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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14D-9
SOLICITATION/RECOMMENDATION STATEMENT
PURSUANT TO SECTION 14(d)(4)
OF THE SECURITIES EXCHANGE ACT OF 1934
THE PEAK TECHNOLOGIES GROUP, INC.
(NAME OF SUBJECT COMPANY)
THE PEAK TECHNOLOGIES GROUP, INC.
(NAME OF PERSON(S) FILING STATEMENT)
COMMON STOCK, PAR VALUE $.01 PER SHARE
(INCLUDING THE ASSOCIATED PREFERRED STOCK PURCHASE RIGHTS)
(TITLE OF CLASS OF SECURITIES)
704683101
((CUSIP) NUMBER OF CLASS OF SECURITIES)
NICHOLAS R.H. TOMS
THE PEAK TECHNOLOGIES GROUP, INC.
600 MADISON AVENUE
NEW YORK, NEW YORK 10022
TELEPHONE: (212) 832-2833
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO RECEIVE NOTICE
AND COMMUNICATIONS ON BEHALF OF THE PERSON(S) FILING STATEMENT)
COPIES TO:
JOHN T. O'CONNOR, ESQ.
MILBANK, TWEED, HADLEY & MCCLOY
ONE CHASE MANHATTAN PLAZA
NEW YORK, NEW YORK 10005
(212) 530-5000
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ITEM 1. SECURITY AND SUBJECT COMPANY.
The name of the subject company is The Peak Technologies Group, Inc., a
Delaware corporation (the "Company"), and the address of its principal executive
offices is 600 Madison Avenue, New York, New York 10022. The title of the class
of equity securities to which this statement relates is Common Stock, par value
$0.01 per share, of the Company (the "Shares"), including the associated rights
(the "Associated Rights") to purchase shares of Series A Preferred Stock, par
value $0.01 per share, of the Company issued pursuant to the Rights Agreement,
dated March 28, 1997 and as amended on April 23, 1997, between the Company and
ChaseMellon Shareholder Services, as Rights Agent (the "Rights Agreement").
Unless the context otherwise requires, all references herein to the Shares
includes the Associated Rights.
ITEM 2. TENDER OFFER OF THE BIDDER.
This statement relates to the tender offer disclosed in a Tender Offer
Statement on Schedule 14D-1, dated April 29, 1997 (the "Schedule 14D-1"), of
Kirkwood Acquisition Corp., a Delaware corporation ("Purchaser"), a wholly-owned
subsidiary of FRDK, Inc., a New York corporation, a wholly-owned subsidiary of
Moore U.S.A. Inc., a Delaware corporation ("Parent"), a wholly-owned subsidiary
of Moore Corporation Limited ("Moore"), a corporation organized under the laws
of Ontario, Canada, to purchase all of the issued and outstanding Shares at a
price of $18.00 per Share (or any greater amount paid per Share pursuant to the
Offer (as defined below)) net to the seller in cash (the "Per Share Amount"),
upon the terms and subject to the conditions set forth in the Offer to Purchase,
dated April 29, 1997 and any supplement thereto (the "Offer to Purchase"), and
the related Letter of Transmittal and any supplement thereto (which together
constitute the "Offer").
The Offer is being made pursuant to an Agreement and Plan of Merger among
Parent, Purchaser and the Company, dated as of April 23, 1997 (the "Merger
Agreement"), which provides that the Purchaser commence the Offer no later than
five (5) business days after the date of the public announcement of the Offer.
The Purchaser publicly announced the Offer on April 23, 1997. The Merger
Agreement provides that, following the consummation of the Offer and the
satisfaction or waiver of certain conditions, Purchaser will be merged with and
into the Company (the "Merger"), with the Company continuing as the surviving
corporation (the "Surviving Corporation"). In the Merger, each outstanding Share
(other than Shares held in the treasury of the Company or by any subsidiary of
the Company and Shares owned by Parent, Purchaser or any other subsidiary of
Parent, which Shares will be cancelled, and other than Shares, if any, held by
stockholders who perfect appraisal rights under the General Corporation Law of
the State of Delaware (the "DGCL")), will, by virtue of the Merger and without
any action by the holder thereof, be converted into the right to receive the Per
Share Amount.
According to the Schedule 14D-1, the address of the principal executive
offices of Parent and Purchaser is 275 N. Field Drive, Suite 220-B, One Conway
Place, Lake Forest, Illinois 60045.
ITEM 3. IDENTITY AND BACKGROUND.
(a) The name and business address of the Company, which is the person
filing this statement, are set forth in Item 1 above, which information is
incorporated herein by reference.
(b)(1) Certain contracts, agreements, arrangements and understandings
between the Company and certain of its executive officers, directors and
affiliates are described in Schedule I attached hereto.
(b)(2) Parent, Purchaser and the Company have entered into the Merger
Agreement, a copy of which is filed herewith as Exhibit (c)(1). The description
of the terms of the Merger Agreement contained in the Offer to Purchase under
the headings "BACKGROUND OF THE OFFER, PAST CONTACTS, TRANSACTIONS OR
NEGOTIATIONS WITH THE COMPANY" and "THE MERGER AGREEMENT" are incorporated
herein by reference.
(b)(3) Parent and the Company entered into a Confidentiality and Standstill
Agreement, a copy of which is filed herewith as Exhibit (c)(2).
(b)(4) Parent and the Company entered into an Exclusivity Agreement, a copy
of which is filed herewith as Exhibit (c)(3).
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(b)(5) Pursuant to a letter dated February 1, 1997, a copy of which is
filed herewith as Exhibit (c)(4), the Company agreed to pay Mr. Gregory Thomas,
a director of the Company, $250,000 in cash immediately prior to the closing of
the Offer in consideration of his efforts on behalf of the Company in
negotiating the terms of the transaction with Parent. In addition, by letter
dated February 1, 1997, a copy of which is filed herewith as Exhibit (c)(5), the
Company retained Hugo Biermann, a stockholder and former director of the
Company, as a consultant to the Company in the negotiations between the Company
and Parent. Mr. Biermann's compensation is $150,000 cash and the grant of 10,000
options to purchase shares of the Company's common stock at $8.625. Furthermore,
Mr. Biermann was retained by the Company pursuant to a Consulting Agreement,
dated February 1, 1997, a copy of which is filed herewith as Exhibit (c)(6),
providing for compensation of $5,000 per month and the grant of 5,000 stock
options at $8.625 per share.
ITEM 4. THE SOLICITATION OR RECOMMENDATION.
(a) Recommendations of the Board of Directors.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS THAT STOCKHOLDERS TENDER
THEIR SHARES PURSUANT TO THE OFFER.
At a meeting of the Board of Directors of the Company (the "Company Board")
held on April 22, 1997, the Company Board, by unanimous vote of the directors
present, (i) determined that the Merger Agreement and the transactions
contemplated thereby, including the Offer and the Merger, taken together, at a
price of $18.00 per share, are fair to, and in the best interests of, the
stockholders of the Company, (ii) approved, subject to the execution and
delivery of the Merger Agreement, the Merger Agreement and the transactions
contemplated thereby, including the Offer and the Merger, (iii) recommended that
the stockholders of the Company accept the Offer and, if required by the DGCL,
vote in favor of the Merger, (iv) amended the Rights Agreement to provide, among
other things, that (a) none of the execution and delivery of the Merger
Agreement or the making of the Offer or the purchase of Shares in the Offer will
cause (x) Parent, Purchaser or any of their affiliates or associates to have
beneficial ownership of any Shares solely as a result of any such event, (y)
Parent, Purchaser or any of their affiliates or associates to be deemed an
"Acquiring Person" under the Rights Agreement or (z) the "Shares Acquisition
Date" or the "Distribution Date" under the Rights Agreement to occur upon any
such event, and (b) the "Rights" (each of the above as defined in the Rights
Agreement) will expire immediately prior to the effective time of the Merger,
and (v) exempted the Offer, the Merger and the Merger Agreement from the
provisions of Section 203 of the DGCL. ACCORDINGLY, THE COMPANY BOARD RECOMMENDS
THAT THE STOCKHOLDERS OF THE COMPANY TENDER THEIR SHARES PURSUANT TO THE OFFER.
Copies of a press release announcing the Merger Agreement and the transactions
contemplated thereby and of a letter to the stockholders of the Company
communicating the Company Board's recommendation are filed herewith as Exhibits
(a)(3) and (a)(4), respectively, and are incorporated herein by reference. On
February 19, 1997, Parent and the Company entered into a confidentiality
agreement which is described in greater detail in Item 4(b)(1) below, which
information is incorporated herein by reference.
(b)(1) Background.
On October 18, 1996, the Company's financial advisor, William Blair &
Company, L.L.C. ("William Blair"), received an inquiry, through Lazard Freres &
Company LLC ("Lazard Freres"), the financial advisor to Parent, pursuant to
which Lazard Freres communicated Parent's interest in investigating a potential
transaction with the Company. On October 21, 1996, the Company received certain
information regarding Parent through William Blair. On October 28, 1996, the
Company informed Parent that it was not interested in pursuing a transaction at
that time, but indicated that it would be willing to consider a specific
proposal from Parent should Parent desire to present such a proposal.
On November 27, 1996, Lazard Freres contacted the Company to arrange a
meeting between the Company and Parent. The Company agreed to an "informational
meeting." Management of the Company and Parent met on December 6, 1996 at the
offices of Lazard Freres and discussed certain information regarding the
Company.
On February 18, 1997, the Company formally retained William Blair as a
financial advisor with respect to the potential transaction with Parent and on
February 19, 1997, the Company and Parent entered into a confidentiality and
standstill agreement.
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On February 28, 1997, representatives from Parent's management visited the
Company's corporate offices in New York City at which time confidential data was
presented, explained and discussed. Between March 1-17, 1997, the Company
delivered additional requested information to Parent.
On March 28, 1997, Parent communicated to the Company, by telephone, that
it would consider a transaction in the form of a tender offer followed by a
merger, with Parent offering to acquire all outstanding shares for $17.00 per
share (subject to negotiation of definitive documentation and completion of due
diligence) which was confirmed in writing on March 31, 1997. On that day, in
conjunction with its public announcement of 1996 earnings, the Company publicly
announced that it had received an offer relating to an acquisition of the
Company at a premium to its then current per share trading price.
After receiving a revised, written indication of Parent's proposal on April
2, 1997, increasing the purchase price to $18.50 per share (subject to
negotiation of definitive documentation and completion of due diligence), the
Company and Parent entered into an exclusivity agreement on April 4, 1997. From
that point until the execution of the Merger Agreement, Parent conducted an
extensive due diligence investigation of the Company and its business and the
parties circulated and negotiated drafts of the Merger Agreement and other
related agreements.
During this time, the Company Board met on several occasions to discuss the
proposed transaction with Parent and adopted resolutions authorizing negotiation
of the proposed transaction.
Following negotiation of definitive documentation and completion of due
diligence, the parties agreed to a final purchase price of $18.00 per share.
At a meeting of the Company Board held on April 22, 1997, the Company Board
considered and discussed the terms and conditions of the Merger Agreement. At
such meeting, William Blair delivered its fairness opinion stating that the cash
consideration to be received by the Company's stockholders pursuant to the Offer
and Merger was fair to such stockholders from a financial point of view. By
unanimous vote of the directors present at the meeting, the Company Board
approved the Merger Agreement and the transactions contemplated thereby. The
Company Board also adopted resolutions (i) stating that the Merger Agreement was
in the best interest of the stockholders, and (ii) calling for the Company to
file this Recommendation Statement on Schedule 14D-9 recommending that
stockholders tender their Shares pursuant to the Offer.
As a part of the transaction, the parties agreed to restructure the
severance arrangements of certain employees as described more fully in Schedule
I attached hereto.
(b)(2) Reasons for the Recommendation.
In making the determinations and recommendations set forth in Item 4(a)
above, the Company Board considered a number of factors including, without
limitation, the following:
(i) The historical and recent trading prices of the Shares and the
fact that the cash offer price of $18.00 per Share provided for in the
Merger Agreement represented a premium of approximately 108% over the
closing market price of $8.625 per share on March 27, 1997, the last full
trading day prior to the date of the Company's public announcement of its
receipt of an offer.
(ii) The opinion of William Blair delivered on April 22, 1997 that, as
of such date and based upon its review and analysis and subject to the
limitations set forth therein, the $18.00 per Share cash consideration to
be received by the Company's stockholders pursuant to the Merger Agreement
in the Offer and the Merger was fair, from a financial point of view, to
such stockholders. A copy of the written opinion, dated April 22, 1997, of
William Blair, which sets forth the procedures followed, matters
considered, assumptions made and limitations of the review undertaken by
William Blair in rendering its opinion, is attached as Exhibit (a)(6)
hereto and is incorporated herein by reference. STOCKHOLDERS ARE URGED TO
READ THE OPINION OF WILLIAM BLAIR CAREFULLY IN ITS ENTIRETY.
(iii) The Company Board's familiarity with the Company's business,
prospects, financial condition, results of operations and current business
strategy and its belief that the price per Share offered pursuant to the
Merger Agreement reflects the values inherent in the Company.
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(iv) Parent's ability to finance the acquisition and the absence of
any financing condition in the Merger Agreement.
In view of the variety of factors considered in connection with its
evaluation of the Merger Agreement, the Company Board did not find it
practicable to, and did not, quantify or otherwise assign relative weights to
the specific factors considered in reaching its determination. In addition,
individual members of the Company Board may have given different weights to
different factors.
ITEM 5. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
By letter agreement, dated March 31, 1997, the Company engaged William
Blair (i) to act as the Company's primary financial advisor in connection with a
possible business combination of the Company with Moore Corporation Limited or
another party (the "Possible Transaction") and (ii) to render an opinion, as to
fairness to the Company's stockholders, from a financial point of view, of the
cash consideration to be received by such stockholders in the Possible
Transaction (the "William Blair Agreement").
Pursuant to the William Blair Agreement, in the event that William Blair
renders an opinion or advises the Company Board that it is unable to render an
opinion in connection with the Possible Transaction, then the Company shall pay
William Blair an opinion fee of $100,000, payable promptly after the rendering
of such opinion or the communication of such advice. An additional opinion fee
of $100,000 shall be payable promptly after the first mailing to any common
stockholder of the Company or the first publication of any proxy statement or
offer to purchase in which the opinion is reproduced in its entirety or
summarized, described or referred to. In the event that the Possible Transaction
is consummated at a price less that $25 per share, the Company shall pay or
cause to be paid to William Blair a fee equal to 0.80% of the total
consideration received by the Company and its stockholders as a result of such
consummation, and if the Possible Transaction is consummated at a price of $25
per share or higher, the Company shall pay or cause to be paid to William Blair
a fee equal to 1.0% of the total consideration, less the aggregate of all fees
then previously paid pursuant to the first two sentences of this paragraph.
The Company also has agreed in the William Blair Agreement to reimburse
William Blair for its reasonable out-of-pocket expenses, including reasonable
fees and expenses of its legal counsel and any other independent experts
retained by William Blair, and to indemnify William Blair and certain related
persons against certain liabilities in connection with William Blair's
engagement thereunder.
Pursuant to a letter agreement dated April 15, 1997, the Company engaged
Goldman, Sachs & Co. ("Goldman Sachs") as one of the Company's financial
advisors in connection with the possible sale of all or a portion of the Company
(the "Goldman Sachs Agreement"). The Company agreed to pay to Goldman Sachs a
minimum fee of $100,000 upon the closing of any transaction involving the sale
of all or a portion of the Company.
Pursuant to the Goldman Sachs Agreement, in the event that (i) the Company
completes a transaction with Parent for the sale of 50% or more of the
outstanding common stock or assets of the Company and (ii) Goldman Sachs
provides an opinion as to the fairness of the transaction to the stockholders of
the Company, the Company will pay Goldman Sachs $750,000. Pursuant to the Merger
Agreement, the Company has agreed that, without the prior written consent of
Parent, it will not seek a fairness opinion from Goldman Sachs.
The Company has also agreed in the Goldman Sachs Agreement to reimburse
Goldman Sachs for its reasonable out-of-pocket expenses, including reasonable
fees and disbursements of legal counsel, and to indemnify Goldman Sachs and
certain related persons against certain liabilities in connection with Goldman
Sachs' engagement thereunder.
The Company has not employed, retained or compensated any other person to
make solicitations or recommendations on its behalf to security holders with
respect to the Offer or the Merger.
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ITEM 6. RECENT TRANSACTIONS AND INTENT WITH RESPECT TO SECURITIES.
(a) There have been no transactions in Shares which were effected during
the past sixty (60) days by the Company or any of its subsidiaries or, to the
best of the Company's knowledge, any executive officer, director or affiliate of
the Company.
(b) To the best of the Company's knowledge, each of its executive officers
and directors presently intends to tender his or her Shares pursuant to the
Offer.
ITEM 7. CERTAIN NEGOTIATIONS AND TRANSACTIONS BY THE SUBJECT COMPANY.
(a) Except as set forth in Items 3(b) and Item 4 above, the Company is not
engaged in any negotiation in response to the Offer which relates to or would
result in (i) an extraordinary transaction such as a merger or reorganization,
involving the Company or any subsidiary of the Company; (ii) a purchase, sale or
transfer of a material amount of assets by the Company or any subsidiary of the
Company; (iii) a tender offer for or other acquisition of securities by or of
the Company; or (iv) any material change in the present capitalization or
dividend policy of the Company.
(b) Except as described in Item 3(b) above, there are no transactions,
board resolutions, agreements in principle or signed contracts in response to
the Offer which relate to or would result in one or more of the matters referred
to in Item 7(a) above.
ITEM 8. ADDITIONAL INFORMATION TO BE FURNISHED.
Reference is hereby made to the Offer to Purchase and the related Letter of
Transmittal, which are attached as Exhibits (a)(1) and (a)(2) hereto,
respectively, and are incorporated by reference herein in their entirety.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
<TABLE>
<C> <S>
*+(a)(1) Offer to Purchase dated April 29, 1997.
*+(a)(2) Letter of Transmittal.
(a)(3) Text of press release issued by the Company dated April 23, 1997.
*(a)(4) Letter to stockholders of the Company dated April 29, 1997.
+(a)(5) Form of Summary Advertisement dated April 29, 1997.
*(a)(6) Fairness Opinion of William Blair & Company, L.L.C., dated April 22, 1997.
(b) Not applicable.
+(c)(1) Agreement and Plan of Merger dated as of April 23, 1997 by and among The
Peak Technologies Group, Inc., Kirkwood Acquisition Corp. and Moore U.S.A.
Inc.
(c)(2) Confidentiality and Standstill Agreement dated February 19, 1997 between
The Peak Technologies Group, Inc. and Moore Corporation Limited.
(c)(3) Exclusivity Agreement dated April 4, 1997 between The Peak Technologies
Group, Inc. and Moore U.S.A. Inc.
(c)(4) Letter Agreement dated February 1, 1997 between The Peak Technologies
Group, Inc. and Mr. Gregory Thomas.
(c)(5) Letter Agreement dated February 1, 1997 between The Peak Technologies
Group, Inc. and Mr. Hugo Biermann.
(c)(6) Consulting Agreement dated February 1, 1997 between The Peak Technologies
Group, Inc. and Mr. Hugo Biermann.
</TABLE>
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* Included in materials delivered to stockholders of the Company.
+ Filed as an exhibit to Purchaser's Tender Offer Statement on Schedule 14D-1
dated April 29, 1997 and incorporated herein by reference.
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SIGNATURE
After reasonable 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: April 29, 1997
THE PEAK TECHNOLOGIES GROUP, INC.
By: /s/ NICHOLAS R.H. TOMS
------------------------------------
Name: Nicholas R.H. Toms
Title: Chairman of the Board and
Chief Executive Officer
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SCHEDULE I
THE PEAK TECHNOLOGIES GROUP, INC.
600 MADISON AVENUE
NEW YORK, NEW YORK 10022
INFORMATION STATEMENT PURSUANT TO
SECTION 14(f) OF THE SECURITIES EXCHANGE ACT OF 1934
AND RULE 14f-1 THEREUNDER
This Information Statement is being mailed on or about April 29, 1997 as
part of the Solicitation/Recommendation Statement on the Schedule 14D-9
("Schedule 14D-9") of The Peak Technologies Group, Inc. (the "Company") to the
holders of record as of the close of business on April 28, 1997 of shares of
Common Stock, par value $.01 per share, of the Company (the "Shares"), including
the associated rights to purchase shares of Series A Junior Participating
Preferred Stock, par value $.01 per share, of the Company pursuant to the Rights
Agreement dated as of March 28, 1997, between the Company and ChaseMellon
Shareholder Services, as Rights Agent, as amended. You are receiving this
Information Statement in connection with the possible election of persons
designated by Kirkwood Acquisition Corp., a Delaware corporation ("Purchaser"),
to at least a majority of the seats on the Board of Directors of the Company
(the "Board"). Purchaser is an indirect wholly-owned subsidiary of Moore U.S.A.
Inc., a Delaware corporation ("Parent").
On April 23, 1997, the Company, Parent and Purchaser entered into an
Agreement and Plan of Merger (the "Merger Agreement") in accordance with the
terms and subject to the conditions of which (i) Purchaser will commence a
tender offer (the "Offer") for all of the issued and outstanding Shares at a
price of $18 per share (or any greater amount paid per share pursuant to the
Offer), net to the seller in cash, and (ii) following the consummation of the
Offer and the satisfaction or waiver of other conditions set forth in the Merger
Agreement, Purchaser will be merged with and into the Company (the "Merger"). As
a result of the Offer and the Merger, the Company will become an indirect
wholly-owned subsidiary of Parent.
The Merger Agreement requires that the Company use its best efforts, at
Parent's request, to take all lawful action necessary to cause Parent's
designees to be elected to the Board under the circumstances described in the
Merger Agreement. See "BOARD OF DIRECTORS AND EXECUTIVE OFFICERS -- Right to
Designate Directors; the Purchaser Designees" below.
You are urged to read this Information Statement carefully. You are not,
however, required to take any action. Capitalized terms used herein and not
otherwise defined herein shall have the meaning set forth in the Schedule 14D-9.
Pursuant to the Merger Agreement, Purchaser has commenced the Offer on
April 29, 1997. The Offer is scheduled to expire at 12:00 midnight, New York
City time, on Tuesday, May 27, 1997, unless the Offer is extended.
The information contained in this Information Statement concerning Parent,
Purchaser and the Purchaser Designees (hereinafter defined) has been furnished
to the Company by Parent, and the Company assumes no responsibility for the
accuracy or completeness of such information.
BOARD OF DIRECTORS AND EXECUTIVE OFFICERS
GENERAL
The Shares are the only class of voting securities of the Company
outstanding. Each Share has one vote. As of April 15, 1997, there were 9,297,472
Shares outstanding. The Board currently consists of six members and each nominee
is elected to a one-year term. The number of directors may be determined from
time to time by resolution of the Board. Vacancies in the Board may be filled by
the Board, and any director chosen to fill a vacancy will hold office until the
next election of the directors.
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RIGHT TO DESIGNATE DIRECTORS; THE PURCHASER DESIGNEES
The Merger Agreement provides that, subject to compliance with Section
14(f) of the Securities Exchange Act of 1934, promptly upon payment for any
Shares by Purchaser pursuant to the Offer, Purchaser shall be entitled to
designate such number of directors ("Purchaser Designees") as will give
Purchaser majority representation on the Board and the Company shall, at such
time, cause Purchaser Designees to be appointed by its existing Board; provided,
however, that in the event that Purchaser Designees are appointed to the Board,
until the effective time of the Merger (the "Effective Time") such Board will
have at least two directors who are directors on the date of the Merger
Agreement and who are not officers of the Company (the "Independent Directors");
and provided further that, in such event, if the number of Independent Directors
will be reduced below two for any reason whatsoever, the remaining Independent
Director will designate a person to fill such vacancy who shall be deemed to be
an Independent Director for purposes of the Merger Agreement or, if no
Independent Directors then remain, the other directors will designate two
persons to fill such vacancies who shall not be officers or affiliates of the
Company or any of its subsidiaries or officers or affiliates of Parent or any of
its subsidiaries, and such persons will be deemed to be Independent Directors
for purposes of the Merger Agreement. In connection with the foregoing, the
Company will promptly, at the option of Parent, either (i) increase the size of
the Board and/or (ii) obtain the resignation of such number of its current
directors as is necessary to enable the Purchaser Designees to be elected or
appointed to, and to constitute a majority of, the Board.
It is expected that the Purchaser Designees may assume office at any time
following the purchase by the Purchasers of Shares pursuant to the Offer, which
purchase may not be earlier than May 27, 1997, and that, upon assuming office,
the Purchaser Designees will thereafter constitute at least a majority of the
Board.
PURCHASER DESIGNEES
Stephen A. Holinski, 50, is Senior Vice President and Chief Financial
Officer of Moore Corporation Limited ("Moore"). Prior to May 1994, Mr. Holinski
held various positions with Northern Telecom Limited, the last of which was Vice
President and Treasurer. Between September 1993 and March 1994, Mr. Holinski was
Vice President - Products Finance of Northern Telecom Limited. Prior to
September 1993, Mr. Holinski was Vice President - Finance Europe of Northern
Telecom Limited. Mr. Holinski is a Director of JetForm Corporation. Mr. Holinski
is also Director and Treasurer of Purchaser. Mr. Holinski is a citizen of
Canada.
Joseph M. Duane, 50, is Vice President, Corporate Development and General
Counsel of Moore. Between January 1994 and August 1996, Mr. Duane was Vice
President and General Counsel. Prior to January 1994, Mr. Duane was Associate
General Counsel of Unisys Corporation. Mr. Duane is also Director and President
of Purchaser. Mr. Duane is a citizen of the United States.
Joan M. Wilson, 41, is Vice President and Secretary of Moore. Prior to
March 1993, Ms. Wilson was Secretary. Ms. Wilson is also Director and Secretary
of Purchaser. Ms. Wilson is a citizen of Canada.
James D. Wyner, 53, is Vice President of Moore Corporation Limited and
President of Moore Labels and Label Systems. Between September 1991 and June
1996, Mr. Wyner was Executive Vice President-Operations of Paxar Corporation.
Prior to September 1991, Mr. Wyner was Vice President and General Manager,
Zellerbach Division of Mead Corporation. Mr. Wyner is a citizen of the United
States.
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DIRECTORS OF THE COMPANY
Set forth below is certain information regarding each Director (each, a
"Director") of the Company as of April 15, 1997:
<TABLE>
<CAPTION>
NAME AGE
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<S> <C>
Nicholas R.H. Toms............................................. 48
John R. Coutts................................................. 61
Howard S. Cohen................................................ 50
Edward S. Stevens.............................................. 41
Gregory N. Thomas.............................................. 50
Herbert W. Marache, Jr......................................... 69
</TABLE>
All of the Company's Directors listed above, except for Messrs. Thomas and
Coutts, will resign from the Board promptly upon payment for any Shares by
Purchaser as more fully described above. See "Right to Designate Directors; the
Purchaser Designees."
CONTINUING DIRECTORS
Gregory N. Thomas, 50, has been a Director of the Company since September
1992 and has served on the Compensation Committee of the Company since September
1992. Mr. Thomas had for more than five years been a partner with William Blair
& Company, an investment banking firm, until his retirement in December 1992.
John R. Coutts, 61, has been a Director of the Company since April 1992,
and had been Chief Operating Officer of the Company from August 1991 until his
retirement in April 1996. From 1985 to 1989 Mr. Coutts served as President and
Chief Operating Officer of V-Band Corporation, a public company engaged in the
manufacture and distribution of high speed voice and data telecommunications
systems. During the period from 1989 to 1991 he worked as an independent
consultant to various companies in the computer peripherals field including the
Company from February 1991 to August 1991.
MEETINGS OF THE BOARD AND COMMITTEES
During the fiscal year ended December 31, 1996, the Board held eight
meetings. All of the Directors attended 75% or more of the meetings of the Board
and committees for which they are members.
The Company has standing Audit and Compensation Committees. The Company
does not have a Nominating Committee.
The Audit Committee, composed of Mr. Marache, held two meetings during the
1996 fiscal year. The Audit Committee, which selects a firm of certified public
accountants whose duty is to audit the financial statements of the Company for
the fiscal year in which they are appointed, monitors the effectiveness of the
audit effort and monitors the Company's internal financial and accounting
organization and financial reporting.
The Compensation Committee, composed of Mr. Thomas, held two meetings
during the 1996 fiscal year. The Compensation Committee reviews and approves
salaries and other matters relating to compensation of the principal officers of
the Company and administers the Company's stock option plans.
COMPENSATION OF DIRECTORS
During 1996, the members of the Board who are not employees of the Company
were paid at a rate of $6,000 annually and $1,000 for each Board meeting day
they attended.
In June 1995, the Company adopted the 1995 Non-Employee Director Stock
Option Plan (the "Director Plan"). Pursuant to the Director Plan, the Company
may grant options to purchase up to 75,000 shares of Common Stock to eligible
Directors. Directors who are also employees of or consultants to the Company are
not eligible to participate in the Director Plan.
I-3
<PAGE> 11
In 1996, the eligible non-employee directors, Messrs. Thomas and Marache,
were each granted an option to purchase 5,000 shares of the Company's common
Stock under the terms of the Director Plan. In addition, on March 27, 1997, the
Company granted to Hugo Biermann, who retired as a Director in 1996, options to
purchase 15,000 shares of Common Stock for $8.625 per share, vesting in
increments from January 1, 1998 to January 1, 2002. Mr. Biermann's options
expire on March 27, 2007, or earlier upon the occurrence of certain events.
EXECUTIVE OFFICERS OF THE COMPANY
The following sets forth certain information as to each executive officer
of the Company as of April 15, 1997:
Nicholas R.H. Toms, 48, has been a Director, Chairman and Chief Executive
Officer of the Company since its inception. Mr. Toms has also been a principal
of Edwardstone & Company, Incorporated ("Edwardstone"), an investment management
company, since 1986 and Chairman, Chief Executive Officer and Secretary of
Edwardstone since 1989. Since 1985 he has served as a Director of Lynton Group,
Inc., a corporation involved in general aviation. Since 1986 he has served as a
Director of Telpar Holdings Inc. ("Telpar") and, since 1990, as Chairman of
Telpar.
Edward A. Stevens, 41, has been a Director of the Company since March 1995
and Executive Vice President and Chief Financial Officer of the Company since
November 1992, Vice President of Administration and Treasurer from August 1992
to November 1992 and Vice President of Business Development from January to
August 1992. Mr. Stevens served from 1988 to 1991 as Vice President, Treasurer,
Secretary and Director of Electrocomponents, Inc., the former parent of MESA
Technology Corporation and the wholly-owned U.S. holding company of
Electrocomponents, Plc., a distributor of electronic, computer and industrial
components and supplies.
Howard S. Cohen, 50, has been a Director of the Company since February 1997
and President and Chief Operating Officer of the Company since March 1997. Mr.
Cohen previously was employed as President of OCE Office Systems, a division of
OCE Van der ginten, NV, headquartered in the Netherlands. Prior to that Mr.
Cohen was Vice President and General Manager of the Alternate Channels Group of
U.S. Sprint where he was responsible for sales, service, marketing and
operations.
Colin Wyatt, 47, has been Vice President and Managing Director of the
Company's European Operations since August 1996. Mr. Wyatt previously was
employed as Managing Director of IBM/Lotus for the United Kingdom and Benelux
areas. Prior to that Mr. Wyatt was President and General Manager for Lotus
Development Ltd. for Canada.
Scot Edwards, 40, has been Senior Vice President -- Marketing of the
Company since March 1997. Prior to coming to the Company, Mr. Edwards served as
Vice President, Worldwide Marketing and US Sales and Corporate Accounts with the
Network Printer Division of Lexmark International. Prior to that Mr. Edwards
spent eleven years with Epson America, Inc.
Michael Fluharty, 47, has been Vice President and General Manager of the
Company's Americas Division, including responsibility for sales and service,
since February 1996. Previously, Mr. Fluharty had served with the Company as
Area Vice President for Sales and as Director of Channel Sales since 1993.
Clayton Vigent, 36, has been Vice President of Operations for the Company
since 1996 and served as Director of Operations for the Company since 1994.
Previously, Mr. Vigent was employed by FMC as Manager of Procurement Control.
Dianne Sagner, 50, was appointed Corporate Secretary and General Counsel of
the Company in March 1997 and was Corporate Counsel for the Company in 1996.
Previously, Ms. Sagner was Special Corporate and Intellectual Property Counsel
for the University of Arizona for two years and held a similar position for five
years with the Howard Hughes Medical Institute.
I-4
<PAGE> 12
Mike Miller, 40, has been Controller of the Company since 1992 and promoted
to Vice President and Controller in 1995. Previously, Mr. Miller was Chief
Financial Officer for Louis Shreve and Associates from 1988 through 1991.
Seth Lee, 34, has been Vice President and Chief Administrative Officer of
the Company since January 1996. Previously, Mr. Lee was employed by Symbol
Technologies for seven years in positions of sales, marketing, quality control
and human resources.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following Table sets forth, as of April 15, 1997, certain information
with respect to the beneficial ownership of the Company's Common Stock held by
(i) each person known by the Company to own beneficially more than 5% of the
outstanding shares of Common Stock, (ii) each director of the Company, (iii) the
Chief Executive Officer and the other executive officers of the Company and (iv)
all officers and directors as a group.
<TABLE>
<CAPTION>
NUMBER OF SHARES
BENEFICIALLY OWNED
ON APRIL 15, 1997
-------------------
NAME ADDRESS NUMBER PERCENT
- ----------------------------- ------------------------------------------------ ------- -------
<S> <C> <C> <C>
Nicholas R.H. Toms........... c/o The Peak Technologies Group, Inc. 450,888(1) 4.8%
600 Madison Avenue
New York, New York 10022
John R. Coutts............... c/o The Peak Technologies Group, Inc. 11,100(2) *
9200 Berger Road
Columbia, Maryland 21046
Edward A. Stevens............ c/o The Peak Technologies Group, Inc. 79,225(3) *
9200 Berger Road
Columbia, Maryland 21046
Howard S. Cohen.............. c/o The Peak Technologies Group, Inc. -- *
9200 Berger Road
Columbia, Maryland 21046
Gregory N. Thomas............ c/o The Peak Technologies Group, Inc. 17,000(4) *
600 Madison Avenue
New York, New York 10022
Herbert W. Marache, Jr. ..... c/o Janney Montgomery Scott, Inc. 16,090(5) *
26 Broadway
New York, New York 10004
Clayton A. Vigent............ c/o The Peak Technologies Group, Inc. 750(6) *
9200 Berger Road
Columbia, Maryland 21046
Seth Lee..................... c/o The Peak Technologies Group, Inc. 500(7) *
9200 Berger Road
Columbia, Maryland 21046
Jeffrey P. Thomas............ c/o The Peak Technologies Group, Inc. 116,950(8) *
9200 Berger Road
Columbia, Maryland 21046
Prescott M. Arnold........... c/o The Peak Technologies Group, Inc. 40,000(9) *
9200 Berger Road
Columbia, Maryland 21046
Putnam Investments, Inc...... One Post Office Square 607,000(10) 6.5%
Boston, Massachusetts 02109
Heartland Advisors, Inc. .... 790 North Milwaukee Street 473,900(11) 5.1%
Milwaukee, Wisconsin 53202
All Officers and Directors as
a Group (12 people)........
585,445 6.2%
</TABLE>
I-5
<PAGE> 13
- ---------------
* Less than one percent.
(1) Includes 353,478 shares of Common Stock owned directly by Mr. Toms and
27,500 shares of Common Stock issuable to Mr. Toms upon exercise of a
currently exercisable nonqualified stock option. Also includes 69,910
shares of Common Stock held by Telpar, of which Mr. Toms is a director and
the holder of 18% of Telpar's outstanding capital stock. Mr. Toms disclaims
beneficial ownership of the shares of Common Stock held by Telpar.
(2) Includes 11,000 shares of Common Stock issuable to Mr. Coutts upon exercise
of a currently exercisable nonqualified stock option.
(3) Includes 13,550 shares of Common Stock issuable to Mr. Stevens upon
exercise of a currently exercisable nonqualified stock option and 62,009
shares of Common Stock held under the Company's Employee Stock Purchase
Plan, of which Mr. Stevens is a trustee. Mr. Stevens disclaims beneficial
ownership of the shares held as part of the Company's Employee Stock
Purchase Plan.
(4) Includes 10,000 shares of Common Stock issuable to Mr. Gregory N. Thomas
upon exercise of a currently exercisable non-employee directors stock
option.
(5) Includes 10,000 shares of Common Stock issuable to Mr. Marache upon
exercise of a currently exercisable non-employee directors stock option and
4,200 shares owned by Nancie A. Marache, the wife of Herbert W. Marache,
Jr., as to which he disclaims beneficial ownership.
(6) Includes 750 shares of Common Stock issuable to Mr. Vigent upon exercise of
a currently exercisable nonqualified stock option.
(7) Includes 500 shares of Common Stock issuable to Mr. Lee upon exercise of a
currently exercisable nonqualified stock option.
(8) Includes 71,675 shares of Common Stock owned directly by Mr. Thomas, 20,000
shares of Common Stock issuable to Mr. Thomas upon exercise of a currently
exercisable nonqualified stock option, and 25,275 shares of Common Stock
held in the Thomas Dependents Scheme, a trust. Mr. Thomas disclaims
beneficial ownership of the shares of Common Stock held by the Thomas
Dependents Scheme.
(9) Includes 30,000 shares of Common Stock owned directly by Mr. Arnold as of
his last day of employment with the Company, and 10,000 shares of Common
Stock issuable to Mr. Arnold upon exercise of currently exercisable
warrants issued in connection with the acquisition of Concord Technologies,
Inc.
(10) Putnam Investments, Inc. does not hold any shares for its own account.
Putnam Investments, Inc. exercises sole voting and sole dispositive power
over these shares of Common Stock solely in its capacity as an investment
adviser registered under Section 203 of the Investment Advisers Act of
1940. Putnam Investments, Inc. disclaims beneficial ownership of these
shares of Common Stock.
(11) Heartland Advisors, Inc. does not hold any shares for its own account.
Heartland Advisors, Inc. exercises sole voting and sole dispositive power
over these shares of Common Stock solely in its capacity as an investment
adviser registered under Section 203 of the Investment Advisers Act of
1940. Heartland Advisors, Inc. disclaims beneficial ownership of these
shares of Common Stock.
I-6
<PAGE> 14
EXECUTIVE COMPENSATION
The following table sets forth certain information concerning compensation
of the Chief Executive Officer of the Company, the other most highly compensated
executive officers of the Company who were serving as such as of December 31,
1996, and two individuals who would have been among such group but for the fact
that such individuals no longer served as an executive officer of the Company as
of December 31, 1996 (collectively, the "Named Executive Officers"):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION ---------------------
NAME AND PRINCIPAL ------------------------------ SECURITIES UNDERLYING ALL OTHER
POSITION YEAR SALARY($) BONUS($) OPTIONS(#) COMPENSATION($)
- ---------------------------- ---- -------- -------- --------------------- ---------------
<S> <C> <C> <C> <C> <C>
Nicholas R.H. Toms(1)....... 1996 $311,875 -- 40,000 --
Chairman and Chief Executive 1995 275,000 -- 25,000 --
Officer 1994 275,000 110,000 15,000 --
John R. Coutts.............. 1996 50,000(2) -- -- --
Chief Operating Officer 1995 150,000 -- 10,000 --
1994 150,000 70,000 -- --
Edward A. Stevens........... 1996 175,771 60,000 20,000 --
Executive Vice President and 1995 145,000 -- 6,000 --
Chief Financial Officer 1994 128,333 55,000 5,000 --
Jeffrey P. Thomas........... 1996 222,625 -- 10,000 $20,000(4)
Vice President and General 1995 140,000 -- 20,000 20,000(4)
Manager of European 1994 25,000(3) -- -- 15,000(4)
Operations
Seth Lee.................... 1996 118,900 -- 5,000 21,700(6)
Vice President and Chief 1995 --(5) -- -- --
Administrative Officer 1994 --(5) -- -- --
Clayton A. Vigent........... 1996 91,354 20,000 5,000 --
Vice
President -- Operations... 1995 78,750 -- 1,000 --
1994 38,654 7,500 -- --
</TABLE>
- ---------------
(1) Mr. Toms will be paid $225,000 in 1997 in respect of certain deferred
compensations.
(2) Mr. Coutts retired as Chief Operating Officer of the Company in April 1996.
In March 1997, Mr. Howard Cohen assumed the office of Chief Operating
Officer.
(3) Mr. Thomas's employment with the Company commenced in October 1994.
(4) As an employee of Peak UK, a British Company, Mr. Thomas received payments
under a profit sharing scheme.
(5) Mr. Lee's employment with the Company commenced in January 1996.
(6) Costs associated with Mr. Lee's relocation.
I-7
<PAGE> 15
OPTIONS GRANTED IN 1996
Information concerning 1996 grants to and exercises by the Chief Executive
Officer and the Named Executive Officers is provided below:
OPTION GRANTS IN THE LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
----------------------------------------------------
NUMBER OF % OF TOTAL POTENTIAL
SECURITIES OPTIONS GRANTED EXERCISE REALIZABLE VALUE(2)
UNDERLYING OPTIONS TO EMPLOYEES OR BASE EXPIRATION ---------------------
NAME: GRANTED IN 1996 PRICE ($/SH) DATE 5%($) 10%($)
- ---------------------- ------------------ ---------------- ------------ ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Nicholas R.H. Toms.... 40,000(1) 14.2% $18.50 1/06 $465,382 $1,179,369
John M. Coutts........ 10,000(1) 6.0 $18.50 1/06 92,762 235,077
Edward A. Stevens..... 20,000(1) 7.1 $18.50 1/06 232,691 589,685
Jeffrey P. Thomas..... 10,000(1) 3.6 $18.50 1/06 116,346 294,842
Seth Lee.............. 5,000(1) 1.8 $18.50 1/06 58,173 147,421
Clayton A.Vigent...... 5,000(1) 1.8 $18.50 1/06 58,173 147,421
</TABLE>
- ---------------
(1) Options granted vest over a five year period in annual increments beginning
on January 1, 1997. The vesting schedule for options granted in 1996 is 10%
in 1997, 15% in 1998, 20% in 1999, 25% in 2000, and 30% in 2001.
(2) Potential Realizable Value is at assumed annual rates of stock price
appreciation for option term compounded annually.
OPTIONS EXERCISED IN 1996
The following table sets forth information regarding the exercise of
options, the number of shares covered by stock options held by the Named
Executive Officers as of the end of fiscal 1996, and the value of "in-the-money"
stock options, which represents the positive spread between the exercise price
of a stock option and the year-end market price of the shares subject to such
options, at the end of fiscal 1996.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
SHARES ACQUIRED OPTIONS AT IN-THE-MONEY OPTIONS AT
ON EXERCISE VALUE REALIZED FISCAL YEAR END (#) FISCAL YEAR END ($)
NAME: (#) ($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- -------------------------- --------------- -------------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Nicholas R.H. Toms........ -- -- 13,000/82,000 $ 37,313/$ 63,938
John M. Coutts............ -- -- 6,107/18,593 150,000/ 360,491
Edward A. Stevens......... -- -- 7,150/32,850 20,638/ 21,613
Jeffrey P. Thomas......... -- -- 20,000/10,000 0/0
Seth Lee.................. -- -- 0/ 5,000 0/0
Clayton A. Vigent......... -- -- 100/ 5,900 0/0
</TABLE>
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS
Employment Agreements. The Company has entered into written employment
agreements with Howard S. Cohen, Clayton Vigent, Scot T. Edwards, Michael
Fluharty and Colin J. Wyatt. Mr. Cohen's agreement terminates in January 1999.
Each such executive officer is entitled to a base salary (as of April 15, 1997
$300,000 for Mr. Cohen, $115,000 for Mr. Vigent, $190,000 for Mr. Edwards,
$165,000 for Mr. Fluharty, and $220,000 for Mr. Wyatt) and to participate
proportionally in all fringe benefit plans available to the most senior
executive officers of the Company from time to time during the term. Except for
the amount of base salary and term of employment, the terms and conditions of
the employment agreements are substantially the
I-8
<PAGE> 16
same. Employment under the agreements may be terminated for cause or without
cause in certain circumstances (as defined therein), including the death or
disability of the executive officer. Upon a termination without cause, Mr. Cohen
is entitled to continuation of salary through the term of the employment
agreement, and a prorated bonus through the termination date. Mr. Cohen's
agreement also provides that certain options granted to him will become fully
vested upon a termination of his employment without cause. All other executives
with employment agreements are entitled to severance pay ranging from six to
twelve months, and benefits for an equivalent period of time if they are
terminated without cause. The agreements contain certain requirements of
noncompetition, including a requirement of noncompetition and nonsolicitation
for a period of one year following a termination of employment, other than a
termination without cause.
In connection with the transactions contemplated by the Merger Agreement,
certain employees of the Company have entered into new employment agreements,
which will become effective at the effective time of the Merger (the "Effective
Time"). At such time, such agreements will substitute for and terminate any and
all employment agreements or arrangements (as described above) and/or severance
agreements (as described below) such employees currently have with the Company.
The new employment agreements of Mr. Wyatt, Mr. Fluharty, Mr. Edwards, Mr.
Vigent, Michael Miller, Seth Lee and Dianne Sagner provide for a term of two
years from the Effective Time and call for compensation and benefits consistent
with what was provided to such employees prior to the Effective Time. The new
agreements provide that if the employee is terminated without cause during the
term of the agreement, the employee will be entitled to the greater of (i) the
salary payable for the remainder of the term of employment, or (ii) twelve
months base salary.
Mr. Toms' new employment agreement provides for a term of one year
commencing with the Effective Time with compensation of $400,000, plus customary
benefits. If Mr. Toms completes his term of employment (or the Company
terminates him without good cause or Mr. Toms severs employment with good
reason), unless the agreement is extended, he will be entitled to receive at the
end of such term payments of approximately $1,200,000 (in respect of severance,
stay bonus and non-competition covenants), plus benefits for one year following
termination.
Mr. Cohen's new employment agreement provides for a term of one year
commencing with the Effective Time with compensation at an annualized rate of
$300,000 from the Effective Time until January 31, 1998, and at an annualized
rate of $350,000 following such time until the end of the Term, plus customary
benefits. If Mr. Cohen completes his term of employment (or the Company
terminates him without good cause or Mr. Cohen severs employment with good
reason), unless the agreement is extended, he will be entitled to receive at the
end of such term payments of approximately $1,300,000 (in respect of severance,
stay bonus, non-competition covenants and certain consulting obligations), plus
benefits for one year following termination.
Mr. Stevens' new employment agreement provides for a term of employment
from the Effective Time to December 30, 1997 with compensation of $280,000, plus
customary benefits. If Mr. Stevens completes his term of employment (or the
Company terminates him without good cause or Mr. Stevens severs employment with
good reason), unless the agreement is extended, he will be entitled to receive
after the conclusion of such term payments of approximately $635,000 (in respect
of severance, non-competition and certain consulting obligations), plus benefits
for eighteen months following termination.
Severance Pay Agreements. The Company has severance pay agreements with
those executives having employment agreements (as described above) and with
certain other key employees of the Company. The severance pay agreements
provide, among other things, that if the employee is terminated without cause
(as defined therein) in connection with, or for a period following a change in
control (as defined therein) then such employee will be entitled to payment of
either three years' salary (Mr. Toms, Mr. Cohen and Mr. Stevens), two years'
salary (Mr. Wyatt, Mr. Fluharty, Mr. Edwards, Mr. Vigent, Mr. Miller, Mr. Lee
and Ms. Sagner), one year's salary (24 employees) or six months' salary (7
employees).
Separation, Waiver and Release Agreement. In December 1996, the Company
terminated the employment of Jeffrey Thomas. Pursuant to the terms of Mr.
Thomas' employment agreement, he will continue to receive his annual salary and
benefits through December 1997. In March 1996, John Coutts retired from the
I-9
<PAGE> 17
position of chief operating officer for the Company. Pursuant to an agreement
dated July 12, 1996, Mr. Coutts was retained as a consultant for a period of
four year (commencing April 1, 1996) at an annual fee of $50,000, plus health
benefits.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board (the "Committee") is responsible
for developing and making recommendations to the Board with respect to the
Company's executive compensation policies. In addition, the Committee, pursuant
to authority delegated by the Board, determines on an annual basis the
compensation to be paid to the Chief Executive Officer and each of the other
executive officers of the Corporation.
The objectives of the Corporation's executive compensation program are to:
- Support the achievement of desired performance by the Company.
- Provide compensation that will attract and retain superior talent and
reward performance.
- Align the executive officers' interests with the success of the Company
by basing a significant portion of compensation upon corporate
performance.
The executive compensation program provides an overall level of
compensation opportunity that is competitive within the industry, as well as
with a broader group of companies of comparable size and complexity. Actual
compensation levels may be greater or less than average competitive levels in
other companies based upon annual and long-term performance, as well as
individual performance. The Committee uses its discretion to set executive
compensation at levels warranted by external, internal or an individual's
circumstances.
The Corporation's executive officer compensation program is comprised of
base salary, cash bonus compensation, long-term incentive compensation in the
form of stock options, and various benefits, including medical and retirement
plans, generally available to employees of the Corporation.
Base Salary.
Base salary levels for the Corporation's executive officers are
competitively set relative to companies in the industry. The Chief Executive
Officer makes salary recommendations for each of the other executive officers,
which are based upon his subjective assessment of the nature of the position,
contribution, experience and Company tenure of the executive officer. The
recommendations are reviewed with the Committee which is responsible for
approving or disapproving those recommendations.
Executive Bonus Plan.
The Company's Executive Bonus Plan (the "Bonus Plan") covers officers of
the Company.
Bonuses could range from 50% to 100% of the participant's base salary.
Bonus awards are weighted between corporate performance (80% to 100%) and
individual performance (0% to 20%), as defined under the Bonus Plan. Achievement
of corporate performance is based primarily on the attainment of targeted
earnings per share as well as certain other financial goals and achievement of
individual performance is based on attainment of quantitative objectives
established from the Company's operating plan. No bonuses will be paid under the
Bonus Plan if the overall corporate performance of the Company does not reach at
least 90% of the Company's budgeted operating income. Messrs. Stevens and Vigent
received bonuses of $60,000 and $20,000, respectively.
Compensation of the Chief Executive Officer.
The Company entered into an employment agreement with Mr. Toms in 1992 that
provided for an annual salary of $275,000, subject to adjustment by the Board.
Mr. Toms' employment agreement expired on December 31, 1995. Although the
Company has experienced significant growth in sales and profitability
I-10
<PAGE> 18
before non-recurring charges, Mr. Toms' salary had not been adjusted from its
original 1992 level. On April 1, 1997, Mr. Toms' salary was increased by
$40,000. In order to encourage Mr. Toms' continued efforts in enhancing the
Company's performance, Mr. Toms was granted nonqualified stock options to
purchase up to 40,000 shares of Common Stock at an option price of $18.50 per
share in 1996.
Stock Options.
Incentive Stock Option Plan. The Company adopted an Incentive Stock Option
Plan (the "ISO Plan") as of June 3, 1991. The ISO Plan provides for the grant of
options to purchase up to 78,125 shares of Common Stock and is administered by
the Compensation Committee of the Board.
Options under the ISO Plan can be granted to employees of the Company who
are key executive, engineering, administrative, sales, professional or technical
personnel and who do not, at the date of the grant, own shares possessing more
than 10% of the total combined voting power of all classes of stock of the
Company and its subsidiaries, including shares attributed to such person under
Section 424 of the Internal Revenue Code of 1986, as amended (the "IRC"). The
Directors of the Company, unless otherwise eligible under the provisions of the
ISO Plan, are not eligible for grants.
Options granted under the ISO Plan are incentive stock options ("ISOs"),
intended to qualify under Section 422 of the IRC. The exercise price of shares
of Common Stock subject to any ISO is determined by the Committee, but cannot be
less than the fair market value of the Company's Common Stock at the time the
ISO is granted. Under the ISO Plan, the exercise price is payable in full in
cash at the time the option is exercised.
The Board has the authority at any time to suspend, terminate, modify or
amend the ISO Plan. Options may be granted under the ISO Plan until June 3,
2001, ten years from the date as of which the Nonqualified Plan was adopted.
During the fiscal year ended December 31, 1996, 4,881 options were
exercised under the ISO Plan. As of December 31, 1996 options to purchase an
aggregate of 4,417 shares of Common Stock were outstanding under the ISO Plan,
each with an exercise price of $3.44 per shares. No options were granted under
the ISO Plan during fiscal year 1996.
Nonqualified Stock Options. The Company adopted a Nonqualified Stock
Option Plan as of April 1, 1992 (the "Nonqualified Plan'). The Nonqualified Plan
provides for the grant of options to purchase up to 1,200,000 shares of Common
Stock. Options under the Nonqualified Plan can be granted to all employees of
the Company. The exercise price of shares of Common Stock subject to any
nonqualified option is determined by the Committee administering the
Nonqualified Plan. Under the Nonqualified Plan, the exercise price is payable in
full in cash at the time the option is exercised.
The Board has the authority at any time to suspend, modify or amend the
Nonqualified Plan, except that the Board cannot increase the number of shares of
Common Stock eligible for grants under the Nonqualified Plan without the
approval of a majority of the Company's stockholders. Options may be granted
under the Nonqualified Plan until April 1, 2002, ten years from the date as of
which the Nonqualified Plan was adopted.
During the fiscal year ended December 31, 1996, 52,203 options were
exercised under the Nonqualified Stock Option Plan. As of December 31, 1996,
options to purchase an aggregate of 526,871 shares of Common Stock were
outstanding under the Nonqualified Plan. Of these options (i) 7,934 were issued
in connection with the acquisition of Concord Technologies, Inc. and have an
exercise price of $7.63 per share, (ii) 25,000 were issued in connection with
the acquisition of Endata Group Limited and have an exercise price of $13.75,
(iii) 10,000 were issued in connection with the acquisition of Datapen and have
an exercise price of $24.60, and (iv) 483,937 were issued by the Company to its
employees and have an average exercise price of $14.38 per share.
Executive officers are eligible to receive periodic grants of nonqualified
stock options under the Company's Nonqualified Plan. The awards are intended to
retain and motivate executive officers to achieve superior market performance of
the Company's stock. During 1996, the Board approved and granted stock
I-11
<PAGE> 19
options totaling 120,000 shares of underlying Common Stock to executive officers
based on subjective recommendations of the Committee.
Non-Employee Directors Stock Option Program. The purpose of The Peak
Technologies Group, Inc. 1995 Non-Employee Directors Stock Option Program (the
"Program") is to promote the interests of the Company and its stockholders by
strengthening the Company's ability to attract and retain the services of
experienced and knowledgeable non-employee directors through formula grants of
non-qualified stock options to acquire the Company's Common Stock as part of the
total compensation paid to such non-employee directors. In addition, such grants
will encourage the closer alignment of the interests of such directors with
those of the Company's stockholders.
The Program provides for automatic, non-discretionary and fixed annual
grants of stock options to each member of the Board who is not an employee of
the Company at the time of any such annual grant. Commencing on January 12,
1995, a stock option to acquire 5,000 shares of the Company's Common Stock was
granted to each non-employee director currently serving as a member of the Board
at the fair market value of the stock on the date of grant. A stock option to
acquire 5,000 shares of the Company's Common Stock (reduced pro-rata if a
sufficient number of option shares are not available) will automatically be
granted each succeeding January 12th to each non-employee director serving as a
member of the Board at such time subject to an annual grant maximum of 25,000
shares of Common Stock under the Program.
Each option granted under the Program will be evidenced by an option
agreement and will not be intended to qualify as an Incentive Stock Option under
Section 422 of the Internal Revenue Code of 1986, as amended. The option price
per share will be the closing price for the Common Stock on the relevant grant
date. An option will become exercisable on the first anniversary of the date of
grant and may thereafter be exercised in whole or in part during the term of the
option by payment of the full option price in cash for the number of underlying
shares to be acquired upon any such exercise.
Each option will expire seven years after the date on which the option is
granted. However, the Program provides for earlier termination of the optionee's
options upon the optionee's termination of service as a director. In respect of
an optionee's first grant of options under the Program, in the event of
termination of the optionee's directorship for any reason, the then outstanding
initial grant option shall become 100% exercisable and shall expire one year
after the date of termination. In respect of all subsequent grants to an
optionee under the Program, in the event of termination of the optionee's
directorship for any reason, the then outstanding and exercisable subsequent
grant options shall expire ninety days after the date of termination and all
unexercisable options shall expire. The Change in Control provisions of the
Program provide for the acceleration of option exercisability in certain
circumstances.
The Company has the authority, at any time (subject to the next sentence)
to amend the Program, subject to the limitation that no amendment may be made
without stockholder approval which will increase the number of shares authorized
under the Program, modify in any way the eligibility requirements or increase
benefits accruing to participants. The terms and provisions of the Program which
determine the eligibility of directors and the amount, price and timing of the
grants may not be amended more than once every six months.
A total of 75,000 shares of Common Stock are available for grant of stock
options under the Program. During the fiscal year ended December 31, 1996, 5,000
stock options were exercised under the Program. As of December 31, 1996 options
to purchase an aggregate of 20,000 shares of Common Stock were outstanding under
the Program, with an average exercise price of $18.85 per share.
Consultants Stock Option Program. The Company adopted a Consultants Stock
Option Plan as of April 1, 1992 (the "Consultants Plan"). Options under the
Consultants Plan can be granted to all consultants of the Company. The exercise
price of shares of Common Stock subject to any consultant option is determined
by the Committee administering the Consultants Plan. Under the Consultants Plan,
the exercise price is payable in full in cash at the time the option is
exercised.
A total of 27,500 shares of Common Stock are available for grant of stock
options under the Consultants Plan. During the fiscal year ended December 31,
1996, 15,000 stock options were granted and no options were
I-12
<PAGE> 20
exercised under the Consultants Program. As of December 31, 1996, options to
purchase an aggregate of 21,500 shares of Common Stock were outstanding under
the Consultants Program, with an average exercise price of $12.85 per share.
Retirement Plan
The Company has a contributory retirement plan (the "401(k) Plan") for all
full-time employees with at least thirty (30) days of service. The 401(k) Plan
is designed to provide tax-deferred income to the Company's employees in
accordance with the provisions of Section 401(k) of the IRC.
The 401(k) Plan provides that each participant may contribute from 6% and
up to 15% of his or her salary (not to exceed the statutory limit). The 401(k)
Plan provides for matching contributions by the Company of 50% of the funds
contributed up to a maximum contribution by the Company of $250 per participant
which is 100% vested upon receipt. This employer contribution vests at the end
of seven (7) years.
Under the terms of the 401(k) Plan, the Company may also make discretionary
profit sharing contributions. Profit sharing contributions are allocated among
participants based on their annual compensation and vest over a period of seven
years. There was no discretionary contribution in 1996.
Employee Stock Purchase Plan
The Company established The Peak Technologies Group, Inc. Employee Stock
Purchase Plan and The Peak Technologies Group, Inc. Global Employee Stock
Purchase Plan (the Plans) for all eligible employees during 1996 with a total of
175,000 shares of Common Stock available for purchase under the Plans. During
1996, a total 40,807 shares of Common Stock were purchased by the Plans.
The Plans purchases are made quarterly, with the per share purchase price
equal to 85% of the lower of the closing price of the common stock on the first
day or the last day of the quarterly participation period. Employee
contributions, which are made through payroll deductions, are limited to the
lesser of 15% of total compensation or $25,000 annually.
Benefits
The Company provides medical and retirement benefits to the executive
officers that are generally available to the Corporation's employees.
BY THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS:
Gregory N. Thomas
I-13
<PAGE> 21
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Board of Directors has established a Compensation Committee which
approves compensation payable to the executive officers. Currently, Gregory
Thomas comprises the Compensation Committee.
STOCK PERFORMANCE GRAPH
The graph below compares the percentage change in the cumulative total
shareholder return on the Shares from the time of the Company's initial public
offering on August 4, 1992, to December 31, 1996, with the cumulative total
return on (a) the S&P 500 Stock Index ("S&P 500") and (b) the Hambrecht & Quist
Technology Index ("H&Q Tech") over the same period.
<TABLE>
<CAPTION>
Measurement Period
(Fiscal Year Covered) Peak S&P H&Q
<S> <C> <C> <C>
Aug. 92 100.00 100.00 100.00
Dec. 92 132.34 102.71 114.77
Dec. 93 141.18 109.96 124.68
Dec. 94 191.18 106.26 144.30
Dec. 95 367.65 140.76 218.18
Dec. 96 141.18 175.95 285.51
</TABLE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
From time to time, William Blair & Company provides financial advisory
services to the Company. As of April 15, 1997, William Blair & Company owned
approximately 2.9% of the outstanding Common Stock of the Company. See
"Principal Stockholders."
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Exchange Act requires directors and certain officers
of the Company, as well as persons who own more than 10% of a registered class
of the Company's equity securities ("Reporting Persons"), to file reports of
ownership and changes in ownership on Forms 3, 4 and 5 with the Securities and
Exchange Commission and NASDAQ.
Based solely upon a review of the copies of such forms furnished to the
Company, or written representations that no Form 5 filings were required, the
Company believes that during the period from January 1, 1996 through December
31, 1996 all Section 16(a) filing requirements applicable to its Reporting
Persons were complied with.
I-14
<PAGE> 22
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION PAGE
- --------- --------------------------------------------------------------------------- -----
<C> <S> <C>
*+(a)(1) Offer to Purchase dated April 29, 1997.
*+(a)(2) Letter of Transmittal.
(a)(3) Text of press release issued by the Company dated April 23, 1997.
*(a)(4) Letter to stockholders of the Company dated April 29, 1997.
+(a)(5) Form of Summary Advertisement dated April 29, 1997.
*(a)(6) Fairness Opinion of William Blair & Company, L.L.C., dated April 22, 1997.
(b) Not applicable.
+(c)(1) Agreement and Plan of Merger dated as of April 23, 1997 by and among The
Peak Technologies Group, Inc., Kirkwood Acquisition Corp. and Moore U.S.A.
Inc.
(c)(2) Confidentiality and Standstill Agreement dated February 19, 1997 between
The Peak Technologies Group, Inc. and Moore Corporation Limited.
(c)(3) Exclusivity Agreement dated April 4, 1997 between The Peak Technologies
Group, Inc. and Moore U.S.A. Inc.
(c)(4) Letter Agreement dated February 1, 1997 between The Peak Technologies
Group, Inc. and Mr. Gregory Thomas.
(c)(5) Letter Agreement dated February 1, 1997 between The Peak Technologies
Group, Inc. and Mr. Hugo Biermann.
(c)(6) Consulting Agreement dated February 1, 1997 between The Peak Technologies
Group, Inc. and Mr. Hugo Biermann.
</TABLE>
- ---------------
* Included in materials delivered to stockholders of the Company.
+ Filed as an exhibit to Purchaser's Tender Offer Statement on Schedule 14D-1
dated April 29, 1997 and incorporated herein by reference.
<PAGE> 1
Exhibit (a)(3)
[PEAK TECHNOLOGIES LETTERHEAD]
FOR IMMEDIATE RELEASE
CONTACT:
<TABLE>
<S> <C>
Nicholas R. H. Toms Edward A. Stevens
Chairman and CEO Executive Vice President and CFO
The Peak Technologies Group, Inc. The Peak Technologies Group, Inc.
(212) 832-2700 (410) 312-6002
Michael Hickey Desmond Towey
Investor Relations Bernadette McLaughlin
The Peak Technologies Group, Inc. Desmond Towey and Associates
(410) 312-6033 (212) 888-7600
</TABLE>
PEAK TECHNOLOGIES ENTERS INTO MERGER AGREEMENT
WITH MOORE CORPORATION LIMITED
New York, NY - April 23, 1997 - The Peak Technologies Group, Inc. (NASDAQ:PEAK)
announced today that it has entered into a definitive agreement with Moore
Corporation Limited (TSE, ME, NYSE:MCL) to merge in an all cash transaction
valued at approximately $210 million. Moore Corporation, through an indirect
wholly-owned subsidiary, will commence an all cash tender offer for all the
outstanding shares of Peak stock at a price of $18 per share.
Nicholas Toms, Peak's Chairman and CEO stated, "We are pleased to join Moore's
team and look forward to serving our mutual customers worldwide. I am confident
that our combined expertise will result in providing customers with superior
data capture and labeling solutions, better and faster than anyone else in the
industry."
Reto Braun, Moore's Chairman and CEO said, "This acquisition moves Moore another
step forward in our strategy to increase the percentage of our revenues coming
from the technology segments of our business, which generate higher margin and
growth. Peak complements Moore's position as the global leader in label systems
and brings to Moore the leading edge technologies in the bar code based data
capture systems as well as a strong track record in capturing increased market
share."
Moore Corporation is the leading global partner helping companies communicate
through print and digital technologies. As the leading supplier of document
formatted information, print outsourcing and data-based marketing, Moore
designs, manufacturers and delivers business communications products, services
and solutions to customers. Founded in 1882,
<PAGE> 2
Moore has approximately 19,000 employees and over 100 manufacturing facilities
serving customers in 47 countries. Sales in 1996 were $2.5 billion.
Howard Cohen, Peak's President and Chief Operating Officer said, "The combined
company will enhance Peak's growth through customer synergies and an expanded
global presence in the business solutions market."
The offer is conditioned upon, among other things, the tendering of at least a
majority of the outstanding Peak shares and the expiration of governmental
waiting periods related to acquisitions.
The Peak Technologies Group, Inc. is the dominant integrator of data capture,
printing and service solutions around the globe. Offering its customers Peak's
software and professional services along with "best of breed" hardware from the
leading manufacturers, Peak operates from 110 locations worldwide, 80 of which
are in the United States and Canada and 30 of which are in Europe.
<PAGE> 1
EXHIBIT (a)(4)
[PEAK TECHNOLOGIES LOGO]
April 29, 1997
Dear Fellow Stockholder:
I am pleased to inform you that on April 23, 1997, The Peak Technologies
Group, Inc. ("Peak") entered into an Agreement and Plan of Merger (the "Merger
Agreement") with Moore U.S.A. Inc. ("Moore") and its indirect wholly-owned
subsidiary, Kirkwood Acquisition Corp. ("Purchaser"), pursuant to which
Purchaser is commencing a cash tender offer (the "Offer") to purchase all of the
issued and outstanding shares of Common Stock of Peak, including the associated
preferred stock purchase rights, at a purchase price of $18.00 per share in
cash. Following the successful completion of the Offer, in accordance with the
terms of the Merger Agreement, Purchaser will merge with and into Peak (the
"Merger") and Peak will continue as the surviving corporation indirectly owned
by Moore. Each share of Peak Common Stock not purchased in the Offer will be
converted in the Merger into the right to receive $18.00 per share (or any
greater amount paid in the Offer) in cash, without interest.
YOUR BOARD OF DIRECTORS HAS DETERMINED THAT THE MERGER AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING THE OFFER AND THE MERGER, TAKEN
TOGETHER, ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE STOCKHOLDERS OF PEAK,
AND RECOMMENDS THAT ALL STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES
PURSUANT TO THE OFFER.
In arriving at its recommendation, the Board of Directors gave careful
consideration to a number of factors which are described in the enclosed
Schedule 14D-9, including, among other things, the opinion of William Blair &
Company to the effect that the $18.00 per share cash consideration to be
received by Peak stockholders pursuant to the Offer and the Merger is fair, from
a financial point of view, to such stockholders.
In addition to the attached Schedule 14D-9 relating to the Offer, enclosed
is the Offer to Purchase, dated April 29, 1997, of Purchaser, together with
related materials, including a Letter of Transmittal to be used for tendering
your shares of Common Stock. These documents set forth the terms and conditions
of the Offer and the Merger and provide instructions as to how to tender your
shares. I urge you to read the enclosed materials carefully.
On behalf of your Board of Directors, I thank you for your continued
support.
Sincerely yours,
/s/ NICHOLAS R.H. TOMS
Nicholas R.H. Toms
Chairman of the Board and
Chief Executive Officer
<PAGE> 1
EXHIBIT (a)(6)
[WILLIAM BLAIR & COMPANY LETTERHEAD]
April 22, 1997
CONFIDENTIAL
Board of Directors
The Peak Technologies Group, Inc.
600 Madison Avenue, 26th Floor
New York, NY 10022
Gentlemen:
You have asked our opinion as to the fairness, from a financial point of
view, to the stockholders of The Peak Technologies Group, Inc. (the "Company")
of the cash consideration which they will receive pursuant to the terms of the
draft Agreement and the Plan of Merger dated as of April 22, 1997 (the "Merger
Agreement") among Moore U.S.A. Inc. ("Moore"), a wholly owned subsidiary of
Moore and the Company. The terms of this merger contemplate, among other things,
a wholly owned subsidiary of Moore acquiring the Company through a tender offer
(the "Tender Offer") at $18.00 per share for all of the outstanding shares of
the Company, followed by a second step merger at the same price (the "Merger").
We have acted as financial advisor to the Company in connection with the
proposed transaction (the "Transaction"). In our review of the Transaction and
the preparation of our opinion herein, we have examined: (a) the financial terms
and conditions of the Merger Agreement; (b) certain unaudited financial
statements of the Company and the audited financial statements for each of the
fiscal years in the three-year period ended December 31, 1996; (c) certain
internal financial analyses and forecasts for the Company prepared by the
management of the Company; and (d) certain other publicly available information
on the Company. We have also held discussions with members of the senior
management of the Company to discuss the foregoing and have considered other
matters which we have deemed relevant to our inquiry.
We have assumed the accuracy and completeness of all the information which
we have reviewed for the purpose of this opinion and we have not assumed any
responsibility to verify independently such information or for an independent
appraisal or evaluation of the assets of the Company. With respect to financial
forecasts, we have assumed that they have been reasonably prepared on bases
reflecting the best currently available estimates and judgments of the
management of the Company, as to their future financial performance and we
express no opinion with respect to such forecasts or the assumptions on which
they are based. Our opinion is based upon circumstances existing and disclosed
to us and which can be evaluated as of the date hereof and does not address the
Company's underlying business decision to enter into the Transaction or,
constitute a recommendation to any holder of the Company's common stock on
tendering into the Tender Offer or voting with respect to the Merger.
In rendering our opinion, we have assumed that the Transaction will be
consummated on the terms described in the Merger Agreement, without any waiver
of any material terms or conditions by the Company.
In conducting our investigation and analysis and in arriving at our opinion
expressed herein, we have taken into account such accepted financial and
investment banking procedures and considerations as we have deemed relevant,
including (a) historical revenues, operating income, net income and
capitalization, as to the Company, and certain publicly held companies; (b) the
current financial position and results of operations of the Company; (c) the
historical market prices and trading volume of the common stock of the Company;
(d) financial information concerning selected actual and proposed business
combinations which we believe to be relevant; and (e) the general condition of
the securities markets.
William Blair & Company, L.L.C. has been engaged in the investment banking
business since 1935. We undertake the valuation of investment securities in
connection with public offerings, private placements,
<PAGE> 2
business combinations, and similar transactions. In the ordinary course of our
business we actively trade shares of the Company's common stock for our own
account and for the accounts of customers and accordingly may at any time hold a
long or short position in such common stock. As financial advisor to the Board
of Directors of the company in connection with the Transaction, we will receive
a fee for our services. The payment of a substantial portion of this fee is
contingent upon the completion of the Transaction. We have provided investment
banking services to the Company in the past and received compensation for such
services.
Based upon and subject to the foregoing, it is our opinion as investment
bankers that, as of the date hereof, the cash consideration of $18.00 per share,
which the stockholders of the Company will receive pursuant to the Tender Offer
and the Merger, is fair from a financial point of view to such stockholders.
Very truly yours,
WILLIAM BLAIR & COMPANY, L.L.C.
<PAGE> 1
EXHIBIT (c)(2)
[PEAK LETTERHEAD]
PRIVATE & CONFIDENTIAL
February 19, 1997
Moore Corporation Limited
1 First Canadian Place
P.O. Box 78
Toronto, Ontario M5X 1G5
Canada
Gentlemen:
In connection with a possible business combination transaction (the
"Transaction") between Moore Corporation Limited ("Moore") and The Peak
Technologies Group, Inc., (the "Company"), Moore has requested certain
information from the Company. As a condition to furnishing Moore with such
information, the Company is requiring that Moore agree as set forth below, to
treat confidentially such information and any other information (collectively,
the "Evaluation Material") which the Company or any of the Company's
stockholders, directors, officers, employees, agents or representatives,
including attorneys, accountants and financial advisors, (collectively,
"representatives") furnishes to Moore or its representatives. The term
"Evaluation Material" will also include all analyses, compilations, studies or
other documents prepared by Moore or its representatives containing or based in
whole or in part on any information furnished by the Company or its
representatives (collectively, "Analyses"). The term "Moore" shall include
Moore Corporation Limited as well as such associate or affiliate, as such terms
are defined in Regulation 12(b) of the General Rules and Regulations of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), of Moore.
Moore agrees that the Evaluation Material, except as hereinafter
provided, without the prior written consent of the Company, will not be used by
Moore in any way detrimental to the Company, will be kept confidential by Moore
and its representatives, shall not be disclosed by Moore or its representatives,
in any manner whatsoever, in whole or in part, and shall not be used by Moore or
its representatives other than for the purpose of evaluating the Transaction.
Moore further agrees to transmit the Evaluation Material only to those of its
representatives who need to know such information for the purpose of evaluating
the Transaction and who shall (i) be advised by Moore of this Agreement and (ii)
agree with Moore to be bound by the provisions hereof. Moore shall be
responsible for any breach of this Agreement by its representatives.
Without the prior written consent of the Company, or except upon the
advise of its outside legal counsel that it is legally required to do so, Moore
will not and will direct its
<PAGE> 2
Moore Corporation Limited - Page Two
representatives who are given access to the Evaluation Material not to, disclose
to any person (other than a person authorized hereunder) the existence of this
letter, or any of the terms, conditions or other facts with respect to the
possible Transaction, including the status thereof. The term "person" as used
in this Agreement shall be broadly interpreted to include without limitation
any corporation, limited liability company, partnership, other entity or any
individual.
In the event that Moore or its representatives are requested or become
legally compelled in any judicial, or administrative proceeding or by any
governmental or regulatory authority (through oral questions, interrogatories,
requests for information or documents, subpoena, civil investigative demand or
similar process) to disclose any of the Evaluation Material or the fact that the
Evaluation Material has been made available to Moore or its representatives,
that discussions or negotiations are taking place or any of the terms,
conditions or other facts with respect to the possible Transaction (the
Evaluation Material together with such other information, the "Confidential
Information"), Moore agrees that it or its representatives, as the case may be,
will provide the Company with prompt written notice thereof so that the Company
may seek a protective order or other appropriate remedy and/or compliance with
the provisions of this Agreement.
Moore further agrees that if, in the absence of a protective order or
the receipt of a waiver hereunder, Moore or any of its representatives is
nonetheless, in the reasonable written opinion of its outside legal counsel
addressed to the Company, compelled to disclose Confidential Information, Moore
or such representative may disclose such information. In such event, or in the
event that the Company waives compliance with the provisions of this Agreement,
Moore agrees that only that portion of the Confidential Information which is
legally required to be furnished shall be furnished and that is will exercise
its best efforts to obtain reliable assurance that confidential treatment will
be accorded to that portion of the Confidential Information which is being
disclosed.
In addition, Moore acknowledges that it is aware (and, if applicable,
that its representatives who are apprised of this matter have been advised)
that the United States securities laws prohibit any person who has material
non-public information about a company, including its subsidiaries, from
purchasing or selling securities of such company.
In consideration of being furnished that Evaluation Material and in
view of the fact that the Evaluation Material consists of confidential and
non-public information, Moore agrees that for a period of thirty-six months from
the date of this Agreement (the "Review Period"), Moore will not in any manner,
nor will Moore assist or encourage others (including by providing financing) to,
directly or indirectly (i) acquire or offer or agree to acquire any securities
or assets of the Company or become a member of any "group" (within the meaning
of Section 13(d) of the Exchange Act) which holds or proposes to acquire
securities of the Company; (ii) commence, propose or announce any tender offer,
merger or other business combination involving the Company or any of its
Subsidiaries, or
<PAGE> 3
Moore Corporation Limited - Page Three
any recapitalization, restructuring liquidation, dissolution or other
extraordinary transaction with respect to the Company or any of its
subsidiaries; (iii) engage in any "solicitation" of "proxies"(as such terms are
used in the proxy rules promulgated under the Exchange Act) or consents to vote
any voting securities of the Company or seek to advise or influence any person
or entity with respect to the voting of any securities of the Company; (iv) make
any filing under the Hart-Scott Rodino Antitrust Improvements Act of 1976 with
respect to the acquisition of voting securities or assets of the Company; (v)
otherwise seek or propose to influence or control the Board of Directors,
management or policies of the Company; (vi) take any action that could
reasonably be expected to force the Company to make a public announcement
regarding any of the types of matters referred to in clauses (i), (ii) or (iii)
above; or (vii) enter into any discussions, negotiations, agreements,
arrangements or understandings with any third party with respect to any of the
foregoing. Moore also agrees during such period not to request the Company or
any of its representatives to amend or waive any provision of this
paragraph (including this sentence). If at any time during such period Moore
is approached by any third party concerning its or their participation in any
of the types of matters referred to in clauses (i), (ii) or (iii) above, Moore
will promptly inform the Company of the nature of such contact and the parties
thereto. Moore hereby acknowledges that neither it nor any of its affiliates or
associates is on the date hereof the beneficial owner shares of capital stock
of the Company.
Moore further agrees that, for a period of thirty-six months from the
date hereof, neither it nor any of its affiliates will solicit to employ any
officer or employee of the Company or any of its subsidiaries, so long as they
are employed by the Company or any of its subsidiaries, without obtaining the
prior written consent of the Company. The term "solicit to employ" does not
include general solicitations of employment not specifically directed towards
employees of the Company and its subsidiaries.
It is expressly understood by the parties hereto that this agreement is
not intended to, and does not, constitute an agreement to consummate a
Transaction or to enter into a definitive Transaction agreement, and neither
the Company nor Moore will have any rights or obligations of any kind
whatsoever with respect to a Transaction by virtue of this agreement or any
other written or oral expression by either party hereto or their respective
representatives unless and until a definitive agreement relating thereto between
the Company and Moore is executed and delivered, other than for the matters
specifically agreed to herein.
<PAGE> 4
Moore Corporation Limited -- Page Four
Moore further acknowledges that (i) the Company and its representatives
shall be free to negotiate with any other person and enter into a definitive
agreement with regard to a Transaction without prior notice to Moore or any
other person, (ii) the Company reserves the right to reject any and all
proposals made by Moore or any of its representatives with regard to a possible
Transaction and to terminate any discussions or negotiations with Moore at any
time, and (iii) neither the Company nor any of its affiliates or
representatives nor any third party with whom the Company enters into any
agreement for, or completes, a business combination transaction shall have any
liability to you arising out of or relating to such a business combination
transaction (other than any liability arising under a definitive Transaction
agreement with Moore in accordance with the terms thereof).
Moore agrees to keep a record of the Evaluation Material furnished to
it or its representatives and of the location thereof. In the event that the
Transaction is not effected after Moore has been furnished with Evaluation
Material, Moore will promptly upon the request of the Company deliver to the
Company the Evaluation Material and all copies thereof, except for that portion
of the Evaluation Material which consists of Analyses, without retaining any
copy thereof. That portion which consists of Analyses will be held by Moore and
kept confidential and subject to the terms of this Agreement or destroyed at
the request of the Company. Such destruction shall be confirmed in writing to
the Company.
The term "Evaluation Material" does not include information which (i)
is or becomes generally available to the public other than as a result of a
disclosure by Moore or its representatives, (ii) was available to Moore on a
non-confidential basis prior to its disclosure to Moore by the Company or its
representatives or (iii) becomes available to Moore on a non-confidential basis
from a source other than the Company or its representatives, provided, however,
that such source is not bound by a confidentiality agreement with the Company
or its representatives.
Although Moore understands that the Company has endeavored to include
in the Evaluation Material information known to the Company which the Company
believes to be relevant for the purpose of its investigation, Moore further
understands that, except as may otherwise be agreed in writing, the Company
does not make any representation or warranty as to the accuracy or completeness
of the Evaluation Material. Moore agrees that neither the Company nor any of
its representatives shall have any liability to Moore or any of its
representatives resulting from the use of the Evaluation Material by Moore or
its representatives.
Moore understands and agrees that no failure or delay in exercising any
right, power or privilege hereunder shall operate as a waiver thereof, nor
shall any single or
<PAGE> 5
Moore Corporation Limited -- Page Five
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any right, power or privilege hereunder.
Moore understands and agrees that money damages would not be a
sufficient remedy for any breach of this Agreement by Moore or its
representatives and that the Company shall be entitled to equitable relief,
including injunction and specific performance, as a remedy for any such breach.
Such remedy shall not be deemed to be the exclusive remedy for any such
breach but shall be in addition to all other remedies available at law or
equity to the Company.
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York without reference to the conflicts of laws
principles thereof.
If you are in agreement with the foregoing, please sign and return one
copy of this Agreement to the undersigned which will constitute our agreement
with respect to the subject matter hereof. This Agreement may be executed in
several counterparts, all of which together shall constitute one and the same
agreement.
Very truly yours,
PEAK TECHNOLOGIES GROUP, INC.
By: /s/ Nicholas R.H. Toms
-----------------------------------
Nicholas R.H. Toms
Chairman & Chief Executive Officer
Confirmed and agreed to as of
the date first above written:
MOORE CORPORATION LIMITED
By: /s/ Joseph M. Duane
----------------------------------
Joseph M. Duane
Vice President Corporate Development
and General Counsel
<PAGE> 1
EXHIBIT(c)(3)
EXCLUSIVITY AGREEMENT
This Exclusivity Agreement (this "Agreement") is entered into as of
this 4th day of April, 1997, between The Peak Technologies Group, Inc. ("Peak"),
a Delaware corporation and Moore U.S.A. Inc. ("Moore"), a Delaware corporation.
1. No Solicitation. From the date hereof until the earlier to occur of
(i) May 4, 1997 and (ii) 9:00 am New York time on April 8, 1997 unless, prior to
such time, Peak shall receive notice from Moore that the Board of Directors of
Moore has authorized its officers to consummate a corporate combination with
Peak on the financial terms specified in the April 2, 1997 letter from Joseph M.
Duane to Nicholas Toms (the "Termination Date"), Peak shall not, and shall not
permit any of its subsidiaries, or any of its or their officers, directors,
employees, representatives, agents or affiliates (including, without limitation,
any investment banker, attorney or accountant retained by Peak or any of its
subsidiaries), directly or indirectly, to enter into, solicit, initiate or
continue any discussions or negotiations with, or encourage or respond to any
inquiries or proposals by, or participate in any negotiations with, or provide
any information to, or otherwise cooperate in any other way with, any
corporation, partnership, person or other entity or group (each, a "Person")
(other than Moore or any of its affiliates or representatives), concerning any
offer or proposal which constitutes or is reasonably likely to lead to any
Acquisition Proposal (as defined below). Until the Termination Date, Peak will
immediately notify Moore orally and in writing if any discussions or
negotiations are sought to be initiated, any inquiry or proposal is made, or any
information is requested by any Person with respect to any Acquisition Proposal
or which could lead to an Acquisition Proposal and immediately notify Moore of
all material terms of any proposal which it may receive in respect of any such
Acquisition Proposal, including the identity of the Person making the
Acquisition Proposal or the request for information, if known. Until the
Termination Date Peak shall, and shall cause its subsidiaries and affiliates,
and will use its best efforts to cause their respective officers, directors,
employees, investment bankers, attorneys, accountants and other agents to,
immediately cease and cause to be terminated all discussions and negotiations
that have taken place prior to the date hereof, if any, with any Persons
conducted
<PAGE> 2
heretofore with respect to any Acquisition Proposal. As used in this
Agreement, "Acquisition Proposal" shall mean any of the following (other than
the transactions contemplated hereunder) involving Peak or any of its
subsidiaries: (i) any merger, consolidation, share exchange, recapitalization,
business combination, or other similar transaction; (ii) any sale, lease
exchange, mortgage, pledge, transfer or other disposition of 10% or more of the
assets of Peak and its subsidiaries, taken as a whole, in a single transaction
or series of transactions; (iii) any tender offer or exchange for or other
purchase of 10% or more of the outstanding shares of the capital stock of Peak
or the filing of a registration statement under the Securities Act in connection
therewith; or (iv) any public announcement of a proposal, plan or intention to
do any of the foregoing.
2. No Agreement. Each party understands and agrees that no contract or
agreement providing for any transaction between them shall be deemed to exist
between them unless and until a final definitive agreement has been executed.
Each party also agrees that unless and until a final definitive agreement
regarding a transaction between them has been executed and delivered, neither
party will be under any legal obligation of any kind whatsoever with respect to
entering into such a transaction by virtue of this Agreement.
3. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York without reference to the
conflicts of laws principles thereof.
4. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original instrument, but
all of which together
2
<PAGE> 3
shall be deemed to be one and the same instrument.
Moore U.S.A. Inc.
By: /s/ Joseph M. Duane
____________________________
Name:
Title:
The Peak Technologies Group, Inc.
By: /s/ Nicholas R.H. Toms
____________________________
Name:
Title:
3
<PAGE> 1
EXHIBIT (c)(4)
[PEAK TECHNOLOGIES LOGO]
February 1, 1997
Mr. Gregory Thomas
The Peak Technologies Group, Inc.
600 Madison Avenue
New York, NY 10022
Dear Greg,
This letter will confirm our understanding relating to the proposed
acquisition transaction (the "Transaction") between The Peak Technologies Group,
Inc. (the "Company") and Moore U.S.A., Inc. In consideration of your efforts on
behalf of the Company in negotiating the terms of the proposed Transaction and
advising and consulting with the Company and its officers and directors with
respect to the proposed Transaction, its effects on the Company and related
matters, the Board of Directors has authorized the Company to pay you,
immediately prior to the closing of the tender offer portion of the proposed
Transaction, a fee of $250,000 in cash.
Your tireless efforts on behalf of the Company and its stockholders are
greatly appreciated.
Sincerely,
/s/ NICHOLAS R.H. TOMS
Nicholas R.H. Toms
<PAGE> 1
EXHIBIT (c)(5)
[PEAK TECHNOLOGIES LOGO]
February 1, 1997
Mr. Hugo Biermann
Flichity House
By Farr
Inverness, Scotland IV1 2XD
Dear Hugo,
This letter will confirm our understanding relating to the proposed
acquisition transaction (the "Transaction") between The Peak Technologies Group,
Inc. (the "Company") and Moore U.S.A., Inc. In consideration of your efforts on
behalf of the Company in negotiating the terms of the proposed Transaction and
advising and consulting with the Company and its officers and directors with
respect to the proposed Transaction, its effects on the Company and related
matters, the Board of Directors has authorized the Company to pay you,
immediately prior to the closing of the tender offer portion of the proposed
Transaction, a fee of $150,000 in cash.
Your tireless efforts on behalf of the Company and its stockholders are
greatly appreciated.
Sincerely,
/s/ NICHOLAS R.H. TOMS
Nicholas R.H. Toms
<PAGE> 1
EXHIBIT (c)(6)
[PEAK TECHNOLOGIES LOGO]
February 1, 1997
Mr. Hugo Biermann
Flat 6
Carlyle Mansions
Cheyne Walk
Chelsea, London SW3
Dear Hugo,
First of all, on behalf of the board I would like to thank you again for
your many contributions to its workings and those of its committees during your
time as a director of various subsidiary companies.
As you know, the board believes it is in the best interests of Peak to
retain you as a consultant for your advice and counsel to the Company in view of
your extensive role over the years helping shape the development of Peak, while
Peak transitions to its next phase of growth.
Therefore, effective February 1, 1997 for a period of one year you are
hereby appointed as a consultant to the Company to be available from time to
time at mutually convenient times as the Company may reasonably request, to
provide your advice and counsel.
In consideration for making yourself available pursuant to this letter you
will be entitled to a monthly retainer of $5,000. In addition, you will be
entitled to options to purchase 5,000 shares of Peak stock at a price of $8.63
per share.
Please indicate your acceptance of this appointment by signing, dating and
returning one copy of this letter to the undersigned, retaining one copy for
your records.
Very truly yours,
/s/ NICHOLAS R.H. TOMS
Nicholas R. H. Toms
Chairman & CEO
Accepted this day of , 1997
/s/ HUGO H. BIERMANN
- ---------------------------------------------------------
Hugo H. Biermann
