TAX CONSEQUENCES, STOCKHOLDERS ARE URGED TO CONSULT THEIR
TAX ADVISORS AS TO THE SPECIFIC TAX CONSEQUENCES TO THEM OF THE OFFER,
INCLUDING THE EFFECTS OF APPLICABLE STATE, LOCAL OR OTHER TAX LAWS.
6. Price Range of Shares; Dividends.
The Shares are traded in the over-the-counter market and are
quoted on the Nasdaq National Market System ("Nasdaq") under the symbol MDYN.
The following table sets forth, for the periods indicated, the high and low
sale prices per Share as quoted on Nasdaq, as reported in the Company's Annual
Report on Form 10-K for the year ended December 31, 1997 (the "Company 10-K")
and thereafter as reported in published financial sources. According to the
Company, the Company has not paid cash dividends on the Shares to date.
<TABLE>
<CAPTION>
High Low
<S> <C> <C>
1996
First Quarter............................ $ 8 $ 5 1/2
Second Quarter........................... 8 3/4 4 7/8
Third Quarter............................ 7 5/8 5 1/4
Fourth Quarter........................... 14 5/8 7 3/8
1997
First Quarter............................ $ 16 3/4 $ 10 5/8
Second Quarter .......................... 17 1/2 10 1/2
Third Quarter............................ 28 1/8 12 5/8
Fourth Quarter........................... 27 3/8 13 5/8
1998
First Quarter............................ $ 17 1/8 $ 9 3/4
Second Quarter........................... 15 1/8 11
Third Quarter (through August 13, 1998).. 20 1/16 9 11/16
</TABLE>
On August 7, 1998, the last full day of trading before public
announcement of the execution of the Merger Agreement, the reported closing
sales price per Share on Nasdaq was $15. On August 13, 1998, the last full day
of trading prior to commencement of the Offer, the reported closing sales price
per Share on Nasdaq was $20.
STOCKHOLDERS ARE URGED TO OBTAIN
CURRENT MARKET QUOTATIONS FOR THE SHARES.
7. Certain Information Concerning the Company.
The Company is a Delaware corporation with its principal
executive offices located at 928 East Arques Avenue, Sunnyvale, California
94086.
According to the Company 10-K, the Company is a leading
developer, manufacturer and international marketer of systems that accelerate
genetic discovery and analysis. The Company markets its products worldwide to
universities, government research laboratories, and biotechnology,
pharmaceutical, genomics and chemical companies.
The following selected consolidated financial data relating to
the Company and its subsidiaries has been taken or derived from the audited
financial statements contained in the Company 10-K and the unaudited financial
statements contained in the Company's quarterly report on Form 10-Q for its
fiscal quarter ended March 31, 1998. More comprehensive financial information
is included in such 10-K and the other documents filed by the Company with the
Securities and Exchange Commission ("Commission"), and the financial data set
forth below is qualified in its entirety by reference to such reports and
other documents and all of the financial statements and notes contained
therein. Such reports and other documents may be examined and copies may be
obtained from the offices of the Commission in the manner set forth below.
MOLECULAR DYNAMICS, INC.
SELECTED CONSOLIDATED FINANCIAL DATA
<TABLE>
<CAPTION>
Three months ended March 31,
Year ended December 31, (unaudited)
--------------------------------- ----------------------------
1997 1996 1995 1998 1997
------- ------- ------- ------- -------
(in thousands, except per share amounts)
<S> <C> <C> <C> <C> <C>
Income Statement Data
Sales and other revenue.......... $55,715 $49,378 $38,938 $14,080 $13,006
------- ------- ------- ------- -------
Gross margin..................... 30,259 27,907 21,406 7,466 7,459
Operating income (loss).......... 4,340 2,894 (3,954) 841 973
Net income (loss)................ 4,860 3,408 (2,987) 845 1,060
Earnings (loss) per share: basic. 0.48 0.34 (0.30) 0.08 0.11
Shares used to compute
earnings earnings (loss)
per share: basic............... 10,181 10,058 10,095 10,406 9,951
Balance Sheet Data
Working capital.................. $34,351 $27,889 $28,568 $35,372 $30,443
Total assets..................... 59,055 46,043 42,745 63,082 48,253
Total stockholders' equity....... 41,918 33,514 33,645 43,450 36,376
</TABLE>
Except as otherwise stated in this Offer to Purchase, the
information concerning the Company contained herein has been taken from or is
based upon reports and other documents on file with the Commission or otherwise
publicly available. Although neither Purchaser nor Parent has any knowledge
that would indicate that any statements contained herein based upon such
reports and documents are untrue, neither Purchaser nor Parent takes any
responsibility for the accuracy or completeness of the information contained in
such reports and other documents or for any failure by the Company to disclose
events that may have occurred and may affect the significance or accuracy of
any such information but that are unknown to Purchaser or Parent.
The Company is subject to the informational filing requirements
of the Exchange Act and in accordance therewith files periodic reports, proxy
statements and other information with the Commission relating to its business,
financial condition and other matters. The Company is required to disclose in
such proxy statements certain information, as of particular dates, concerning
the Company's directors and officers, their remuneration, stock options
granted to them, the principal holders of the Company's securities and any
material interest of such persons in transactions with the Company. Such
reports, proxy statements and other information may be inspected at the public
reference facilities maintained by the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 and should also be available for inspection and copying
at the regional offices of the Commission in New York (Seven World Trade
Center, 13th Floor, New York, New York 10048) and Chicago (Citicorp Center,
500 West Madison Street (Suite 1400), Chicago, Illinois 60661). Such material
may also be obtained from the Commission's web site at http://www.sec.gov.
Copies of such material should be obtainable by mail, upon payment of the
Commission's customary charges, by writing to the Commission's principal
office at 450 Fifth Street, N.W., Washington, D.C. 20549.
In the course of the discussions between representatives of
Parent and the Company regarding the Offer and the Merger, representatives of
Parent were informed (i) that the Company was aware of Wall Street analyst
expectations for 1999 earnings per Share in the range of $0.75 per Share and
that the Company's initial budget for 1999 was moderately above that and (ii)
that the Company expects its earnings to grow at a compound annual rate of
approximately 30% during the next five years. These data should be read
together with the financial statements of the Company referred to herein.
The foregoing projections were not prepared with a view to
public disclosure or compliance with published guidelines of the Commission or
the guidelines established by the American Institute of Certified Public
Accountants regarding projections, and are included in this Offer to Purchase
only because they were provided to Parent. The inclusion of these projections
should not be regarded as an indication that the Company, Purchaser or Parent
or any other person who received such information considers it an accurate
prediction of future events, and none of them has relied on them as such.
While presented with numerical specificity, these projections are based upon a
variety of assumptions relating to the businesses of the Company which may not
be realized and are subject to significant uncertainties and contingencies,
many of which are beyond the control of the Company and many of which are
described in more detail under "Item 1: Business" of the Company 10-K. There
can be no assurance that the projections will be realized, and actual results
may vary materially from those shown. None of the Company, Parent or
Purchaser intends to update, revise or correct such projections if they become
inaccurate (even in the short term).
8. Certain Information Concerning Purchaser, Parent, Amersham Pharmacia
Biotech Ltd and Nycomed Amersham plc.
Purchaser is a Delaware corporation which was incorporated on
August 6, 1998 and to date has engaged in no activities other than those
incident to its formation, the execution and delivery of the Merger Agreement
and the Stockholder Agreement, the commencement of the Offer and certain
financing transactions related thereto. Purchaser is a wholly-owned
subsidiary of Parent. The principal executive offices of Purchaser are
located at c/o Amersham Pharmacia Biotech Inc., 800 Centennial Avenue, P.O.
Box 1327, Piscataway, NJ 08855-1327.
Parent is a Delaware corporation. Parent is a wholly-owned
subsidiary of Amersham Pharmacia Biotech Ltd, a limited liability company
organized under the laws of England ("APB Ltd"), 55% of which is owned by
Nycomed Amersham plc ("Nycomed Amersham") and 45% of which is owned by
Pharmacia & Upjohn Inc. The principal executive offices of Parent are located
at 800 Centennial Avenue, P.O. Box 1327, Piscataway, NJ 08855-1327. The
principal executive offices of APB Ltd are located at Bjorkgatan 30, S-751 82
Uppsala, Sweden.
APB Ltd and Parent (collectively, "Amersham Pharmacia Biotech")
are engaged in life science research, which is the study of biological systems
to enable scientists and researchers to explain the fundamental processes of
living cells and to understand the mechanics of disease so as to develop
better ways of controlling and combating them. The principal market for their
research products consists of scientists working in laboratory groups located
in universities, medical research centers, hospitals and research institutes
and commercial enterprises such as pharmaceutical, biotechnology, and
agrochemical companies as well as production engineers in the pharmaceutical
and biotechnology industry.
Amersham Pharmacia Biotech estimates that its research customer
base comprises more than 200,000 individual researchers worldwide, located in
50,000 laboratories at 10,000 institute or company locations. Amersham
Pharmacia Biotech supplies products to over 120 countries, with the principal
markets being the U.S., Japan, Germany, France and the U.K.
Amersham Pharmacia Biotech's strategy is to collaborate with
other researchers in its peer group to convert technology into systems,
products and services which can be used to improve health management. Amersham
Pharmacia Biotech is focusing on identifying and commercializing innovative
new technologies so as to extend the existing platform of enabling
technologies, products and services that significantly improve various research
activities. Amersham Pharmacia Biotech will continue its focus on high growth
segments of molecular biology, cell biology and automated sequencing in the
pharmaceutical and biotechnology sectors.
The key areas addressed by Amersham Pharmacia Biotech are
applied genomics (including molecular biology and DNA sequencing), cell
biology (in support of drug discovery and development) and separations
(complete systems for separating and purifying biological molecules and large
scale DNA synthesis).
Amersham Pharmacia Biotech's estimated share of the world-wide market for its
product is presented in the table below:
Market Share(1) Market Position(1)
- --------------------------------------------------------------------
Applied genomics.............. 15%
DNA sequencing................ 2
Molecular biology............. 1
Protein studies............... 2
Cell biology.................. 25%
Drug screening reagents....... 1
Custom labelling.............. 1
Drug development assays....... 2
Radiochemicals................ 1
Separations................... 33%
Industrial chromatography..... 1
DNA synthesis................. 1
Laboratory chromatography..... 1
- ------------
(1) By sales
Turnover of Amersham Pharmacia Biotech, as reported by Nycomed
Amersham, for the year ended March 31, 1997 and the nine months ended December
31, 1997, respectively, was Pound Sterling163.9 million and Pound
Sterling237.5 million, in each case representing 44% of the consolidated
turnover of the Nycomed Amersham group. Profit before interest and taxation of
Amersham Pharmacia Biotech, as reported by Nycomed Amersham, for the year ended
March 31, 1997 and the nine months ended December 31, 1997, respectively, was
Pound Sterling37.4 million and Pound Sterling40.2 million. Nycomed Amersham
reported a consolidated profit before interest and taxation for Amersham
Pharmacia Biotech for the year ended March 31, 1997 of Pound Sterling66.4
million and a consolidated loss before interest and taxation for the nine
months ended December 31, 1997 of Pound Sterling55.6 million.
Nycomed Amersham is a public limited company organized under
the laws of England. It is an international pharmaceutical group engaged in
the research and development ("R&D"), production, sale, distribution and
licensing of medical imaging contrast media and radiotherapy. Nycomed
Amersham and its subsidiaries are also engaged in R&D, manufacture and sale of
specialized products for life science research and development, manufacturing
and marketing of pharmaceutical, nutraceutical and in vitro diagnostic
products.
The merger of Amersham International plc and Nycomed ASA was
completed on October 21, 1997, and Amersham International plc, which acquired
Nycomed ASA by tender offer to effect the merger, changed its name to Nycomed
Amersham plc as of October 22, 1997. Nycomed Amersham and its subsidiaries
are currently organized into three principal lines of business: the medical
imaging business, the life science business which is operated through APB Ltd
and the therapeutic business.
The principal executive offices of Nycomed Amersham are located
at Amersham Place, Little Chalfont, Buckinghamshire, England HP7 9NA. The
name, business address, principal occupation or employment, five year
employment history and citizenship of each director and executive officer of
Nycomed Amersham, APB Ltd, Parent and Purchaser are set forth on Schedule I
hereto.
Except as described in this Offer to Purchase, (i) neither
Nycomed Amersham, APB Ltd, Parent or Purchaser (the "Reporting Persons") nor,
to the best of their knowledge, any of the persons listed in Schedule I
hereto, nor any associate or majority-owned subsidiary of any of the foregoing
beneficially owns, or has any right to acquire, directly or indirectly, any
Shares and (ii) none of the Reporting Persons nor, to the best of their
knowledge, any of the persons or entities referred to above nor any director,
executive officer or subsidiary of any of the foregoing, has effected any
transaction in the Shares during the past 60 days.
Except as described in this Offer to Purchase, none of the
Reporting Persons nor, to the best of their knowledge, any of the persons
listed in Schedule I hereto, has any contract, arrangement, understanding or
relationship with any other person with respect to any securities of the
Company, including, but not limited to, any contract, arrangement,
understanding or relationship concerning the transfer or voting of such
securities, finder's fees, joint ventures, loan or option arrangements, puts
or calls, guarantees of loans, guarantees, division of profits or loss or the
giving or withholding of proxies. Except as set forth in this Offer to
Purchase, since January 1, 1995, none of the Reporting Persons nor, to the
best of their knowledge, any of the persons listed in Schedule I hereto, has
had any business relationship or transaction with the Company or any of its
executive officers, directors, or affiliates that is required to be reported
under the rules and regulations of the Commission applicable to the Offer.
Except as set forth in this Offer to Purchase, since January 1, 1995, there
have been no contacts, negotiations or transactions between the Reporting
Persons or any of their subsidiaries or, to the best knowledge of Parent and
Purchaser, any of the persons listed in Schedule I hereto, on the one hand,
and the Company or its affiliates, on the other hand, concerning a merger,
consolidation or acquisition, tender offer or other acquisition of securities,
an election of directors or a sale or other transfer of a material amount of
assets.
9. Source and Amount of Funds.
The total amount of funds required by Purchaser to purchase
Shares pursuant to the Offer and to pay related fees and expenses is estimated
to be approximately $223 million (the "Required Amount"). In order to finance
the purchase of the Shares and to pay the related fees and expenses, Nycomed
Amersham has undertaken, pursuant to a commitment letter provided to Parent,
to lend the Required Amount to Parent. It is expected that Parent will,
immediately prior to the consummation of the Offer, make a capital
contribution to Purchaser in the Required Amount in consideration for the
issuance by Purchaser of shares of common stock. It is also expected that an
intercompany note will evidence the loan (the "Intercompany Loan"). It is
further expected that the Intercompany Loan will mature in six months and will
bear interest at LIBOR plus 0.375 percentage points. Amounts may be borrowed
in multiple currencies. The Intercompany Loan will be unsecured.
It is expected that the Intercompany Loan will be repaid from
funds generated internally by Purchaser (including, after consummation of the
Merger with the Company, funds generated by the Company).
The total assets of the Nycomed Amersham group as at December
31, 1997, calculated in accordance with U.S. GAAP, were $4,732.9 million, and
stockholders' equity of the Nycomed Amersham group as at December 31, 1997,
was $2,697.3 million. At June 30, 1998, Nycomed Amersham had available
approximately Pound Sterling519 million in undrawn credit facilities.
The foregoing financial data (other than the last sentence of
the preceding paragraph) relating to Nycomed Amersham and its subsidiaries has
been taken or derived from the audited financial statements contained in
Nycomed Amersham's Annual Report on Form 20-F for the year ended March 31,
1997. More comprehensive financial information is included in such Annual
Report and the other documents filed by Nycomed Amersham with the Commission,
and the financial data set forth above is qualified in its entirety by
reference to such Annual Report and other documents and all of the financial
statements and notes contained therein.
Nycomed Amersham is subject to certain of the informational
filing requirements of the Exchange Act and in accordance therewith files
periodic reports and other information with the Commission relating to its
business, financial condition and other matters. Such reports and other
information should be available for inspection and copying at the offices of
the Commission in the same manner as set forth with respect to the Company in
Section 7. Such material should also be available for inspection at the
library of the New York Stock Exchange, Inc., 20 Broad Street, New York, NY,
10005.
10. Background of the Offer; Past Contacts, Transactions or Negotiations with
the Company.
Background of the Offer. In April 1994, Nycomed Amersham and
the Company established a strategic alliance to bring together the molecular
biology and chemistry skills of Parent with the instrumentation skills of the
Company to create complete DNA sequencing and genomic analysis systems. This
strategic alliance was documented in a series of Collaboration, Cross
Co-Promotion and Co-Development Agreements. At the same time Parent purchased
1,002,000 Shares and entered into the Standstill Agreement. See "Other
Agreements" below.
From 1994 until 1997 the parties cooperated in marketing a
variety of products, including a fluorescent scanner for electrophoresis gels
together with fluorescent labeling kits used in detecting DNA and proteins, a
DNA labstation and fluorescent DNA sequencers. The development of these
products and the strategic direction of the alliance was directed by a
Business Steering Group ("BSG"), comprising representatives of both parties.
In 1996 and 1997, the BSG refocused the alliance on developing
and marketing technologies for genomic analysis. The major technologies
comprised microarrays for gene expression analysis, marketed as the Microarray
Technology Access Program ("MTAP") and capillary electrophoresis sequencing
marketed as the MegaBACE 1000[Trademark] instrument and associated reagents.
The BSG recognized as early as August 1997 that better
coordination between Parent and the Company of R&D and sales and marketing was
desirable for commercial success of the MegaBACE and the MTAP. At that time,
several options were discussed between the parties, ranging from acquisition
of part or all of the Company by Parent to large scale secondment or joint
venture arrangements. These discussions were inconclusive and ceased by
December 1997.
Further discussions on improved coordination took place at a
meeting of the BSG in February 1998 in Silverado, California. At this
meeting, the Company proposed a change in the profit sharing arrangements for
the MTAP. The parties were unable to agree to the proposed change. Over the
next few months, several other options were also discussed among the
representatives of the parties with no results. These options included an R&D
joint venture, an exclusive marketing arrangement for the products by one of
the parties' salesforce or an acquisition by Parent of the assets of the
MegaBACE program.
On June 26, 1998, Ron Long (Chief Executive Officer of APB
Ltd), Michael Evans (Vice President, Applied Genomics of APB Ltd) and Alan
Dance (Vice President, Corporate Development of APB Ltd) met Mark Sutherland
(Vice President, Microarray Business Segment of the Company), Jay Flatley
(Chief Executive Officer of the Company) and David Barker (Vice President,
Research and Scientific Development of the Company) in Sunnyvale, California
to discuss in greater detail a potential acquisition by Parent of the MegaBACE
assets. The parties were, however, unable to agree on price. The meeting
closed with both parties agreeing that the existing arrangements were not
satisfactory and that both would explore other options.
On June 29, 1998, Mr. Long telephoned James Schlater (Chairman
of the Company) to say that the options that Parent would consider were for
Parent to become the distributor for MegaBACE, to contribute MegaBACE into a
company to be jointly owned by the two parties, or to consider an outright
acquisition of the Company. On June 30, 1998, on a conference call, Mr. Long,
Mr. Schlater and Mr. Flatley agreed that these were the options that should be
considered by the respective management teams.
On July 7, 1998, Mr. Long and Mr. Flatley discussed the
progress made on the evaluation of the options and Mr. Long advised Mr.
Flatley that Parent had requested its external advisors to help with the
analysis.
On July 28, 1998, Mr. Long informed Mr. Flatley that Parent's
evaluation of the options discussed was nearly complete and that Parent would
present these options to its Board of Directors at a meeting to be held on
July 30, 1998 and to the Nycomed Amersham Board of Directors at a meeting to
be held on August 6, 1998. Mr. Long suggested that the parties meet on the
afternoon of August 7 to discuss these options with a view to reaching a
settlement on one of them. Mr. Flatley said he would be reviewing the same
options with the Board of Directors of the Company and agreed to the proposed
meeting.
On August 7, 1998, Mr. Long met Mr. Schlater and Mr. Flatley
with their respective legal and financial advisors in New York in order to
discuss the possibility of pursuing one of the options identified at previous
meetings. The parties agreed that the best option would be for Parent to
offer to acquire all the outstanding Shares, provided an acceptable price and
other terms could be agreed. The parties proceeded on August 7 to discuss the
price of an acquisition, the text of a draft merger agreement and the details
of an employee incentive plan. During these discussions, APB proposed an
offer price of $18.50 per share, which was rejected by representatives of the
Company. Negotiations regarding price and other terms continued, and on the
afternoon of August 8, 1998, the parties reached an agreement in principle on
$20.50 per share in cash, but such agreement was contingent on satisfactory
resolutions of the Merger Agreement and other ancillary issues, approval by
the Board of Directors of the Company and the receipt of approvals from APB
Ltd's shareholders, Nycomed Amersham and Pharmacia & Upjohn Inc.
On the morning of August 9, 1998, APB Ltd obtained the
approvals of its shareholders and later in the day the parties reached
agreement on the Merger Agreement, the terms of an employee incentive plan and
other ancillary agreements. Following a telephonic meeting of the Board of
Directors of the Company on August 9, 1998, the Merger Agreement and
Stockholder Agreements were executed.
Other Agreements. In April 1994, the Company entered into a
Collaboration Agreement, a Co-Development and Co-Promotion Agreement for
FluorImager Reagents and a Cross Co-Promotion Agreement with Nycomed Amersham
under which agreements the Company would take responsibility for development
and sales of certain instrumentation, and Parent would develop and sell
associated reagents. Operating profits of these reagent and instrument sales
are shared between the Company and Parent. In addition, on April 6, 1994, the
Company and Amersham Holdings, Inc. ("Amersham Holdings"), an affiliate of
Nycomed Amersham, entered into a Warrant Purchase Agreement pursuant to which
the Company granted to Amersham Holdings a warrant to purchase for its own
account up to 1,002,000 Shares at $13.20 per Share, subject to customary
anti-dilution provisions (the "Warrant"). The amount of Shares that could be
purchased by Amersham Holdings under the Warrant was to be reduced by any
amount of Shares that it subsequently purchased on the open market. Between
April 11, 1994 and June 23, 1994, Amersham Holdings purchased 1,002,000 Shares
on the Nasdaq National Market at prices ranging from $6.36 per Share to $7.50
per Share. These Shares were subsequently contributed to Amersham Life
Science, Inc. and are now owned by Parent (which is a successor to Amersham
Life Science, Inc.). The information contained in the Schedule 13D dated
April 16, 1994 (and the amendments thereto) (the "Schedule 13D") filed by
Amersham Holdings with the Commission is incorporated herein by reference.
Concurrently with the issuance of the Warrant, on April 6,
1994, Amersham Holdings and the Company entered into a Standstill Agreement.
Subject to certain exceptions, the Standstill Agreement (i) prohibits Amersham
Holdings and its affiliates ( the "Investor Group") from acquiring or
exercising any rights to purchase the Shares or any other securities entitled
to vote for the election of directors of the Company ("Voting Securities") if
the effect of such acquisition or exercise would result in the Investor Group
attaining in excess of 19.9% (the "Threshold Percentage") of the voting power
of the Company and (ii) prohibits the Investor Group from soliciting proxies
or participating in the solicitation of proxies or entering into any type of
voting arrangement in respect of the Shares. However, if any other group of
persons were to acquire, or make a tender or exchange offer for, more than
19.9% of the Company's Voting Securities ("13D Group"), then the Investor
Group is permitted under the Standstill Agreement to make a competing offer
provided that the Investor Group may not in any case own more than the number
of Shares acquired or to be acquired (assuming any offers to purchase have been
consummated) by the 13D Group.
If after the consummation of an offer by a 13D Group, such
group ultimately holds less then 19.9% of the Voting Securities and the
Investor Group holds more than 19.9% of the Voting Securities, then the
Investor Group shall have the right to dispose of Voting Securities in excess
of 19.9% of the voting power of the Company ("Incremental Shares") within 60
days from the date of holding Incremental shares to either (i) an independent
third party in a bona fide transaction or transaction or (ii) into the public
market in accordance with the terms of Rule 144. Upon expiration of the sixty
day period, the Company has a 90-day option to acquire any such Incremental
Shares which have not been disposed at a price equal to the price paid by the
Investor Group for the Incremental Shares, plus expenses incurred in
connection with the acquisition of such Shares. If this option is not
exercised by the Company, then the original Threshold Percentage of 19.9%
shall be raised to a percentage which reflects the actual voting power held by
the Investor Group upon expiration of the option granted to the Company.
The Investor Group was granted the right (the "Top-Up Right")
to purchase additional shares up to the prevailing Threshold Percentage if the
number of outstanding Voting Securities is increased in any manner. If a 13D
Group has made a competing offer as described above, then the Investor Group
must first exercise or waive its right to make a competing offer before
exercising its Top-Up Right. The duration of the Top-Up Right and the price
at which the Investor Group may purchase Shares from the Company is specified
in the agreement.
The Standstill Agreement also provides that, for five years
from the date of the Standstill Agreement, if the Company shall issue any
additional Shares (other than issuances for (i) employee stock options, (ii) a
bona fide acquisition by the Company or (iii) the issuance of Shares or other
securities in the ordinary course of business for equity financing purposes to
other persons with whom the Company has a business relationship), the Investor
Group has a right to purchase such number of additional Shares as to maintain
its proportionate ownership of the Company's Voting Securities. Furthermore,
whenever any member of the Investor Group proposes to offer for sale any
Shares of the Company, it must first offer such Shares to the Company. The
Investor Group may offer for sale to any person or persons Shares which are
not purchased by the Company for a period of twenty days, at which time unsold
Shares must be reoffered to the Company.
The Company has granted Parent and Purchaser a waiver under the
Standstill Agreement in respect of the Offer and the Merger. See Section 11.
The foregoing summary of the Warrant Purchase Agreement, the
Warrant and the Standstill Agreement is qualified in its entirety by reference
to such agreements, which have previously been filed as exhibits to the
Schedule 13D.
11. The Merger Agreement; The Stockholder Agreement; Other Arrangements.
The Merger Agreement. The following is a summary of the Merger
Agreement, a copy of which is filed as an Exhibit to the Schedule 14D-1. Such
summary is qualified in its entirety by reference to the Merger Agreement.
The Offer. The Merger Agreement provides for the making of the
Offer. The obligation of Purchaser to accept for payment Shares tendered
pursuant to the Offer is subject to the satisfaction of the Minimum Condition
and certain other conditions that are described in Section 15. Purchaser has
agreed that no change in the Offer may be made, without the consent of the
Company, which changes the form of consideration to be paid or decreases the
price per Share or the number of Shares sought in the Offer, waives the
Minimum Condition, imposes conditions to the Offer in addition to the Minimum
Condition and those conditions described in Section 15 or otherwise adversely
affects the stockholders of the Company. Purchaser may, however, without the
consent of the Company, (i) extend the Offer, if at any scheduled or extended
expiration date of the Offer any of the conditions to the Offer shall not be
satisfied and waived, (ii) extend the Offer for any period required by any
rule, regulation, interpretation or position of the Commission or the staff
thereof applicable to the Offer or any period required by applicable law and
(iii) extend the Offer on one or more occasions for an aggregate period of not
more than 10 business days beyond the latest expiration date that would
otherwise be permitted under clause (i) or (ii) of this sentence, if on such
expiration date there shall not have been tendered at least 90% of the
outstanding Shares.
Pursuant to the Merger Agreement, in the event of the failure
of one or more of the conditions to the Offer to be satisfied or waived on any
date on which the Offer would otherwise have expired, Purchaser shall, if such
condition could reasonably be expected to be satisfied, extend the Offer for a
reasonable period time, except that Purchaser shall not be required to extend
the Offer beyond October 31, 1998.
Recommendation. The Board of Directors has (i) unanimously
determined that the Merger Agreement and the transactions contemplated
thereby, including the Offer and the Merger, are fair to and in the best
interest of the Company's stockholders, (ii) unanimously approved the Merger
Agreement and the transactions contemplated thereby, including the Offer and
the Merger and (iii) unanimously resolved to recommend acceptance of the Offer
and approval and adoption of the Merger Agreement and the Merger by the
Company's stockholders. This recommendation of the Board of Directors may be
withdrawn or modified by the Board of Directors if advised by counsel in
writing that such withdrawal or modification is required in order to comply
with the fiduciary duties of the Board of Directors. In such event, the
Merger Agreement may be terminated and the Company will pay a fee to Purchaser
and reimburse Purchaser for certain fees and expenses as set forth in "Fees
and Expenses" below.
The Merger. The Merger Agreement provides that, upon the terms
and subject to the conditions thereof, at the time at which the Company and
Purchaser file a certificate of merger with the Secretary of State of the State
of Delaware and make all other filings or recordings required by the Delaware
General Corporation Law ("Delaware Law") in connection with the Merger,
Purchaser shall be merged with and into the Company in accordance with
Delaware Law. The Merger shall become effective at such time as the
Certificate of Merger is duly filed with the Secretary of State of the State
of Delaware (the "Effective Time"). As a result of the Merger, the separate
corporate existence of Purchaser will cease and the Company will be the
surviving corporation (the "Surviving Corporation").
At the Effective Time, (i) each issued and outstanding Share
held in the treasury of the Company, or owned by Purchaser shall be canceled,
and no payment shall be made with respect thereto; (ii) each share of common
stock of Purchaser then outstanding shall be converted into and become one
share of common stock of the Surviving Corporation; and (iii) each Share
outstanding immediately prior to the Effective Time shall, except as otherwise
provided in (i) above or with respect to Shares as to which appraisal rights
have been perfected, be converted into the right to receive $20.50 in cash
without interest.
The Merger Agreement provides that, from and after the
Effective Time, until successors are duly elected or appointed and qualified
in accordance with applicable law, (a) the directors of Purchaser at the
Effective Time shall be the directors of the Surviving Corporation and (b) the
officers of the Company at the Effective Time shall be the officers of the
Surviving Corporation.
Employee Stock Options. At the Effective time, (i) each option
to purchase shares of Common Stock outstanding under any employee stock option
or compensation plan or arrangement of the Company (except for the Molecular
Dynamics, Inc. 1993 Employee Stock Purchase Plan (the "Company Stock Purchase
Plan")) that is vested and exercisable (other than any option that becomes
vested and exercisable by its terms as a result of the transactions
contemplated by the Merger Agreement) shall be canceled, and the Company shall
pay each such holder in cash at the Effective Time for each such option an
amount determined by multiplying the excess, if any, of $20.50 per Share over
the applicable exercise price per Share of such option by the number of shares
to which such option relates, and (ii) each option to purchase shares of
Common Stock outstanding under any employee stock option or compensation plan
or arrangement of the Company (except for the Company Stock Purchase Plan) that
is unvested or unexercisable at the Effective Time (each, an "Unvested
Option") shall be canceled, and Parent shall replace each such Unvested Option
with an award (a "Replacement Award") with a total value determined by
multiplying the excess, if any, of $20.50 per Share over the applicable
exercise price per Share of such Unvested Option by the number of Shares to
which such Unvested Option relates. The total value of the Replacement Award
shall be payable in cash to the optionee in five installments, with the first
such installment (constituting 25% of the Replacement Award) payable at the
Effective Time and thereafter, the remaining portion of the Replacement Award
shall be paid in four equal installments on the last business day of the
third, sixth, ninth and twelfth month following the Effective Time (provided
that the optionee shall only be entitled to such quarterly payment for any
quarter during which such optionee is employed by the Company or its successor
as of such quarterly payment date). Each Replacement Award shall represent an
unfunded, unsecured obligation of the Company or its successor.
Employee Stock Purchase Plan. As of the Effective Time, the
Company Stock Purchase Plan shall be terminated. Parent shall pay each
participant in any then current offering under such Plan that commences after
the date of the Merger Agreement in cash at or promptly after the Effective
Time, in cancellation of all rights under such Plan, the amount of such
participant's account balance under the Plan.
Board of Directors. The Merger Agreement provides that
effective upon purchase and payment by Purchaser for a number of Shares that
satisfies the Minimum Condition, Parent shall be entitled to designate the
number of directors, rounded up to the next whole number, on the Company's
Board of Directors that equals the product of (i) the total number of
directors on the Board of Directors (giving effect to the election of any
additional directors pursuant to this paragraph) and (ii) the percentage that
the number of Shares beneficially owned by Parent (including Shares accepted
for payment) bears to the total number of Shares outstanding, and the Company
shall take all action necessary to cause Parent's designees to be elected or
appointed to the Board of Directors, including, without limitation, increasing
the number of directors and seeking and accepting resignations of its incumbent
directors. At such times, the Company will use its best efforts to cause
individuals designated by Parent to constitute the same percentage as such
individuals represent on the Company's Board of Directors of (i) each
committee of the Board and (ii) each board of directors (and committee
thereof) of each Subsidiary ("Subsidiary" means any corporation or other
entity in which the Company has an ownership interest sufficient to elect a
majority of the board of directors or other persons performing similar
functions). Notwithstanding the foregoing, the Company shall use its best
efforts to cause at least three members of the Company's Board of Directors as
of the date hereof who are not employees of the Company (the "Continuing
Directors") to remain members of the Board of Directors until the Effective
Time and Parent consents thereto.
Following the consummation of the Offer and until the Effective
Time, the approval of at least a majority of the Continuing Directors shall be
required to authorize any termination of the Merger Agreement by the Company,
any amendment of the Merger Agreement requiring action by the Board of
Directors, any action with respect to the Merger or the Company Stockholder
Meeting (as defined below) requiring action by the Board of Directors, and any
waiver of compliance with any of the agreements or conditions contained in the
Merger Agreement for the benefit of the Company (provided in each case that,
if, following the expiration of the Offer, Parent shall own 90% or more of the
Shares, the Board of Directors of the Company will take all actions necessary
to effect the Merger).
Company Stockholder Meeting. Pursuant to the Merger Agreement,
the Company shall cause a meeting of its stockholders (the "Company
Stockholder Meeting") to be duly called and held as soon as reasonably
practicable for the purpose of voting on the approval and adoption of the
Merger Agreement, unless a vote of stockholders by the Company is not required
by Delaware Law.
The Merger Agreement provides that the Company will promptly
prepare and file with the Commission under the Exchange Act a proxy statement
relating to the Company Stockholder Meeting. The Company has agreed, subject
to the fiduciary duties of its Board of Directors as advised in writing by
counsel, to use its best efforts to obtain the necessary approvals by its
stockholders of the Merger Agreement and the transactions contemplated
thereby. Parent has agreed to vote all Shares then beneficially owned by it
in favor of adoption of the Merger Agreement.
Covenants of the Company. The Company has agreed that, prior
to the Effective Time, the Company will conduct its business in the ordinary
course consistent with past practice and that it will not adopt or propose any
change in its certificate of incorporation or bylaws. In addition, the
Company has agreed that, prior to the Effective Time, the Company will not,
and will not permit any of its Subsidiaries to
(a) except pursuant to existing agreements or arrangements,
(i) acquire (by merger, consolidation or acquisition of stock or assets) any
material corporation, partnership or other business organization or division
thereof, or sell, lease or otherwise dispose of a material subsidiary or a
material amount of assets or securities, (ii) make any investment in an amount
in excess of $250,000 in the aggregate whether by purchase of stock or
securities, contributions to capital or any property transfer (other than
investments in marketable securities made in compliance with the Company's cash
management policy), or purchase for an amount in excess of $250,000 in the
aggregate, any property or assets of any other individual or entity, (iii)
waive, release, grant or transfer any rights of material value, (iv) license,
dispose of, assign, transfer or encumber any intellectual property other than
technology transfer and technology access agreements substantially on the terms
of the Company's standard form agreements, (v) modify or change in any material
respect any existing material license, lease, contract, or other document, (vi)
enter into any supply or distribution agreement providing for a term in excess
of twelve months, (vii) except to refund or refinance commercial paper, incur,
assume or prepay an amount of long-term or short-term debt in excess of
$2,000,000 in the aggregate, (viii) assume, guarantee, endorse or otherwise
become liable or responsible (whether directly, contingently or otherwise) for
the obligations of any other person which are in excess of $250,000 in the
aggregate, (ix) make any loans to any other person which are in excess of
$250,000 in the aggregate or (x) authorize any new capital expenditures which,
individually or in the aggregate, are in excess of $500,000;
(b) split, combine or reclassify any shares of its capital
stock, declare, set aside or pay any dividend or other distribution (whether in
cash, stock or property or any combination thereof) in respect of its capital
stock, other than cash dividends and distributions by a wholly owned Subsidiary
of the Company to the Company or to a subsidiary all of the capital stock which
is owned directly or indirectly by the Company, or redeem, repurchase or
otherwise acquire or offer to redeem, repurchase, or otherwise acquire any of
its securities or any securities of its Subsidiaries;
(c) adopt or amend any bonus, profit sharing, compensation,
severance, termination, stock option, pension, retirement, deferred
compensation, employment or employee benefit plan, agreement, trust, plan, fund
or other arrangement for the benefit and welfare of any director, officer or
employee, or (except for normal increases in the ordinary course of business
that are consistent with past practices and that, in the aggregate, do not
result in a material increase in benefits or compensation expense to the
Company) increase in any manner the compensation or fringe benefits of any
director, officer or employee or pay any benefit not required by any existing
plan or arrangement (including, without limitation, the granting of stock
options or stock appreciation rights or the removal of existing restrictions in
any benefit plans or agreements);
(d) revalue in any material respect any of its assets,
including, without limitation, writing down the value of inventory in any
material manner or write-off of notes or accounts receivable in any material
manner;
(e) pay, discharge or satisfy any material claims, liabilities
or obligations (whether absolute, accrued, asserted or unasserted, contingent
or otherwise) other than the payment, discharge or satisfaction in the ordinary
course of business, consistent with past practices, of liabilities reflected or
reserved against in the consolidated financial statements of the Company or
incurred in the ordinary course of business, consistent with past practices;
(f) make any tax election or settle or compromise any material
income tax liability;
(g) take any action other than in the ordinary course of
business and consistent with past practices with respect to accounting policies
or procedures; or
(h) agree or commit to do any of the foregoing; or
(i) take or agree or commit to take any action that would make
any representation and warranty of the Company under the Merger Agreement
inaccurate in any respect at, or as of any time prior to, the Effective Time.
Other Offers. Pursuant to the Merger Agreement, the Company
has agreed that from the date of the Merger Agreement until the termination
thereof, neither the Company nor any of its Subsidiaries shall (whether
directly or indirectly through advisors, agents or other intermediaries), nor
shall the Company or any of its Subsidiaries authorize or permit any of its or
their officers, directors, agents, representatives, advisors or Subsidiaries to
(i) solicit, initiate or take any action knowingly to
facilitate the submission of inquiries, proposals or offers from any Third
Party (as defined below) (other than Parent) which constitutes or would
reasonably be expected to lead to (A) any acquisition or purchase of 20% or
more of the consolidated assets of the Company and its Subsidiaries or of over
20% of any class of equity securities of the Company or any of its
Subsidiaries, (B) any tender offer (including a self tender offer) or exchange
offer that if consummated would result in any Third Party beneficially owning
20% or more of any class of equity securities of the Company or any of its
Subsidiaries, (C) any merger, consolidation, business combination, sale of
substantially all assets, recapitalization, liquidation, dissolution or
similar transaction involving the Company or any of its Subsidiaries whose
assets, individually or in the aggregate, constitute more than 20% of the
consolidated assets of the Company other than the transactions contemplated by
Merger Agreement, or (D) any other transaction the consummation of which would
or could reasonably be expected to interfere with, prevent or materially
delay the Merger or which would or could reasonably be expected to materially
dilute the benefits to Parent of the transactions contemplated by the Merger
Agreement (collectively, "Acquisition Proposals"), or agree to or endorse any
Acquisition Proposal,
(ii) enter into or participate in any discussions or
negotiations regarding any of the foregoing, or furnish to any Third Party any
information with respect to its business, properties or assets or any of the
foregoing, or otherwise cooperate in any way with, or knowingly assist or
participate in, facilitate or encourage, any effort or attempt by any Third
Party (other than Parent) to do or seek any of the foregoing, or
(iii) except for the waiver under the Standstill Agreement (as
described below), grant any waiver or release under any standstill or similar
agreement with respect to any class of equity securities of the Company or any
of its Subsidiaries. The foregoing shall not prohibit the Company (either
directly or indirectly through advisors, agents or other intermediaries) from
(x) furnishing information pursuant to an appropriate confidentiality letter (a
copy of which shall be provided to Parent) concerning the Company and its
businesses, properties or assets to a Third Party who has made or is seeking
to initiate discussions with respect to a bona fide Acquisition Proposal, (y)
engaging in discussions or negotiations with such a Third Party who has made a
bona fide Acquisition Proposal, and/or (z) following receipt of a bona fide
Acquisition Proposal, taking and disclosing to its stockholders a position
contemplated by Rule 14e-2(a) under the Exchange Act or otherwise making
disclosure to its stockholders, but in each case referred to in the foregoing
clauses (x) through (z), only to the extent that the Board of Directors of the
Company shall have concluded in good faith on the basis of written advice from
Company Counsel that such action by the Board of Directors is required in
order to comply with the fiduciary duties of the Board of Directors to the
stockholders of the Company under applicable law.
The Board of Directors of the Company shall not take any of the
foregoing actions referred to in clauses (x) through (z) until after
reasonable notice to Parent with respect to such action and that such Board of
Directors shall continue to advise Parent after taking such action and, in
addition, if the Board of Directors of the Company receives an Acquisition
Proposal, then the Company shall promptly inform Parent of the terms and
conditions of such proposal and the identity of the person making it.
As of the date of the Merger Agreement, the Company is
obligated to immediately cease and cause its advisors, agents and other
intermediaries to cease any and all existing activities, discussions or
negotiations with any parties conducted heretofore with respect to any of the
foregoing, and to use its reasonable best efforts to cause any such parties in
possession of confidential information about the Company that was furnished by
or on behalf of the Company to return or destroy all such information in the
possession of any such party or in the possession of any agent or advisor of
any such party.
"Third Party" means any person, corporation, entity or "group,"
as defined in Section 13(d) of the Exchange Act, other than Parent or any of
its affiliates.
Company Stock Option. The Merger Agreement provides for a
grant by the Company to Parent of an irrevocable option (the "Company Stock
Option") to purchase for $20.50 per share in cash up to 1,750,000 Shares.
Parent may exercise the Company Stock Option, in whole or in part, at any time
or from time to time, from the date on which an Acquisition Proposal (as
defined above) shall have been made or occur, as applicable, until the day
(the "Option Termination Date") which is the earlier of (i) the Effective Time
or (ii) nine months after the termination of the Merger Agreement. Parent may
purchase Shares pursuant to the Company Stock Option only if all of the
following conditions are satisfied: (i) Parent is not at the time of purchase
in material breach of its obligations under the Merger Agreement, (ii) no
preliminary or permanent injunction or other order, decree or ruling against
the sale or delivery of the Shares issued by any federal or state court of
competent jurisdiction in the United States is in effect at such time and
(iii) any applicable waiting period under the HSR Act shall have expired or
been terminated at or prior to such time.
In the event of any change in the Company's capital stock by
reason of stock dividends, stock splits, mergers, consolidations,
recapitalizations, combinations, conversions, exchanges of Shares,
extraordinary or liquidating dividends, or other changes in the corporate or
capital structure of the Company which would have the effect of diluting or
changing Parent's rights under the Company Stock Option, the number and kind
of Shares subject to the Company Stock Option and the purchase price per Share
(but not the total purchase price) shall be appropriately and equitably
adjusted so that Parent shall receive upon exercise of the Company Stock
Option the number and class of Shares or other securities or property that
Parent would have received in respect of the Shares purchasable upon exercise
of the Company Stock Option if the Company Stock Option had been exercised
immediately prior to such event.
At any time or from time to time after the making of any
Acquisition Proposal (as defined above), in connection with the anticipated
consummation of an Acquisition Proposal Parent may, at its election, upon two
days' notice to the Company, surrender all or a part of the Company Stock
Option to the Company, in which event the Company shall pay to Parent, on the
day of each such surrender and in consideration thereof, against tender by
Parent of an instrument evidencing such surrender, an amount in cash per Share
the rights to which are surrendered equal to the excess of (i) the price per
Share to be paid in such Acquisition Proposal over (ii) the price per Share
offered in connection with the Offer. Such surrender and payment shall be
subject to, and occur substantially concurrently with, the consummation of the
Acquisition Proposal. If all or a portion of the price per Share to be paid
in such Acquisition Proposal consists of non-cash consideration, then price
per Share referred to in clause (i) above shall be the cash consideration per
Share, if any, plus the fair market value of the non-cash consideration per
Share as set forth in such Acquisition Proposal or, if not so set forth, as
determined by Parent investment bankers. Upon exercise of its right to
surrender the Company Stock Option or any portion thereof and the receipt by
the Parent of cash pursuant to this Section, any and all rights of the Parent
to purchase Shares with respect to the portion of the Company Stock Option
surrendered pursuant to this Section shall be terminated.
The Company will apply to list all of the Shares subject to the
Company Stock Option on the Nasdaq National Market System and will use its
best efforts to obtain approval of such listing as soon as practicable.
If Parent requests the Company in writing to register under the
Securities Act of 1933, as amended, any of the Shares owned by Parent, the
Company will use its best efforts to cause the offering of the Shares so
specified in such request to be registered as soon as practicable so as to
permit the sale or other distribution by Parent of the Shares specified in its
request.
Redemption of Rights Plan. The Company shall take all
necessary action to render the Rights Agreement inapplicable to the Offer, the
Merger, the Company Stock Option, the Merger Agreement, the Stockholder
Agreement and any other transaction contemplated hereby and thereby.
Waiver of Standstill Agreement. The Company waives all of its
rights and privileges under the Standstill Agreement with respect to the
Merger, the Offer, the Company Stock Option, the other transactions
contemplated hereby, the Stockholder Agreement (as described below) and the
transactions contemplated thereby.
Voting of Shares. Parent agrees to vote all Shares
beneficially owned by it in favor of adoption of this Agreement at the Company
Stockholder Meeting.
Director and Officer Liability. From and after the Effective
Time, Parent agrees that it will indemnify and hold harmless each present and
former director and officer of the Company and its Subsidiaries, determined as
of the Effective Time (the "Indemnified Parties"), against any costs or
expenses (including attorneys' fees), judgments, fines, losses, claims,
damages or liabilities (collectively, "Costs") incurred in connection with any
claim, action, suit, proceeding or investigation, whether civil, criminal,
administrative or investigative, arising out of matters existing or occurring
at or prior to the Effective Time, whether asserted or claimed prior to, at or
after the Effective Time, to the fullest extent that the Company would have
been permitted under Delaware Law and its Certificate of Incorporation or
Bylaws in effect on the date hereof to indemnify such person, and Parent shall
also advance expenses as incurred to the fullest extent permitted under the
Company's By-Laws. For six years after the Effective Time, Parent will cause
the Company to provide officers' and directors' liability insurance in respect
of acts or omissions occurring prior to the Effective Time covering each such
person currently covered by the Company's officers' and directors' liability
insurance policy on terms with respect to coverage and amount no less
favorable than those of such policy in effect on the date of the Merger
Agreement, provided that in satisfying this obligation, Parent shall not be
obligated to cause the Company to pay premiums in excess of 125% of the amount
per annum the Company paid as of the date of the Merger Agreement, which
amount has been disclosed to Parent (the "Maximum Premium"). If such
insurance coverage cannot be obtained at all, or can only be obtained at an
annual premium in excess of the Maximum Premium, Parent shall cause the
Company to maintain the most advantageous policies of directors' and officers'
liability insurance for an annual premium equal to the Maximum Premium.
Employee Benefits. During the period commencing on the
Effective Time and ending on the first anniversary thereof, Parent shall
provide employees of the Company and its Subsidiaries with salary and benefits
reasonably comparable, in the aggregate, to the salary and benefits provided
such employees immediately prior to the Effective Time (disregarding for this
purpose any stock options of other equity-based compensation provided such
employees prior to the Effective Time). For purposes of any employee benefit
plan or arrangement maintained by Parent, Parent shall recognize service with
the Company as service for all purposes except benefit accrual under any
defined benefit pension plan maintained by Parent.
Parent shall cause the Company to adopt, as of the Effective
Time, retention plans for the employees of the Company which shall include the
following terms:
(a) Eligibility: The Company's Board of Directors will, in
its sole discretion, select employees entitled to receive awards
("participants") and the category and amount of each such award;
(b) Awards: The amounts of all bonuses will be designated in
the plan and/or award agreement applicable to each individual participant.
Three categories of awards will be granted, as follows: (i) Category I:
Retention Bonus (50% of "Total Retention Bonus"): payable on the third
anniversary of the Effective Time, provided that the participant is employed
by the Company on such date; Annual Sales Target Bonuses (50% of "TRB"): three
consecutive annual sales target bonuses (with the first one-year period
commencing at the Effective Time), each accruing separately subject to the
attainment of the designated Company sales targets for such one-year period.
All annual sales target bonuses vest and become payable on the third
anniversary of the Effective Time, provided that the participant is eligible
to receive a Retention Bonus; Death or disability: upon a participant's death
or disability (meaning an inability to work for at least six months in any
12-month period), the following amounts shall be payable: (A) a pro rata
portion of the Retention Bonus, (B) the full amount of any Annual Sales Target
Bonuses previously accrued and (C) a pro rata portion of the Annual Sales
Target Bonus (if any) payable with respect to the year in which such death or
disability occurred; Involuntary Termination: upon a participant's
involuntary termination other than for cause (meaning willful misconduct or
insubordination), a pro rata portion of the Retention Bonus shall be payable;
(ii) Category II: Retention Bonus: payable on the first anniversary of the
Effective Time, provided that the participant is employed by the Company on
such date; and (iii) Category III: Retention Bonus: payable six months after
the Effective Time, provided that the participant is employed by the Company
on such date.
Representations and Warranties. The Merger Agreement contains
customary representations and warranties of the parties thereto including
representations by the Company as to the absence of certain changes or events
concerning its respective business, patents and other proprietary rights,
compliance with law, litigation, employee benefit plans, taxes, environmental
and other matters.
Conditions to Certain Obligations. The obligations of the
Company, Purchaser and Parent to consummate the Merger are subject to the
satisfaction of the following conditions: (i) if required by Delaware Law, the
adoption by the stockholders of the Company of the Merger Agreement in
accordance with such law; (ii) any applicable waiting period under the HSR Act
relating to the Merger shall have expired or been terminated; (iii) no
provision of any applicable law or regulation and no judgment, injunction,
order or decree shall prohibit the consummation of the Merger; and (iv)
Purchaser shall have purchased Shares pursuant to the Offer.
Termination. The Merger Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time
(notwithstanding any approval of this Agreement by the stockholders of the
Company): (a) by mutual written consent of the Company and Parent; (b) by
either the Company or Parent, (i) if Purchaser shall not have accepted for
payment any Shares pursuant to the Offer prior to October 31, 1998; provided,
however, that the right to terminate the Merger Agreement pursuant to this
clause (i) shall not be available to any party whose failure to perform any of
its obligations under the Merger Agreement results in the failure of any
conditions to the Offer described in Section 15; (ii) if there shall be any
law or regulation that makes consummation of the Offer or the Merger illegal
or otherwise prohibited or if any judgment, injunction, order or decree
enjoining Parent or the Company from consummating the Offer or the Merger is
entered and such judgment, injunction, order or decree shall become final and
nonappealable; (c) by Parent, (i) if the Board of Directors of the Company
shall or shall resolve to (x) not recommend, or withdraw its approval or
recommendation of, the Offer, the Merger, the Merger Agreement or any of the
transactions contemplated thereby, (y) modify such approval or recommendation
in a manner adverse to Parent or Purchaser, or (z) approve, recommend or fail
to take a position that is adverse to any proposed Acquisition Proposal; (ii)
in the event of a material breach or failure to perform in a material respect
by the Company of any representation, warranty, covenant or other agreement
contained in the Merger Agreement which cannot be cured, or has not been cured
within 30 days after the Company receives written notice from Parent of such
breach or failure to perform; (d) by the Company, (i) if, in order to permit
the Company to consummate an Acquisition Proposal which the Board of Directors
of the Company has determined to be on terms more favorable to the Company's
stockholders from a financial point of view, the Board of Directors of the
Company shall or shall resolve to (x) not recommend, or withdraw its approval
or recommendation of, the Offer, the Merger, the Merger Agreement or any of
the transactions contemplated thereby, (y) modify such approval or
recommendation in a manner adverse to Parent or Purchaser, or (z) approve,
recommend or fail to take a position that is adverse to any proposed
Acquisition Proposal; or (ii) if Purchaser shall have failed to perform its
obligations described under "The Offer" (unless such failure shall result from
a breach by the Company of its obligations under the Merger Agreement) and
such breach cannot be cured, or has not been cured within 30 days after Parent
or Purchaser receive notice from the Company of such breach.
If the Merger Agreement is terminated, the Merger Agreement
shall become void and of no effect with no liability on the part of any party
thereto, except that termination of the Merger Agreement shall be without
prejudice to any rights any party may have thereunder against any other party
for wilful breach of the Merger Agreement. The agreements regarding the
Company Stock Option and the obligation on the Company to pay certain fees and
expenses (as described below) shall survive the termination of the Merger
Agreement.
Fees and Expenses. Except as provided below, all costs and
expenses incurred in connection with the Merger Agreement shall be paid by the
party incurring such cost or expense. If a Payment Event (as defined below)
occurs, the Company shall pay to Parent, within two business days following
such Payment Event, a fee of $7,000,000 (the "Termination Fee").
"Payment Event" means (i) the termination of the Merger
Agreement by Parent pursuant to clause (c)(i) described above under
"Termination" or by the Company pursuant to clause (d)(i) described above under
"Termination"; (ii) the termination of the Merger Agreement by either the
Company or Parent, pursuant to clause (b)(i) described above under
"Termination" and (x) the Company shall have failed to observe or perform in
any material respect any of its obligations described under "Other Offers"
above or (y) an Acquisition Proposal is received prior to the termination of
this Agreement and not publicly rejected by the Company's Board of Directors;
or (iii) the consummation of any Acquisition Proposal within nine months of
the termination of the Merger Agreement by the Company pursuant to clause
(d)(i) described above under "Termination" provided that any Acquisition
Proposal shall have been made prior to the termination of this Agreement.
If a Payment Event occurs, the Company shall reimburse Parent
and its affiliates not later than two business days after submission of
reasonable documentation thereof for 100% of their documented out-of-pocket
fees and expenses (including the reasonable fees and expenses of counsel) up
to $2,000,000 (plus any applicable VAT), in each case, actually incurred by
any of them or on their behalf in connection with the Merger Agreement and the
transactions contemplated thereby.
The "Total Profit" (as hereinafter defined) that Parent shall
be permitted to realize in respect of the Termination Fee and the Company
Stock Option shall not exceed $10,000,000. In the event Parent's Total Profit
would exceed such amount, Parent shall, at its sole election, (a) reduce
the number of Shares subject to the Company Stock Option, (b) deliver Shares
received upon an exercise of the Company Stock Option to the Company for
cancellation, (c) pay an amount of cash to the Company or (d) do any
combination of the foregoing so that Parent's actual realized Total Profit
shall not exceed $10,000,000. "Total Profit" shall mean the aggregate (before
taxes) of (i) any amount received pursuant to the Company's repurchase of
the Company Stock Option (or any portion thereof), (ii) any amount received
pursuant to the Company's repurchase of the Shares (less the purchase price
for such Shares), (iii) any net cash received pursuant to the sale of Shares
received by Parent in any exercise of the Company Stock Option to any third
party (less the purchase price of such Shares), (iv) any amounts received on
transfer of the Company Stock Option or any portion thereof to a third party,
(v) any equivalent amounts received with respect to the Option (as adjusted
pursuant to the Merger Agreement) and (vi) the Termination Fee.
Amendment and Waivers. Any provision of the Merger Agreement
may be amended or waived prior to the Effective Time if, and only if, such
amendment or waiver is in writing and signed, and (i) in the case of an
amendment, by the Company, Parent and Purchaser or (ii) in the case of a
waiver, by the party against whom the waiver is to be effective. After the
adoption of the Merger Agreement by the stockholders of the Company, no such
amendment or waiver shall alter or change (i) the amount or kind of
consideration to be received in exchange for any shares of capital stock of
the Company, (ii) any term of the certificate of incorporation of the Surviving
Corporation or (iii) any other terms and conditions of the Merger Agreement if
such change would materially affect the holders of any shares of capital stock
of the Company.
The Stockholder Agreement. The following is a summary of the
Stockholder Agreement, a copy of which is filed as an Exhibit to the Schedule
14D-1. Such summary is qualified in its entirety by reference to the
Stockholder Agreement.
Agreement to Tender. Pursuant to the Stockholders Agreement,
Jay T. Flatley and James M. Schlater (the "Stockholders") will tender in, and
not withdraw from, the Offer all Shares presently owned by them and any
additional Shares acquired by any of them after the date of the Stockholder
Agreement (the "Stockholder Shares").
At Parent's written request, Stockholders shall also exercise
some or all of their vested employee options; provided, however, that Parent
shall only make such a request in connection with the anticipated consummation
of an Acquisition Proposal (as defined in the Merger Agreement) or of the
Offer. The exercise of such employee options shall be subject to, and occur
substantially simultaneously with, the consummation of the Acquisition
Proposal or the Offer, as applicable. In the event Parent shall request a
Stockholder to exercise some or all of such Stockholders' employee options,
Parent shall loan to such Stockholder the aggregate exercise price payable by
Stockholder in respect of the number of employee options requested to be
exercised, which amount will be repaid to Parent at such time as the
Stockholder Shares are acquired in the Offer or pursuant to an Acquisition
Proposal.
Other Offers. In the event of the consummation of any
Acquisition Proposal, each Stockholder shall pay to Parent a portion of the
consideration per Share or vested employee option, as applicable (the
"Consideration") received by such Stockholder at the consummation of such
Acquisition Proposal equal to (i) in the case of Stockholder Shares, an amount
equal to the excess, if any, of the Consideration over $20.50 multiplied by the
number of Stockholder Shares acquired pursuant to such Acquisition Proposal,
or (ii) in the case of vested employee options, an amount equal to the excess,
if any, of the Consideration over $20.50 multiplied by the number of
Stockholder Shares underlying such vested employee options which are cashed or
rolled over pursuant to such Acquisition Proposal.
Grant of Proxy. Pursuant to the Stockholder Agreement, each
Stockholder has granted an irrevocable proxy appointing Parent as such
Stockholder's attorney-in-fact and proxy, with full power of substitution, for
and in such Stockholder's name, to vote, express consent or dissent, or
otherwise to utilize such voting power in such manner and upon such matters
related to the Offer and the Merger as Parent or its proxy or substitute
shall, in Parent's sole discretion, deem proper with respect to the
Stockholder Shares.
Representations and Warranties. The Stockholder Agreement
contains customary representations and warranties of the parties thereto.
No Shopping. Until such time as the Merger Agreement shall be
terminated, no Stockholder shall directly or indirectly (i) solicit, initiate
or encourage (or authorize any person to solicit, initiate or encourage) any
inquiry, proposal or offer from any person to acquire the business, property
or capital stock of the Company or any direct or indirect subsidiary thereof,
or any acquisition of a substantial equity interest in, or a substantial
amount of the assets of, the Company or any direct or indirect subsidiary
thereof, whether by merger, purchase of assets, tender offer or other
transaction or (ii) subject to the fiduciary duty of the Stockholder as a
director of the Company under applicable law, participate in any discussion or
negotiations regarding, or furnish to any other person any information with
respect to, or otherwise cooperate in any way with, or participate in,
facilitate or encourage any effort or attempt by any other person to do or
seek any of the foregoing. The Stockholder shall promptly advise Parent of the
terms of any communications it may receive relating to any of the foregoing.
Amendments; Termination. The Stockholder Agreement may not be
modified, amended, altered or supplemented, except upon the execution and
delivery of a written agreement executed by the parties thereto. The
Stockholder Agreement shall terminate automatically upon the termination of
the Merger Agreement, provided that the payment obligation on the part of the
Stockholders described under "Other Offers" will survive any such termination
until the date which is nine months thereafter, provided further, that if an
Acquisition Proposal shall have been made on or prior to such date, such
payment obligation shall survive until 30 days following the consummation of
such Acquisition Proposal.
The Letter Agreement with Mr. Jay T. Flatley. The following is
a summary of the Letter Agreement dated as of August 9, 1998 between the
Company and Mr. Flatley, a copy of which is filed as an Exhibit to Schedule
14D-1. Such summary is qualified in its entirety by reference to the Letter
Agreement.
Continued Employment. Mr. Flatley will retain his position as
Chief Executive Officer of the Company for a period of up to one year from the
consummation of the Merger, for the purpose of managing the Company's
integration with Purchaser. During the period of his continued employment, Mr.
Flatley will receive salary at an annual rate of $252,000 through December 31,
1998 and at an annual rate of $265,000 from January 1, 1999 to the Payment
Date (as defined below), and benefits at the level currently applicable to him
(excluding stock options and bonuses (other than his 1998 bonus) or any other
incentive awards).
Transition Incentive Award. In partial consideration of: (i)
Mr. Flatley's continued employment and contribution towards the objectives
described above; (ii) the fact that Mr. Flatley will no longer be entitled to
awards of options or other incentive compensation; and (iii) Mr. Flatley
agreeing to the confidentiality, noncompetition and non-solicitation
provisions referred to below, the Company will pay him an additional award of
$1,000,000 (the "Transition Incentive Compensation") in a single lump sum in
cash (net of any required withholding) on the first anniversary of the
Effective Date (the "Payment Date"), provided he has not voluntarily
terminated his employment with the Company (or its successor) prior to the
Payment Date. If the Company should determine, in its discretion, that the
integration of organizational structures pursuant to the Merger has been
successfully completed before the Payment Date, the Company may pay the
Transition Incentive Compensation in advance of the Payment Date. In such
case, the employment will be terminated as of the date of payment of the
Transition Incentive Compensation, but Mr. Flatley will continue to receive
salary and benefits until the Payment Date at the levels in effect as of the
date of termination of his employment.
Confidentiality; Non-Solicitation; Non-Competition. As a
condition to entitlement to the compensation and benefits described in this
letter, and in partial consideration for the amounts to be received by him in
accordance with the Merger Agreement, Mr. Flatley agrees (i) to continue to
adhere to the provisions of the confidentiality and inventions assignment
agreement previously executed by him in connection with his employment with the
Company; and (ii) for a period of one year from the date of termination of his
employment, not to hire or solicit the employment of any person then employed
by the Company, or otherwise induce any such person to leave such employment.
In addition, for a period of two years from the effective date of the Merger,
Mr. Flatley will not compete with the Company, except as may be otherwise
agreed by him and the Company in writing.
12. Purpose of the Offer; Plans for the Company.
The purpose of the Offer is to acquire control of, and an
equity interest in, the Company. The purpose of the Merger is to acquire all
outstanding Shares not tendered and purchased pursuant to the Offer. The
Offer is being made pursuant to the Merger Agreement and the purchase of the
Shares pursuant to the Offer will increase the likelihood that the Merger will
be effected. If the Offer is successful, the Shares not acquired by Purchaser
pursuant to the Offer will be converted (except with respect to Shares as to
which appraisal rights have been perfected), subject to the terms of the
Merger Agreement, into the right to receive cash in an amount equal to the
price per share paid pursuant to the Offer.
The Board of Directors of the Company has unanimously approved
the Merger and adopted the Merger Agreement. Depending upon the number of
Shares purchased by Purchaser pursuant to the Offer, the Board may be required
to submit the Merger Agreement to the Company's stockholders for approval at a
stockholder's meeting convened for that purpose in accordance with Delaware
Law. If stockholder approval is required, the Merger Agreement must be
approved by a majority of all votes entitled to be cast at such meeting.
If the Minimum Condition is satisfied, Purchaser will have
sufficient voting power to approve the Merger Agreement at the stockholders'
meeting without the affirmative vote of any other stockholder.
If Purchaser acquires 90% of the Shares, the Merger may be
consummated without a stockholders' meeting and without the approval of the
Company's stockholders. The Merger Agreement provides that Purchaser (the
parent corporation) will be merged with and into the Company (the subsidiary
corporation) following the Offer, and that the certificate of incorporation of
the Company will be the certificate of incorporation of the Surviving
Corporation following the Merger.
Under Delaware Law, holders of Shares do not have appraisal
rights as a result of the Offer. In connection with the Merger, however,
stockholders of the Company may have the right to dissent and demand appraisal
of their Shares under Delaware Law. Under Delaware Law, dissenting
stockholders who comply with the applicable statutory procedures will be
entitled to receive a judicial determination of the fair value of their Shares
(exclusive of any element of value arising from the accomplishment or
expectation of such merger or similar business combination) and to receive
payment of such fair value in cash. Any such judicial determination of the
fair value of the Shares could be based upon considerations other than or in
addition to the price paid in the Merger and the market value of the Shares.
In Weinberger v. UOP, Inc., the Delaware Supreme Court stated, among other
things, that "proof of value by any techniques or methods which are generally
considered acceptable in the financial community and otherwise admissible in
court" should be considered in an appraisal proceeding. Stockholders should
recognize that the value so determined could be higher or lower than the price
per Share paid pursuant to the Offer or the consideration per Share paid in
such a merger or other similar business combination. Moreover, Purchaser may
argue in an appraisal proceeding that, for purposes of such a proceeding, the
fair value of the Shares is less than the price paid in the Offer.
In addition, several decisions by Delaware courts have held
that, in certain circumstances a controlling stockholder of a company involved
in a merger has a fiduciary duty to other stockholders which requires that the
merger be fair to such other stockholders. In determining whether a merger is
fair to minority stockholders, Delaware courts have considered, among other
things, the type and amount of consideration to be received by the
stockholders and whether there was fair dealing among the parties. The
Delaware Supreme Court stated in Weinberger and Rabkin v. Philip A. Hunt
Chemical Corp. that the remedy ordinarily available to minority stockholders
in a cash-out merger is the right to appraisal described above. However, a
damages remedy or injunctive relief may be available if a merger is found to
be the product of procedural unfairness, including fraud, misrepresentation or
other misconduct.
If Purchaser purchases Shares pursuant to the Offer and the
Merger is consummated more than one year after the completion of the Offer or
if an alternative merger transaction were to provide for the payment of
consideration less than that paid pursuant to the Offer, compliance by
Purchaser with Rule 13e-3 under the Exchange Act would be required, unless the
Shares were to be deregistered under the Exchange Act prior to such
transaction. Rule 13e-3 requires, among other things, that certain financial
information concerning the Company and certain information relating to the
fairness of the proposed merger transaction and the consideration offered to
minority stockholders therein be filed with the Commission and disclosed to
minority stockholders prior to consummation of the merger transaction.
Plans for the Company. Upon the completion of the Offer,
Parent, with the assistance of the Company's management, intends to conduct a
detailed review of the Company and its assets, corporate structure,
capitalization, operations, properties, policies, management and personnel to
determine what changes, if any, would be desirable. Such changes may include
extraordinary corporate transactions involving the Company or its subsidiaries,
acquisitions of stock or assets, issuances of debt or equity securities or
similar transactions. Parent expects that following the Effective Time (as
defined in Section 11) (or at any earlier time permitted by the Merger
Agreement) it will cause its designees to constitute a majority of the members
of the Board of Directors. In the event the Offer is consummated, Parent may
designate a number of members to the Company's Board of Directors (as
contemplated by the Merger Agreement), equal to the product of (i) the total
number of directors on the Board of Directors (giving effect to the election
of any additional directors designated by Parent) and (ii) the percentage that
the number of shares then owned by Parent bears to the total number of Shares
outstanding. The persons who may be designated by Parent are listed on
Schedule I, which also includes the information required to be disclosed by
Parent with respect to such designees under Rule 14f-1 under the Exchange Act.
Except as described above or elsewhere in this Offer to
Purchase, Parent has no present plans or proposals that would relate to or
result in an extraordinary corporate transaction involving the Company or any
of its subsidiaries (such as a merger, reorganization, liquidation, relocation
of any operations or sale or other transfer of a material amount of assets),
any change in the Company's Board of Directors or management, any material
change in the Company's capitalization or dividend policy or any other
material change in the Company's corporate structure or business.
13. Effect of the Offer on the Market for Shares; Stock Quotations;
Registration under the Exchange Act.
The purchase of Shares pursuant to the Offer will reduce the
number of Shares that might otherwise trade publicly and may reduce the number
of holders of Shares, which could adversely affect the liquidity and market
value of the remaining Shares held by stockholders other than Purchaser.
Purchaser cannot predict whether the reduction in the number of Shares that
might otherwise trade publicly would have an adverse or beneficial effect on
the market price for, or marketability of, the Shares or whether such
reduction would cause future market prices to be greater or less than the
Offer price.
Depending upon the number of Shares purchased pursuant to the
Offer, the Shares may no longer meet the standards for continued inclusion in
Nasdaq. If, as a result of the purchase of Shares pursuant to the Offer, the
Shares no longer meet the criteria for continuing inclusion in Nasdaq, the
market for the Shares could be adversely affected. According to Nasdaq's
published guidelines, in order for the Shares to be eligible for continued
inclusion in Nasdaq, there must continue to be, among other things, at least
1,100,000 publicly held Shares, held by at least 400 round lot stockholders,
with a market value of at least $8 million. If the Shares were no longer
eligible for inclusion in Nasdaq, they may nevertheless continue to be
included in the Nasdaq SmallCap Market unless, among other things, the number
of publicly held Shares (excluding Shares held by officers, directors and
beneficial owners of more than 10% of the Shares) was less than 100,000, or
there were fewer than 300 holders in total. If the Shares are no longer
eligible for inclusion in the Nasdaq National Market or the Nasdaq SmallCap
Market, the Shares might still be quoted on the OTC Bulletin Board.
The Shares are currently "margin securities" under the
regulations of the Board of Governors of the Federal Reserve System (the
"Federal Reserve Board"), which has the effect, among other things, of
allowing brokers to extend credit on the collateral of such Shares. Depending
upon factors similar to those described above regarding listing and market
quotations, the Shares might no longer constitute "margin securities" for the
purposes of the Federal Reserve Board's margin regulations and, therefore,
could no longer be used as collateral for loans made by brokers.
The Shares are currently registered under the Exchange Act.
Such registration may be terminated upon application of the Company to the
Commission if the Shares are neither listed on a national securities exchange
nor held by 300 or more holders of record. Termination of the registration of
the Shares under the Exchange Act would substantially reduce the information
required to be furnished by the Company to holders of Shares and to the
Commission and would make certain of the provisions of the Exchange Act, such
as the short-swing profit recovery provisions of Section 16(b), the
requirement of furnishing a proxy statement pursuant to Section 14(a) in
connection with a stockholder's meeting and the related requirement of an
annual report to stockholders and the requirements of Rule 13e-3 under the
Exchange Act with respect to "going private" transactions, no longer
applicable to the Shares. Furthermore, "affiliates" of the Company and persons
holding "restricted securities" of the Company may be deprived of the ability
to dispose of such securities pursuant to Rule 144 promulgated under the
Securities Act of 1933. If registration of the Shares under the Exchange Act
were terminated, the Shares would no longer be "margin securities" or eligible
for listing or Nasdaq reporting. Purchaser intends to seek to cause the
Company to terminate registration of the Shares under the Exchange Act as soon
after consummation of the Offer as the requirements for termination of
registration of the Shares are met.
14. Dividends and Distributions.
If on or after August 19, 1998, the Company should (i) split,
combine or otherwise change the Shares or its capitalization, (ii) acquire or
otherwise cause a reduction in the number of outstanding Shares or (iii) issue
or sell any additional Shares (other than Shares issued pursuant to of
employee stock options), shares of any other class or series of capital stock,
other voting securities or any securities convertible into, or options,
rights, or warrants, conditional or otherwise, to acquire, any of the
foregoing, then, without prejudice to Purchaser's rights under Sections 15 and
16, Purchaser may, in its sole discretion, make such adjustments in the
purchase price and other terms of the Offer as it deems appropriate including
the number or type of securities to be purchased.
15. Extension of Tender Period; Termination; Amendment.
Purchaser reserves the right, at any time or from time to time,
in its sole discretion and regardless of whether or not any of the conditions
specified in Section 16 shall have been satisfied, (i) subject to the terms of
the Merger Agreement, to extend the period of time during which the Offer is
open by giving oral or written notice of such extension to the Depositary and
by making a public announcement of such extension or (ii) subject to the terms
of the Merger Agreement, to amend the Offer in any respect by making a public
announcement of such amendment. There can be no assurance that Purchaser will
exercise its right to extend or amend the Offer.
If Purchaser decreases the percentage of Shares being sought or
increases or decreases the consideration to be paid for Shares pursuant to the
Offer and the Offer is scheduled to expire at any time before the expiration of
a period of 10 business days from, and including, the date that notice of such
increase or decrease is first published, sent or given in the manner specified
below, the Offer will be extended until the expiration of such period of 10
business days. If Purchaser makes a material change in the terms of the Offer
(other than a change in price or percentage of securities sought) or in the
information concerning the Offer, or waives a material condition of the Offer,
Purchaser will extend the Offer, if required by applicable law, for a period
sufficient to allow stockholders to consider the amended terms of the Offer.
In a published release, the Commission has stated that in its view an offer
must remain open for a minimum period of time following a material change in
the terms of such offer and that the waiver of a condition such as the Minimum
Condition is a material change in the terms of an offer. The release states
that an offer should remain open for a minimum of five business days from the
date the material change is first published, sent or given to security
holders, and that if material changes are made with respect to information
that approaches the significance of price and share levels, a minimum of 10
business days may be required to allow adequate dissemination and investor
response. The term "business day" shall mean any day other than Saturday,
Sunday or a federal holiday and shall consist of the time period from 12:01
A.M. through 12:00 Midnight, New York City time.
Purchaser also reserves the right, in its sole discretion, in
the event any of the conditions specified in Section 16 shall not have been
satisfied and so long as Shares have not theretofore been accepted for
payment, to delay (except as otherwise required by applicable law) acceptance
for payment of or payment for Shares or to terminate the Offer and not accept
for payment or pay for Shares.
If Purchaser extends the period of time during which the Offer
is open, is delayed in accepting for payment or paying for Shares or is unable
to accept for payment or pay for Shares pursuant to the Offer for any reason,
then, without prejudice to Purchaser's rights under the Offer, the Depositary
may, on behalf of Purchaser, retain all Shares tendered, and such Shares may
not be withdrawn except as otherwise provided in Section 3. The reservation
by Purchaser of the right to delay acceptance for payment of or payment for
Shares is subject to applicable law, which requires that Purchaser pay the
consideration offered or return the Shares deposited by or on behalf of
stockholders promptly after the termination or withdrawal of the Offer.
Any extension, termination or amendment of the Offer will be
followed as promptly as practicable by a public announcement thereof. Without
limiting the manner in which Purchaser may choose to make any public
announcement, Purchaser will have no obligation (except as otherwise required
by applicable law) to publish, advertise or otherwise communicate any such
public announcement other than by making a release to the Dow Jones News
Service. In the case of an extension of the Offer, Purchaser will make a
public announcement of such extension no later than 9:00 A.M., New York City
time, on the next business day after the previously scheduled Expiration Date.
16. Certain Conditions of the Offer.
Notwithstanding any other provision of the Offer, Purchaser
shall not be required to accept for payment or pay for any Shares, and may
terminate the Offer, if (i) the Minimum Condition has not been satisfied by the
Expiration Date, (ii) the applicable waiting period under the HSR Act shall
not have expired or been terminated by the expiration date of the Offer, or
(iii) at any time on or after August 14, 1998 and prior to the expiration of
the Offer, any of the following conditions exist:
(a) there shall be instituted or pending any action, suit,
investigation or proceeding by any government or governmental authority or
agency, domestic or foreign, or by any other person, domestic or foreign,
before any court or governmental authority or agency, domestic or foreign,
challenging or seeking to make illegal, to delay materially or otherwise
directly or indirectly to restrain or prohibit the making of the Offer, the
acceptance for payment of or payment for some of or all the Shares pursuant to
the Offer or the consummation of the Merger, seeking to obtain material
damages or otherwise directly or indirectly relating to the transactions
contemplated by the Offer or the Merger, seeking to restrain, prohibit or
materially restrict Parent's ownership or operation (or that of its respective
subsidiaries or affiliates) of all or any material portion of the business or
assets of the Company and the Subsidiaries, taken as a whole, or (based on
claims arising out of or relating to the Offer, the Merger or the transactions
contemplated by the Merger Agreement) of Parent and its subsidiaries, taken as
a whole, or to compel Parent or any of its subsidiaries or affiliates to
dispose of or hold separate all or any material portion of the business or
assets of the Company and the Subsidiaries, taken as a whole, or (based on
claims arising out of or relating to the Offer, the Merger or the transactions
contemplated by the Merger Agreement) of Parent and its subsidiaries, taken as
a whole, seeking to impose or confirm material limitations on the ability of
Parent or any of its subsidiaries or affiliates effectively to exercise full
rights of ownership of the Shares, including, without limitation, the right to
vote any Shares acquired or owned by Parent or any of its subsidiaries or
affiliates on all matters properly presented to the Company's stockholders, or
seeking to require divestiture by Parent or any of its subsidiaries or
affiliates of any Shares, or that otherwise is reasonably likely to have a
Material Adverse Effect.
(b) there shall be any action taken, or any statute, rule,
regulation, injunction, order or decree enacted, enforced, promulgated, issued
or deemed applicable to the Offer or the Merger, by any court, government or
governmental authority or agency, domestic or foreign other than the
application of the waiting period provisions of the HSR Act to the Offer or
the Merger that is reasonably likely, directly or indirectly, to result in any
of the consequences referred to in clauses (i) through (v) of paragraph (a)
above; or
(c) the Company shall have breached or failed to perform in any
material respect any of its covenants or agreements under the Merger
Agreement, or any of the representations and warranties of the Company set
forth in the Merger Agreement shall not be true when made or at any time prior
to consummation of the Offer as if made at and as of such time (except as to
any representation or warranty which speaks as of a specific date, which must
be untrue as of such date), except for such inaccuracies which, when taken
together (in each case without regard to any qualifications as to materiality
or Material Adverse Effect contained in the applicable representations and
warranties) would not be likely to have a Material Adverse Effect; or
(d) the Company shall have entered into, or shall have publicly
announced its intention to enter into, an agreement or an agreement in
principle with respect to any Acquisition Proposal or the Board of Directors
of the Company shall have withdrawn or materially modified in a manner adverse
to Parent the Board's approval or recommendation of the Offer or the Merger; or
(e) the Merger Agreement shall have been terminated in
accordance with its terms;
which, in the reasonable judgment of Parent in any such case, and regardless
of the circumstances giving rise to any such condition, makes it inadvisable
to proceed with such acceptance for payment or payment.
The foregoing conditions are for the sole benefit of Parent and
Purchaser and may, subject to the terms of the Agreement, be waived by Parent
and Purchaser in whole or in part at any time and from time to time in their
discretion. The failure by Parent or Purchaser at any time to exercise any of
the foregoing rights shall not be deemed a waiver of any such right, the
waiver of any such right with respect to particular facts and circumstances
shall not be deemed a waiver with respect to any other facts and
circumstances, and each such right shall be deemed an ongoing right that may
be asserted at any time and from time to time prior to the Effective Time.
17. Certain Legal Matters; Regulatory Approvals.
General. Based on its examination of publicly available
information filed by the Company with the Commission and other publicly
available information concerning the Company, Purchaser is not aware of any
governmental license or regulatory permit that appears to be material to the
Company's business that might be adversely affected by Purchaser's acquisition
of Shares as contemplated herein or, except as set forth below, of any
approval or other action by any government or governmental administrative or
regulatory authority or agency, domestic or foreign, that would be required
for the acquisition or ownership of Shares by Purchaser as contemplated
herein. Should any such approval or other action be required, Purchaser
currently contemplates that such approval or other action will be sought.
There can be no assurance that any such approval or other action, if needed,
would be obtained or would be obtained without substantial conditions or that
if such approvals were not obtained or such other actions were not taken
adverse consequences might not result to the Company's business or certain
parts of the Company's business might not have to be disposed of, any of which
could cause Purchaser to elect to terminate the Offer without the purchase of
Shares thereunder. Purchaser's obligation under the Offer to accept for
payment and pay for Shares is subject to certain conditions. See Section 16.
Antitrust. Under the HSR Act and the rules that have been
promulgated thereunder by the Federal Trade Commission (the "FTC"), certain
acquisition transactions may not be consummated unless certain information has
been furnished to the Antitrust Division of the Department of Justice (the
"Antitrust Division") and the FTC and certain waiting period requirements have
been satisfied. The purchase of Shares pursuant to the Offer is subject to
such requirements.
Pursuant to the requirements of the HSR Act, Purchaser
expects to file a Notification and Report Form with respect to the Offer and
Merger with the Antitrust Division and the FTC on or before August 19, 1998.
As a result, the waiting period applicable to the purchase of Shares pursuant
to the Offer is scheduled to expire at 11:59 P.M., New York City time, on
September 3, 1998. However, prior to such time, the Antitrust Division or the
FTC may extend the waiting period by requesting additional information or
documentary material relevant to the Offer from Purchaser. If such a request
is made, the waiting period will be extended until 11:59 P.M., New York City
time, on the tenth day after substantial compliance by Purchaser with such
request. Thereafter, such waiting period can be extended only by court order.
A request is being made pursuant to the HSR Act for early
termination of the waiting period applicable to the Offer. There can be no
assurance, however, that the 15-day HSR Act waiting period will be terminated
early. Shares will not be accepted for payment or paid for pursuant to the
Offer until the expiration or earlier termination of the applicable waiting
period under the HSR Act. See Section 16. Any extension of the waiting
period will not give rise to any withdrawal rights not otherwise provided for
by applicable law. See Section 3. If Purchaser's acquisition of Shares is
delayed pursuant to a request by the Antitrust Division or the FTC for
additional information or documentary material pursuant to the HSR Act, the
Offer may, but need not, be extended.
The Antitrust Division and the FTC frequently scrutinize the
legality under the antitrust laws of transactions such as the acquisition of
Shares by Purchaser pursuant to the Offer. At any time before or after the
consummation of any such transactions, the Antitrust Division or the FTC could
take such action under the antitrust laws as it deems necessary or desirable
in the public interest, including seeking to enjoin the purchase of Shares
pursuant to the Offer or seeking divestiture of the Shares so acquired or
divestiture of substantial assets of Parent or the Company. Private parties
(including individual states) may also bring legal actions under the antitrust
laws. Purchaser does not believe that the consummation of the Offer will
result in a violation of any applicable antitrust laws. However, there can be
no assurance that a challenge to the Offer on antitrust grounds will not be
made, or if such a challenge is made, what the result will be. See Section 16
for certain conditions to the Offer, including conditions with respect to
litigation and certain governmental actions and Section 11 for certain
termination rights in connection with antitrust suits.
Appraisal Rights. If the Merger is consummated, stockholders
of the Company may have the right to dissent and demand appraisal of their
Shares under Delaware Law. Under Delaware Law, dissenting stockholders who
comply with the applicable statutory procedures will be entitled to receive a
judicial determination of the fair value of their Shares (exclusive of any
element of value arising from the accomplishment or expectation of the Merger)
and to receive payment of such fair value in cash, together with a fair rate
of interest, if any. Any such judicial determination of the fair value of the
Shares could be based upon considerations other than or in addition to the
price paid in the Offer, the consideration per Share to be paid in the Merger
and the market value of the Shares, including asset values and the investment
value of the Shares. Stockholders should recognize that the value so
determined could be higher or lower than the price per Share paid pursuant to
the Offer or the consideration per Share to be paid in the Merger.
Other. The Company and its Subsidiaries own property and
conduct business in a number of foreign countries. In connection with the
acquisition of Shares pursuant to the Offer, the laws of certain of these
foreign countries may require the filing of information with, or the obtaining
of the approval of, governmental authorities therein. Purchaser is currently
evaluating the applicability of any such laws and intends to take such action
as they may require, but no assurance can be given that such approvals will be
obtained. If any action is taken prior to completion of the Offer by any such
government or governmental authority, Purchaser may not be obligated to accept
for payment or pay for any tendered Shares. See Sections 15 and 16.
18. Fees and Expenses.
Morgan Stanley & Co. Incorporated ("Morgan Stanley") is acting
as financial advisor to Purchaser and is acting as Dealer Manager in
connection with the Offer. Parent has agreed to pay Morgan Stanley, as
compensation for its services as financial advisor, a monthly advisory fee of
$125,000, a fee of approximately $500,000 payable upon the announcement of the
transaction and an additional fee of approximately $2.1 million payable upon
consummation of the Offer (against which any aforementioned fees paid will be
credited). Parent has also agreed to reimburse Morgan Stanley for certain
out-of-pocket expenses incurred in connection with the Offer (including the
fees and disbursements of outside counsel) and to indemnify Morgan Stanley
against certain liabilities, including certain liabilities under the federal
securities laws.
Parent has retained Georgeson & Company Inc. to act as the
Information Agent and Harris Trust Company of New York to act as the
Depositary in connection with the Offer. The Information Agent may contact
holders of Shares by mail, telephone, telex, telegraph and personal interviews
and may request brokers, dealers and other nominee stockholders to forward
materials relating to the Offer to beneficial owners. The Information Agent
and the Depositary each will receive reasonable and customary compensation for
their respective services, will be reimbursed for certain out-of-pocket
expenses and will be indemnified against certain liabilities in connection
therewith, including certain liabilities under the federal securities laws.
Neither Parent nor Purchaser will pay any fees or commissions
to any broker or dealer or any other person (other than the Dealer Manager,
the Information Agent and the Depository) for soliciting tenders of Shares
pursuant to the Offer. Brokers, dealers, commercial banks and trust companies
will, upon request, be reimbursed by Parent or Purchaser for reasonable and
necessary costs and expenses incurred by them in forwarding materials to their
customers.
19. Miscellaneous.
The Offer is not being made to, nor will tenders be accepted
from or on behalf of, holders of Shares in any jurisdiction in which the
making of the Offer or acceptance thereof would not be in compliance with the
laws of such jurisdiction. However, Purchaser may, in its discretion, take
such action as it may deem necessary to make the Offer in any such
jurisdiction and extend the Offer to holders of Shares in such jurisdiction.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE
ANY REPRESENTATION ON BEHALF OF PURCHASER NOT CONTAINED IN THIS OFFER TO
PURCHASE OR IN THE LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED.
Purchaser has filed with the Commission a Tender Offer
Statement on Schedule 14D-1, together with exhibits, pursuant to Rule 14d-3 of
the General Rules and Regulations under the Exchange Act, furnishing certain
additional information with respect to the Offer. The Schedule 14D-1 and any
amendments thereto, including exhibits, may be examined and copies may be
obtained from the offices of the Commission in the manner set forth in Section
7 of this Offer to Purchase (except that such information will not be
available at the regional offices of the Commission).
APB ACQUISITION CORP.
August 14, 1998
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS
A. Directors and Executive Officers of Amersham Pharmacia
Biotech Inc. The name, business address, present principal occupation or
employment and five-year employment history of each director and executive
officer of Parent and certain other information are set forth below. Unless
otherwise indicated below, the address of each director and officer is 800
Centennial Avenue, P.O. Box 1327, Piscataway, NJ, 08855-1327. Unless otherwise
indicated, each occupation set forth opposite an individual's name refers to
employment with Amersham Pharmacia Biotech Inc. and each individual is a
United States citizen. Directors are identified by an asterisk.
Present Principal Occupation or Employer
and Material Positions Held
Name and Business Address During the Past Five Years
- ------------------------- -----------------------------------------
Ronald Eric Long* Mr. Long, 51, has served as Chief Executive
Officer since August 1997. He previously was
Managing Director, Life Science, of Amersham
International plc from August 1996 to July 1997.
Prior to that, he served as Commercial Director
of Amersham International plc. He is a citizen
of the United Kingdom.
Kurt Arne Forsell* Mr. Forsell, 56, has served as Chief Operating
Officer since August 1997. He previously was
President of Pharmacia Biotech AB from August
1990 to August 1997. He is a citizen of Sweden.
Julian Alfred Cooper* Mr. Cooper, 41, has served as Director of Human
Resources for Nycomed Amersham since July 1998.
Prior to that he was Vice President, Human
Resources for Amersham Pharmacia Biotech and,
since 1994, Director of Human Resources for
Amersham International. He is a citizen of the
United Kingdom.
Phil George Douglas* Mr. Douglas, 53, has served as President since
February 1998. He previously was Vice President
and General Manager for Amersham Life Science
Inc. He is a citizen of the United Kingdom.
Per-Erik Sandlund* Mr. Sandlund is Chief Financial Officer of
Amersham Pharmacia Biotech Ltd. He is a citizen
of Sweden.
Peter Bailey Coggins* Mr. Coggins, 49, is President, North American
Region.
David J. M. Dally Mr. Dally, 38, is Vice President, Finance and
Administration and Treasurer. He previously was
Controller for Amersham Life Science from 1995 to
1997. Prior to that he served as Manager,
Corporate Development for Amersham International
plc from 1993 to 1995. He is a citizen of the
United Kingdom.
John Charles Moses Mr. Moses, 43, is Vice President of Human
Resources. He was director of Human Resources of
Amersham Corporation from 1995 to 1997. He is a
citizen of the United Kingdom.
Andrew David Rackear Mr. Rackear, 44, has served as Vice President,
Secretary and General Counsel since December
1997. He previously was General Counsel and
Secretary of Pharmacia Biotech Inc. from December
1994 to December 1997. Prior to that, he was
Counsel to Pharmacia Inc.
B. Directors and Executive Officers of APB Acquisition Corp.
The name, business address, present principal occupation or employment and
five-year employment history of each director and executive officer of
Purchaser and certain other information are set forth below. Unless otherwise
indicated below, the address of each director and officer is c/o Amersham
Pharmacia Biotech Inc., 800 Centennial Avenue, P.O. Box 1327, Piscataway, NJ,
08855-1327. Unless otherwise indicated, each occupation set forth opposite an
individual's name refers to employment with Purchaser and each individual is a
United States citizen. Directors are identified by an asterisk.
Present Principal Occupation or Employer
and Material Positions Held
Name and Business Address During the Past Five Years
- ------------------------- -----------------------------------------
David J. M. Dally* President since August 1998. Mr. Dally, 38, is
Vice President, Finance and Administration and
Treasurer of Amersham Pharmacia Biotech Inc.
Prior to that he was Controller Amersham Life
Science from 1995 to 1997 and Manager Corporate
Development of Amersham International plc from
1993 to 1995. He is a citizen of the United
Kingdom.
William J. Sulinski* Secretary and Treasurer since August 1998. Mr.
Sulinski, 56, has served as Vice President,
Business Development, in Amersham Pharmacia
Biotech Inc., since May 1998. He previously has
held similar roles within the Pharmacia & Upjohn
and Pharmacia Inc. and its affiliates.
C. Directors and Executive Officers of Amersham Pharmacia
Biotech Limited. The name, business address, present principal occupation or
employment of each director and executive officer of APB Ltd and certain other
information are set forth below. Unless otherwise indicated below, the
address of each director and officer is Bjorkgatan 30, S-75182 Uppsala,
Sweden. Unless otherwise indicated, each occupation set forth opposite an
individual's name refers to employment with APB Ltd and each individual is
a United States citizen. Directors are identified by an asterisk.
<TABLE>
<CAPTION>
Name and Business Address Present Principal Occupation or Employer
- ------------------------- ----------------------------------------
<S> <C>
Ronald Eric Long* Mr. Long, 51, is Chief Executive Officer. He has also
served as Chief Executive Officer of Amersham Pharmacia
Biotech Inc. since August 1997. He previously was
Managing Director, Life Science, of Amersham
International plc from August 1996 to July 1997. Prior to
that, he served as Commercial Director of Amersham
International plc. He is a citizen of the United Kingdom.
William Martin Castell* Mr. Castell, 51, has served as Chief Executive Officer of
Nycomed Amersham plc since June 1989. He previously
was Chief Executive Officer of Amersham International
plc. He also is a director of General Electric Co. He is a
citizen of the United Kingdom.
Giles Francis Bertram Kerr* Mr. Kerr, 38, has served as Finance Director of Nycomed
Amersham plc since November 1997. He previously was
Company Secretary of Nycomed Amersham plc. Prior to
that, he served as Director of Corporate Development and
Company Secretary of Amersham International plc. He is
a citizen of the United Kingdom.
Mats Pettersson* Mr. Pettersson is Vice President of Corporate Development
of Pharmacia & Upjohn Inc. He is a citizen of Sweden.
Donald R. Parfet* Mr. Parfet, 45, has been Deputy Chairman of the
Amersham Pharmacia Biotech Board of Directors since its
formation in 1997. He was previously Chairman of the
Board of Pharmacia Biotech AB. He is Senior Vice
President, Associated Businesses at Pharmacia & Upjohn,
where he has been employed since 1977.
Mathias Uhlen* Mr. Uhlen, 44, has served as a non-executive Director of
the Amersham Pharmacia Board since 1997. He is also
professor at the Royal Institute of Technology, Stockholm,
Sweden. He is a citizen of Sweden.
Dr. Michael Crumpton* Dr. Crumpton was Deputy Director of Laboratories
Imperial Cancer Research Fund.
Kurt Arne Forsell* Mr. Forsell, 56, is Chief Operating Officer. He has also
served as Chief Operating Officer of Amersham Pharmacia
Biotech Inc. since August 1997. He previously was
President of Pharmacia Biotech AB from August 1990 to
August 1997. He is a citizen of Sweden.
Per-Erik Sandlund Mr. Sandlund is Chief Financial Officer. He is a citizen of
Sweden.
Julian Alfred Cooper Mr. Cooper, 41, is Secretary. He has also served as
Director of Human Resources for Nycomed Amersham
since July 1998. Prior to that he was Vice President,
Human Resources for Amersham Pharmacia Biotech and,
since 1994, Director of Human Resources for Amersham
International. He is a citizen of the United Kingdom.
Maris Hartmanis Mr. Hartmanis is Vice President, Research and
Development.
</TABLE>
D. Directors and Executive Officers of Nycomed Amersham plc.
The name, business address, present principal occupation or employment and
five-year employment history of each director and executive officer of Nycomed
Amersham and certain other information are set forth below. Unless otherwise
indicated below, the address of each director and officer is Amersham Place,
Little Chalfont, Buckinghamshire, England, HP7 9NA. Unless otherwise
indicated, each occupation set forth opposite an individual's name refers to
employment with Nycomed Amersham. All directors and officers listed below are
citizens of the United Kingdom except Johan Fr. Odfjell, Svein Aaser, Trond V.
Jacobsen, Tore Laerdal, Erik Thorsby and John Henrik Johansen who are citizens
of Norway, Jacques F. Rejeange who is a citizen of Switzerland and Mathias
Uhlen who is a citizen of Sweden.
Name, Present Principal Occupation or Employer and
Material Positions Held During the Past Five Years
- ------------------------------------------------------------------------------
Johan Fr. Odfjell, 50, has served as non-executive Chairman of the Board of
Directors since October 1997. He is also currently non-executive Chairman of
Hafslund ASA and Nera ASA, Deputy Chairman of Det norske Veritas, Director of
Skandia AB and Chairman of the Corporate Assembly of Scandinavian Airlines
Systems. He previously was Chief Executive Officer of the Vesta Insurance
Group.
Richard Douglas Lapthorne, 55, has served as a non-executive Deputy Chairman of
Board of Directors since December 1988. He previously was the Chairman of
Amersham International plc. He also is currently the Vice Chairman of British
Aerospace plc.
William Martin Castell, 51, has served as Chief Executive Officer since June
1989. He previously was Chief Executive Officer of Amersham International
plc. He also is a Director of General Electric Co.
Svein Aaser, 51, has served as Deputy Chief Executive Officer, Chairman of
Pharma, and Chief Executive Officer of Imaging since October 1997. He
previously was President and Chief Executive Officer of Nycomed ASA.
Ronald Eric Long, 51, has served as Chief Executive Officer of Amersham
Pharmacia Biotech since August 1997. He previously was Managing Director, Life
Science, of Amersham International plc from August 1996 to July 1997. Prior to
that, he served as Commercial Director of Amersham International plc.
Giles Francis Bertram Kerr, 38, has served as Finance Director since November
1997. He previously was Company Secretary of Nycomed Amersham plc. Prior to
that, he served as Director of Corporate Development and Company Secretary of
Amersham International plc.
Trond V. Jacobsen, 53, has served as Chief Executive of Pharma since October
1997. He previously was President of Nycomed Pharma, AS from 1996 to 1997.
Donald Hood Brydon, 53, has served as a non-executive Director since June 1997.
He previously was a non-executive Director of Amersham International plc. He
also is Chairman and Chief Executive of Axa Investment Managers S.A. He was
Executive of Management Functions of Barclays plc from 1977 to 1996. He also is
a Director of Allied Domecq plc and of Sun Life Provincial Holdings plc and was
a director of the London Stock Exchange.
Ronald Morton Cresswell, 63, has served as non-executive Director since August
1995. He previously was a non-executive Director of Amersham International
plc. He also is Chairman of Parke-Davis Pharmaceutical Research and Vice
President of Warner-Lambert Company.
Tore Laerdal, 46, has served as non-executive Director since October 1997. He
previously was a Director of Nycomed ASA. He also is President and Chief
Executive Officer of the Laerdal Medical Group.
Thomas Fulton Wilson McKillop, 55, has served as non-executive Director since
April 1992. He previously was a non-executive Director of Amersham
International plc. He also is Chief Executive Officer of Zeneca
Pharmaceuticals.
Jacques F. Rejeange, 58, has served as non-executive Director since October
1997. He previously was a Director of Nycomed ASA. He is the Former President
and was Chief Executive Officer from June 1993 to June 1995 of Sterling
Winthrop Inc., USA. He also has been the General Manager of Florham Consulting
S.A. since August 1995.
Erik Thorsby, 60, has served as non-executive Director since October 1997. He
previously was a Director of Nycomed ASA. He is Head of the Institute of
Transplant Immunology at Norway's National Hospital since 1970. He is also the
Vice-Chairman of Medinova.
John Henrik Johansen, 51, has served as non-executive Director (employee
representative) since October 1997. He previously was a Director of Nycomed
ASA. He also is Senior Research Scientist for Nycomed Imaging AS.
Geoffrey Miaz Thackray, 53, has served as Head of Corporate Development since
August 1998. Prior to that, he was Restructuring Controller. Prior to October
1997 he was Group Controller of Amersham International plc.
Kevin Quinn, 38, is Group Finance Controller. He was previously a consultant
with Pricewaterhouse Coopers.
Alan Edmund Royle, 49, has served as Director of Treasury of Nycomed Amersham
plc since April 1998. He was previously Corporate Treasurer of S. C. Johnson &
Son, Inc., based in Racine, Wisconsin, from 1990 to 1997.
E. Persons Who May Be Designated by Parent to Serve as Directors
on the Company's Board of Directors. The name, age and five-year employment
history of each person who may be appointed to the Company's Board of Directors
after the consummation of the Offer but prior to the Merger is as follows:
Present Principal Occupation or Employer and
Name Age Material Positions Held During the Past Five Years
- ---- --- --------------------------------------------------
Ronald Eric Long 51 Mr. Long has served as Chief Executive Officer of
Amersham Pharmacia Biotech since August 1997. He
previously was Managing Director, Life Science, of
Amersham International plc from August 1996 to July
1997. Prior to that, he served as Commercial
Director of Amersham International plc. He is a
citizen of the United Kingdom.
David J. M. Dally 38 Mr. Dally is Vice President, Finance and
Administration and Treasurer of Amersham Pharmacia
Biotech Inc. Prior to that, he was Controller
Amersham Life Science from 1995 to 1997 and
Manager, Corporate Development of Amersham
International plc from 1993 to 1995. He is a
citizen of the United Kingdom.
Michael Evans 40 Mr. Evans is Vice President, Applied Genomics for
Amersham Pharmacia Biotech Ltd. He previously was
Marketing Director for Amersham Life Science during
1997, Head of Business Development for Amersham
Life Science during 1995 and Group Marketing
Manager of Amersham Life Science from 1994 to 1995.
He is a citizen of the United Kingdom.
Facsimile copies of the Letter of Transmittal will be accepted.
The Letter of Transmittal and certificates for Shares and any other required
documents should be sent to the Depositary at one of the addresses set forth
below:
The Depositary for the Offer is:
HARRIS TRUST COMPANY OF NEW YORK
<TABLE>
<S> <C> <C>
By Facsimile Transmission
By Mail: (for Eligible Institutions only): By Hand or Overnight Courier:
Wall Street Station (212) 701-7636 Receive Window
P.O. Box 1023 Wall Street Plaza
New York, NY 10268-1023 88 Pine Street, 19th Floor
New York, NY 10005
Confirm By Telephone:
(212) 701-7624
</TABLE>
Questions or requests for assistance or additional copies of
this Offer to Purchase and the Letter of Transmittal may be directed to the
Information Agent or the Dealer Manager at their respective addresses and
telephone numbers set forth below. Stockholders may also contact their broker,
dealer, commercial bank or trust company for assistance concerning the Offer.
The Information Agent for the Offer is:
GEORGESON
& COMPANY INC.
Wall Street Plaza
New York, New York 10005
Banks and Brokers Call Collect: (212) 440-9800
All Others Call Toll-Free: (800) 223-2064
The Dealer Manager for the Offer is:
MORGAN STANLEY DEAN WITTER
Morgan Stanley & Co. Incoporated
1585 Broadway
New York, New York 10036
(212) 761-4308
(call collect)
For immediate release
- ---------------------
14 September 1998-09-14
NYCOMED AMERSHAM PLC ANNOUNCES THAT TENDER OFFER FOR MOLECULAR DYNAMICS, INC.
SUCCESSFULLY COMPLETED
Nycomed Amersham plc announces that the tender offer for Molecular Dynamics,
Inc. has been successfully completed. This acquisition will further strengthen
Amersham Pharmacia Biotech's competitive position in the market for DNA
sequencing by incorporating the proven skills of the Molecular Dynamics
California based team.
Amersham Pharmacia Biotech is one of the world's largest suppliers of
biotechnology products to those already involved in life-science research and
pharmaceutical production. It is already the leader in the majority of its
markets: industrial and laboratory separation of biomolecules, drug screening,
production technologies for anti-sense type drugs, reagents for drug trials
and molecular biology.
Molecular Dynamics, a public corporation with headquarters in Sunnyvale,
California is a leading provider of systems that accelerate genetic discovery
and analysis. These include DNA sequencing instruments (based on capillary
array electrophoresis), microarrays and scanners.
The two companies formed a strategic alliance in 1994. This partnership has
been highly successful in bringing together the molecular biology and
chemistry skills of Amersham Pharmacia Biotech with the instrumentation and
software capabilities of Molecular Dynamics to develop and market complete DNA
sequencing and genomic analysis systems.
Since its launch last year, the alliance's Microarray programme for DNA
analysis has achieved significant market acceptance through technology access
contacts involving more than 20 partner companies. The alliance's
high-throughput DNA sequencing system, MegaBACE TM, is based on the
state-of-the-art capillary electrophoresis. Designed for production-scale
sequencing operations, MegaBACE was first commercialised a year ago and is now
routinely used in leading American, European and Japanese genomics centres.
The partners believe that combining their operations will accelerate the
commercialisation of these systems. Further, an integrated research and
development approach will maximise the potential of the technologies and
customers will also benefit from unified approach. The combined extensive
global sales force network is expected to enhance the market penetration of
Molecular Dynamics' well-established scanners as well as the sequencing and
microarray systems.
Bill Castell, Chief Executive, Nycomed Amersham plc said "We are delighted
with the acquisition of Molecular Dynamics and believe that this important
step will further strengthen our position at the heart of the genomics
industry and accelerate the commercialisation and development of our genomic
technologies."
London, England and Palo Alto, California - September 11 1998 - Nycomed
Amersham plc (NYSE: NYE) and Molecular Dynamics, Inc. (Nasdaq: MDYN) announced
today that the offer by Amersham Pharmacia Biotech Ltd., the joint venture
between Nycomed Amersham plc (55%) and Pharmacia & Upjohn Inc. (45%) (NYSE:
PNU) to purchase all outstanding shares of common stock of Nycomed's strategic
partner, Molecular Dynamics, for $20.50 in cash expired, as scheduled, at
midnight, New York City time on Friday September 11, 1998. Amersham Pharmacia
Biotech accepted for purchase all Molecular Dynamics shares validly tendered
and not withdrawn prior to the expiration of the offer.
As of the expiration of the offer, approximately 9,032,000 shares of Molecular
Dynamics common stock, including shares tendered pursuant to guarantees of
delivery, has been validly tendered and not withdrawn. Payment for shares
validly tendered is expected to be made by Harris Trust Company of New York,
acting as depositary for the tender offer, promptly in accordance with the
terms of this offer. The shares accepted for purchase in the offer and the
1,000,000 shares of Molecular Dynamics already owned by Amersham Pharmacia
Biotech represent approximately 97% of the outstanding shares of common stock
of Molecular Dynamics.
Nycomed Amersham expects that the merger of APB Acquisition Co., a wholly
owned subsidiary of Amersham Pharmacia Biotech, and Molecular Dynamics will
occur promptly.
- ENDS -
Media / financial enquiries:
Giles Kerr Finance Director +44 1494 542246
Nycomed Amersham
Matthew Butler Director of Corporate Affairs +44 1494 542050
Nycomed Amersham
Louise Charlton Brunswick Group Ltd +44 171 404 5959
Kate Inverarity Brunswick Group Ltd +1 212 333 3810
New York
