As filed with the Securities and Exchange Commission on August 14, 1998
==============================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------
SCHEDULE 14D-1
Tender Offer Statement Pursuant to Section
14(d)(1) of the Securities Exchange Act of 1934
and
SCHEDULE 13D
under the Securities Exchange Act of 1934
(Amendment No. 3)
Molecular Dynamics, Inc.
(Name of Subject Company)
APB Acquisition Corp.
(Bidder)
Amersham Pharmacia Biotech Inc.
Amersham Pharmacia Biotech Ltd
(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)
Copies to:
John W. Buttrick
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Telephone: (212) 450-4000
CALCULATION OF FILING FEE
Transaction valuation* Amount of filing fee
---------------------- --------------------
$ 218,718,887 $ 43,743.78
* Value derived by multiplying 10,669,214 (the number of shares of common
stock of the subject company outstanding (i) plus shares of common stock
issuable pursuant to vested stock options (ii) minus 1,002,000 shares of
common stock beneficially owned by Amersham Pharmacia Biotech Inc.) by
$20.50 (the purchase price per share offered by the bidder).
[ ] Check box if any part of the fee is offset as provided by Rule
0-11(a)(2) and identify the filing with which the offsetting fee was
previously paid. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
Amount Previously Paid: Not applicable.
Form or Registration No.: Not applicable.
Filing Party: Not applicable.
Date Filed: Not applicable.
==============================================================================
CUSIP No. 608514 10 5
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 Ltd
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
Item 1. Security and Subject Company.
(a) The name of the subject company is Molecular Dynamics,
Inc., a Delaware corporation (the "Company"), and the address of its principal
executive offices is set forth in Section 7 "Certain Information Concerning
the Company" of the Offer to Purchase, which is incorporated herein by
reference.
(b) This Statement relates to the offer by APB Acquisition
Corp., a Delaware corporation ("Purchaser") and a wholly-owned subsidiary of
Amersham Pharmacia Biotech Inc., a Delaware corporation ("Parent"), to
purchase all outstanding shares of Common Stock, $0.01 par value (the "Common
Stock"), including the associated Rights (the "Rights") to purchase Series A
Junior Participating Preferred Stock 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 Common Stock and the Rights are referred to
herein collectively as the "Shares"), of the Company at $20.50 per share, net
to the seller in cash, upon the terms and conditions set forth in the Offer to
Purchase and in the related Letter of Transmittal, copies of which are
attached hereto as Exhibits (a)(1) and (a)(2) (which are herein collectively
referred to as the "Offer"). The bidder is Purchaser; co-bidders are Amersham
Pharmacia Biotech Ltd ("APB Ltd") and Parent, a wholly-owned subsidiary of APB
Ltd. The information set forth in the introduction to the Offer to Purchase
(the "Introduction") is incorporated herein by reference.
(c) The information set forth in Section 6 "Price Range of
Shares; Dividends" of the Offer to Purchase is incorporated herein by
reference.
Item 2. Identity and Background.
(a)-(d), (g) This statement is filed by Purchaser, Parent and
APB Ltd. The information set forth in the Introduction, Section 8 "Certain
Information Concerning Purchaser, Parent, Amersham Pharmacia Biotech Ltd and
Nycomed Amersham plc" and Schedule I of the Offer to Purchase is incorporated
herein by reference.
(e)-(f) Neither Parent, Purchaser, Nycomed Amersham plc or APB
Ltd, nor, to the best knowledge of Purchaser, any of the persons listed in
Schedule I of the Offer to Purchase, has during the last five years (i) been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors) or (ii) been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such
proceeding was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting activities subject to, federal or state
securities laws or finding any violation of such laws.
Item 3. Past Contacts, Transactions or Negotiations with the Subject Company.
(a)-(b) The information set forth in the Introduction, Section
8 "Certain Information Concerning Purchaser, Parent, Amersham Pharmacia
Biotech Ltd and Nycomed Amersham plc" and Section 10 "Background of the Offer;
Past Contacts or Negotiations with the Company" of the Offer to Purchase is
incorporated herein by reference.
Item 4. Source and Amount of Funds or Other Consideration.
(a)-(b) The information set forth in Section 9 "Source and
Amount of Funds" of the Offer to Purchase is incorporated herein by reference.
(c) Not applicable.
Item 5. Purpose of the Tender Offer and Plans or Proposals of the Bidder.
(a)-(e) The information set forth in the Introduction and
Section 12 "Purpose of the Offer; Plans for the Company" of the Offer to
Purchase is incorporated herein by reference.
(f)-(g) The information set forth in Section 13 "Effect of the
Offer on the Market for Shares; Stock Quotations; Registration under the
Exchange Act" of the Offer to Purchase is incorporated herein by reference.
Item 6. Interest in Securities of the Subject Company.
(a)-(b) The information set forth in the Introduction, Section
8 "Certain Information Concerning Purchaser, Parent, Amersham Pharmacia
Biotech Ltd and Nycomed Amersham plc", Section 10 "Background of the Offer;
Past Contacts; Transactions or Negotiations with the Company"; and Schedule I
of the Offer to Purchase is incorporated herein by reference.
Item 7. Contracts, Arrangements, Understandings or Relationships with Respect
to the Subject Company's Securities.
The information set forth in the Introduction, Section 8
"Certain Information Concerning the Purchaser, Parent, Amersham Pharmacia
Biotech Ltd and Nycomed Amersham plc", Section 10 "Background of the Offer;
Past Contacts or Negotiations with the Company" and Schedule I of the Offer to
Purchase is incorporated herein by reference.
Item 8. Persons Retained, Employed or to be Compensated.
The information set forth in Section 18 "Fees and Expenses" of
the Offer to Purchase is incorporated herein by reference.
Item 9. Financial Statements of Certain Bidders.
None.
Item 10. Additional Information.
(a) The information set forth in Section 10 "Background of the
Offer; Past Contacts or Negotiations with the Company" of the Offer to
Purchase in incorporated herein by reference.
(b)-(c) The information set forth in Section 17 "Certain Legal
Matters; Regulatory Approvals" of the Offer to Purchase is incorporated herein
by reference.
(d) The information set forth in Section 13 "Effect of the
Offer on the Market for Shares; Stock Quotations; Registration under the
Exchange Act" of the Offer to Purchase is incorporated herein by reference.
(e) Not applicable.
(f) The information set forth in the Offer to Purchase and the
Letter of Transmittal is incorporated herein by reference in its entirety.
Item 11. Material to be Filed as Exhibits.
(a)(1) Offer to Purchase, dated 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
(b) Commitment Letter dated as of August 12, 1998 from Nycomed
Amersham plc to APB 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 Flatley.
(d) None
(e) None
(f) None
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: August 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/ G.F.B. Kerr
----------------------------------
Name: G.F.B. Kerr
Title: Director
EXHIBIT INDEX
<TABLE>
Exhibit Sequentially
Number Description Numbered Page
- ------ ----------- -------------
<S> <C> <C>
(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............................
(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 Flatley.
(d) None...........................................................................
(e) None...........................................................................
(f) None...........................................................................
</TABLE>
EXHIBIT (A)(1)
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.
- ------------------------------------------------------------------------------
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.
------------------------
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.
------------------------
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.................26
16. Certain Conditions of the Offer....................................27
17. Certain Legal Matters; Regulatory Approvals........................28
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.
High Low
------------- -----------
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
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:
<TABLE>
<S> <C> <C>
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
</TABLE>
- ---------------
(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 Sterling, 163.9 million and Pound
Sterling, 237.5 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 Sterling, 37.4 million and Pound Sterling,
40.2 million. Nycomed Amersham reported a consolidated profit before
interest and taxation for Amersham Pharmacia Biotech for the year ended
March 31, 1997 of Pound Sterling, 66.4 million and a consolidated loss
before interest and taxation for the nine months ended December 31, 1997 of
Pound Sterling, 55.6 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) a 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
October 31, 1998, (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.
<TABLE>
<CAPTION>
Name and Business Present Principal Occupation or Employer and
Address Material Positions Held During the Past Five Years
- --------------------- --------------------------------------------------
<S> <C>
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.
</TABLE>
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.
<TABLE>
<CAPTION>
Name and Business Present Principal Occupation or Employer and
Address Material Positions Held During the Past Five Years
- -------------------- --------------------------------------------------
<S> <C>
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.
</TABLE>
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 Betram 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 is Vice President of Affiliated Businesses of
Pharmacia & Upjohn Inc.
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, 49, has served as a non-executive Chairman of the Board
of Directors since October 1997. He has been the Chairman for Nycomed ASA
and Hafslund since 1996. He also has been the Chairman of Westfal-Larsen
since 1987. Additionally, he is member of the board of directors of
several companies in the shipping and insurance sectors and an investment
and business consultant.
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.
Mathias 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.
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:
<TABLE>
<CAPTION>
Present Principal Occupation or Employer and
Name Age Material Positions Held During the Past Five Years
---- --- --------------------------------------------------
<S> <C> <C>
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.
</TABLE>
Facsimile copies of the Letter of Transmittal will be accepted. The
Letter of Transmittal and certificates for Shares and any other required
documents should be sent to the Depositary at one of the addresses set forth
below:
The Depositary for the Offer is:
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)
EXHIBIT (A)(2)
LETTER OF TRANSMITTAL
To Tender Shares of Common Stock
(Including the Associated Rights)
of
Molecular Dynamics, Inc.
Pursuant to the Offer to Purchase
dated August 14, 1998
of
APB Acquisition Corp.
a wholly owned subsidiary of
Amersham Pharmacia Biotech Inc.
- ------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME,
ON FRIDAY, SEPTEMBER 11, 1998, UNLESS THE OFFER IS EXTENDED.
- ------------------------------------------------------------------------------
To: Harris Trust Company of New York, Depositary
<TABLE>
<S> <C> <C>
By Mail: By Facsimile Transmission: By Hand/Overnight Delivery:
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
For Information Telephone:
(212) 701-7624
</TABLE>
Delivery of this instrument to an address other than as set
forth above or transmission of instructions to a facsimile number other than
the ones listed above will not constitute a valid delivery.
This Letter of Transmittal is to be used if certificates are to
be forwarded herewith or, unless an Agent's Message (as defined in the Offer
to Purchase) is utilized, if delivery of Shares (as defined below) is to be
made by book-entry transfer to the Depositary's account at The Depository
Trust Company (hereinafter referred to as the "Book-Entry Transfer Facility")
pursuant to the procedures set forth in Section 2 of the Offer to Purchase.
Shareholders who cannot deliver their Shares and all other
documents required hereby to the Depositary by the Expiration Date (as defined
in the Offer to Purchase) must tender their Shares pursuant to the guaranteed
delivery procedure set forth in Section 2 of the Offer to Purchase. See
Instruction 2.
DESCRIPTION OF SHARES TENDERED
<TABLE>
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------
Name(s) and Address(es) of Registered Holder(s) Shares Tendered
(Please fill in, if blank) (Attach additional list if necessary)
- ---------------------------------------------------------------------------------------------------------------------
Total Number of Shares Number of
Certificate Represented by Shares
Number(s)* Certificate(s)* Tendered**
------------------------------------------------------------
------------------------------------------------------------
------------------------------------------------------------
------------------------------------------------------------
Total Shares
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
- ---------------
* Need not be completed by stockholders tendering by book-entry transfer.
** Unless otherwise indicated, it will be assumed that all Shares represented
by any certificates delivered to the Depositary are being tendered. See
Instruction 4.
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ ACCOMPANYING INSTRUCTIONS CAREFULLY
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO
THE DEPOSITARY'S ACCOUNT AT THE BOOK-ENTRY TRANSFER FACILITY AND COMPLETE
THE FOLLOWING:
Name of Tendering Institution
---------------------------------------------
Account No. at The Depository Trust Company
-------------------------------
Transaction Code No.
------------------------------------------------------
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING:
Name(s) of Tendering Stockholder(s)
---------------------------------------
Date of Execution of Notice of Guaranteed Delivery
------------------------
Name of Institution which Guaranteed Delivery
-----------------------------
If delivery is by book-entry transfer:
Name of Tendering Institution
------------------------------------------
Account No. at The Depository Trust Company
-------------------------------
Transaction Code No.
------------------------------------------------------
-----------------------
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
The undersigned hereby tenders to APB Acquisition Corp., a
Delaware corporation (the "Purchaser") and a wholly-owned subsidiary of
Amersham Pharmacia Biotech Inc., the above-described shares of common stock,
$.01 par value (the "Common Stock"), including the associated Rights (as
defined in the Merger Agreement) to purchase Series A Junior Participating
Preferred Stock (the Common Stock and the Rights are referred to herein
collectively as the "Shares"), of Molecular Dynamics, Inc., a Delaware
corporation (the "Company"), pursuant to the Purchaser's offer to purchase all
outstanding Shares at a price of $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
dated August 14, 1998, receipt of which is hereby acknowledged, and in this
Letter of Transmittal (which together constitute the "Offer"). The Purchaser
reserves the right to transfer or assign, in whole or from time to time in
part, to one or more of its affiliates the right to purchase Shares tendered
pursuant to the Offer.
Upon the terms and subject to the terms and conditions of the
Offer and effective upon acceptance for payment of and payment for the Shares
tendered herewith, the undersigned hereby sells, assigns and transfers to or
upon the order of the Purchaser all right, title and interest in and to all
the Shares that are being tendered hereby (and any and all other Shares or
other securities issued or issuable in respect thereof on or after August 9,
1998) and appoints the Depositary the true and lawful agent and
attorney-in-fact of the undersigned with respect to such Shares (and all such
other Shares or securities), with full power of substitution (such power of
attorney being deemed to be an irrevocable power coupled with an interest), to
(a) deliver certificates for such Shares (and all such other Shares or
securities), or transfer ownership of such Shares (and all such other Shares
or securities) on the account books maintained by the Book-Entry Transfer
Facility, together, in any such case, with all accompanying evidences of
transfer and authenticity, to or upon the order of the Purchaser, (b) present
such Shares (and all such other Shares or securities) for transfer on the
books of the Company and (c) receive all benefits and otherwise exercise all
rights of beneficial ownership of such Shares (and all such other Shares or
securities), all in accordance with the terms of the Offer.
The undersigned hereby irrevocably appoints William J. Sulinski
and David J. M. Dally and each of them, the attorneys and proxies of the
undersigned, each with full power of substitution, to exercise all voting and
other rights of the undersigned in such manner as each such attorney and proxy
or his substitute shall in his sole discretion deem proper, with respect to
all of the Shares tendered hereby which have been accepted for payment by the
Purchaser prior to the time of any vote or other action (and any and all other
Shares or other securities issued or issuable in respect thereof on or after
August 9, 1998), at any meeting of shareholders of the Company (whether annual
or special and whether or not an adjourned meeting), by written consent or
otherwise. This proxy is irrevocable and is granted in consideration of, and
is effective upon, the acceptance for payment of such Shares by the Purchaser
in accordance with the terms of the Offer. Such acceptance for payment shall
revoke any other proxy or written consent granted by the undersigned at any
time with respect to such Shares (and all such other Shares or securities),
and no subsequent proxies will be given or written consents will be executed
by the undersigned (and if given or executed, will not be deemed to be
effective).
The undersigned hereby represents and warrants that the
undersigned has full power and authority to tender, sell, assign and transfer
the Shares tendered hereby (and any and all other Shares or other securities
issued or issuable in respect thereof on or after August 9, 1998) and that
when the same are accepted for payment by the Purchaser, the Purchaser will
acquire good and unencumbered title thereto, free and clear of all liens,
restrictions, charges and encumbrances and not subject to any adverse claims.
The undersigned will, upon request, execute and deliver any additional
documents deemed by the Depositary or the Purchaser to be necessary or
desirable to complete the sale, assignment and transfer of the Shares tendered
hereby (and all such other Shares or securities).
All authority herein conferred or agreed to be conferred shall
survive the death or incapacity of the undersigned, and any obligation of the
undersigned hereunder shall be binding upon the heirs, personal
representatives, successors and assigns of the undersigned. Except as stated
in the Offer, this tender is irrevocable.
The undersigned understands that tenders of Shares pursuant to
any one of the procedures described in Section 2 of the Offer to Purchase and
in the instructions hereto will constitute an agreement between the
undersigned and the Purchaser upon the terms and subject to the conditions of
the Offer.
Unless otherwise indicated under "Special Payment
Instructions", please issue the check for the purchase price of any Shares
purchased, and return any Shares not tendered or not purchased, in the name(s)
of the undersigned (and, in the case of Shares tendered by book-entry
transfer, by credit to the account at the Book-Entry Transfer Facility).
Similarly, unless otherwise indicated under "Special Delivery Instructions",
please mail the check for the purchase price of any Shares purchased and any
certificates for Shares not tendered or not purchased (and accompanying
documents, as appropriate) to the undersigned at the address shown below the
undersigned's signature(s). In the event that both "Special Payment
Instructions" and "Special Delivery Instructions" are completed, please issue
the check for the purchase price of any Shares purchased and return any Shares
not tendered or not purchased in the name(s) of, and mail said check and any
certificates to, the person(s) so indicated. The undersigned recognizes that
the Purchaser has no obligation, pursuant to the "Special Payment
Instructions", to transfer any Shares from the name of the registered
holder(s) thereof if the Purchaser does not accept for payment any of the
Shares so tendered.
<TABLE>
<S> <C>
SPECIAL PAYMENT INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 6, 7 and 8) (See Instructions 6, 7 and 8)
To be completed ONLY if the check for the Purchase To be completed ONLY if the check for the Purchase
Price of Shares purchased (less the amount of any Price of Shares purchased (less the amount of any
federal income and backup withholding tax required to federal income and backup withholding tax required to
be withheld) or certificates for Shares not tendered or be withheld) or certificates for Shares not tendered or
not purchased are to be issued in the name of someone not purchased are to be mailed to someone other than
other than the undersigned. the undersigned or to the undersigned at an address
other than that shown below the undersigned's
signature(s).
Mail [ ] check Mail [ ] check
[ ] certificates to: [ ] certificates to:
Name Name
------------------------------------------------ ------------------------------------------------
(Please Print) (Please Print)
Address Address
--------------------------------------------- ---------------------------------------------
(Zip Code) (Zip Code)
- ------------------------------------------------------
(also see Substitute Form W-9 below)
</TABLE>
SIGN HERE
(Please complete Substitute Form W-9 below)
- ------------------------------------------------------
- ------------------------------------------------------
Dated_______________________, 1998
Name(s)
----------------------------------------------
- ------------------------------------------------------
(Please Print)
Capactiy (full title)
---------------------------------
Address
-----------------------------------------------
- ------------------------------------------------------
(Include Zip Code)
Area Code and Telephone Number
------------------------
(Must be signed by registered holders(s) exactly as
names(s) appear(s) on stock certificate(s) or on a
security position listing or by person(s) authorized to
become registered holders(s) by certificates and
documents transmitted herewith. If signature is by a
trustee, executor, administrator, guardian,
attorney-in-fact, agent, officer of a corporation or
other person acting in a fiduciary or representative
capacity, please set forth full title and see
Instruction 5.)
Guarantee of Signatures(s)
(If required; see Insturctions 1 and 5)
Name of Firm
------------------------------------------
Authorized Signature
----------------------------------
Dated ___________________________________, 1998
<TABLE>
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
SUBSTITUTE Part I Taxpayer Identification No. -- For All Accounts Part II For Payees Exempt
FORM W-9 --------------------------------------------------------------------------- From Backup With-
Department of the Treasury Enter your taxpayer identification number in the holding (see
appropriate box. For most individuals and sole ----------------------- enclosed Guidelines)
proprietors, this is your Social Security Number. Social Security
For other entities, it is your Employer Number
Identification Number. If you do not have a number,
see "How to Obtain a TIN" in the enclosed Guidelines OR
Note: If the account is in more than one name, see
the cart on page 2 of the enclosed Guidelines to
determine what number to enter. -----------------------
Employee Identification
Number
- -----------------------------------------------------------------------------------------------------------------------------------
Certification -- Under penalties of perjury, I certify that:
(1) The number shown on this form is my correct Taxpayer Identification Number (or I am waiting for a number to be issued to me)
and either (a) I have mailed or delivered an application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or (b) I intend to mail or deliver an application in
the near future. I understand that if I do not provide a taxpayer identification number within (60) days, 31% of all reportable
payments made to me thereafter will be withheld until I provide a number;
(2) I am not subject to backup withholding either because (a) I am exempt from backup withholding, or (b) I have not been notified
by the Internal Revenue Service ("IRS") that I am subject to backup withholding as a result of a failure to report all interest
or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding; and
(3) Any information provided on this form is true, correct and complete.
- -----------------------------------------------------------------------------------------------------------------------------------
SIGNATURE DATE , 1998
----------------------------------------------------------------- ------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE
OFFER. PLEASE REVIEW ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL
DETAILS.
</TABLE>
INSTRUCTIONS
Forming Part of the Terms and Conditions of the Offer
1. Guarantee of Signatures. Except as otherwise provided below, all
signatures on this Letter of Transmittal must be guaranteed by a firm which is
a member of a recognized Medallion Program approved by The Securities Transfer
Associations, Inc. (an "Eligible Institution"). Signatures on this Letter of
Transmittal need not be guaranteed (a) if this Letter of Transmittal is signed
by the registered holder(s) of the Shares (which term, for purposes of this
document, shall include any participant in the Book-Entry Transfer Facility
whose name appears on a security position listing as the owner of Shares)
tendered herewith and such holder(s) have not completed the instruction
entitled "Special Payment Instructions" on this Letter of Transmittal or (b)
if such Shares are tendered for the account of an Eligible Institution. See
Instruction 5.
2. Delivery of Letter of Transmittal and Shares. This Letter of
Transmittal is to be used either if certificates are to be forwarded herewith
or, unless an Agent's Message is utilized, if delivery of Shares is to be made
by book-entry transfer pursuant to the procedures set forth in Section 2 of
the Offer to Purchase. Certificates for all physically delivered Shares, or a
confirmation of a book-entry transfer into the Depositary's account at the
Book-Entry Transfer Facility of all Shares delivered electronically, as well
as a properly completed and duly executed Letter of Transmittal (or facsimile
thereof or, in the case of a book-entry transfer, an Agent's Message) and any
other documents required by this Letter of Transmittal, must be received by
the Depositary at one of its addresses set forth on the front page of this
Letter of Transmittal by the Expiration Date. Shareholders who cannot deliver
their Shares and all other required documents to the Depositary by the
Expiration Date must tender their Shares pursuant to the guaranteed delivery
procedure set forth in Section 2 of the Offer to Purchase. Pursuant to such
procedure: (a) such tender must be made by or through an Eligible Institution,
(b) a properly completed and duly executed Notice of Guaranteed Delivery
substantially in the form provided by the Purchaser must be received by the
Depositary by the Expiration Date and (c) the certificates for all physically
delivered Shares, or a confirmation of a book-entry transfer into the
Depositary's account at the Book-Entry Transfer Facility of all Shares
delivered electronically, as well as a properly completed and duly executed
Letter of Transmittal (or facsimile thereof or, in the case of a book-entry
delivery, an Agent's Message) and any other documents required by this Letter
of Transmittal, must be received by the Depositary within three National
Association of Securities Dealers, Inc. Automated Quotation ("Nasdaq")
National Market System trading days after the date of execution of such Notice
of Guaranteed Delivery, all as provided in Section 2 of the Offer to Purchase.
The method of delivery of Shares and all other required
documents is at the option and risk of the tendering shareholder. If
certificates for Shares are sent by mail, registered mail with return receipt
requested, properly insured, is recommended.
No alternative, conditional or contingent tenders will be
accepted, and no fractional Shares will be purchased. By executing this
Letter of Transmittal (or facsimile thereof), the tendering shareholder waives
any right to receive any notice of the acceptance for payment of the Shares.
3. Inadequate Space. If the space provided herein is inadequate,
the certificate numbers and/or the number of Shares should be listed on a
separate schedule attached hereto.
4. Partial Tenders (not applicable to shareholders who tender by
book-entry transfer). If fewer than all the Shares represented by any
certificate delivered to the Depositary are to be tendered, fill in the number
of Shares which are to be tendered in the box entitled "Number of Shares
Tendered". In such case, a new certificate for the remainder of the Shares
represented by the old certificate will be sent to the person(s) signing this
Letter of Transmittal, unless otherwise provided in the appropriate box on
this Letter of Transmittal, as promptly as practicable following the
expiration or termination of the Offer. All Shares represented by
certificates delivered to the Depositary will be deemed to have been tendered
unless otherwise indicated.
5. Signatures on Letter of Transmittal; Stock Powers and
Endorsements. If this Letter of Transmittal is signed by the registered
holder(s) of the Shares tendered hereby, the signature(s) must correspond with
the name(s) as written on the face of the certificates without alteration,
enlargement or any change whatsoever.
If any of the Shares tendered hereby is held of record by two
or more persons, all such persons must sign this Letter of Transmittal.
If any of the Shares tendered hereby are registered in
different names on different certificates, it will be necessary to complete,
sign and submit as many separate Letters of Transmittal as there are different
registrations of certificates.
If this Letter of Transmittal is signed by the registered
holder(s) of the Shares tendered hereby, no endorsements of certificates or
separate stock powers are required unless payment of the purchase price is to
be made, or Shares not tendered or not purchased are to be returned, in the
name of any person other than the registered holder(s). Signatures on any
such certificates or stock powers must be guaranteed by an Eligible
Institution.
If this Letter of Transmittal is signed by a person other than
the registered holder(s) of the Shares tendered hereby, certificates must be
endorsed or accompanied by appropriate stock powers, in either case, signed
exactly as the name(s) of the registered holder(s) appear(s) on the
certificates for such Shares. Signature(s) on any such certificates or stock
powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal or any certificate or stock power
is signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or
representative capacity, such person should so indicate when signing, and
proper evidence satisfactory to the Purchaser of the authority of such person
so to act must be submitted.
6. Stock Transfer Taxes. The Purchaser will pay any stock transfer
taxes with respect to the sale and transfer of any Shares to it or its order
pursuant to the Offer. If, however, payment of the purchase price is to be
made to, or Shares not tendered or not purchased are to be returned in the
name of, any person other than the registered holder(s), or if a transfer tax
is imposed for any reason other than the sale or transfer of Shares to the
Purchaser pursuant to the Offer, then the amount of any stock transfer taxes
(whether imposed on the registered holder(s), such other person or otherwise)
will be deducted from the purchase price unless satisfactory evidence of the
payment of such taxes, or exemption therefrom, is submitted herewith.
7. Special Payment and Delivery Instructions. If the check for the
purchase price of any Shares purchased is to be issued, or any Shares not
tendered or not purchased are to be returned, in the name of a person other
than the person(s) signing this Letter of Transmittal or if the check or any
certificates for Shares not tendered or not purchased are to be mailed to
someone other than the person(s) signing this Letter of Transmittal or to the
person(s) signing this Letter of Transmittal at an address other than that
shown above, the appropriate boxes on this Letter of Transmittal should be
completed. Shareholders tendering Shares by book-entry transfer may request
that Shares not purchased be credited to such account at the Book-Entry
Transfer Facility as such shareholder may designate under "Special Payment
Instructions". If no such instructions are given, any such Shares not
purchased will be returned by crediting the account at the Book-Entry Transfer
Facility designated above.
8. Substitute Form W-9. Under the federal income tax laws, the
Depositary will be required to withhold 31% of the amount of any payments made
to certain shareholders pursuant to the Offer. In order to avoid such backup
withholding, each tendering shareholder, and, if applicable, each other payee,
must provide the Depositary with such shareholder's or payee's correct
taxpayer identification number and certify that such shareholder or payee is
not subject to such backup withholding by completing the Substitute Form W-9
set forth above. In general, if a shareholder or payee is an individual, the
taxpayer identification number is the Social Security number of such
individual. If the Depositary is not provided with the correct taxpayer
identification number, the shareholder or payee may be subject to a $50
penalty imposed by the Internal Revenue Service. Certain shareholders or
payees (including, among others, all corporations and certain foreign
individuals) are not subject to these backup withholding and reporting
requirements. In order to satisfy the Depositary that a foreign individual
qualifies as an exempt recipient, such shareholder or payee must submit a
statement, signed under penalties of perjury, attesting to that individual's
exempt status. Such statements can be obtained from the Depositary. For
further information concerning backup withholding and instructions for
completing the Substitute Form W-9 (including how to obtain a taxpayer
identification number if you do not have one and how to complete the
Substitute Form W-9 if Shares are held in more than one name), consult the
enclosed Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
Failure to complete the Substitute Form W-9 will not, by
itself, cause Shares to be deemed invalidly tendered, but may require the
Depositary to withhold 31% of the amount of any payments made pursuant to the
Offer. Backup withholding is not an additional federal income tax. Rather,
the federal income tax liability of a person subject to backup withholding
will be reduced by the amount of tax withheld. If withholding results in an
overpayment of taxes, a refund may be obtained provided that the required
information is furnished to the Internal Revenue Service. NOTE: FAILURE TO
COMPLETE AND RETURN THE SUBSTITUTE FORM W-9 MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW THE
ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON
SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
9. Requests for Assistance or Additional Copies. Requests for
assistance or additional copies of the Offer to Purchase and this Letter of
Transmittal may be obtained from the Information Agent or the Dealer Manager
at their respective addresses or telephone numbers set forth below.
The Information Manager 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. Incorporated
1585 Broadway
New York, New York 10036
(212) 761-4308
(call collect)
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
Guidelines for Determining the Proper Identification Number to Give the Payer
- -- Social Security numbers have nine digits separated by two hyphens: i.e.,
000-00-0000. Employer identification numbers have nine digits separated by
only one hyphen: i.e., 00-0000000. The table below will help determine the
number to give the payer.
For this type of Give the
account: SOCIAL SECURITY
number of --
- -------------------------------------------------------------------
1. An individual's The individual
account
2. Two or more The actual owner of the
individuals (joint account or, if combined
account) funds, any one of the
individuals(1)
3. Husband and wife The actual owner of the
(joint account) account or, if joint
funds, either person(1)
4. Custodian account of The minor(2)
a minor (Uniform
Gift to Minors Act)
5. Adult and minor The adult or, if the
(joint account) minor is the only
contributor, the minor(1)
6. Account in the name The ward, minor, or
of guardian or incompetent person(3)
committee for a
designated ward,
minor, or
incompetent person
7. a. The usual The grantor-trustee(1)
revocable savings
trust account
(grantor is also
trustee)
b. So-called trust The actual owner(1)
account that is not
a legal or valid
trust under State
law
For this type of Give the
account: EMPLOYER
IDENTIFICATION
number of --
- -------------------------------------------------------------------
8. Sole proprietorship The owner(4)
account
9. A valid trust, estate, Legal entity (Do not
or pension trust furnish the identifying
number of the personal
representative or trustee
unless the legal entity
itself is not designated in
the account title.)(5)
10. Corporate account The corporation
11. Religious, The organization
charitable, or
educational
organization
account
12. Partnership held in The partnership
the name of the
business
13. Association, club or The organization
other tax-exempt
organization
14. A broker or The broker or nominee
registered nominee
15. Account with the The public entity
Department of
Agriculture in the
name of a public
entity (such public
entity as a State or
local governmental,
school district or
prison) that receives
agricultural
program payments.
- ------------
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number
(4) Show the name of the owner.
(5) List first and circle the name of the legal trust, estate or pension
trust.
NOTE: If no name is circled when there is more than one name, the number will
be considered to be that of the first name listed.
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
Obtaining a Number
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5. Application for a Social Security Number Card, or
Form SS-4 Application for Employer Identification Number, at the local office
of the Social Security Administration or the Internal Revenue Service and
apply for a number.
Payees Exempt from Backup Withholding
Payees specifically exempted from backup withholding on ALL payments include
the following:
o A corporation.
o A financial institution.
o An organization exempt from tax under section 501(a), or an individual
retirement plan.
o The United States or any agency or instrumentality thereof.
o A State, The District of Columbia, a possession of the United States, or any
subdivision or instrumentality thereof.
o A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof.
o An international organization or any agency or instrumentality thereof.
o A registered dealer in securities or commodities registered in the U.S.
or a possession of the U.S.
o A real estate investment trust.
o A common trust fund operated by a bank under section 584(a).
o An exempt charitable remainder trust, or a non-exempt trust described in
section 4947(a)(1).
o An entity registered at all times under the Investment Company Act of 1940.
o A foreign central bank of issue.
Payment of dividends and patronage dividends not generally subject to
backup withholding include the following:
o Payments to nonresident aliens subject to withholding under section 1441.
o Payments to partnerships not engaged in a trade or business in the U.S. and
which have at least one non-resident partner.
o Payments of patronage dividends where the amount renewed is not paid in
money.
o Payments made by certain foreign organizations.
o Payments made to a nominee.
Payments of interest not generally subject to backup withholding include
the following:
o Payments of interest on obligations issued by individuals. Note: You
may be subject to backup withholding if this interest is $600 or more and
is paid in the course of the payer's trade or business and you have not
provided your correct taxpayer identification number to the payer.
o Payments of tax-exempt interest (including exempt-interest dividends
under section 852).
o Payments described in section 6049(b)(5) to non-resident aliens.
o Payments on tax-free covenant bonds under section 1451.
o Payments made by certain foreign organizations.
o Payments made to a nominee.
Exempt payees described above should file Form W-9 to avoid possible
erroneous backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR
TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND
RETURN IT TO THE PAYER, IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE
DIVIDENDS, ALSO SIGN AND DATE THE FORM.
Certain payments other than interest, dividends, and patronage
dividends that are not subject to information reporting are also not
subject to information reporting are also not subject to backup
withholding. For details, see the regulations under sections 6041,
6041A(a), 6045, and 6050A.
Privacy Act Notice -- Section 6109 requires most recipients of
dividend, interest, or other payments to give taxpayer identification
numbers to payers who must report the payments to IRS. IRS uses the
numbers for identification purposes. Payers must be given the numbers
whether or not recipients are required to file tax returns. Payers must
generally withhold 31% of taxable interest, dividend, and certain other
payments to a payee who does not furnish a taxpayer identification number
to a payer. Certain penalties may also apply.
Penalties
(1) Penalty for Failure to Furnish Taxpayer Identification Number. If you
fail to furnish your taxpayer identification number to a payer, you
are subject to a penalty of $50 for each such failure unless your
failure is due to reasonable cause and not to willful neglect.
(2) Civil Penalty for False Information With Respect to Withholding. If
you make a false statement with no reasonable basis which results in
no imposition of backup withholding, you are subject to a penalty of
$500.
(3) Criminal Penalty for Falsifying Information. Falsifying
certifications or affirmations may subject you to criminal penalties
including fines and/or imprisonment.
(4) Criminal Penalty for Falsifying Information - Falsifying certification
or affirmations may subject you to criminal penalties including fines and
or imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE.
EXHIBIT (A)(3)
NOTICE OF GUARANTEED DELIVERY
in respect of
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.
This form, or a form substantially equivalent to this form,
must be used to accept the Offer (as defined below) if the shares of Common
Stock of Molecular Dynamics, Inc. and all other documents required by the
Letter of Transmittal cannot be delivered to the Depositary by the expiration
of the Offer. Such form may be delivered by hand or facsimile transmission,
telex or mail to the Depositary. See Section 2 of the Offer to Purchase.
To: Harris Trust Company of New York, Depositary
<TABLE>
<S> <C> <C>
By Mail: By Facsimile Transmission: By Hand/Overnight Delivery:
Wall Street Station (212) 701-7636 Receive Window
P.O. Box 1023 For Information Telephone: Wall Street Plaza
New York, NY 10268-1023 (212) 701-7624 88 Pine Street, 19th Floor
New York, NY 10005
</TABLE>
Ladies and Gentlemen:
The undersigned hereby tenders to APB Acquisition Corp., a
Delaware corporation (the "Purchaser") and a wholly-owned subsidiary of
Amersham Pharmacia Biotech Inc., upon the terms and subject to the conditions
set forth in the Offer to Purchase dated August 14, 1998 and the related Letter
of Transmittal (which together constitute the "Offer"), receipt of which is
hereby acknowledged, __________ shares of Common Stock, $.01 par value per
share (the "Common Stock"), including the associated Rights (as defined in the
Offer to Purchase) to purchase Series A Junior Participating Preferred Stock
(the Common Stock and the Rights are referred to herein collectively as the
"Shares"), of Molecular Dynamics, Inc., a Delaware corporation, pursuant to the
guaranteed delivery procedure set forth in Section 2 of the Offer to Purchase.
Certificate Nos. (if available) SIGN HERE
- ------------------------------------- -------------------------------------
Signature(s)
- ------------------------------------- -------------------------------------
(Address)
If shares will be tendered by book-entry transfer:
Name of Tendering Institution -------------------------------------
(Name(s)) (Please Print)
- ------------------------------------- -------------------------------------
(Zip Code)
Account No. of The Depository Trust Company:
- ------------------------------------- -------------------------------------
(Area Code and Telephone No.)
GUARANTEE
(Not to be used for signature guarantee)
The undersigned, a firm which is a member of a registered
national securities exchange or the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent in the United States, guarantees (a) that the above named
person(s) "own(s)" the Shares tendered hereby within the meaning of Rule 14e-4
under the Securities Exchange Act of 1934, (b) that such tender of Shares
complies with Rule 14e-4 and (c) to deliver to the Depositary the Shares
tendered hereby, together with a properly completed and duly executed Letter(s)
of Transmittal (or facsimile(s) thereof) or an Agent's Message (as defined in
the Offer to Purchase) in the case of a book-entry delivery and any other
required documents, all within three National Association of Securities
Dealers, Inc. Automated Quotation ("Nasdaq") National Market System trading
days of the date hereof.
-------------------------------------
(Name of Firm)
-------------------------------------
(Authorized Signature)
-------------------------------------
(Name)
-------------------------------------
(Address)
-------------------------------------
(Zip Code)
-------------------------------------
(Area Code and Telephone No.)
Dated:________________, 1998.
EXHIBIT (A)(4)
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
(Including the Associated Rights)
of
Molecular Dynamics, Inc.
at
$20.50 Net Per Share
by
APB Acquisition Corp.
a wholly owned subsidiary of
Amersham Pharmacia Biotech Inc.
August 14, 1998
To Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees:
We have been appointed by APB Acquisition Corp., a Delaware
corporation (the "Purchaser") and a wholly-owned subsidiary of Amersham
Pharmacia Biotech Inc., to act as Dealer Manager in connection with its offer
to purchase all outstanding shares of Common Stock, $.01 par value (the
"Common Stock"), and the associated Rights (as defined in the Offer to
Purchase) to purchase Series A Junior Participating Preferred Stock (the
Common Stock and the Rights are referred to herein collectively as the
"Shares"), of Molecular Dynamics, Inc., a Delaware corporation (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 Purchaser's Offer to Purchase dated
August 14, 1998 and the related Letter of Transmittal (which together
constitute the "Offer").
For your information and for forwarding to your clients for
whom you hold Shares registered in your name or in the name of your nominee,
we are enclosing the following documents:
1. Offer to Purchase dated August 14, 1998;
2. Letter of Transmittal for your use and for the information of
your clients, together with Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 providing information
relating to backup federal income tax withholding;
3. Notice of Guaranteed Delivery to be used to accept the Offer if
the Shares and all other required documents cannot be delivered to the
Depositary by the Expiration Date (as defined in the Offer to Purchase);
4. A form of letter which may be sent to your clients for whose
accounts you hold Shares registered in your name or in the name of your
nominee, with space provided for obtaining such clients' instructions
with regard to the Offer; and
5. Return envelope addressed to Harris Trust Company of New York,
the Depositary.
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE.
THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW
YORK CITY TIME, ON FRIDAY, SEPTEMBER 11, 1998, UNLESS THE OFFER IS EXTENDED.
The Purchaser will not pay any fees or commissions to any
broker or dealer or other person (other than the Dealer Manager, the
Information Agent or the Depositary as described in the Offer to Purchase) for
soliciting tenders of Shares pursuant to the Offer. The Purchaser will,
however, upon request, reimburse brokers, dealers, commercial banks and trust
companies for reasonable and necessary costs and expenses incurred by them in
forwarding materials to their customers. The Purchaser will pay all stock
transfer taxes applicable to its purchase of Shares pursuant to the Offer,
subject to Instruction 6 of the Letter of Transmittal.
In order to accept the Offer a duly executed and properly
completed Letter of Transmittal and any required signature guarantees, or an
Agent's Message (as defined in the Offer to Purchase) in connection with a
book-entry delivery of Shares, and any other required documents, should be
sent to the Depositary by 12:00 midnight, New York City time, on Friday,
September 11, 1998.
Any inquiries you may have with respect to the Offer should be
addressed to, and additional copies of the enclosed materials may be obtained
from, the Information Agent or the undersigned at the addresses and telephone
numbers set forth on the back cover of the Offer to Purchase.
Very truly yours,
MORGAN STANLEY & CO. INCORPORATED
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL
CONSTITUTE YOU THE AGENT OF APB ACQUISITION CORP., AMERSHAM PHARMACIA BIOTECH
INC., THE DEALER MANAGER, THE INFORMATION AGENT OR THE DEPOSITARY, OR
AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENT ON
BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE DOCUMENTS
ENCLOSED HEREWITH AND THE STATEMENTS CONTAINED THEREIN.
EXHIBIT (A)(5)
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
(Including the Associated Rights)
of
Molecular Dynamics, Inc.
at
$20.50 Net Per Share
by
APB Acquisition Corp.
a wholly owned subsidiary of
Amersham Pharmacia Biotech Inc.
To Our Clients:
Enclosed for your consideration are the Offer to Purchase dated
August 14, 1998 and the related Letter of Transmittal (which together
constitute the "Offer") in connection with the offer by APB Acquisition Corp.,
a Delaware corporation (the "Purchaser") and a wholly-owned subsidiary of
Amersham Pharmacia Biotech Inc., to purchase for cash all outstanding shares
of Common Stock, $.01 par value (the "Common Stock"), including the associated
Rights (as defined in the Offer to Purchase) to purchase Series A Junior
Participating Preferred Stock (the Common Stock and the Rights are referred to
herein collectively as the "Shares"), of Molecular Dynamics, Inc., a Delaware
corporation (the "Company"). We are the holder of record of Shares held for
your account. A tender of such Shares can be made only by us as the holder of
record and pursuant to your instructions. The Letter of Transmittal is
furnished to you for your information only and cannot be used by you to tender
Shares held by us for your account.
We request instructions as to whether you wish us to tender any
or all of the Shares held by us for your account, upon the terms and subject
to the conditions set forth in the Offer to Purchase and the Letter of
Transmittal.
Your attention is invited to the following:
1. The tender price is $20.50 per Share, net to you in cash.
2. The Offer and withdrawal rights expire at 12:00 Midnight, New York
City time, on Friday, September 11, 1998, unless the Offer is extended.
3. The Offer is conditioned upon, among other things, there being
validly tendered by the Expiration Date (as defined in the Offer) and
not withdrawn a number of Shares which, together with the Shares then
owned by the Purchaser, represents at least a majority of the total
voting power of the Shares on a fully diluted basis.
4. Any stock transfer taxes applicable to the sale of Shares to the
Purchaser pursuant to the Offer will be paid by the Purchaser, except as
otherwise provided in Instruction 6 of the Letter of Transmittal.
If you wish to have us tender any or all of your Shares, please
so instruct us by completing, executing, detaching and returning to us the
instruction form on the detachable part hereof. An envelope to return your
instructions to us is enclosed. If you authorize tender of your Shares, all
such Shares will be tendered unless otherwise specified on the detachable part
hereof. Your instructions should be forwarded to us in ample time to permit
us to submit a tender on your behalf by the expiration of the Offer.
The Offer is not being made to, nor will tenders be accepted
from or on behalf of, holders of Shares in any jurisdiction in which the
making of the Offer or acceptance thereof would not be in compliance with the
laws of such jurisdiction.
Payment for Shares purchased pursuant to the Offer will in all
cases be made only after timely receipt by Harris Trust Company of New York
(the "Depositary") of (a) Share Certificates or timely confirmation of the
book-entry transfer of such Shares into the account maintained by the
Depositary at The Depository Trust Company (the "Book-
Entry Transfer Facility"), pursuant to the procedures set forth in Section 2
of the Offer to Purchase, (b) the Letter of Transmittal (or a facsimile
thereof), properly completed and duly executed, with any required signature
guarantees or an Agent's Message (as defined in the Offer to Purchase), in
connection with a book-entry delivery, and (c) any other documents required by
the Letter of Transmittal. Accordingly, payment may not be made to all
tendering stockholders at the same time depending upon when certificates for
or confirmations of book-entry transfer of such Shares into the Depositary's
account at the Book-Entry Transfer Facility are actually received by the
Depositary.
Instructions with Respect to
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
(Including the Associated Rights)
of
Molecular Dynamics, Inc.
The undersigned acknowledge(s) receipt of your letter and the
enclosed Offer to Purchase dated August 14, 1998, and the related Letter of
Transmittal, in connection with the offer by APB Acquisition Corp. to purchase
all outstanding shares of Common Stock, $.01 par value per share (the "Common
Stock"), including the associated Rights (as defined in the Offer to Purchase)
to purchase Series A Junior Participating Preferred Stock (the Common Stock
and the Rights are referred to herein collectively as the "Shares"), of
Molecular Dynamics, Inc.
This will instruct you to tender the number of Shares indicated
below held by you for the account of the undersigned, upon the terms and
subject to the conditions set forth in the Offer to Purchase and the related
Letter of Transmittal.
Number of Shares to be Tendered: SIGN HERE
Shares*
- ----------------------------------- ---------------------------------
Signature(s)
Dated , 1998.
--------------------------- ---------------------------------
---------------------------------
---------------------------------
Please print name(s) and
addresses here
- ----------------
* Unless otherwise indicated, it will be assumed that all Shares held by us for
your account are to be tendered.
EXHIBIT (A)(6)
Nycomed Amersham - Agreement to Acquire Molecular Dynamics
AGREED MERGER WILL FURTHER STRENGTHEN AMERSHAM PHARMACIA BIOTECH'S LEADING
POSITION IN FAST-GROWING GENOMICS MARKET
Nycomed Amersham plc (NYSE: NYE) and Molecular Dynamics, Inc.
(Nasdaq: MDYN) announce that Amersham Pharmacia Biotech Ltd, the joint venture
between Nycomed Amersham plc (55%) and Pharmacia & Upjohn Inc. (NYSE: PNU)
(45%), and its strategic partner, Molecular Dynamics, have entered into a
merger agreement providing for the acquisition of Molecular Dynamics, Inc. by
Amersham Pharmacia Biotech Inc. This acquisition will further strengthen
Amersham Pharmacia Biotech's competitive position in the market for DNA
sequencing and genomic analysis.
Under the terms of the agreement, Amersham Pharmacia Biotech
will initiate a cash tender offer of US$20.50 per Molecular Dynamics share,
thereby valuing the entire fully diluted Molecular Dynamics' share capital at
approximately US$256 million. The board of directors of Molecular Dynamics
has unanimously approved the acquisition and recommends that shareholders in
Molecular Dynamics accept the offer. The chairman and chief executive officer
of Molecular Dynamics have agreed to tender their shares into the offer.
Amersham Pharmacia Biotech is one of the world's largest
suppliers of biotechnology products to those 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. For the year
ended 31 December 1997, Molecular Dynamics reported sales of US$55.7 million
and pre-tax profits of US$5.5 million. The company had net assets of
US$41.9 million at 31 December 1997.
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. The alliance
has established a strong position with leading genomic and pharmaceutical
companies through its technology leadership, which is underpinned by
intellectual property rights held by both Amersham Pharmacia Biotech and
Molecular Dynamics.
Since its launch last year, the alliance's Microarray programme
for DNA analysis has achieved significant market acceptance through technology
access contracts involving more than 20 partner companies. The alliance's
high-throughput DNA sequencing system, MegaBACE[Trademark], is based on
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 the leading American, European and Japanese genomics
centers.
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 a unified support approach.
The combined extensive global sales network is expected to enhance the market
penetration of Molecular Dynamics' well-established scanners as well as the
sequencing and microarray systems.
Ron Long, chief executive of Amersham Pharmacia Biotech,
explained: "This important step of combining with our California partner will
strengthen our position at the heart of the genomics industry. The move
balances our portfolio of enabling technologies that we offer to the
pharmaceutical industry and academic researchers. Through Molecular Dynamics,
we will be focusing our efforts on collaborating with the international
genomics community to enable the acceleration of their research programmes
through our innovative technology."
Jay Flatley, president and chief executive officer of Molecular
Dynamics, will continue to lead the business and report to Ron Long. Mr.
Flatley added: "This agreement is the natural evolution of our successful
four-year collaboration. We believe that our combination is the most
effective way to accelerate the commercialisation and development of our
genomic technologies. It will enable us to build on our existing California
operation as a world-class centre of excellence in DNA sequencing and
microarray technologies."
The net cash cost to Amersham Pharmacia Biotech of acquiring
those shares it does not already own and cancelling in-the-money share options
is expected to be approximately US$199 million. This is after taking into
account cash and marketable securities held by Molecular Dynamics of US$19.7
million as of 30 June 1998. Amersham Pharmacia Biotech has held 1 million
shares in Molecular Dynamics since 1994.
The acquisition will be financed through existing bank
facilities. The boards of Nycomed Amersham plc anticipates that the
acquisition will enhance Nycomed Amersham's earnings per share before goodwill
in the year ending December 2000.
The completion of the tender offer will be conditional upon the
customary regulatory approvals and upon a majority of the fully diluted shares
in Molecular Dynamics being properly tendered and not withdrawn prior to the
expiration of the offer. Upon the successful completion of the tender offer,
a subsidiary of Amersham Pharmacia Biotech Inc will be merged into Molecular
Dynamics and any Molecular Dynamics shares not tendered and purchased in the
tender offer will be converted to the right to receive US$20.50 per share in
cash. The common stock of Molecular Dynamics is traded on the National Market
System of Nasdaq (symbol: MDYN) and the company presently has approximately
10.28 million common shares outstanding.
Except for the historical information contained herein, the
matters discussed in this news release are forward looking statements that
involve risks and uncertainties, including the timely shipment of new
products, the effect of competitive pressures and the other risks detailed
from time to time in the companies' SEC reports, including the Annual Reports
on Forms 10-K for the fiscal year ended December 31, 1997 for Nycomed Amersham
plc and Molecular Dynamics, Inc and the Quarterly Report on Form 10-Q for the
quarter ended March 31, 1998 for Molecular Dynamics.
Nycomed Amersham and Amersham Pharmacia Biotech are being
advised by Morgan Stanley. Molecular Dynamics is being advised by Vector
Securities International.
ends
Notes to editors
o Nycomed Amersham plc is a world leader in in-vivo diagnostic
imaging and research-based biotechnology supply to global markets.
The company has annual sales of Pound Sterling1.4 billion and
around 11,000 employees world-wide.
o Amersham Pharmacia Biotech is a joint venture of leading
international healthcare specialists - Nycomed Amersham plc and
Pharmacia & Upjohn Inc. In June 1997, they merged their
respective life science businesses to create one of the world's
largest suppliers of biotechnology products to those involved in
medical and life-science research.
o Amersham Pharmacia Biotech has its headquarters in Uppsala, Sweden
with facilities in: Piscataway, Cleveland and Milwaukee, USA;
Freiburg, Germany; Tokyo, Japan; and Amersham and Cardiff in the
UK. The company has over 30 marketing and sales offices
throughout the world, with a major emphasis on North America,
Europe and Japan, as well as on growing markets such as the Asia
Pacific region.
o Employing more than 3,600 people, in 1997 Amersham Pharmacia
Biotech generated sales of 425 million British pounds sterling.
Its three core divisions achieved the following sales for the
year: applied genomics - 173 million pounds; cell biology - 61
million pounds; and separations - 173 million pounds.
o In 1997 Amersham Pharmacia Biotech spent over 37 million pounds on
research and development. During the year, the company applied
for 30 new patents to protect new technology.
o Molecular Dynamics, a public corporation with headquarters in
Sunnyvale, California, is a leading developer, manufacturer and
international marketer of systems that accelerate genetic
discovery and analysis. The company's products dramatically
increase scientists' ability to visualise, quantify and analyse
genetic information.
o MegaBACE 1000 DNA sequencing systems are designed for production-
scale DNA analysis. They use 96 capillary columns, each about the
size of a human hair, filled with a gel which acts as a separating
filter during electrophoresis. Operating in parallel, the columns
separate, detect and analyse fluorescently labeled DNA fragments.
Sequence read lengths typically exceed 500 base pairs per sample. The
system automates gel replacement, sample injection, DNA separation and
data analysis for very significant productivity gains compared to
traditional slab gel systems.
o A microarray consists of thousands of DNA samples deposited or
synthesized in small spots on the surface of a slide. Microarrays
promise the highest productivity of all gene expression tools and
could significantly reduce the time and costs associated with the
development of new diagnostic tests and pharmaceuticals. The
system developed by Molecular Dynamics and Amersham Pharmacia
Biotech permits researchers to make and analyse high-density
microarrays with increased speed, efficiency and sensitivity.
Media enquiries:
Financial/Business
Giles Kerr Nycomed Amersham +44 1494 542246
Matthew Butler Nycomed Amersham +44 1494 542050
Non-USA Anita Scott Brunswick Group Ltd +44 171 404 5959
USA Kate Inverarity Brunswick, NY +1 212 333 3810
Non-financial
Non-USA Peter Gibson The Graylings Group +44 171 255 1100
USA Marcy Saack MCS PR +1 908 273 9626
EXHIBIT (A)(7)
This announcement is not an offer to purchase or a solicitation of an offer
to sell Shares. The Offer is made solely by the Offer to Purchase dated
August 14, 1998 and the related Letter of Transmittal and is not being made
to, nor will tenders be accepted from or on behalf of, holders of Shares in
any jurisdiction in which the making of the Offer or acceptance thereof
would not be in compliance with the laws of such jurisdiction. In those
jurisdictions where the applicable laws require that the Offer be made by a
licensed broker or dealer, the Offer shall be deemed to be made on behalf
of Purchaser by the Dealer Manager or one or more registered brokers or
dealers licensed under the laws of such jurisdiction.
Notice of Offer to Purchase for Cash
All Outstanding Shares of Common Stock
(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.
APB Acquisition Corp., a Delaware corporation (the "Purchaser")
and a wholly-owned subsidiary of Amersham Pharmacia Biotech Inc., a Delaware
corporation (the "Parent"), is offering to purchase all outstanding shares of
common stock, $.01 par value (the "Shares") and the associated Rights to
Purchase Series A Junior Participating Preferred Stock, of Molecular Dynamics,
Inc., a Delaware corporation (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 dated August 14, 1998 (the "Offer to Purchase") and in the
related Letter of Transmittal (which together constitute the "Offer").
- ------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON FRIDAY, SEPTEMBER 11, 1998, OR SUCH LATER DATE TO WHICH
THE OFFER IS EXTENDED ("THE EXPIRATION DATE").
- ------------------------------------------------------------------------------
The Offer is conditioned upon, among other things, there being
validly tendered and not withdrawn prior to the Expiration Date a number of
Shares which, together with the Shares then owned by the Parent, would
represent at least a majority of the total number of outstanding Shares on a
fully diluted basis (the "Minimum Condition").
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED
THE OFFER AND THE MERGER DESCRIBED IN THE OFFER TO PURCHASE, AND HAS
UNANIMOUSLY DETERMINED THAT THE OFFER AND THE MERGER ARE FAIR TO, AND IN THE
BEST INTERESTS OF, THE COMPANY'S STOCKHOLDERS, AND UNANIMOUSLY RECOMMENDS THAT
THE COMPANY'S STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT
TO THE OFFER.
The Offer is being made pursuant to an Agreement and Plan of
Merger dated as of August 9, 1998 (the "Merger Agreement") among Parent,
Purchaser and the Company. 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. Pursuant to the Merger, each
outstanding Share (other than Shares held by Purchaser or Shares held by
stockholders exercising appraisal rights) will be converted into the right to
receive $20.50 in cash, without interest.
The Offer is subject to certain conditions set forth in the
Offer to Purchase. If any such condition is not satisfied, the 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 below, retain all such Shares until the expiration of the Offer as so
extended or (iii) waive such condition and, subject to any requirement to
extend the time during which the Offer is open, purchase all Shares validly
tendered prior to the Expiration Date and not withdrawn.
The Purchaser reserves the right, at any time or from time to
time, to extend the period of time during which the Offer is open by giving
oral or written notice of such extension to the Depositary. Any such extension
will be followed as promptly as practicable by public announcement thereof.
For purposes of the Offer, the Purchaser shall be deemed to
have accepted for payment tendered Shares when, as and if the Purchaser gives
oral or written notice to the Depositary of its acceptance of the tenders of
such Shares. Payment for Shares accepted for payment pursuant to the Offer
will be made only after timely receipt by the Depositary of certificates for
such Shares (or a confirmation of a book-entry transfer of such Shares into
the Depositary's account at the Book-Entry Transfer Facility (as defined in
the Offer to Purchase)), a properly completed and duly executed Letter of
Transmittal (or facsimile thereof) and any other required documents.
Tenders of Shares made pursuant to the Offer may be withdrawn
at any time prior to the Expiration Date. Thereafter, such tenders are
irrevocable, except that they may be withdrawn after October 14, 1998 unless
theretofore accepted for payment as provided in the Offer to Purchase. To be
effective, a written, telegraphic, telex or facsimile transmission notice of
withdrawal must be timely received by the Depositary at one of its addresses
set forth in the Offer to Purchase and must specify the name of the person who
tendered the Shares to be withdrawn and the number of Shares to be withdrawn.
If the Shares to be withdrawn have been delivered to the Depositary, a signed
notice of withdrawal with (except in the case of Shares tendered by an
Eligible Institution (as defined in the Offer to Purchase)) signatures
guaranteed by an Eligible Institution must be submitted prior to the release
of such Shares. In addition, such notice must specify, in the case of Shares
tendered by delivery of certificates, the name of the registered holder (if
different from that of the tendering 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 one of the Book-Entry Transfer Facilities to be credited with the
withdrawn Shares.
The information required to be disclosed by paragraph
(e)(1)(vii) of Rule 14d-6 of the General Rules and Regulations under the
Securities Exchange Act of 1934 is contained in the Offer to Purchase and is
incorporated herein by reference.
The Company has provided the Purchaser with the Company's
stockholder list and security position listings for the purpose of
disseminating the Offer to holders of Shares. The Offer to Purchase and the
related Letter of Transmittal will be mailed to record holders of Shares and
will be furnished to brokers, banks and similar persons whose names, or the
names of whose nominees, appear on the 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.
The Offer to Purchase and Letter of Transmittal contain
important information which should be read before any decision is made with
respect to the Offer.
Requests for copies of the Offer to Purchase and the related
Letter of Transmittal and other tender offer materials may be directed to the
Information Agent or the Dealer Manager as set forth below, and copies will be
furnished promptly at the Purchaser's expense.
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
Call Toll Free: 1-800-223-2064
The Dealer Manager for the Offer is:
Morgan Stanley Dean Witter
Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
(212) 761-4308
(call collect)
August 14, 1998
EXHIBIT (B)
The Directors,
Amersham Pharmacia Biotech Inc.
800 Centennial Avenue
P.O. Box 1327
Piscataway, NJ 08855-1327
USA
13th August 1998
Dear Sirs:
RE: SHORT TERM LIBOR LINKED LOAN FACILITY
This letter sets out the terms upon which Nycomed Amersham plc undertakes to
provide you with the loans. These terms apply from 13th August 1998.
1. Amount
The loans amount shall be up to the sum of Two Hundred and Forty
Million United States Dollars (USD 240,000,000).
2. Term
The loans will expire on 31 March 1999.
3. Purpose
The loans shall be used for financing the acquisition of Molecular
Dynamics, Inc. by APB Acquisition Corp.
4. Interest
Interest shall be paid on 31 march 1999.
The rate of interest for each loan will be LIBOR plus a margin of 0.375%.
LIBOR will be the appropriate LIBOR rate from the date of the loan until
31 March 1999.
5. Repayment
The loans will be repaid in full on 31 March 1999.
6. Prepayment
Either Amersham Pharmacia Biotech Inc. or Nycomed Amersham plc may,
by giving fourteen days prior written notice to the other party,
prepay any of the loans in whole or in part.
Any such amount prepaid may not be redrawn.
7. Default
On the occurrence of any of the events below, Nycomed Amersham plc may
terminate all or any of its obligations hereunder and demand
immediate repayment of any indebtedness and all accrued interest,
charges, costs and expenses.
(i) Amersham Pharmacia Biotech Inc. becomes insolvent or unable to
pay its obligations as they fall due;
(ii) Amersham Pharmacia Biotech Inc. initiates debt negotiations under
the supervision of a court or becomes subject to bankruptcy
proceedings;
(iii) a substantial part of the assets of Amersham Pharmacia Biotech
Inc. is taken under administration by a Receiver;
(iv) an event similar to any of those listed under (ii) to (iii)
occurs in any jurisdiction.
8. Assignation and transfer
Nycomed Amersham plc retains the right to assign its right and
obligations under the terms of these loans without consent of
Amersham Pharmacia Biotech Inc.
9. Law
This agreement shall be governed by and construed in accordance with
English law.
10. Acceptance
As evidence of your acceptance of these terms, will you please sign,
date and return the attached copy of this letter.
Signed on behalf of Nycomed Amersham plc
/s/ G.F.B. Kerr /s/ A.E. Royle
--------------------------------- ---------------------------------
G.F.B. Kerr A.E. Royle
Group Finance Director Director of Treasury
Accepted on behalf of Amersham Pharmacia Biotech Inc.
Date: 14/8/98 /s/ Julian A. Cooper
--------------------- ---------------------------------
Julian A. Cooper
Director
EXHIBIT (C)(1)
CONFORMED COPY
AGREEMENT AND PLAN OF MERGER
dated as of
AUGUST 9, 1998
among
MOLECULAR DYNAMICS, INC.,
AMERSHAM PHARMACIA BIOTECH INC.
and
APB ACQUISITION CORP.
TABLE OF CONTENTS
Page
____
ARTICLE 1
The Offer
Section 1.1. The Offer........................................... 1
Section 1.2. Company Action...................................... 2
Section 1.3. Directors........................................... 3
ARTICLE 2
The Merger
Section 2.1. The Merger.......................................... 4
Section 2.2. Conversion of Shares................................ 5
Section 2.3. Surrender and Payment............................... 5
Section 2.4. Dissenting Shares................................... 6
Section 2.5. Stock Options....................................... 7
Section 2.6. Employee Stock Purchase Plan........................ 7
ARTICLE 3
The Surviving Corporation
Section 3.1. Certificate of Incorporation........................ 8
Section 3.2. Bylaws.............................................. 8
Section 3.3. Directors and Officers.............................. 8
ARTICLE 4
Representations and Warranties of the Company
Section 4.1. Corporate Existence and Power....................... 8
Section 4.2. Corporate Authorization............................. 9
Section 4.3. Governmental Authorization.......................... 9
Section 4.4. Non-Contravention................................... 9
Section 4.5. Capitalization...................................... 10
Section 4.6. Subsidiaries........................................ 10
Section 4.7. SEC Filings......................................... 11
Section 4.8. Financial Statements................................ 11
Section 4.9. Disclosure Documents................................ 12
Section 4.10. Absence of Certain Changes......................... 12
Section 4.11. No Undisclosed Material Liabilities................ 14
Section 4.12. Litigation......................................... 15
Section 4.13. Taxes.............................................. 15
Section 4.14. ERISA.............................................. 15
Section 4.15. Compliance with Laws............................... 17
Section 4.16. Finders' Fees...................................... 17
Section 4.17. Patents and Other Proprietary Rights............... 17
Section 4.18. Environmental Matters.............................. 19
Section 4.19. Approvals; Antitakeover Provisions................. 20
Section 4.20. Rights Plan........................................ 20
ARTICLE 5
Representations and Warranties of Buyer
Section 5.1. Corporate Existence and Power....................... 21
Section 5.2. Corporate Authorization............................. 21
Section 5.3. Governmental Authorization.......................... 21
Section 5.4. Non-contravention................................... 21
Section 5.5. Disclosure Documents................................ 22
Section 5.6. Finders' Fees....................................... 22
Section 5.7. Available Funds..................................... 22
ARTICLE 6
Covenants of the Company
Section 6.1. Conduct of the Company.............................. 23
Section 6.2. Stockholder Meeting; Proxy Material................. 25
Section 6.3. Access to Information............................... 25
Section 6.4. Other Offers........................................ 26
Section 6.5. Notices of Certain Events........................... 28
Section 6.6. Redemption of Rights Plan........................... 28
Section 6.7. Waiver of Standstill Agreement...................... 28
ARTICLE 7
Covenants of Buyer
Section 7.1. Obligations of Merger Subsidiary.................... 29
Section 7.2. Voting of Shares.................................... 29
Section 7.3. Director and Officer Liability...................... 29
Section 7.4. Employee Benefits................................... 29
ARTICLE 8
Covenants of Buyer and the Company
Section 8.1. Best Efforts........................................ 30
Section 8.2. Certain Filings..................................... 30
Section 8.3. Public Announcements................................ 30
Section 8.4. Further Assurances.................................. 30
Section 8.5. Company Stock Option................................ 31
ARTICLE 9
Conditions to the Merger
Section 9.1. Conditions to the Obligations of Each Party......... 34
ARTICLE 10
Termination
Section 10.1. Termination........................................ 35
Section 10.2. Effect of Termination.............................. 36
ARTICLE 11
Miscellaneous
Section 11.1. Notices............................................ 36
Section 11.2. Survival of Representations and Warranties......... 37
Section 11.3. Amendments; No Waivers............................. 37
Section 11.4. Fees and Expenses.................................. 38
Section 11.5. Successors and Assigns............................. 39
Section 11.6. Governing Law...................................... 40
Section 11.7. Counterparts; Effectiveness........................ 40
Section 11.8. Entire Agreement................................... 40
Section 11.9. Severability....................................... 40
Section 11.10. Definitions....................................... 40
ANNEX I Conditions to the Offer
EXHIBIT A Terms of Employee Retention Plans
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of August 9, 1998 among
Molecular Dynamics, Inc., a Delaware corporation (the "Company"), Amersham
Pharmacia Biotech Inc., a Delaware corporation ("Buyer") and APB Acquisition
Corp., a Delaware corporation and a wholly-owned subsidiary of Buyer ("Merger
Subsidiary").
WHEREAS, each of the Boards of Directors of Buyer, Merger
Subsidiary and the Company has approved and deems it advisable and in the best
interests of their respective stockholders to consummate the acquisition by
Buyer of the Company on the terms and subject to the conditions set forth
herein;
WHEREAS, in order to induce Buyer and Merger Subsidiary to
enter into this Agreement, the Company will grant to Buyer an option to
purchase Shares (as defined below) on the terms and subject to the conditions
set forth herein;
WHEREAS, concurrently with the execution of the Agreement, in
order to induce Buyer and Merger Subsidiary to enter into this Agreement,
certain stockholders of the Company have entered into the Stockholder
Agreement, dated as of the date hereof, among Buyer, Merger Subsidiary and
such stockholders, pursuant to which such stockholders have agreed to tender
the Shares owned by such stockholders, on the terms and subject to the
condition set forth therein;
NOW, THEREFORE, in consideration of the foregoing, and of the
mutual covenants and agreements set forth herein, the parties hereto agree as
follows:
ARTICLE 1
The Offer
Section 1.1. The Offer. (a) Provided that nothing shall have
occurred that would result in a failure to satisfy any of the conditions
set forth in Annex I hereto, Merger Subsidiary shall, as promptly as
practicable after the date hereof, but in no event later than five business
days following the public announcement of the terms of this Agreement,
commence an offer (the "Offer") to purchase all of the outstanding shares
(the "Shares") of common stock, $0.01 par value per share, of the Company
(the "Common Stock") and the associated rights to purchase Shares (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") at a price of $20.50 per Share (and
associated Right), net to the seller in cash. The Offer shall be subject
to the condition that a number of Shares which, together with the Shares
then owned by Buyer, represents at least a majority of the Shares
outstanding on a fully diluted basis shall be validly tendered in
accordance with the terms of the Offer prior to the expiration date of the
Offer and not withdrawn (the "Minimum Condition") and to the other
conditions set forth in Annex I hereto. Without the consent of the
Company, Merger Subsidiary shall not (i) change the form of consideration
to be paid, (ii) decrease the price per Share, (iii) decrease the number of
Shares sought in the Offer, (iv) waive the Minimum Condition, (v) impose
conditions to the Offer in addition to those set forth in Annex I or (vi)
otherwise amend the terms and conditions of the Offer in a manner adverse
to the stockholders of the Company. Notwithstanding the foregoing, Merger
Subsidiary may, without the consent of the Company, (i) extend the Offer,
if at any scheduled or extended expiration date of the Offer any of the
Offer Conditions shall not be satisfied and waived, (ii) extend the offer
for any period required by any rule, regulation, interpretation or position
of the Securities and Exchange Commission (the "SEC") 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.
Buyer and Merger Subsidiary further agree that 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, Merger
Subsidiary shall, if such condition could reasonably be expected to be
satisfied, extend the Offer for a reasonable period time, provided that Merger
Subsidiary shall not be required to extend the Offer beyond October 31, 1998.
The initial expiration date of the Offer shall be 20 business days following
the commencement of the Offer. On the terms of the Offer and subject to the
foregoing, Merger Subsidiary shall pay for all Shares in accordance with
applicable law.
(b) As soon as practicable on the date of commencement of
the Offer, Buyer and Merger Subsidiary shall file with the SEC a Tender
Offer Statement on Schedule 14D-1 with respect to the Offer which will
contain the offer to purchase and form of the related letter of transmittal
(together with any supplements or amendments thereto, collectively the
"Offer Documents"). Buyer and the Company each agrees promptly to correct
any information provided by it for use in the Offer Documents if and to the
extent that it shall have become false or misleading in any material
respect. Merger Subsidiary agrees to take all steps necessary to cause the
Offer Documents as so corrected to be filed with the SEC and to be
disseminated to holders of Shares, in each case as and to the extent
required by applicable federal securities laws. The Company and its
counsel shall be given an opportunity to review and comment on the Schedule
14D-1 (and any amendments thereto) prior to its being filed with the SEC.
Section 1.2. Company Action. (a) The Company hereby consents
to the Offer and represents that its Board of Directors, at a meeting duly
called and held, has (i) unanimously determined that this Agreement and the
transactions contemplated hereby, including the Offer and the Merger (as
defined in Section 2.1), are fair to and in the best interest of the Company's
stockholders, (ii) unanimously approved this Agreement and the transactions
contemplated hereby, including the Offer and the Merger, which approval
satisfies in full any applicable requirements of the General Corporation Law
of the State of Delaware ("Delaware Law"), and (iii) unanimously resolved,
except as may be required, in response to an unsolicited bona fide written
Acquisition Proposal (as defined in Section 6.4), in order to comply with the
fiduciary duties of the Board of Directors under applicable law as advised in
writing by Venture Law Group, A Professional Corporation ("Company Counsel"),
to recommend acceptance of the Offer and approval and adoption of this
Agreement and the Merger by its stockholders. The Company further represents
that Vector Securities International, Inc. has delivered to the Company's
Board of Directors its written opinion that the consideration to be paid in
the Offer and the Merger is fair to the holders of Shares (other than Buyer
and Merger Subsidiary) from a financial point of view. The Company has been
advised that all of its directors and executive officers intend either to
tender their Shares pursuant to the Offer or to vote in favor of the Merger.
The Company will promptly furnish Buyer with a list of its stockholders,
mailing labels and any available listing or computer file containing the names
and addresses of all record holders of Shares and lists of securities
positions of Shares held in stock depositories, in each case true and correct
as of the most recent practicable date, and will provide to Buyer such
additional information (including, without limitation, updated lists of
stockholders, mailing labels and lists of securities positions) and such other
assistance as Buyer may reasonably request in connection with the Offer.
Buyer will return such materials promptly if the Offer is not consummated.
(b) As soon as practicable on the day that the Offer is
commenced, the Company will file with the SEC a Solicitation/Recommendation
Statement on Schedule 14D-9 (the "Schedule 14D-9") which shall reflect the
recommendations of the Company's Board of Directors referred to above. The
Company and Buyer each agree promptly to correct any information provided
by it for use in the Schedule 14D-9 if and to the extent that it shall have
become false or misleading in any material respect. The Company agrees to
take all steps necessary to cause the Schedule 14D-9 as so corrected to be
filed with the SEC and to be disseminated to holders of Shares, in each
case as and to the extent required by applicable federal securities laws.
Buyer and its counsel shall be given an opportunity to review and comment
on the Schedule 14D-9 prior to its being filed with the SEC.
Section 1.3. Directors. (a) Effective upon the acceptance for
payment pursuant to the Offer of a number of Shares that satisfies the Minimum
Condition, Buyer shall be entitled to designate the number of directors,
rounded up to the next whole number, on the Company's Board of Directors that
equals the product of (i) the total number of directors on the Company's Board
of Directors (giving effect to the election of any additional directors
pursuant to this Section) multiplied by (ii) the percentage that the number of
Shares beneficially owned by Buyer (including Shares accepted for payment)
bears to the total number of Shares outstanding; and the Company shall take
all action necessary to cause Buyer's designees to be elected or appointed to
the Company's Board of Directors, including, without limitation, increasing
the number of directors and seeking and accepting resignations of incumbent
directors. At such times, the Company will use its best efforts to cause
individuals designated by Buyer to constitute the same percentage as such
individuals represent on the Company's Board of Directors of (i) each
committee of the Board and (ii) each board of directors (and committee
thereof) of each Subsidiary (as defined in Section 4.6). Notwithstanding the
foregoing, the Company shall use its best efforts to cause at least three
members of the Company's Board of Directors as of the date hereof who are not
employees of the Company (the "Continuing Directors") to remain members of the
Board of Directors until the Effective Time (as defined in Section 2.1(b)),
and Buyer consents thereto. For purposes of Articles 9 and 10 and Sections
2.1, 6.2 and 11.3, no action taken by the Board of Directors of the Company
after the consummation of the Offer and prior to the Merger shall be effective
unless such action is approved by the affirmative vote of at least a majority
of the Continuing Directors. Notwithstanding any provisions of this Agreement
to the contrary, if, following the expiration of the Offer, Merger Subsidiary
shall own 90% or more the Shares, at the request of Buyer, the Board of
Directors of the Company shall take all actions necessary to effect the Merger
pursuant to Section 253 of the Delaware Law.
(b) The Company's obligations to appoint designees to the
Board of Directors shall be subject to Section 14(f) of the Exchange Act
(as defined in Section 4.3) and Rule 14f-1 promulgated thereunder. The
Company shall promptly take all actions required pursuant to Section 14(f)
and Rule 14f-1 in order to fulfill its obligations under this Section and
shall include in the Schedule 14D-9 such information with respect to the
Company and its officers and directors as is required under Section 14(f)
and Rule 14f-1 to fulfill its obligations under this Section. Buyer will
supply to the Company in writing and be solely responsible for any
information with respect to itself and its nominees, officers, directors
and affiliates required by Section 14(f) and Rule 14f-1.
ARTICLE 2
The Merger
Section 2.1. The Merger. (a) At the Effective Time (as
defined below), Merger Subsidiary shall be merged (the "Merger") with and into
the Company in accordance with Delaware Law, whereupon the separate existence
of Merger Subsidiary shall cease, and the Company shall be the surviving
corporation (the "Surviving Corporation").
(b) As soon as practicable after satisfaction or, to the extent
permitted hereunder, waiver of all conditions to the Merger, the Company and
Merger Subsidiary will file a certificate of merger ("Certificate of Merger")
with the Secretary of State of the State of Delaware and make all other
filings or recordings required by Delaware Law in connection with the Merger.
The Merger shall become effective at such time as the Articles of Merger are
duly filed with the Secretary of State of the State of Delaware (the
"Effective Time").
(c) From and after the Effective Time, the Surviving
Corporation shall possess all the rights, privileges, powers and franchises
and be subject to all of the restrictions, disabilities and duties of the
Company and Merger Subsidiary, all as provided under Delaware Law.
Section 2.2. Conversion of Shares. At the Effective Time:
(a) each Share held by the Company as treasury stock or
owned by Buyer or any subsidiary of Buyer immediately prior to the
Effective Time shall be canceled, and no payment shall be made with respect
thereto;
(b) each share of common stock of Merger Subsidiary
outstanding immediately prior to the Effective Time shall be converted into
and become one share of common stock of the Surviving Corporation with the
same rights, powers and privileges as the shares so converted and shall
constitute the only outstanding shares of capital stock of the Surviving
Corporation; and
(c) each Share outstanding immediately prior to the
Effective Time shall, except as otherwise provided in Section 2.2(a) or as
provided in Section 2.4 with respect to Shares as to which appraisal rights
have been exercised, be converted into the right to receive $20.50 in cash,
without interest (the "Merger Consideration").
Section 2.3. Surrender and Payment. (a) Prior to the
Effective Time, Buyer shall appoint an agent (the "Exchange Agent") for the
purpose of exchanging certificates representing Shares for the Merger
Consideration. Buyer will make available to the Exchange Agent, in such
amounts as may be needed from time to time, the Merger Consideration to be
paid in respect of the Shares. Promptly after the Effective Time, Buyer will
send, or will cause the Exchange Agent to send, to each holder of Shares at
the Effective Time a letter of transmittal for use in such exchange (which
shall specify that the delivery shall be effected, and risk of loss and title
shall pass, only upon proper delivery of the certificates representing Shares
to the Exchange Agent).
(b) Each holder of Shares that have been converted into a
right to receive the Merger Consideration, upon surrender to the Exchange
Agent of a certificate or certificates representing such Shares, together
with a properly completed letter of transmittal covering such Shares, will
be entitled to receive the Merger Consideration payable in respect of such
Shares. From and after the Effective Time, all Shares which have been so
converted shall no longer be outstanding and shall automatically be
canceled and retired, and each such certificate shall, after the Effective
Time, represent for all purposes, only the right to receive such Merger
Consideration.
(c) If any portion of the Merger Consideration is to be
paid to a Person other than the registered holder of the Shares represented
by the certificate or certificates surrendered in exchange therefor, it
shall be a condition to such payment that the certificate or certificates
so surrendered shall be properly endorsed or otherwise be in proper form
for transfer and that the Person requesting such payment shall pay to the
Exchange Agent any transfer or other taxes required as a result of such
payment to a Person other than the registered holder of such Shares or
establish to the satisfaction of the Exchange Agent that such tax has been
paid or is not payable. For purposes of this Agreement, "Person" means an
individual, a corporation, a limited liability company, a partnership, an
association, a trust or any other entity or organization, including a
government or political subdivision or any agency or instrumentality
thereof.
(d) After the Effective Time, there shall be no further
registration of transfers of Shares. If, after the Effective Time,
certificates representing Shares are presented to the Surviving
Corporation, they shall be canceled and exchanged for the consideration
provided for, and in accordance with the procedures set forth, in this
Article 2.
(e) Any portion of the Merger Consideration made available
to the Exchange Agent pursuant to Section 2.3(a) that remains unclaimed by
the holders of Shares six months after the Effective Time shall be returned
to Buyer, upon demand, and any such holder who has not exchanged Shares for
the Merger Consideration in accordance with this Section 2.3 prior to that
time shall thereafter look only to Buyer for payment of the Merger
Consideration in respect of Shares. Notwithstanding the foregoing, Buyer
shall not be liable to any holder of Shares for any amount paid to a public
official pursuant to applicable abandoned property laws.
(f) Any portion of the Merger Consideration made available
to the Exchange Agent pursuant to Section 2.3(a) to pay for Shares for
which appraisal rights have been perfected shall be returned to Buyer, upon
demand.
Section 2.4. Dissenting Shares. Notwithstanding Section 2.2,
Shares outstanding immediately prior to the Effective Time and held by a
holder who has not voted in favor of the Merger or consented thereto in
writing and who has demanded appraisal for such Shares in accordance with
Delaware Law shall not be converted into a right to receive the Merger
Consideration, unless such holder fails to perfect or withdraws or otherwise
loses his right to appraisal. If after the Effective Time such holder fails to
perfect or withdraws or loses his right to appraisal, such Shares shall be
treated as if they had been converted as of the Effective Time into a right to
receive the Merger Consideration. The Company shall give Buyer prompt notice
of any demands received by the Company for the payment of fair value for
Shares, and Buyer shall have the right to participate in all negotiations and
proceedings with respect to such demands. The Company shall not, except with
the prior written consent of Buyer, make any payment with respect to, or
settle or offer to settle, any such demands.
Section 2.5. Stock Options. (a) At the Effective Time, (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 hereby) 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 (A) the excess, if any, of the Merger Consideration
over the applicable exercise price per share of such option by (B) the number
of shares to which such option relates; 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 Buyer shall replace each such
Unvested Option with an award (a "Replacement Award") with a total value
determined by multiplying (A) the excess, if any, of the Merger Consideration
over the applicable exercise price per share of such Unvested Option by (B)
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.
(b) Prior to the Effective Time, the Company shall take all
actions (including, if appropriate, amending the terms of the Company's
stock option or compensation plans or arrangements) that are necessary to
give effect to the transactions contemplated by Sections 2.5(a).
Section 2.6. Employee Stock Purchase Plan. (a) As of the
Effective Time, the Company Stock Purchase Plan shall be terminated. Buyer
shall pay each participant in any then current offering under such Plan that
commences after the date hereof in cash at or promptly after the Effective
Time, in cancellation of all rights under such Plan, the amount of such
participant's account balance under the Plan.
(b) Prior to the Effective Time, the Company shall take all
actions (including, if appropriate, amending the terms of the Company Stock
Purchase Plan) that are necessary to give effect to the transactions
contemplated by Section 2.6(a).
ARTICLE 3
The Surviving Corporation
Section 3.1. Certificate of Incorporation. (a) The
Certificate of Incorporation of the Surviving Corporation shall be amended
pursuant to the Certificate of Merger to read in its entirety as set forth in
the Certificate of Incorporation of Merger Subsidiary, except that the name of
the Surviving Corporation shall be Molecular Dynamics, Inc.
(b) The Surviving Corporation shall initially be authorized
to issue up to 1,000 shares of its common stock, par value $.01 per share.
Section 3.2. Bylaws. The bylaws of Merger Subsidiary in
effect at the Effective Time shall be the bylaws of the Surviving Corporation
until amended in accordance with applicable law.
Section 3.3. Directors and Officers. From and after the
Effective Time, until successors are duly elected or appointed and qualified
in accordance with applicable law, (a) the directors of Merger Subsidiary at
the Effective Time shall be the directors of the Surviving Corporation and (b)
the officers of the Company at the Effective Time shall be the officers of the
Surviving Corporation.
ARTICLE 4
Representations and Warranties of the Company
The Company represents and warrants to Buyer that, except as
set forth on the disclosure schedule of the Company which accompanies this
Agreement:
Section 4.1. Corporate Existence and Power. The Company is a
corporation duly incorporated, validly existing and in good standing under the
laws of Delaware and has all corporate powers and all material governmental
licenses, authorizations, consents and approvals required to carry on its
business as now conducted. The Company is duly qualified to do business as a
foreign corporation and is in good standing in each jurisdiction where the
character of the property owned or leased by it or the nature of its
activities makes such qualification necessary, except for those jurisdictions
where the failure to be so qualified would not, individually or in the
aggregate, have a material adverse effect on the financial condition,
business, assets or results of operations of the Company and the Subsidiaries
taken as a whole (a "Material Adverse Effect"). The Company has heretofore
delivered to Buyer true and complete copies of the Company's Certificate of
Incorporation and bylaws as currently in effect.
Section 4.2. Corporate Authorization. The execution, delivery
and performance by the Company of this Agreement and the consummation by the
Company of the transactions contemplated hereby are within the Company's
corporate powers and, except as set forth in the following sentence, have been
duly authorized by all necessary corporate action. The affirmative vote of
the holders of a majority of the Shares approving this Agreement, if
necessary, is the only vote of the holders of the Company's capital stock
necessary to approve the transactions contemplated by this Agreement. This
Agreement constitutes a valid and binding agreement of the Company.
Section 4.3. Governmental Authorization. The execution,
delivery and performance by the Company of this Agreement and the consummation
of the Merger by the Company require no action by or in respect of, or filing
with, any governmental body, agency, official or authority by the Company or
its subsidiaries other than (a) the filing of a Certificate of Merger in
accordance with Delaware Law; (b) compliance with any applicable requirements
of the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the "HSR Act");
and (c) compliance with any applicable requirements of the Securities Exchange
Act of 1934 and the rules and regulations promulgated thereunder (the
"Exchange Act").
Section 4.4. Non-Contravention. The execution, delivery and
performance by the Company of this Agreement and the consummation by the
Company of the transactions contemplated hereby do not and will not (a)
contravene or conflict with the Certificate of Incorporation or bylaws of the
Company, (b) assuming compliance with the matters referred to in Section 4.3,
contravene or conflict with or constitute a violation of any provision of any
law, regulation, judgment, injunction, order or decree binding upon or
applicable to the Company or any Subsidiary, (c) constitute a default under or
give rise to a right of termination, cancellation or acceleration of any right
or obligation of the Company or any Subsidiary or to a loss of any benefit to
which the Company or any Subsidiary is entitled under any provision of any
agreement, contract or other instrument binding upon the Company or any
Subsidiary or any license, intellectual property rights franchise, permit or
other similar authorization held by the Company or any Subsidiary, or (d)
result in the creation or imposition of any Lien on any asset of the Company
or any Subsidiary except, in the case of clauses (b), (c) and (d), for such
matters as would not, individually or in the aggregate, have a Material
Adverse Effect. For purposes of this Agreement, "Lien" means, with respect to
any asset, any mortgage, lien, pledge, charge, security interest or
encumbrance of any kind in respect of such asset.
Section 4.5. Capitalization. The authorized capital stock of
the Company consists of 30,000,000 shares of Common Stock, $0.01 par value per
share and 1,000,000 shares of Preferred Stock. As of July 5, 1998, there were
outstanding 10,278,300 shares of Common Stock, no shares of Preferred Stock,
and stock options to purchase an aggregate of 2,211,991 shares of Common Stock
(of which options to purchase an aggregate of 1,392,914 shares of Common Stock
were vested). All outstanding shares of capital stock of the Company have been
duly authorized and validly issued and are fully paid and nonassessable. All
shares of Common Stock issuable upon exercise of outstanding stock options
have been duly authorized and will have been validly issued and will be fully
paid and nonassessable. Except as set forth in this Section, the Rights and
except for changes since July 5, 1998 resulting from the exercise of stock
options outstanding on such date, there are outstanding (a) no shares of
capital stock or other voting securities of the Company, (b) no securities of
the Company convertible into or exchangeable for shares of capital stock or
voting securities of the Company and (c) no options or other rights to acquire
from the Company, and no obligation of the Company to issue, any capital
stock, voting securities or securities convertible into or exchangeable for
capital stock or voting securities of the Company (the items in clauses (a),
(b) and (c) being referred to collectively as the "Company Securities").
There are no outstanding obligations of the Company or any Subsidiary to
repurchase, redeem or otherwise acquire any Company Securities.
Section 4.6. Subsidiaries. (a) Each Subsidiary is a
corporation duly incorporated, validly existing and, if applicable, in good
standing under the laws of its jurisdiction of incorporation, has all
corporate powers and all material governmental licenses, authorizations,
consents and approvals required to carry on its business as now conducted and
is duly qualified to do business as a foreign corporation and is in good
standing in each jurisdiction where the character of the property owned or
leased by it or the nature of its activities makes such qualification
necessary, except for those jurisdictions where failure to be so qualified
would not, individually or in the aggregate, have a Material Adverse Effect.
For purposes of this Agreement, "Subsidiary" means any corporation or other
entity of which the Company owns, directly or indirectly, stock, securities or
other ownership interests having ordinary voting power sufficient to elect a
majority of the board of directors or other persons performing similar
functions. All Subsidiaries and their respective jurisdictions of
incorporation are identified in the Company's annual report on Form 10-K for
the fiscal year ended December 28, 1997 (the "Company 10-K").
(b) All of the outstanding capital stock of, or other voting
securities or ownership interests in, each Subsidiary, is owned by the
Company, directly or indirectly, free and clear of any Lien and free of any
other limitation or restriction (including any restriction on the right to
vote, sell or otherwise dispose of such stock or other securities or ownership
interests). There are no outstanding (i) securities of the Company or any
Subsidiary convertible into or exchangeable for shares of capital stock or
other voting securities or ownership interests in any Subsidiary and (ii)
options or other rights to acquire from the Company or any Subsidiary, or other
obligation of the Company or any Subsidiary to issue, any capital stock, voting
securities or other ownership interests in, or any securities convertible into
or exchangeable for any capital stock, voting securities or ownership
interests in, any Subsidiary (the items in clauses (i) and (ii) being referred
to collectively as the "Subsidiary Securities"). There are no outstanding
obligations of the Company or any Subsidiary to repurchase, redeem or
otherwise acquire any outstanding Subsidiary Securities.
Section 4.7. SEC Filings. (a) The Company has delivered to
Buyer (i) the Company's annual reports on Form 10-K for its fiscal years ended
December 28, 1997, December 29, 1996, and December 31, 1995, (ii) its
quarterly report on Form 10-Q for its fiscal quarter ended March 31, 1998 (the
"Company 10-Q"), (iii) its proxy or information statements relating to
meetings of, or actions taken without a meeting by, the stockholders of the
Company held since December 28, 1997 and (iv) all of its other reports,
statements, schedules and registration statements filed with the SEC since
December 28, 1997.
(b) As of its filing date, each such report or statement filed
pursuant to the Exchange Act did not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make
the statements made therein, in the light of the circumstances under which
they were made, not misleading.
(c) Each such registration statement, as amended or
supplemented, if applicable, filed pursuant to the Securities Act of 1933
as of the date such statement or amendment became effective did not contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein
not misleading.
Section 4.8. Financial Statements. (a) The audited condensed
consolidated financial statements and unaudited condensed consolidated interim
financial statements of the Company included in its annual reports on Form
10-K referred to in Section 4.7 and the Company 10-Q fairly present, in
conformity with generally accepted accounting principles applied on a
consistent basis (except as may be indicated in the notes thereto), the
consolidated financial position of the Company and its consolidated
subsidiaries as of the dates thereof and their consolidated results of
operations and cash flows for the periods then ended (subject to normal
year-end adjustments in the case of any unaudited interim financial
statements). For purposes of this Agreement, "Balance Sheet" means the
consolidated balance sheet of the Company as of December 31, 1997 set forth in
the Company 10-K and "Balance Sheet Date" means December 31, 1997.
(b) The unaudited, consolidated interim financial
statements of the Company at and as of June 30, 1998 set forth in Schedule
4.08(b) hereto (the "Interim Financial Statements") fairly present, in
conformity with generally accepted accounting principles applied on a
consistent basis (except as may be indicated in the notes thereto), the
consolidated financial position of the Company and its consolidated
subsidiaries as of such date and their consolidated results of operations
and cash flows for the six-month period then ended (subject to normal year-
end adjustments).
(c) Schedule 4.08(c) hereto contains a complete and
accurate description of the cash, cash equivalents and securities available
for sale of the Company as of July 31, 1998.
Section 4.9. Disclosure Documents. (a) Each document required
to be filed by the Company with the SEC in connection with the transactions
contemplated by this Agreement (the "Company Disclosure Documents"),
including, without limitation, the Schedule 14D-9, the proxy or information
statement of the Company (the "Company Proxy Statement"), if any, to be filed
with the SEC in connection with the Merger, and any amendments or supplements
thereto will, when filed, comply as to form in all material respects with the
applicable requirements of the Exchange Act.
(b) At the time the Company Proxy Statement or any amendment
or supplement thereto is first mailed to stockholders of the Company and at
the time such stockholders vote on adoption of this Agreement, the Company
Proxy Statement, as supplemented or amended, if applicable, will not contain
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading. At the time of the
filing of any Company Disclosure Document other than the Company Proxy
Statement, at the time of any distribution thereof and at the time of
consummation of the Offer, such Company Disclosure Document will not contain
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading. The representations
and warranties contained in this Subsection 4.9(b) will not apply to
statements or omissions included in the Company Disclosure Documents based
upon information furnished to the Company in writing by Buyer specifically for
use therein.
(c) The information with respect to the Company or any
Subsidiary that the Company furnishes to Buyer in writing specifically for
use in the Offer Documents will not, at the time of the filing thereof, at
the time of any distribution thereof and at the time of the consummation of
the Offer, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to
make the statements made therein, in the light of the circumstances under
which they were made, not misleading.
Section 4.10. Absence of Certain Changes. Except as disclosed
in the Company 10-K or in the Company 10-Q, or in writing to Buyer prior to
the date hereof, or, in the case of Subsections 4.10(d) and (f), in the
Interim Financial Statements, since the Balance Sheet Date, the Company and
Subsidiaries have conducted their business in the ordinary course consistent
with past practice and there has not been:
(a) any event, occurrence or development or state of
circumstances or facts which has had or could reasonably be expected to
have a Material Adverse Effect;
(b) any declaration, setting aside or payment of any
dividend or other distribution with respect to any shares of capital stock
of the Company, or any repurchase, redemption or other acquisition by the
Company or any Subsidiary of any outstanding shares of capital stock or
other securities of, or other ownership interests in, the Company or any
Subsidiary;
(c) any amendment of any material term of any outstanding
security of the Company or any Subsidiary;
(d) any incurrence, assumption or guarantee by the Company
or any Subsidiary of any indebtedness for borrowed money, or any foreign
currency, hedging, financial derivative or similar transactions, other than
in the ordinary course of business and in amounts and on terms consistent
with past practices;
(e) any creation or assumption by the Company or any
Subsidiary of any Lien on any material asset other than in the ordinary
course of business consistent with past practices;
(f) any making of any loan, advance or capital contributions
to or investment in any Person other than loans, advances or capital
contributions to or investments in wholly-owned Subsidiaries made in the
ordinary course of business consistent with past practices or any amendment
of the terms of any loan to executive officers or directors;
(g) any damage, destruction or other casualty loss (whether
or not covered by insurance) affecting the business or assets of the
Company or any Subsidiary which, individually or in the aggregate, has had
or could reasonably be expected to have a Material Adverse Effect;
(h) any transaction or commitment made, or any contract or
agreement entered into, by the Company or any Subsidiary relating to its
assets or business (including the acquisition or disposition of any assets,
including any license, disposition, assignment, transfer or encumbrance of
Intellectual Property (as defined below)) or any relinquishment by the
Company or any Subsidiary of any contract or other right, in either case,
material to the Company and the Subsidiaries taken as a whole, other than
transactions and commitments in the ordinary course of business consistent
with past practice and those contemplated by this Agreement;
(i) any change in any method of accounting or accounting
practice by the Company or any Subsidiary, except for any such change
required by reason of a concurrent change in generally accepted accounting
principles or in Regulation S-X promulgated under the Exchange Act;
(j) any tax election, other than those consistent with past
practice, not required by law or any settlement or compromise of any tax
liability in either case that is material to the Company and the
Subsidiaries;
(k) any (i) grant of any severance or termination pay to any
director, officer or employee of the Company or any Subsidiary, (ii)
increase in benefits payable under any existing severance or termination
pay policies or employment agreements, (iii) entering into of any
employment, deferred compensation or other similar agreement (or any
amendment to any such existing agreement) with any director, officer or
employee of the Company or any Subsidiary or (iv) increase in compensation,
bonus or other benefits payable to directors, officers or employees of the
Company or any Subsidiary, other than any such increases payable to
employees other than directors or officers in the ordinary course of
business consistent with past practice;
(l) any labor dispute, other than routine individual
grievances, or any activity or proceeding by a labor union or
representative thereof to organize any employees of the Company or any
Subsidiary, which employees were not subject to a collective bargaining
agreement at the Balance Sheet Date, or any lockouts, strikes, slowdowns,
work stoppages or threats thereof by or with respect to such employees; or
(m) any cancellation of any licenses, sublicenses,
franchises, permits or agreements to which the Company or any Subsidiary is
a party, or any notification to the Company or any Subsidiary that any
party to any such arrangements intends to cancel or not renew such
arrangements beyond their expiration date as in effect on the date hereof,
which cancellation or notification, individually or in the aggregate, has
had or reasonably could be expected to have a Material Adverse Effect.
Section 4.11. No Undisclosed Material Liabilities. There are
no liabilities or obligations of the Company or any Subsidiary of any kind
whatsoever, whether accrued, contingent, absolute, determined, determinable or
otherwise, and there is no existing condition, situation or set of
circumstances which could reasonably be expected to result in such a liability
or obligation, other than:
(a) liabilities or obligations disclosed or provided for in
the Balance Sheet or the Interim Financial Statements;
(b) liabilities or obligations incurred in the ordinary
course of business consistent with past practice since the Balance Sheet
Date, which in the aggregate could not reasonably be expected to have a
Material Adverse Effect;
(c) liabilities or obligations arising from the action
involving the Company, certain affiliates of Buyer and Perkin-Elmer
Corporation and disclosed in Note 7 to the interim financial statements
included in the Company 10-Q; and
(d) liabilities or obligations under this Agreement.
Section 4.12. Litigation. Except as set forth in the Company
10-K, there is no action, suit, investigation or proceeding pending, or to the
knowledge of the Company threatened, or any circumstances which are likely to
give rise to any such proceedings, against or affecting the Company or any
Subsidiary or any of their respective properties or any of their respective
officers or directors in their capacity as officers or directors of the
Company (or any basis therefor) before any court or arbitrator or before or by
any governmental body, agency or official (x) as of the date hereof, or (y)
which could reasonably be expected, individually or in the aggregate, to have
a Material Adverse Effect.
Section 4.13. Taxes. The Company has filed all material tax
returns, statements, reports and forms required to be filed with any tax
authority when due and in accordance with all applicable laws, and all taxes
shown as due and payable thereon have been timely paid, or withheld and
remitted, to the appropriate taxing authority. No deficiency in payment of
any taxes for any period has been asserted by any taxing authority which
remains unsettled at the date hereof except for deficiencies which would not
have a Material Adverse Effect. The Company and Subsidiaries do not own any
interest in real property in the State of New York or in any other
jurisdiction in which a tax is imposed on the transfer of a controlling
interest in an entity that owns any interest in real property.
Section 4.14. ERISA. (a) Schedule 4.14(a) contains a correct
and complete list identifying each "employee benefit plan", as defined in
Section 3(3) of the Employee Retirement Income Security Act of 1974 ("ERISA"),
each employment, severance or similar contract, plan, arrangement or policy
and each plan or arrangement (written or oral) providing for compensation,
bonuses, profit-sharing, stock option or other stock related rights or other
forms of incentive or deferred compensation, vacation benefits, insurance
coverage (including any self-insured arrangements), health or medical
benefits, disability benefits, workers' compensation, supplemental
unemployment benefits, severance benefits and post-employment or retirement
benefits (including compensation, pension, health, medical or life insurance
benefits) which is maintained, administered or contributed to by the Company
or any affiliate (as defined below) and covers any employee or former employee
of the Company or any affiliate or under which the Company or any affiliate
has any liability. Copies of such plans (and, if applicable, related trust
agreements) and all amendments thereto and written interpretations thereof
have been furnished to Buyer together with the three most recent annual
reports (Form 5500 including, if applicable, Schedule B thereto) prepared in
connection with any such plan. Such plans are referred to collectively herein
as the "Employee Plans". For purposes of this Section, "affiliate" of any
Person means any other Person which, together with such Person, would be
treated as a single employer under Section 414 of the Code. The only Employee
Plans which individually or collectively would constitute an "employee pension
benefit plan" as defined in Section 3(2) of ERISA (the "Pension Plans") are
identified as such in the list referred to above.
(b) No Employee Plan (i) constitutes a "multiemployer plan", as
defined in Section 3(37) of ERISA; (ii) is maintained in connection with any
trust described in Section 501(c)(9) of the Code; or (iii) is subject to Title
IV of ERISA. The Company knows of no "reportable event", within the meaning of
Section 4043 of ERISA, and no event described in Section 4041, 4042, 4062 or
4063 of ERISA has occurred in connection with any Employee Plan. Neither the
Company nor any of its affiliates has incurred any material liability under
Title IV of ERISA arising in connection with the termination of, or complete
or partial withdrawal from, any plan covered or previously covered by Title IV
of ERISA. Nothing done or omitted to be done and no transaction or holding of
any asset under or in connection with any Employee Plan has or will make the
Company or any Subsidiary, or any officer or director of the Company or any
Subsidiary, subject to any liability under Title I of ERISA or liable for any
tax pursuant to Section 4975 of the Code.
(c) Each Employee Plan which is intended to be qualified
under Section 401(a) of the Code is so qualified and has been so qualified
during the period from its adoption to date, and each trust forming a part
thereof is exempt from tax pursuant to Section 501(a) of the Code. The
Company has furnished to the Buyer copies of the most recent Internal
Revenue Service determination letters with respect to each such Plan. Each
Employee Plan has been maintained in substantial compliance with its terms
and with the requirements prescribed by any and all statutes, orders, rules
and regulations, including but not limited to ERISA and the Code, which are
applicable to such Plan.
(d) There is no contract, agreement, plan or arrangement
covering any employee or former employee of the Company or any affiliate
that, individually or collectively, could give rise to the payment of any
amount that would not be deductible pursuant to the terms of Sections
162(a)(1) or 280G of the Code.
(e) The Company does not provide post-employment health or
medical benefits for former employees of the Company and its affiliates
except as required to avoid imposition of tax under Section 4980B of the
Code. No condition exists that would prevent the Company or any Subsidiary
from amending or terminating any Employee Plan or Benefit Arrangement
providing health or medical benefits in respect of any active employee of
the Company or any Subsidiary other than limitations imposed under the
terms of a collective bargaining agreement.
(f) Except as disclosed in writing to Buyer prior to the
date hereof, there has been no amendment to, written interpretation or
announcement (whether or not written) by the Company or any of its
affiliates relating to, or change in employee participation or coverage
under, any Employee Plan or Benefit Arrangement which would increase
materially the expense of maintaining such Employee Plan or Benefit
Arrangement above the level of the expense incurred in respect thereof for
the fiscal year ended on the Balance Sheet Date.
(g) Neither the Company nor any Subsidiary is a party to or
subject to any union contract or any employment contract or arrangement
providing for annual future compensation of $150,000 or more with any
officer, consultant, director or employee.
(h) The list delivered to Buyer prior to the date hereof
entitled "Option Activity for Current Option Holders Only" accurately sets
forth, as of July 5, 1998, the number of options to purchase Shares
("Company Options") outstanding, the number of vested Company Options
outstanding and the exercise price of such Company Options. The number of
vested Company Options outstanding which have an exercise price equal to or
greater than $20.50 is 51,750.
Section 4.15. Compliance with Laws. Neither the Company nor
any Subsidiary is in violation of, or has violated, any applicable provisions
of any laws, statutes, ordinances or regulations, except for any such
violation that, individually or in the aggregate, has not had and could not
reasonably be expected to have a Material Adverse Effect.
Section 4.16. Finders' Fees. Except for Vector Securities
International, Inc., a copy of whose engagement agreement has been provided to
Buyer, there is no investment banker, broker, finder or other intermediary
which has been retained by or is authorized to act on behalf, of the Company
or any Subsidiary who might be entitled to any fee or commission from Buyer or
any of its affiliates upon consummation of the transactions contemplated by
this Agreement.
Section 4.17. Patents and Other Proprietary Rights.
(a) The Company and its subsidiaries have not granted or
promised to grant any exclusive licenses or any material non-exclusive
licenses or covenants not to sue thereunder to any third party in respect of
any Intellectual Property (as defined below) used in or necessary for the
conduct of its business as currently conducted or as proposed to be conducted
as reflected in the Company's existing business plans (other than (A) to
Buyer or its subsidiaries, (B) trademark or service mark licenses entered
into in the ordinary course of business under distribution and supply
agreements and (C) technology transfer and technology access agreements
substantially on the terms of the Company's standard form agreements). The
patents owned by the Company and its subsidiaries are valid and enforceable
and any patent issuing from patent applications of the Company and its
subsidiaries will be valid and enforceable for the duration of its term
other than any such lack of validity or enforceability which, individually
or in the aggregate, would not reasonably be expected to have a Material
Adverse Effect.
(b) (1) the Company and each of its subsidiaries owns, or is
licensed to use or otherwise possesses the legal right to use (in each case,
free and clear of any Liens (other than Liens arising out of payment
obligations in respect of such Intellectual Property) in respect of the
Company's or any of its subsidiaries' interests therein) all Intellectual
Property used in or necessary for the conduct of its business as currently
conducted;
(2) the use of any Intellectual Property by the Company
and its subsidiaries does not infringe on or otherwise violate the
rights of any person;
(3) no product (or component thereof or process) used,
sold or manufactured by the Company or any of its subsidiaries
infringes or otherwise violates the Intellectual Property of any
other person; and
(4) no person is challenging, infringing on or
otherwise violating any right of the Company or any of its
subsidiaries with respect to any Intellectual Property owned by
and/or licensed to the Company and its subsidiaries,
except as would not have a Material Adverse Effect.
For purposes of this Agreement "Intellectual Property" shall
mean trademarks, service marks, brand names, certification marks, trade dress,
assumed names, trade names and other indications of origin, the goodwill
associated with the foregoing and registrations in any jurisdiction of, and
applications in any jurisdiction to register, the foregoing, including any
extension, modification or renewal of any such registration or application;
inventions, discoveries and ideas, whether patentable or not in any
jurisdiction; manufacturing know-how; patents, applications for patents
(including, without limitation, division, continuations, continuations in part
and renewal applications), and any renewals, extensions or reissues thereof,
in any jurisdiction; nonpublic information, trade secrets and confidential
information and rights in any jurisdiction to limit the use or disclosure
thereof by any person; writings and other works, whether copyrightable or not
in any jurisdiction; registration or applications for registration of
copyrights in any jurisdiction, and any renewals or extensions thereof; or any
similar intellectual property or proprietary rights.
(c) Except as disclosed in writing to Buyer prior to the
date hereof, none of the processes, techniques and formulae, research and
development results and other know-how relating to the business of the
Company and its subsidiaries, the value of which to the Company is
contingent upon maintenance of the confidentiality thereof, has been
disclosed by the Company or any affiliate thereof to any person or entity
other than those persons or entities who are bound to hold such information
in confidence pursuant to confidentiality agreements or by operation of
law, other than any such disclosure which, individually or in the
aggregate, would reasonably be expected to have a Material Adverse Effect.
Section 4.18. Environmental Matters. (a) Except as set forth
in the Company 10-K:
(i) no notice, notification, demand, request for
information, citation, summons, complaint or order has been
received by, or, to the knowledge of the Company, is pending
or threatened by any Person against, the Company or any
Subsidiary nor has any material penalty been assessed
against the Company or any Subsidiary with respect to any
(A) alleged violation of any Environmental Law or liability
thereunder, (B) alleged failure to have any permit,
certificate, license, approval, registration or
authorization required under any Environmental Law, (C)
generation, treatment, storage, recycling, transportation or
disposal of any Hazardous Substance or (D) discharge,
emission or release of any Hazardous Substance;
(ii) no Hazardous Substance has been discharged,
emitted, released or is present at any property now or
previously owned, leased or operated by the Company or any
Subsidiary, which circumstances, individually or in the
aggregate, could reasonably be expected to result in a
Material Adverse Effect; and
(iii) there are no Environmental Liabilities that
have had or could reasonably be expected to have a Material
Adverse Effect.
(b) Except as disclosed in writing to Buyer prior to the
date hereof, there has been no environmental investigation, study, audit,
test, review or other analysis conducted of which the Company has knowledge
in relation to the current or prior business of the Company or any property
or facility now or previously owned or leased by the Company or any
Subsidiary which has not been delivered to Buyer prior to the date hereof.
(c) For purposes of this Section 4.18, the following terms
shall have the meanings set forth below:
"Company" and "Subsidiary" shall include any entity which
is, in whole or in part, a predecessor of the Company or any
Subsidiary;
"Environmental Laws" means any and all federal, state, local
and foreign statutes, laws, judicial decisions, regulations,
ordinances, rules, judgments, orders, decrees, codes, plans,
injunctions, permits, concessions, grants, franchises,
licenses, agreements and governmental restrictions, relating
to human health, the environment or to emissions, discharges
or releases of pollutants, contaminants or other hazardous
substances or wastes into the environment, including without
limitation ambient air, surface water, ground water or land,
or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport
or handling of pollutants, contaminants or other hazardous
substances or wastes or the clean-up or other remediation
thereof;
"Environmental Liabilities" means any and all liabilities of
or relating to the Company and any Subsidiary, whether
contingent or fixed, actual or potential, known or unknown,
which (i) arise under or relate to matters covered by
Environmental Laws and (ii) relate to actions occurring or
conditions existing on or prior to the Effective Time; and
"Hazardous Substances" means any toxic, radioactive,
corrosive or otherwise hazardous substance, including
petroleum, its derivatives, by-products and other
hydrocarbons, or any substance having any constituent
elements displaying any of the foregoing characteristics,
which in any event is regulated under Environmental Laws.
Section 4.19. Approvals; Antitakeover Provisions. Section 203
of the Delaware Law does not in any way restrict the acquisition of Shares
pursuant to the Offer, the consummation of the Merger or the other
transactions contemplated hereby. The adoption of this Agreement by the
affirmative vote of the holders of Shares entitling such holders to exercise
at least a majority of the voting power of the Shares is the only vote of
holders of any class or series of the capital stock of the Company that may be
required to adopt this Agreement, or to approve the Merger or any of the other
transactions contemplated hereby and no higher or additional vote is required
pursuant to of the Company's Certificate of Incorporation or otherwise.
Section 4.20. Rights Plan. The Rights Agreement has been
amended to render the Rights Agreement inapplicable to the Offer, the Merger,
the Company Stock Option, this Agreement, the Stockholder Agreement dated as
of the date hereof among Buyer, Merger Subsidiary and certain stockholders of
the Company (the "Stockholder Agreement") or any transaction contemplated
hereby or thereby between the Company, Buyer, Merger Subsidiary or such
stockholders.
ARTICLE 5
Representations and Warranties of Buyer
Buyer represents and warrants to the Company that:
Section 5.1. Corporate Existence and Power. Each of Buyer and
Merger Subsidiary is a corporation duly incorporated, validly existing and in
good standing under the laws of its jurisdiction of incorporation and has all
corporate powers and all material governmental licenses, authorizations,
consents and approvals required to carry on its business in all material
respects as now conducted. Since the date of its incorporation, Merger
Subsidiary has not engaged in any activities other than in connection with or
as contemplated by this Agreement or in connection with arranging any
financing required to consummate the transactions contemplated hereby.
Section 5.2. Corporate Authorization. The execution, delivery
and performance by Buyer and Merger Subsidiary of this Agreement and the
consummation by Buyer and Merger Subsidiary of the transactions contemplated
hereby are within the corporate powers of Buyer and Merger Subsidiary and have
been duly authorized by all necessary corporate and stockholder action. This
Agreement constitutes a valid and binding agreement of each of Buyer and Merger
Subsidiary.
Section 5.3. Governmental Authorization. The execution,
delivery and performance by Buyer and Merger Subsidiary of this Agreement and
the consummation by Buyer and Merger Subsidiary of the transactions
contemplated by this Agreement require no action by or in respect of, or
filing with, any governmental body, agency, official or authority other than
(a) the filing of the Certificate of Merger in accordance with Delaware Law,
(b) compliance with any applicable requirements of the HSR Act or of antitrust
laws and regulations in the Federal Republic of Germany; and (c) compliance
with any applicable requirements of the Exchange Act.
Section 5.4. Non-contravention. The execution, delivery and
performance by Buyer and Merger Subsidiary of this Agreement and the
consummation by Buyer and Merger Subsidiary of the transactions contemplated
hereby do not and will not (a) contravene or conflict with the Memorandum and
Articles of Association of Buyer or the Certificate of Incorporation or bylaws
of Merger Subsidiary, (b) assuming compliance with the matters referred to in
Section 5.3, contravene or conflict with any provision of law, regulation,
judgment, order or decree binding upon Buyer or Merger Subsidiary, or (c)
constitute a default under or give rise to any right of termination,
cancellation or acceleration of any right or obligation of Buyer or Merger
Subsidiary or to a loss of any benefit to which Buyer or Merger Subsidiary is
entitled under any agreement, contract or other instrument binding upon Buyer
or Merger Subsidiary other than (i) the Standstill Agreement, dated as of
April 6, 1994, between the Company, Nycomed Amersham plc (as successor to
Amersham International plc, "Nycomed") and Amersham Holdings, Inc. (the
"Standstill Agreement") and (ii) any such termination, cancellation,
acceleration or loss which, individually or in the aggregate, would not
reasonably be expected to have a material adverse effect on Buyer or Merger
Subsidiary.
Section 5.5. Disclosure Documents. (a) The information with
respect to Buyer and its subsidiaries that Buyer furnishes to the Company in
writing specifically for use in any Company Disclosure Document will not
contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements made therein, in the light of
the circumstances under which they were made, not misleading (i) in the case
of the Company Proxy Statement, at the time the Company Proxy Statement or any
amendment or supplement thereto is first mailed to stockholders of the Company
and at the time the stockholders vote on adoption of this Agreement (if
applicable), and (ii) in the case of any Company Disclosure Document other
than the Company Proxy Statement, at the time of the filing thereof, at the
time of any distribution thereof, and at the time of consummation of the Offer.
(b) The Offer Documents, when filed, will comply as to form
in all material respects with the applicable requirements of the Exchange
Act and will not at the time of the filing thereof, at the time of any
distribution thereof or at the time of consummation of the Offer, contain
any untrue statement of a material fact or omit to state any material fact
necessary to make the statements made therein, in the light of the
circumstances under which they were made, not misleading, provided, that
this representation and warranty will not apply to statements or omissions
in the Offer Documents based upon information furnished to Buyer or Merger
Subsidiary in writing by the Company specifically for use therein.
Section 5.6. Finders' Fees. Except for Morgan Stanley & Co.
Incorporated, whose fees will be paid by Buyer, there is no investment banker,
broker, finder or other intermediary who might be entitled to any fee or
commission from the Company or any of its affiliates upon consummation of the
transactions contemplated by this Agreement.
Section 5.7. Available Funds. Buyer and Merger Subsidiary
have or will have the funds necessary to consummate the Offer and the Merger.
ARTICLE 6
Covenants of the Company
Section 6.1. Conduct of the Company. From the date hereof
until the Effective Time, the Company and the Subsidiaries shall conduct their
business in the ordinary course consistent with past practice and shall use
their reasonable best efforts to preserve intact their business organizations
and relationships with third parties and to keep available the services of
their present officers and employees. Without limiting the generality of the
foregoing, from the date hereof until the Effective Time the Company will not,
and will cause its Subsidiaries not to:
(a) adopt or propose any change in its certificate of
incorporation or bylaws;
(b) 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;
(c) 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;
(d) 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);
(e) 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;
(f) 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;
(g) make any tax election or settle or compromise any
material income tax liability;
(h) take any action other than in the ordinary course of
business and consistent with past practices with respect to accounting
policies or procedures; or
(i) agree or commit to do any of the foregoing; or
(j) take or agree or commit to take any action that would
make any representation and warranty of the Company hereunder inaccurate in
any respect at, or as of any time prior to, the Effective Time.
Section 6.2. Stockholder Meeting; Proxy Material. The Company
shall cause a meeting of its stockholders (the "Company Stockholder Meeting")
to be duly called and held as soon as reasonably practicable following the
consummation of the Offer for the purpose of voting on the approval and
adoption of this Agreement, unless a vote shall not be required under Delaware
Law. The Directors of the Company shall, except as may be required, in
response to an unsolicited bona fide written Acquisition Proposal (as defined
in Section 6.4), in order to comply with the fiduciary duties of the Board of
Directors under applicable law as advised in writing by Company Counsel,
recommend approval and adoption of this Agreement and the Merger by the
Company's stockholders. In connection with such meeting, the Company (i) will
promptly prepare and file with the SEC, will use its best efforts to have
cleared by the SEC and will thereafter mail to its stockholders as promptly as
practicable the Company Proxy Statement and all other proxy materials for such
meeting, (ii) will use its best efforts to obtain the necessary approvals by
its stockholders of this Agreement and the transactions contemplated hereby
and (iii) will otherwise comply with all legal requirements applicable to such
meeting.
Section 6.3. Access to Information. (a) From the date hereof
until the Effective Time, the Company will give Buyer, its counsel, financial
advisors, auditors and other authorized representatives full access during
normal business hours on reasonable notice to the offices, properties, books
and records of the Company and the Subsidiaries and such financial and
operating data and other information as such Persons may reasonably request
and will instruct the Company's employees, counsel and financial advisors to
cooperate with Buyer in its investigation of the business of the Company and
the Subsidiaries; provided that no investigation pursuant to this Section 6.3,
shall affect any representation or warranty given by the Company to Buyer
hereunder.
(b) The Company shall not be required to permit any inspection
or to disclose any information which, in the reasonable judgment of the
Company, would result in the disclosure of any trade secrets of third
parties or violate any obligation of the Company with respect to
confidentiality if the Company shall have used reasonable efforts to obtain
the consent of such third party for such inspection or disclosure. All
information exchanged pursuant to this Section 6.3 shall be subject to
existing confidentiality agreements between the Company and Buyer. All
requests for information pursuant to this Section 6.3 shall be directed to
an executive officer of the Company or such person as may be designated by
any such executive officer. Upon termination of the Agreement, Buyer will
collect and deliver to the Company all documents obtained by it or its
representatives then in its possession and any copies thereof.
Section 6.4. Other Offers. (a) 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 Buyer) 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 this 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 Buyer of the transactions contemplated hereby
(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 Buyer) to do or
seek any of the foregoing, or
(iii) except for the waiver referred to in Section 6.7,
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;
provided, however, that 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 (which letter shall not be less favorable to the
Company in any material respect (with respect to duration and standstill
provisions) than the Confidentiality Agreement, and a copy of which shall
be provided for informational purposes only to Buyer) 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.
(b) The Board of Directors of the Company shall not take
any of the foregoing actions referred to in clauses (x) through (z) of
subsection (a) above until after reasonable notice to Buyer with respect to
such action and that such Board of Directors shall continue to advise Buyer
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 Buyer of the terms and conditions of such proposal and the identity
of the person making it.
(c) The Company will 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 shall 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.
(d) As used in this Agreement, the term "Third Party" means
any person, corporation, entity or "group," as defined in Section 13(d) of the
Exchange Act, other than Buyer or any of its affiliates.
Section 6.5. Notices of Certain Events. The Company shall
promptly notify Buyer of:
(a) any notice or other communication from any Person
alleging that the consent of such Person is or may be required in
connection with the transactions contemplated by this Agreement;
(b) any notice or other communication from any governmental or
regulatory agency or authority in connection with the transactions
contemplated by this Agreement; and
(c) any actions, suits, claims, investigations or proceedings
commenced or, to the best of its knowledge threatened against, relating to or
involving or otherwise affecting the Company or any Subsidiary which, if
pending on the date of this Agreement, would have been required to have been
disclosed pursuant to Section 4.12 or which relate to the consummation of the
transactions contemplated by this Agreement.
Section 6.6. 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, this Agreement, the Stockholder
Agreement and any other transaction contemplated hereby and thereby.
Section 6.7. 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 and the
transactions contemplated thereby.
ARTICLE 7
Covenants of Buyer
Section 7.1. Obligations of Merger Subsidiary. Buyer will
take all action necessary to cause Merger Subsidiary to perform its
obligations under this Agreement and to consummate the Merger on the terms
and conditions set forth in this Agreement.
Section 7.2. Voting of Shares. Buyer agrees to vote all
Shares beneficially owned by it in favor of adoption of this Agreement at the
Company Stockholder Meeting.
Section 7.3. Director and Officer Liability. (a) From and
after the Effective Time, Buyer 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 Buyer shall also advance expenses as incurred to the fullest
extent permitted under the Company's By-Laws. For six years after the
Effective Time, Buyer will cause the Surviving Corporation to provide
officers' and directors' liability insurance in respect of acts or omissions
occurring prior to the Effective Time covering each such Person currently
covered by the Company's officers' and directors' liability insurance policy
on terms with respect to coverage and amount no less favorable than those of
such policy in effect on the date hereof, provided that in satisfying its
obligation under this Section, Buyer shall not be obligated to cause the
Surviving Corporation to pay premiums in excess of 125% of the amount per
annum the Company paid as of the date hereof, which amount has been disclosed
to Buyer (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, Buyer shall cause the Surviving Corporation to maintain the
most advantageous policies of directors' and officers' liability insurance for
an annual premium equal to the Maximum Premium.
(b) This Section 7.3 is intended to be for the benefit of the
Indemnified Parties.
Section 7.4. Employee Benefits. (a) During the period
commencing on the Effective Time and ending on the first anniversary thereof,
Buyer 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 Buyer,
Buyer shall recognize service with Seller as service for all purposes except
benefit accrual under any defined benefit pension plan maintained by Buyer.
(b) Buyer shall cause the Surviving Corporation to adopt, as
of the Effective Time, retention plans for the employees of the Company
which shall include the terms set forth in Exhibit A hereto.
ARTICLE 8
Covenants of Buyer and the Company
Section 8.1. Best Efforts. Subject to the terms and
conditions of this Agreement, each party will use its best efforts to take, or
cause to be taken, all actions and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations to
consummate the transactions contemplated by this Agreement.
Section 8.2. Certain Filings. The Company and Buyer shall
cooperate with one another (a) in connection with the preparation of the
Company Disclosure Documents and the Offer Documents, (b) in determining
whether any action by or in respect of, or filing with, any governmental body,
agency or official, or authority is required, or any actions, consents,
approvals or waivers are required to be obtained from parties to any material
contracts, in connection with the consummation of the transactions
contemplated by this Agreement and (c) in seeking any such actions, consents,
approvals or waivers or making any such filings, furnishing information
required in connection therewith or with the Company Disclosure Documents or
the Offer Documents and seeking timely to obtain any such actions, consents,
approvals or waivers.
Section 8.3. Public Announcements. The parties have agreed
upon the form of a joint press release announcing the execution of this
Agreement and the transactions contemplated hereby. Buyer and the Company
will consult with each other before issuing any press release or making any
public statement with respect to this Agreement and the transactions
contemplated hereby. Except as may be required by applicable law or any
listing agreement with any national securities exchange or automated quotation
system, the Company will not issue any such press release or make any such
public statement prior to receiving Buyer's approval.
Section 8.4. Further Assurances. At and after the Effective
Time, the officers and directors of the Surviving Corporation will be
authorized to execute and deliver, in the name and on behalf of the Company or
Merger Subsidiary, any deeds, bills of sale, assignments or assurances and to
take and do, in the name and on behalf of the Company or Merger Subsidiary,
any other actions and things to vest, perfect or confirm of record or
otherwise in the Surviving Corporation any and all right, title and interest
in, to and under any of the rights, properties or assets of the Company
acquired or to be acquired by the Surviving Corporation as a result of, or in
connection with, the Merger.
Section 8.5. Company Stock Option.
(a) Grant of Company Stock Option. Subject to Section
11.4(d), the Company hereby grants to the Buyer an irrevocable option (the
"Company Stock Option") to purchase for $20.50 per share in cash up to
1,750,000 Shares.
(b) Exercise of Stock Option. The Buyer 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 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
this Agreement.
(c) Conditions to Purchase. The Buyer may purchase Shares
pursuant to the Company Stock Option only if all of the following conditions
are satisfied: (i) the Buyer is not at the time of purchase in material breach
of its obligations under this 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.
(d) Exercise of Stock Option. If the Buyer wishes to exercise
the Company Stock Option, it shall do so by giving the Company notice to such
effect, specifying the number of Shares to be purchased and a place and date
not earlier than one business day nor later than ten business days from the
date such notice is given for the closing of the purchase. If any such
closing cannot be consummated on the date specified by the Buyer in its notice
of election to exercise the Company Stock Option because any condition to the
purchase of Shares has not been satisfied or as a result of any restriction
arising under any applicable law or regulation, the date for such closing
shall be on such date within five days following the satisfaction of all such
conditions and the cessation of all such restrictions as the Buyer may specify.
(e) Payment and Delivery of Shares. At any closing in
connection with the Company Stock Option, (i) the Buyer shall make payment to
the Company of the aggregate purchase price for the Shares to be purchased by
delivery to the Company of a certified, cashier's or bank check payable to the
order of the Company or, if mutually agreed, by wire transfer of funds to an
account designated by the Company and (ii) the Company shall deliver to the
Buyer a certificate or certificates representing the Shares and the associated
Rights so purchased, registered in the name of the Buyer or its designee.
(f) Certain Adjustments. 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 the Buyer's rights hereunder, 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 the Buyer shall receive upon exercise of the Company Stock
Option the number and class of Shares or other securities or property that the
Buyer 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.
(g) Acquisition Proposals. At any time or from time to time
after the making of any Acquisition Proposal, in connection with the
anticipated consummation of an Acquisition Proposal the Buyer 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
the Buyer, on the day of each such surrender and in consideration thereof,
against tender by the Buyer 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 the Buyer's investment bankers. Upon
exercise of its right to surrender the Company Stock Option or any portion
thereof and the receipt by the Buyer of cash pursuant to this Section, any and
all rights of the Buyer to purchase Shares with respect to the portion of the
Company Stock Option surrendered pursuant to this Section shall be terminated.
(h) Listing and Reservation of Shares; Notification of Record
Dates. (i) Promptly after the date hereof, and from time to time
thereafter if necessary, 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.
(ii) The Company has taken all necessary corporate and
other action to authorize and reserve and to permit it to issue, and at all
times from the date hereof until such time as the obligation to deliver
Shares upon the exercise of the Company Stock Option terminates, will have
reserved for issuance, upon any exercise of the Company Stock Option, the
number of Shares subject to the Company Stock Option (less the number of
Shares previously issued upon any partial exercise of the Company Stock
Option or as to which the Company Stock Option may no longer be exercised).
(iii) The Company shall give the Buyer at least ten
days' prior written notice before setting the record date for determining
the holders of record of Shares entitled to notice of, or to vote on, any
matter, to receive any dividend or distribution or to participate in any
rights offering or other matter, or to receive any other benefit or right,
with respect to Shares.
(i) Registration of the Shares. (i) If the Buyer
requests the Company in writing to register under the Securities Act of
1933, as amended (the "Securities Act"), any of the Shares owned by the
Buyer, 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 the Buyer of the Shares
specified in its request (and to keep such registration in effect for a
period of at least 90 days), and in connection therewith prepare and file
as promptly as reasonably possible (but in no event later than 60 days from
receipt of the Buyer's request) a registration statement under the
Securities Act to effect such registration on an appropriate form, which
would permit the sale of the Shares by the Buyer in the manner specified by
the Buyer in its request. The Company shall not be obligated to make
effective more than three registration statements pursuant to the foregoing
sentence. Upon written notice to Buyer, the Company may postpone effecting
a registration pursuant to this Section 8.5 on one occasion during any
period of six consecutive months for a reasonable time specified in the
notice but not exceeding 90 days (which period may not be extended or
renewed), if (1) an investment banking firm of recognized national standing
shall advise the Company and Buyer in writing that effecting the
registration would materially and adversely affect an offering of
securities of the Company the preparation of which had then been commenced
or (2) the Company is in possession of material non-public information the
disclosure of which during the period specified in such notice the Company
believes, in its reasonable judgment, would not be in the best interests of
the Company.
(ii) The Company shall notify the Buyer in writing not
less than ten days prior to filing a registration statement under the
Securities Act (other than a filing on Form S-4 or S-8) with respect to any
Shares of the Company's intention so to file. If the Buyer wishes to have
any portion of its Shares included in such registration statement, it shall
advise the Company in writing to that effect within two business days
following receipt of such notice, and the Company will thereupon include
the number of Shares indicated by the Buyer under such Registration
Statement. If such registration involves an underwritten public offering
and the managing underwriter shall advise the Company and the Buyer that in
its view the number of Shares requested to be included in such registration
(including any securities which the Company proposes to be included)
exceeds the largest number of shares which can be sold without having an
adverse effect on such offering, including the price at which such shares
can be sold (the "Maximum Offering Size"), the Company will include in such
registration, up to the Maximum Offering Size: first, all securities
proposed to be registered by the Company, and second, Shares requested to
be registered by Buyer.
(iii) The Company shall pay all fees and expenses in
connection with any registration pursuant to this Section other than
underwriting discounts and commissions to brokers or dealers and shall
indemnify the Buyer, its officers, directors, agents, other controlling
persons and any underwriters retained by the Buyer in connection with such
sale of such Shares in the customary way, and agree to customary
contribution provisions with such persons, with respect to claims, damages,
losses and liabilities (and any expenses relating thereto) arising (or to
which the Buyer, its officers, directors, agents, other controlling persons
or underwriters may be subject) in connection with any such offer or sale
under the federal securities laws or otherwise, except for information
furnished in writing by the Buyer or its underwriters to the Company. The
Buyer and its underwriters, respectively, shall indemnify the Company to
the same extent with respect to information furnished in writing to the
Company by the Buyer and such underwriters.
ARTICLE 9
Conditions to the Merger
Section 9.1. Conditions to the Obligations of Each Party. The
obligations of the Company, Buyer and Merger Subsidiary to consummate the
Merger are subject to the satisfaction of the following conditions:
(a) if required by Delaware Law, this Agreement shall have been
adopted by the stockholders of the Company in accordance with such law;
(b) any applicable waiting period under the HSR Act relating
to the Merger shall have expired or been terminated;
(c) no provision of any applicable law or regulation and no
judgment, injunction, order or decree shall prohibit the consummation of
the Merger; and
(d) Buyer shall have purchased Shares pursuant to the Offer.
ARTICLE 10
Termination
Section 10.1. Termination. This Agreement may be terminated
and the Merger may be abandoned at any time prior to the Effective Time
(notwithstanding any approval of this Agreement by the stockholders of the
Company):
(a) by mutual written consent of the Company and Buyer;
(b) by either the Company or Buyer,
(i) if Merger Subsidiary shall not have accepted for
payment any Shares pursuant to the Offer prior to October 31, 1998;
provided, however, that the right to terminate this Agreement pursuant
to this subparagraph (i) shall not be available to any party whose
failure to perform any of its obligations under this Agreement results
in the failure of any Offer condition set forth in Annex I hereto;
(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
Buyer or the Company from consummating the Offer or the Merger is
entered and such judgment, injunction, order or decree shall become
final and nonappealable;
(c) by Buyer,
(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, this Agreement or any of the
transactions contemplated hereby, (y) modify such approval or
recommendation in a manner adverse to Buyer or Merger Subsidiary, 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 this Agreement
which cannot be cured, or has not been cured within 30 days after the
Company receives written notice from Buyer 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, this Agreement or any of
the transactions contemplated hereby, (y) modify such approval or
recommendation in a manner adverse to Buyer or Merger Subsidiary, or
(z) approve, recommend or fail to take a position that is adverse to
any proposed Acquisition Proposal; or
(ii) if Merger Subsidiary shall have failed to perform
its obligations set forth in Section 1.01(a) (unless such failure
shall result from a breach by the Company of its obligations under
this Agreement) and such breach cannot be cured, or has not been cured
within 30 days after Buyer or Merger Subsidiary receive notice from
the Company of such breach.
(e) The party desiring to terminate this Agreement pursuant to
clauses (b), (c) or (d) shall give written notice of such termination to the
other party in accordance with Section 11.1.
Section 10.2. Effect of Termination. If this Agreement is
terminated pursuant to Section 10.1, this Agreement shall become void and of
no effect with no liability on the part of any party hereto, except that
termination of this Agreement shall be without prejudice to any rights any
party may have hereunder against any other party for wilful breach of this
Agreement. The agreements contained in Sections 8.5, 10.2, 11.4 and 11.6 shall
survive the termination hereof.
ARTICLE 11
Miscellaneous
Section 11.1. Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including telecopy
or similar writing) and shall be given,
if to Buyer or Merger
Subsidiary to: Amersham Pharmacia Biotech, Inc.
800 Centennial Avenue
P.O. Box 1327
Piscataway, NJ 08855-1327
Facsimile: 732-457-8131
Att: William J. Sulinski
with copies to: Nycomed Amersham plc
Amersham Place, Little Chalfont
Buckinghamshire, England
Facsimile: 011-44-1494-542-266
Att: Robert Allnutt
Davis Polk & Wardwell
450 Lexington Avenue
New York, NY 10017
Facsimile: 212-450-4800
Att: John W. Buttrick
if to the Company, to: Molecular Dynamics, Inc.
928 East Arques Avenue
Sunnyvale, CA 94086
Facsimile: 408-773-8343
Att: Jay Flatley
with a copy to: Venture Law Group
2800 Sand Hill Road
Menlo Park, CA 94025
Facsimile: 650-233-8386
Att: Steven Tonsfeldt
Jeffrey Suto
or such other address or telecopy number as such party may hereafter specify
for the purpose by notice to the other parties hereto. Each such notice,
request or other communication shall be effective (a) if given by telecopy,
when such telecopy is transmitted to the telecopy number specified in this
Section and the appropriate telecopy confirmation is received or (b) if given
by any other means, when delivered at the address specified in this Section.
Section 11.2. Survival of Representations and Warranties. The
representations and warranties and agreements contained herein and in any
certificate or other writing delivered pursuant hereto shall not survive the
Effective Time or the termination of this Agreement except for the agreements
set forth in Section 6.4, 7.1, 7.3, 7.4, 8.5, 10.2, 11.4 and 11.6.
Section 11.3. Amendments; No Waivers. (a) Any provision of
this Agreement may be amended or waived prior to the Effective Time if, and
only if, such amendment or waiver is in writing and signed, in the case of an
amendment, by the Company, Buyer and Merger Subsidiary or in the case of a
waiver, by the party against whom the waiver is to be effective; provided that
after the adoption of this Agreement by the stockholders of the Company, no
such amendment or waiver shall, without the further approval of such
stockholders, 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 of the terms or conditions of this Agreement if such alteration or change
would adversely affect the holders of any shares of capital stock of the
Company.
(b) No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies
herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law.
Section 11.4. Fees and Expenses. (a) Except as provided in
this Section, all costs and expenses incurred in connection with this
Agreement shall be paid by the party incurring such cost or expense.
(b) If a Payment Event (as hereinafter defined) occurs, the
Company shall pay to Buyer, within two business days following such Payment
Event, a fee of $7,000,000 (the "Termination Fee").
"Payment Event" means
(i) the termination of this Agreement by the Buyer pursuant to
Section 10.1(c)(i) or by the Company pursuant to Section 10.1(d)(i);
(ii) this Agreement shall have been terminated in accordance
with 10.1(b)(i) and (x) the Company shall have failed to observe or
perform in any material respect any of its obligations under Section
6.4 of this Agreement 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 this Agreement pursuant to Section
10.1(b)(i) provided that any Acquisition Proposal shall have been
made prior to the termination of this Agreement.
(c) If a Payment Event occurs, the Company shall reimburse
Buyer 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 this Agreement and the
transactions contemplated hereby.
(d) Notwithstanding any provision of this Agreement to the
contrary, the "Total Profit" (as hereinafter defined) that Buyer 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 Buyer's Total
Profit would exceed such amount, Buyer 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 Buyer'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 Buyer 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 adjusted pursuant to Section 8.5(f) and
(vi) the Termination Fee.
(e) The Company acknowledges that the agreements contained
in this Section are an integral part of the transactions contemplated by
this Agreement, and that, without these agreements, Buyer would not enter
into this Agreement. Accordingly, if the Company fails to promptly pay any
amount due pursuant to this Section and, in order to obtain such payment,
the other party commences a suit which results in a judgment against the
Company for the fee or fees and expenses set forth in this Section, the
Company shall also pay to Buyer its costs and expenses incurred in
connection with such litigation.
Section 11.5. Successors and Assigns. The provisions of this
Agreement shall be binding upon and inure to the benefit only of the parties
hereto and their respective successors and assigns (except as expressly
provided herein), provided that no party may assign, delegate or otherwise
transfer any of its rights or obligations under this Agreement without the
consent of the other parties hereto except that Buyer may transfer or assign,
in whole or from time to time in part, to one or more of its affiliates, the
right to purchase Shares pursuant to the Offer or the Company Stock Option,
but any such transfer or assignment will not relieve Buyer of its obligations
hereunder or prejudice the rights of tendering stockholders to receive payment
for Shares validly tendered and accepted for payment pursuant to the Offer.
Section 11.6. Governing Law. This Agreement shall be
construed in accordance with and governed by the laws of the State of Delaware.
Section 11.7. Counterparts; Effectiveness. This Agreement may
be signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the
same instrument. This Agreement shall become effective when each party hereto
shall have received counterparts hereof signed by all of the other parties
hereto.
Section 11.8. Entire Agreement. This Agreement constitutes
the entire agreement among Buyer, Merger Subsidiary and the Company with
respect to the subject matter hereof and supersedes all prior agreements and
understandings, both written and oral, among Buyer, Merger Subsidiary and the
Company with respect to the subject matter hereof.
Section 11.9. Severability. If any term or provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of
law or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect. Upon such a determination
that any term or other provision is invalid, illegal or incapable of being
enforced, the parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible to the fullest extent permitted by the applicable law in an
acceptable manner to the end that the transactions contemplated hereby are
fulfilled to the extent possible.
Section 11.10. Definitions. Each of the following terms is
defined in the Section set forth opposite such term:
Term Section
_____________________________ _____________
Acquisition Proposals 6.4(a)(i)(D)
Balance Sheet 4.8(a)
Balance Sheet Date 4.8(a)
Buyer Recitals
Certificate of Merger 2.1(b)
Common Stock 1.1(a)
Company Recitals
Company Counsel 1.2(a)(iii)
Company Disclosure Documents 4.9(a)
Company Options 4.14(h)
Company Proxy Statement 4.9(a)
Company Securities 4.5
Company Stockholder Meeting 6.2
Company Stock Option 8.5(a)
Company Stock Purchase Plan 2.5(a)(i)
Company 10-K 4.6(a)
Company 10-Q 4.7(a)
Continuing Directors 1.3(a)
Costs 7.3(a)
Delaware Law 1.2(a)(ii)
Effective Time 2.1(b)
Employee Plans 4.14(a)
ERISA 4.14(a)
Exchange Act 4.3
Exchange Agent 2.3(a)
HSR Act 4.3
Indemnified Parties 7.3(a)
Intellectual Property 4.17(b)
Interim Financial Statements 4.8(b)
Lien 4.4
Material Adverse Effect 4.1
Maximum Offering Size 8.5(i)
Maximum Premium 7.3(a)
Merger 2.1(a)
Merger Subsidiary Recitals
Merger Consideration 2.2(c)
Minimum Condition 1.1(a)
Nycomed 5.4
Offer 1.1(a)
Offer Documents 1.1(b)
Option Termination Date 8.5(b)
Payment Event 11.4(b)
Person 2.3(c)
Pension Plans 4.14(a)
Replacement Award 2.5(a)(ii)
Rights 1.1(a)
Rights Agreement 1.1(a)
Schedule 14D-9 1.2(b)
SEC 1.1(a)
Securities Act 8.5(i)
Shares 1.1(a)
Standstill Agreement 5.4
Stockholder Option Agreement 4.20
Subsidiary 4.6(a)
Subsidiary Securities 4.6(b)
Surviving Corporation 2.1(a)
Termination Fee 11.4(b)
Third Party 6.4(d)
Unvested Option 2.5(a)(ii)
Vesting Date 2.5(a)(ii)
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
MOLECULAR DYNAMICS, INC.
By: /s/ Jay Flatley
------------------------------
Name: Jay Flately
Title: President and Chief
Executive Officer
AMERSHAM PHARMACIA BIOTECH INC.
By: /s/ David J. M. Dally
------------------------------
Name: David J. M. Dally
Title: Vice President
APB ACQUISITION CORP.
By: /s/ David J. M. Dally
______________________________
Name: David J. M. Dally
Title: President
ANNEX I
Notwithstanding any other provision of the Offer, Buyer shall
not be required to accept for payment or pay for any Shares, and may
terminate the Offer, if (i) the Minimum Condition (as defined in the Merger
Agreement) has not been satisfied by October 31, 1998, (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
________, 1998 and prior to the acceptance for payment or payment of
Shares, 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, (i)
challenging or seeking to make illegal, to delay materially or otherwise
directly or indirectly to restrain or prohibit the making of the Offer, the
acceptance for payment of or payment for some of or all the Shares pursuant to
the Offer or the consummation of the Merger, seeking to obtain material
damages or otherwise directly or indirectly relating to the transactions
contemplated by the Offer or the Merger, (ii) seeking to restrain, prohibit
or materially restrict Buyer's ownership or operation (or that of its
respective subsidiaries or affiliates) of all or any material portion of the
business or assets of the Company and the Subsidiaries, taken as a whole, or
(based on claims arising out of or relating to the Offer, the Merger or the
transactions contemplated by the Merger Agreement) of Buyer and its
subsidiaries, taken as a whole, or to compel Buyer or any of its subsidiaries
or affiliates to dispose of or hold separate all or any material portion of
the business or assets of the Company and the Subsidiaries, taken as a whole,
or (based on claims arising out of or relating to the Offer, the Merger or the
transactions contemplated by the Merger Agreement) of Buyer and its
subsidiaries, taken as a whole, (iii) seeking to impose or confirm material
limitations on the ability of Buyer or any of its subsidiaries or affiliates
effectively to exercise full rights of ownership of the Shares, including,
without limitation, the right to vote any Shares acquired or owned by Buyer or
any of its subsidiaries or affiliates on all matters properly presented to the
Company's stockholders, or (iv) seeking to require divestiture by Buyer or any
of its subsidiaries or affiliates of any Shares, or (v) that otherwise is
reasonably likely to have a Material Adverse Effect.
(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 Buyer 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 Buyer 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 Buyer and Merger
Subsidiary and may, subject to the terms of the Agreement, be waived by Buyer
and Merger Subsidiary in whole or in part at any time and from time to time in
their discretion. The failure by Buyer or Merger Subsidiary at any time to
exercise any of the foregoing rights shall not be deemed a waiver of any such
right, the waiver of any such right with respect to particular facts and
circumstances shall not be deemed a waiver with respect to any other facts and
circumstances, and each such right shall be deemed an ongoing right that may
be asserted at any time and from time to time prior to the Effective Time.
EXHIBIT (C)(2)
CONFORMED COPY
STOCKHOLDER AGREEMENT
AGREEMENT, dated as of August 9, 1998 among Amersham Pharmacia
Biotech Inc., a Delaware corporation ("Parent"), APB Acquisition Corp., a
Delaware corporation ("Buyer"), and the holders listed on the signature pages
hereof (the "Stockholders") of the shares of common stock, $0.01 par value per
share, of Molecular Dynamics, Inc., a Delaware corporation (the "Company")
(together with the associated Rights (as defined in the Merger Agreement), the
"Shares"), and options to purchase Shares (the "Employee Options").
WHEREAS, in order to induce Parent and Buyer to enter into an
agreement and plan of merger ("Merger Agreement") with the Company dated as of
the date hereof, Buyer has requested the Stockholders, and the Stockholders
have agreed, to enter into this Agreement; and
WHEREAS, pursuant to the Merger Agreement, Buyer shall commence
an offer (as extended from time to time, the "Offer") to purchase all of the
outstanding shares of common stock, $0.01 par value per share, of the Company
at a price of $20.50 per Share (the "Offer Price").
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE 1
Shares and Options
Section 1.1. Agreement to Tender. Each of the Stockholders
hereby agrees to tender in, and not to withdraw from, the Offer all Shares
presently owned by him as set forth on the signature page hereto and any
additional Shares acquired by such Stockholder (whether by purchase, exercise
of Employee Options pursuant to Section 1.2 hereof or otherwise) after the date
of this Agreement (the "Stockholder Shares").
Section 1.2. Exercise of Employee Options. (a) At Buyer's
written request Stockholder shall exercise some or all of its vested Employee
Options; provided, however, that Buyer 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.
(b) In the event Buyer shall request a Stockholder to exercise
some or all of such Stockholders' Employee Options, Buyer 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 Buyer at such time as the Stockholder Shares are acquired in the
Offer or pursuant to an Acquisition Proposal (as defined in the Merger
Agreement).
Section 1.3. Other Consideration. (a) In the event of the
consummation of any Acquisition Proposal (as defined in the Merger Agreement),
each Stockholder shall pay to Buyer 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 the Offer Price 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 the Offer Price multiplied by the number of Stockholder
Shares underlying such vested Employee Options which are cashed or rolled over
pursuant to such Acquisition Proposal.
(b) If all or a portion of the price per Share or Employee
Option to be paid in such Acquisition Proposal consists of non-cash
consideration, the Consideration shall mean the cash consideration per
Share or Employee Option, as applicable, if any, plus the fair market value
of the non-cash consideration per Share or Employee Option, as applicable,
as set forth in such Acquisition Proposal or, if not so set forth, as
determined by Buyer's investment bankers.
(c) Any amounts payable by Stockholder to Buyer hereunder
shall be paid no later than 30 days following the consummation of the
relevant Acquisition Proposal.
ARTICLE 2
Grant of Proxy
Each Stockholder hereby revokes any and all previous proxies
granted with respect to such Stockholder's Shares relating to the approval and
adoption of the Merger Agreement, as the same may be amended from time to
time, all agreements related to the Offer and the Merger and any actions
relating thereto, any proposal or transaction which could prevent or delay the
consummation of the transactions contemplated by the Merger Agreement or this
Agreement and any other related matters (including the adjournment,
postponement or continuation of any meeting of the stockholders of the Company
at which any of the foregoing are submitted for the consideration of the
stockholders of the Company) (the "Merger Matters"). By entering into this
Agreement, each Stockholder hereby grants a proxy appointing Buyer 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 Merger
Matters as Buyer or its proxy or substitute shall, in Buyer's sole discretion,
deem proper with respect to the Stockholder Shares. The proxy granted by such
Stockholder pursuant to this Article 2 is irrevocable and is granted in
consideration of Buyer's entering into this Agreement and the Merger
Agreement; provided, however, that such proxy shall be revoked upon
termination of this Agreement in accordance with its terms.
ARTICLE 3
Representations and Warranties of the Stockholders
Each Stockholder, severally and not jointly, represents and
warrants to the Buyer that:
Section 3.1. Valid Title. The Stockholder is the sole,
true, lawful and beneficial owner of the Stockholder Shares and Employee
Options with no restrictions on the Stockholder's voting rights, where
applicable, or rights of disposition pertaining thereto. At any Closing, the
Stockholder will convey good and valid title to the Stockholder Shares being
purchased free and clear of any and all claims, liens, charges, encumbrances
and security interests. None of the Stockholder Shares is subject to any
voting trust or other agreement or arrangement with respect to the voting of
such Shares.
Section 3.2. Non-Contravention. The execution, delivery and
performance by the Stockholder of this Agreement and the consummation of the
transactions contemplated hereby do not and will not contravene or constitute
a default under or give rise to a right of termination, cancellation or
acceleration of any right or obligation of the Stockholder or to a loss of any
benefit of the Stockholder under any provision of applicable law or regulation
or of any agreement, judgment, injunction, order decree, or other instrument
binding on the Stockholder or result in the imposition of any lien on any asset
of the Stockholder.
Section 3.3. Binding Effect. This Agreement is the valid and
binding Agreement of the Stockholder, enforceable against the Stockholder in
accordance with its terms, except as enforcement may be limited by bankruptcy,
insolvency, moratorium or other similar laws relating to creditors' rights
generally. If this Agreement is being executed in a representative or
fiduciary capacity, the person signing this Agreement has full power and
authority to enter into and perform such Agreement.
Section 3.4. Total Securities. The number of Shares and
Employee Options set forth on the signature page hereto are the only Shares and
Employee Options beneficially owned by the Stockholder and, except as set
forth on such signature page, such Stockholders own no options to purchase or
rights to subscribe for or otherwise acquire any securities of the Company and
has or have no other interest in or voting rights with respect to any
securities of the Company.
Section 3.5. Finder's Fees. No investment banker, broker or
finder is entitled to a commission or fee from Buyer or the Company in respect
of this Agreement based upon any arrangement or agreement made by or on behalf
of the Stockholder in their capacities as such.
ARTICLE 4
Representations and Warranties of Buyer
The Buyer represents and warrants to each of the Stockholders:
Section 4.1. Corporate Power and Authority. Buyer has all
requisite corporate power and authority to enter into this Agreement and to
perform its obligations hereunder. The execution, delivery and performance by
Buyer of this Agreement and the consummation by Buyer of the transactions
contemplated hereby have been duly authorized by the board of directors of
Buyer and no other corporate action on the part of Buyer is necessary to
authorize the execution, delivery or performance by Buyer of this Agreement
and the consummation by Buyer of the transactions contemplated hereby. This
Agreement has been duly executed and delivered by Buyer and is a valid and
binding Agreement of Buyer, enforceable against it in accordance with its
terms, except as enforcement may be limited by bankruptcy, insolvency,
moratorium or other similar laws relating to creditors' rights generally.
ARTICLE 5
Covenants of the Stockholders
Each of the Stockholders hereby covenants and agrees that:
Section 5.1. No Proxies for or Encumbrances on Stockholder
Shares. Except pursuant to the terms of this Agreement, the Stockholder shall
not, without the prior written consent of Buyer, directly or indirectly, (i)
grant any proxies or enter into any voting trust or other agreement or
arrangement with respect to the voting of any Stockholder Shares or (ii)
acquire, sell, assign, transfer, encumber or otherwise dispose of, or enter
into any contract, option or other arrangement or understanding with respect
to the direct or indirect acquisition or sale, assignment, transfer,
encumbrance or other disposition of, any Stockholder or Employee Options
during the term of this Agreement. The Stockholder shall not seek or solicit
any such acquisition or sale, assignment, transfer, encumbrance or other
disposition or any such contract, option or other arrangement or assignment or
understanding and agrees to notify Buyer promptly and to provide all details
requested by Buyer if the Stockholder shall be approached or solicited,
directly or indirectly, by any person with respect to any of the foregoing.
Section 5.2. No Shopping. Until such time as the Merger
Agreement shall be terminated, the Stockholder shall not 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 Buyer of the terms of any communications it may receive
relating to any of the foregoing.
ARTICLE 6
Miscellaneous
Section 6.1. Expenses. All costs and expenses incurred in
connection with this Agreement shall be paid by the party incurring such cost
or expense.
Section 6.2. Further Assurances. The Buyer and the
Stockholders will each execute and deliver or cause to be executed and
delivered all further documents and instruments and use its best efforts to
secure such consents and take all such further action as may be reasonably
necessary in order to consummate the transactions contemplated hereby or to
enable the Buyer to exercise and enjoy all benefits and rights of the
Stockholders with respect to the Shares.
Section 6.3. Additional Agreements. Subject to the terms and
conditions of this Agreement, each of the parties hereto agrees to use all
reasonable efforts to take, or cause to be taken, all action and to do, or
cause to be done, all things necessary, proper or advisable under applicable
laws and regulations and which may be required under any agreements, contracts,
commitments, instruments, understandings, arrangements or restrictions of any
kind to which such party is a party or by which such party is governed or
bound, to consummate and make effective the transactions contemplated by this
Agreement, to obtain all necessary waivers, consents and approvals and effect;
all necessary registrations and filings, including, but not limited to,
filings under the HSR Act (as defined in the Merger Agreement), responses to
requests for additional information related to such filings, and submission of
information requested by governmental authorities, and to rectify any event or
circumstances which could impede consummation of the transactions contemplated
hereby.
Section 6.4. Specific Performance. The parties hereto agree
that the Buyer would be irreparable damaged if for any reason the Stockholders
failed to tender the Stockholder Shares or exercise the Employee Options or to
perform any of its other obligations under this Agreement, and that the Buyer
would not have an adequate remedy at law for money damages in such event.
Accordingly, the Buyer shall be entitled to specific performance and injunctive
and other equitable relief to enforce the performance of this Agreement by the
Stockholders. This provision is without prejudice to any other rights that the
Buyer may have against the Stockholders for any failure to perform its
obligations under this Agreement.
Section 6.5. Notices. All notices, requests, claims, demands
and other communications hereunder shall be deemed to have been duly given
when delivered in person, by cable, telegram or telex, or by registered or
certified mail (postage prepaid, return receipt requested) to such party at its
address set forth on the signature page hereto.
Section 6.6. Survival of Representations and Warranties. All
representations and warranties contained in this Agreement shall survive
delivery of and payment for the Stockholder Shares.
Section 6.7. Amendments; Termination. This Agreement may not
be modified, amended, altered or supplemented, except upon the execution and
delivery of a written agreement executed by the parties hereto. This Agreement
shall terminate automatically upon the termination of the Merger Agreement,
provided that Section 1.3 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, Section 1.3 shall
survive until 30 days following the consummation of such Acquisition Proposal.
Section 6.8. Successors and Assigns. The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns, provided that no party may assign,
delegate or otherwise transfer any of its rights or obligations under this
Agreement without the consent of the other parties hereto; provided, however,
that Buyer may assign its rights and obligations to any affiliate of Buyer;
provided, further, that no Stockholder may assign, delegate or otherwise
transfer any of its rights or obligations under this Agreement without the
consent of the Buyer.
Section 6.9. Governing Law. This Agreement shall construed in
accordance with and governed by the law of Delaware without giving effect to
the principles of conflicts of laws thereof.
Section 6.10. Counterparts; Effectiveness. This Agreement may
be signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement shall become effective when each party hereto shall
have received counterparts hereof signed by all of the other parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above written.
AMERSHAM PHARMACIA BIOTECH INC.
By: /s/ David J. M. Dally
------------------------------------
Name: David J. M. Dally
Title: Vice President
APB ACQUISITION CORP.
By: /s/ David J. M. Dally
------------------------------------
Name: David J. M. Dally
Title: President
/s/ James M. Schlater
------------------------------------
Class of Shares/ James M. Schlater
Stock/ Employee
Employee Options
Options Owned
-------- ---------
common 118,082
stock
Employee 263,750
Options
(vested)
/s/ Jay Flatley
------------------------------------
Class of Shares/ Jay T. Flatley
Stock/ Employee
Employee Options
Options Owned
-------- -------
common 13,198
stock
Employee 221,020
Options
(vested)
EXHIBIT (C)(3)
MOLECULAR DYNAMICS INC.
August 9, 1998
Mr. Jay Flatley
18930 Congress Junction Ct.
Saratoga, CA 95070
Dear Jay,
In light of the agreement by Molecular Dynamics, Inc. (the "Company") to
merge with APB Acquisition Corp. in accordance with the terms set forth in the
Agreement and Plan of Merger dated as of the date hereof among the Company,
Amersham Pharmacia Biotech Inc. ("APB") and APB Acquisition Corp. (the "Merger
Agreement"), the following sets forth our understanding concerning your
continued employment. The effectiveness of this letter is conditioned on
consummation of the merger contemplated by the Merger Agreement (the
"Merger"). (References in this letter to the Company shall, after the
effective date of the Merger, be interpreted as references to the Surviving
Corporation (as defined in the Merger Agreement.)
You will retain your 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 APB. The integration of the
two organizations' structures, alignment of the terms and conditions
applicable to their employees, and establishment of an environment in which
the Company can recruit, develop, and retain staff of the highest caliber,
remain priorities to which both the Company and APB are fully committed.
During the period of your continued employment, you agree to carry out your
duties to the Company, including the pursuit of these priorities, in good
faith and to the best of your ability.
During the period of your continued employment, you 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 you (excluding stock options and
bonuses (other than your 1998 bonus) or any other incentive awards).
In addition, in partial consideration of: (i) your continued employment
and contribution towards the objectives described above; (ii) the fact that
you will no longer be entitled to awards of options or other incentive
compensation; and (iii) your agreeing to the confidentiality, noncompetition
and nonsolicitation provisions referred to below, the Company will pay you 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 of the Merger (the "Payment Date"), provided
you have not voluntarily terminated your employment with the Company (or its
successor) prior to the Payment Date. You shall not have been deemed to have
voluntarily terminated your employment with the Company (or its successor) if
you terminate your employment following a constructive termination. A
"constructive termination" shall have occurred in the event that (i) your
position and responsibility shall have been materially altered from that
contemplated by this agreement without your consent, (ii) the terms and
conditions of this agreement are materially breached through no action of
yours; or (iii) the principal place of business of the Company (or its
successor) is relocated more than 50 miles without your consent.
Notwithstanding the foregoing, if your employment is terminated before the
Payment Date by reason of either disability or death, you (or your estate)
will be entitled to receive a pro rata portion of the Transition Incentive
Compensation, reduced to reflect the period between the termination of your
employment and the Payment Date. For this purpose, termination by reason of
"disability" means termination of employment after your inability, as a result
of physical or mental incapacity, to work for a period of at least six months
in any 12-month period.
As of the Payment Date, your employment will be terminated and you will
not be entitled to any further compensation from the Company (except benefits
previously accrued and payable in accordance with the terms of any applicable
employee benefit plan), provided that the Company agrees that repayment of the
note delivered by you to the Company for a principal amount of $330,000 will
not be accelerated by reason of your termination of employment hereunder, and
that such note will remain outstanding with the same repayment and other terms
and conditions as in effect immediately before such termination (it being
understood that such loan will be repaid in full no later than January 28,
2001).
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 Transition Incentive Compensation may
be paid to you by the Company in advance of the Payment Date. In such case,
your employment will be terminated as of the date of payment of the Transition
Incentive Compensation, but you will continue to receive salary and benefits
until the Payment Date at the levels in effect as of the date of termination
of your employment.
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
you in accordance with the Merger Agreement, you agree (i) to continue to
adhere to the provisions of the confidentiality and inventions assignment
agreement previously executed by you in connection with your employment with
the Company; and (ii) for a period of one year from the date of termination of
your 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, you will not compete with the Company, except as may be otherwise
agreed by you and the Company in writing. For the purposes of this agreement,
"compete" shall mean engaging in, or otherwise directly or indirectly being
employed by or acting as a consultant to, or being a director, officer,
employee, principal, licensor, trustee, broker, agent, stockholder, member,
owner joint venturer or partner of, or permitting your name to be used in
connection with the activities of any other business or organization which
engages in, the Business, as defined below. For this purpose, "Business"
means the development, production or marketing of microarrays, DNA sequencing
instruments, or fluorescent scanners. Notwithstanding the foregoing, you will
not be deemed to be competing with the Company if you become the registered or
beneficial owner of up to five percent of any class of capital stock of a
corporation engaged in the Business and registered under the Securities
Exchange Act of 1934, as amended, provided you do not actively participate in
the business of such corporation until such time as this covenant expires. You
acknowledge that due to the uniqueness of your services and the confidential
nature of the information you will possess, the covenants set forth herein are
reasonable and necessary for the protection of the business and goodwill of
the Company.
This new opportunity for our organization represents another significant
milestone in the Company's history. It reflects your loyal and committed
leadership and direction since the Company's formation, for which the Board of
Directors wishes to express its sincere gratitude.
This letter agreement shall be governed by and construed in accordance
with the laws of the State of New York. The terms and conditions set forth in
this letter may only be amended pursuant to a written document between the
Company (or its successor) and you.
If you agree to the terms and conditions set forth in this letter,
kindly so indicate by signing in the space provided below.
Very truly yours,
Molecular Dynamics, Inc.
By: /s/ James M. Schlater
-----------------------------
Name: James M. Schlater
Title: Chairman of the Board
Accepted and agreed to as of
the date first above written.
/s/ Jay Flatley
- ----------------------------
Jay Flatley
