<PAGE>
As filed with the Securities and Exchange Commission on May 10, 2000
Schedule TO
Tender Offer Statement
under Section 14(d)(1) or 13(e)(1) of the Securities Exchange Act of 1934
Shared Medical Systems Corporation
(Name of Subject Company)
Autobahn Acquisition Corporation
a Wholly Owned Subsidiary of
Siemens Corporation
an Indirect Wholly Owned Subsidiary of
Siemens Aktiengesellschaft
(Name of Filing Persons)
COMMON STOCK,
PAR VALUE $0.01
(Title of Class of Securities)
819486101
(CUSIP Number of Class of Securities)
Kenneth R. Meyers, Esq.
Siemens Corporation
153 East 53rd Street
New York, New York 10022
(212) 258-4000
(Name, address, and telephone numbers of person authorized
to receive notices and communications on behalf of filing persons)
with a copy to:
Benjamin F. Stapleton III, Esq.
Sullivan & Cromwell
125 Broad Street
New York, New York 10004-2498
(212) 558-4000
- --------------------------------------------------------------------------------
CALCULATION OF FILING FEE
<TABLE>
<S> <C>
Transaction valuation (1) Amount of filing fee
$2,192,613,911 $438,523
</TABLE>
- --------------------------------------------------------------------------------
(1) Based on the offer to purchase all of the outstanding shares of common
stock of Shared Medical Systems Corporation at a purchase price of $73.00
cash per share, 27,012,963 shares outstanding and outstanding options with
respect to 3,022,844 shares, in each case as of April 30, 2000.
[_]Check the box if any part of the fee is offset as provided by Rule 0-
11(a)(2) and identify the filing with which the offsetting fee was
previously paid. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
Amount Previously Paid: N/A
Form or Registration No.: N/A
Filing Party: N/A
Date Filed: N/A
[_]Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.
Check the appropriate boxes below to designate any transactions to which the
statement relates:
[X]third-party tender offer subject to Rule 14d-1.
[_]issuer tender offer subject to Rule 13e-4.
[_]going-private transaction subject to Rule 13e-3.
[_]amendment to Schedule 13D under Rule 13d-2.
Check the following box if the filing is a final amendment reporting the
results of the tender offer: [_]
<PAGE>
This Tender Offer Statement on Schedule TO relates to the commencement by
Autobahn Acquisition Corporation, a Delaware corporation ("Merger Sub") and a
wholly owned subsidiary of Siemens Corporation, a Delaware corporation
("Parent"), and an indirect wholly owned subsidiary of Siemens
Aktiengesellschaft, a corporation formed under the laws of the Federal Republic
of Germany ("Siemens AG"), of its offer to purchase all of the outstanding
shares of common stock, par value $0.01 per share ("Common Stock"), of Shared
Medical Systems Corporation, a Delaware corporation (the "Company"), together
with the associated rights to purchase Series A Junior Participating Preferred
Stock ("Rights") issued pursuant to the Rights Agreement, dated as of May 1,
1991, as amended, between the Company and ChaseMellon Shareholder Services,
L.L.C. (the Common Stock and the Rights together being referred to herein as
the "Shares"), at a price of $73.00 per Share, net to the seller in cash, upon
the terms and subject to the conditions set forth in the Offer to Purchase,
dated May 10, 2000 (the "Offer to Purchase"), a copy of which is attached
hereto as Exhibit (a)(1), and in the related Letter of Transmittal, a copy of
which is attached hereto as Exhibit (a)(2) (which, as they may be amended and
supplemented from time to time, together constitute the "Offer").
The information in the Offer to Purchase, including all schedules and
annexes thereto, is hereby incorporated by reference in response to all the
items of this Schedule TO, except as otherwise set forth below.
Item 10. Financial Statements.
(a) Financial information. Not applicable.
(b) Pro forma information. Not applicable.
Item 11. Additional Information.
(b) Other material information. The information set forth in the Letter of
Transmittal attached hereto as Exhibit (a)(2) is incorporated herein by
reference.
Item 12. Exhibits.
The following are attached as exhibits to this Schedule TO:
<TABLE>
<C> <S>
(a)(1) Offer to Purchase, dated May 10, 2000.
(a)(2) Letter of Transmittal.
(a)(3) Notice of Guaranteed Delivery.
(a)(4) Guidelines for Certification of Taxpayer Identification Number
on Substitute
Form W-9.
(a)(5) Form of Letter to brokers, dealers, commercial banks, trust
companies and
other nominees.
(a)(6) Form of Letter to be used by brokers, dealers, commercial
banks, trust companies and
other nominees to their clients.
(a)(7) Summary newspaper advertisement, dated May 10, 2000. Published
in The Wall
Street Journal.
Exhibit (b) None.
Exhibit (d)(1) Agreement and Plan of Merger, dated as of April 30, 2000, by
and among Parent,
the Merger Sub and the Company.
Exhibit (d)(2) None.
Exhibit (g) None.
Exhibit (h) None.
</TABLE>
Item 13. Information Required by Schedule 13E-3.
Not applicable.
2
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify that
the information set forth in this statement is true, complete and correct.
Date: May 10, 2000 Autobahn Acquisition Corporation
/s/ Michael W. Schiefen
-------------------------------------
Name:Michael W. Schiefen
Title:President
/s/ E. Robert Lupone
-------------------------------------
Name:E. Robert Lupone
Title:Vice President
Siemens Corporation
/s/ Michael W. Schiefen
-------------------------------------
Name:Michael W. Schiefen
Title:Vice President-Corporate
Department
/s/ E. Robert Lupone
-------------------------------------
Name:E. Robert Lupone
Title:Vice President, General
Counsel
and Secretary
Siemens Aktiengesellschaft
/s/ Prof. Dr. Erich Reinhardt
-------------------------------------
Name:Prof. Dr. Erich Reinhardt
Title:CEO & Group President Medical
Engineering
/s/ Goetz Steinhardt
-------------------------------------
Name:Goetz Steinhardt
Title:Corporate Vice President
Group Executive Medical
Engineering
3
<PAGE>
EXHIBIT (a) (1)
Offer to Purchase for Cash
All of the Outstanding Shares of Common Stock
(Including the Associated Rights to Purchase
Series A Junior Participating Preferred Stock)
of
Shared Medical Systems Corporation
at
$73 Net Per Share
by
Autobahn Acquisition Corporation
a wholly owned subsidiary of
Siemens Corporation
an indirect wholly owned subsidiary of
Siemens Aktiengesellschaft
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON WEDNESDAY, JUNE 7, 2000, UNLESS THE OFFER IS EXTENDED.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN A NUMBER OF SHARES OF COMMON STOCK, PAR VALUE $0.01
PER SHARE (THE "COMMON STOCK"), TOGETHER WITH THE ASSOCIATED RIGHTS TO PURCHASE
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK (THE "RIGHTS" AND, COLLECTIVELY
WITH THE COMMON STOCK, THE "SHARES"), OF SHARED MEDICAL SYSTEMS CORPORATION
(THE "COMPANY") REPRESENTING AT LEAST A MAJORITY OF THE OUTSTANDING SHARES. THE
CONSUMMATION OF THE OFFER IS ALSO SUBJECT TO THE OTHER CONDITIONS SET FORTH IN
THIS OFFER TO PURCHASE. SEE SECTION 13.
THE OFFER IS BEING MADE PURSUANT TO AN AGREEMENT AND PLAN OF MERGER, DATED
AS OF APRIL 30, 2000 (THE "MERGER AGREEMENT"), BY AND AMONG SIEMENS
CORPORATION, AUTOBAHN ACQUISITION CORPORATION AND THE COMPANY. THE BOARD OF
DIRECTORS OF THE COMPANY, BY UNANIMOUS VOTE OF THE DIRECTORS PRESENT AT A
MEETING OF THE BOARD OF DIRECTORS HELD ON APRIL 30, 2000, DETERMINED THAT THE
TERMS OF THE OFFER AND THE MERGER ARE FAIR TO, AND IN THE BEST INTERESTS OF,
THE STOCKHOLDERS OF THE COMPANY, APPROVED THE MERGER AND THE OTHER TRANSACTIONS
CONTEMPLATED BY THE MERGER AGREEMENT AND APPROVED THE MERGER AGREEMENT. THE
BOARD OF DIRECTORS RECOMMENDS THAT THE COMPANY'S STOCKHOLDERS ACCEPT THE OFFER
AND TENDER THEIR SHARES IN THE OFFER.
IMPORTANT
Any stockholder desiring to tender all or any portion of such stockholder's
Shares should (1) complete and sign the Letter of Transmittal or a facsimile
thereof in accordance with the instructions in the Letter of Transmittal,
including any required signature guarantees, and mail or deliver the Letter of
Transmittal or such facsimile with such stockholder's certificate(s) for the
tendered Shares and any other required documents to the Depositary named
herein, (2) follow the procedure for book-entry tender of Shares set forth in
Section 3 or (3) request such stockholder's broker, dealer, commercial bank,
trust company or other nominee to effect the transaction for such stockholder.
Stockholders having Shares registered in the name of a broker, dealer,
commercial bank, trust company or other nominee must contact such broker,
dealer, commercial bank, trust company or other nominee if they desire to
tender Shares so registered. Unless the context requires otherwise, all
references to Shares herein shall include the associated Rights.
The Rights are presently evidenced by the certificates for the Common Stock
and a tender by a stockholder of such stockholder's Shares will also constitute
a tender of the associated Rights. A stockholder of the Company who desires to
tender Shares and whose certificates for such Shares are not immediately
available, or who cannot comply with the procedure for book-entry transfer on a
timely basis, may tender such Shares by following the procedures for guaranteed
delivery set forth in Section 3.
Questions and requests for assistance may be directed to the Information
Agent or the Dealer Manager at their respective addresses and telephone numbers
set forth on the back cover of this Offer to Purchase. Requests for additional
copies of this Offer to Purchase, the Letter of Transmittal, the Notice of
Guaranteed Delivery and other tender offer materials may be directed to the
Information Agent or the Dealer Manager. Stockholders may also contact their
broker, dealer, commercial bank, trust company or other nominee.
The Dealer Manager for the Offer is:
[LOGO OF CREDIT SUISSE]
May 10, 2000
<PAGE>
SUMMARY TERM SHEET
This summary highlights important and material information from this Offer
to Purchase but does not purport to be complete. To fully understand the offer
described in this document and for a more complete description of the terms of
the offer described in this document, you should read carefully this entire
Offer to Purchase and the Letter of Transmittal (which together, as amended and
supplemented, constitute the "Offer"). We have included section references to
direct you to a more complete description of the topics contained in this
summary.
. WHO IS OFFERING TO BUY MY SECURITIES?
Autobahn Acquisition Corporation (the "Merger Sub"), a wholly owned
subsidiary of Siemens Corporation and an indirect wholly owned subsidiary
of Siemens Aktiengesellschaft ("Siemens AG"), is offering to buy your
Shares as described in this document. See Section 9 of this document for
further information about Siemens AG, Parent and Merger Sub.
. WHAT ARE THE CLASSES AND AMOUNTS OF SECURITIES SOUGHT IN THE OFFER?
Autobahn Acquisition Corporation is offering to buy all of the outstanding
Shares, including the associated Rights, of Shared Medical Systems
Corporation. For information about the conditions to which the Offer is
subject, see Section 13 of this document.
. HOW MUCH IS AUTOBAHN ACQUISITION CORPORATION OFFERING TO PAY AND WHAT IS THE
FORM OF PAYMENT?
Autobahn Acquisition Corporation is offering to pay $73 in cash for each
Share, including the associated Rights, of Shared Medical Systems
Corporation. See Section 1 of this document for information about the terms
of the Offer.
. DOES AUTOBAHN ACQUISITION CORPORATION HAVE THE FINANCIAL RESOURCES TO MAKE
PAYMENT?
Yes. Siemens Corporation, parent of Autobahn Acquisition Corporation, will
be financing the Offer described in this document with funds provided by
Siemens AG and its affiliates. See Section 12 of this document for more
information about how Siemens Corporation will finance the Offer.
. ARE SIEMENS CORPORATION'S FINANCIAL RESULTS RELEVANT TO MY DECISION AS TO
WHETHER TO TENDER IN THE OFFER?
Since the Offer is for cash and is not subject to any financing condition,
Siemens Corporation's financial results should not be relevant to your
decision on whether to tender your Shares in the Offer.
. HOW LONG DO I HAVE TO DECIDE WHETHER TO TENDER IN THE INITIAL OFFERING
PERIOD?
You may tender your Shares into the Offer until 12:00 midnight, New York
City time, on June 7, 2000, which is the scheduled expiration date of the
offering period, unless Autobahn Acquisition Corporation decides to extend
the offering period or provide a subsequent offering period. See Section 3
of this document for information about tendering your Shares.
. CAN THE OFFER BE EXTENDED, AND UNDER WHAT CIRCUMSTANCES?
Yes, Autobahn Acquisition Corporation may elect to extend the Offer (1) on
one or more occasions, for a period not longer than 20 business days at a
time, if at the then-scheduled expiration date of the Offer any of the
conditions to Autobahn Acquisition Corporation's obligations to accept for
payment and pay for the Shares is not satisfied or waived, (2) for any
period required by any rule, regulation, interpretation or position of the
SEC applicable to the Offer, and (3) on one or more occasions for an
aggregate period of
i
<PAGE>
not more than 20 business days if a number of Shares representing at least
a majority but less that 90% of the total number of outstanding Shares
shall have been validly tendered prior to the expiration of the Offer and
not withdrawn. See Section 1 of this document for information about
extension of the Offer.
. WILL THERE BE A SUBSEQUENT OFFERING PERIOD?
Following the satisfaction of all the conditions to the Offer and the
acceptance of and payment for all the Shares tendered during the offering
period, Autobahn Acquisition Corporation may elect to provide a subsequent
offering period, although Autobahn Acquisition Corporation currently has no
intention to do so.
. HOW WILL I BE NOTIFIED IF THE OFFER IS EXTENDED?
Autobahn Acquisition Corporation will announce by press release any
extension of the Offer no later than 9:00 a.m., New York City time, on the
next day after the previously scheduled expiration date. See Section 1 of
this document for more information about extension of the Offer. If
Autobahn Acquisition Corporation determines to provide a subsequent
offering period, it will publicly disclose its intentions by issuing a
press release no later than 9:00 a.m., New York City time, on the next day
after the expiration date of the offering period. Any such press release
will state the approximate number of Shares tendered to date.
. WHAT ARE THE MOST SIGNIFICANT CONDITIONS TO THE OFFER?
The Offer is conditioned upon, among other things, at least a majority of
the total number of outstanding Shares of Shared Medical Systems being
validly tendered and not withdrawn. For a complete description of all of
the conditions to which the Offer is subject, see Section 13 of this
document.
. HOW DO I TENDER MY SHARES?
If you hold the certificates for your Shares, you should complete the
enclosed Letter of Transmittal and enclose all the documents required by
it, including your certificates, and send them to the Depositary at the
address listed on the back cover of this document. If your broker holds
your Shares for you in "street name" you must instruct your broker to
tender your Shares on your behalf. In any case, the Depositary must receive
all required documents prior to 12:00 midnight, New York City time, on June
7, 2000, which is the expiration date of the Offer, unless Autobahn
Acquisition Corporation decides to extend the Offer. If you cannot comply
with any of these procedures, you still may be able to tender your Shares
by using the guaranteed delivery procedures described in this document. See
Section 3 of this document for more information on the procedures for
tendering your Shares.
. UNTIL WHAT TIME CAN I WITHDRAW PREVIOUSLY TENDERED SHARES?
The tender of your Shares may be withdrawn at any time prior to the
expiration date of the offering period. There will be no withdrawal rights
during any subsequent offering period. See Section 4 of this document for
more information.
. HOW DO I WITHDRAW PREVIOUSLY TENDERED SHARES?
You (or your broker or bank if your Shares were held in "street name") must
notify the Depositary at the address and telephone number listed on the
back cover of this document, and the notice must include the name of the
stockholder that tendered the Shares, the number of Shares to be withdrawn
and the name in which the tendered Shares are registered. For complete
information about the procedures for withdrawing your previously tendered
Shares, see Section 4 of this document.
ii
<PAGE>
. WHAT DOES MY BOARD OF DIRECTORS THINK OF THE OFFER?
The Board of Directors of the Company, by unanimous vote of the directors
present at a meeting of the Board of Directors held on April 30, 2000,
determined that the terms of the Offer and the Merger are fair to, and in
the best interest of, the stockholders of the Company, approved the Merger
and the other transactions contemplated by the Merger Agreement and
approved the Merger Agreement. The Board of Directors recommends that the
Company's stockholders accept the Offer and tender their Shares in the
Offer.
. IF AUTOBAHN ACQUISITION CORPORATION CONSUMMATES THE TENDER OFFER, WHAT ARE
AUTOBAHN ACQUISITION CORPORATION'S PLANS WITH RESPECT TO ALL THE SHARES THAT
ARE NOT TENDERED IN THE OFFER?
If Autobahn Acquisition Corporation purchases at least a majority of the
Shares of Shared Medical Systems Corporation pursuant to the Offer, it
intends to cause a merger to occur between Autobahn Acquisition Corporation
and Shared Medical Systems Corporation in which stockholders who have not
previously tendered their Shares will also receive $73 in cash subject to
their right to dissent and demand the fair cash value of their Shares. If
Autobahn Acquisition Corporation does not receive at least a majority of
the Shares, it does not presently intend to acquire any Shares.
. IF I DECIDE NOT TO TENDER, HOW WILL THE OFFER AFFECT MY SHARES?
The purchase of the Shares by Autobahn Acquisition Corporation will reduce
the number of the Shares that might otherwise trade publicly and may reduce
the number of holders of the Shares, which could adversely affect the
liquidity and market value of the remaining Shares held by the public. The
Shares may also cease to be listed on the New York Stock Exchange. Also,
Shared Medical Systems Corporation may cease making filings with the SEC or
may otherwise cease being required to comply with the SEC's rules relating
to publicly held companies. See Section 7 of this document for complete
information about the effect of the Offer on your Shares.
. WHAT IS THE MARKET VALUE OF MY SHARES AS OF A RECENT DATE?
On April 28, 2000, the last full trading day prior to the public
announcement of the Offer, the reported closing price of the Common Stock
on the New York Stock Exchange was $41.4375 per Share. On May 9, 2000, the
last full trading day for which prices were available before the
commencement of the Offer, the reported closing price of the Common Stock
on the New York Stock Exchange was $71.00 per Share. You should obtain a
recent market quotation for your Shares in deciding whether to tender them.
See Section 6 of this document for recent high and low sales prices for the
Shares.
. WHO IS RESPONSIBLE FOR THE PAYMENT OF TAXES AND BROKERAGE FEES?
Stockholders of record who tender Shares directly will not be obligated to
pay brokerage fees or commissions or, except as set forth in Instruction 6
of the Letter of Transmittal, stock transfer taxes on the purchase of the
Shares by Parent pursuant to the Offer. However, any tendering stockholder
or other payee who fails to complete and sign the Substitute Form W-9
included in the Letter of Transmittal may be subject to backup federal
income tax withholding of 31% of the gross proceeds payable to such
stockholder or other payee pursuant to the Offer. See Section 3.
Stockholders who hold their Shares through a broker, bank or other nominee
should check with such institution as to whether they charge any service
fees.
. WHO CAN I TALK TO IF I HAVE QUESTIONS ABOUT THE TENDER OFFER?
If you have any questions you can call the Dealer Manager, Credit Suisse
First Boston Corporation at (800) 646-4543 (toll free), or the Information
Agent, Georgeson Shareholder Communications Inc. at (800) 223-2064 (toll
free). See the back cover of this Offer to Purchase.
iii
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Section Page
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<S> <C>
SUMMARY TERM SHEET........................................................ i
INTRODUCTION.............................................................. 1
1. Terms of the Offer.................................................. 2
2. Acceptance for Payment and Payment for the Shares................... 4
3. Procedure for Tendering the Shares.................................. 5
4. Rights of Withdrawal................................................ 8
5. Certain Federal Income Tax Consequences of the Offer................ 8
6. Price Range of the Shares........................................... 9
7. Effect of the Offer on the Market for the Shares; Stock Quotation,
Margin Regulations and Exchange Act Registration................. 9
8. Certain Information Concerning the Company.......................... 10
9. Certain Information Concerning Siemens AG, Parent and the Merger
Sub.................................................................... 13
10. Background of the Offer; Contacts with the Company.................. 14
11. Purpose of the Offer; Plans for the Company; the Merger............. 15
12. Source and Amount of Funds.......................................... 24
13. Certain Conditions of the Offer..................................... 24
14. Dividends and Distributions......................................... 26
15. Certain Legal Matters............................................... 26
16. Fees and Expenses................................................... 28
17. Miscellaneous....................................................... 28
Schedule A Information Concerning the Directors and Executive Officers of
Siemens AG, Parent and the Merger Sub......................... A-1
</TABLE>
iv
<PAGE>
To the Holders of the Shares of
Shared Medical Systems Corporation
INTRODUCTION
Autobahn Acquisition Corporation, a Delaware corporation (the "Merger Sub")
and a wholly owned subsidiary of Siemens Corporation, a Delaware corporation
("Parent"), and an indirect wholly owned subsidiary of Siemens
Aktiengesellschaft, a corporation formed under the laws of the Federal Republic
of Germany ("Siemens AG"), hereby offers to purchase all of the outstanding
shares of Common Stock, par value $0.01 per share (the "Common Stock"), of
Shared Medical Systems Corporation, a Delaware corporation (the "Company"),
together with the associated rights to purchase Series A Junior Participating
Preferred Stock (the "Rights") issued pursuant to the Rights Agreement, dated
as of May 1, 1991, as amended (the "Rights Agreement"), between the Company and
ChaseMellon Shareholder Services, L.L.C. (the Common Stock and the Rights
together being referred to herein as the "Shares"), at $73 per Share, net to
the seller in cash (the "Common Stock Price"), upon the terms and subject to
the conditions set forth in this Offer to Purchase and in the related Letter of
Transmittal (which, together with any amendments or supplements hereto or
thereto, collectively constitute the "Offer"). Tendering stockholders who are
record holders of their Shares and tender directly to ChaseMellon Shareholder
Services, L.L.C. (the "Depositary") will not be obligated to pay brokerage fees
or commissions or, subject to Instruction 6 of the Letter of Transmittal, stock
transfer taxes on the purchase of the Shares by the Merger Sub pursuant to the
Offer. Stockholders who hold their Shares through a broker or bank should
consult such institution as to whether it charges any service fees. The Merger
Sub will pay all charges and expenses of Credit Suisse First Boston
Corporation, as dealer manager ("Credit Suisse First Boston" or the "Dealer
Manager"), the Depositary and Georgeson Shareholder Communications Inc. (the
"Information Agent"). Unless the context requires otherwise, all references to
Shares herein shall include the associated Rights, and all references to the
Rights shall include all benefits that may inure to the holders of the Rights
pursuant to the Rights Agreement.
The Offer is being made pursuant to an Agreement and Plan of Merger (the
"Merger Agreement"), dated as of April 30, 2000, among Parent, the Merger Sub
and the Company, pursuant to which, upon the terms and subject to the
conditions of the Merger Agreement, at the Effective Time (as defined below) in
accordance with the Delaware General Corporation Law (the "DGCL"), Merger Sub
shall be merged with and into the Company and the separate existence of Merger
Sub shall thereupon cease (the "Merger"). The Company shall continue its
existence under the laws of the State of Delaware. As a result of the Merger,
the Company (sometimes referred to herein as the "Surviving Corporation") will
become a wholly owned subsidiary of Parent.
The Merger shall become effective (i) upon the filing of a certificate of
merger with the Secretary of State of the State of Delaware in accordance with
the DGCL or (ii) at such time as shall be stated in such filing (such time, the
"Effective Time"). In the Merger, each issued and outstanding Share (other than
Shares, if any, that are held by stockholders who are entitled to and who
properly exercise dissenters' rights ("Dissenting Stockholders") pursuant to
Section 262 of the DGCL) shall, by virtue of the Merger and without any action
on the part of the holder thereof, be converted into the right to receive,
without interest, an amount in cash equal to the Common Stock Price.
The Board of Directors of the Company, by unanimous vote of the directors
present at a meeting of the Board of Directors held on April 30, 2000,
determined that the terms of the Offer and the Merger are fair to, and in the
best interest of, the stockholders of the Company, approved the Merger and the
other transactions contemplated by the Merger Agreement and approved the Merger
Agreement. The Board of Directors recommends that the Company's stockholders
accept the Offer and tender their Shares in the Offer.
1
<PAGE>
Goldman, Sachs & Co. ("Goldman Sachs"), financial advisor to the Company,
has delivered to the Board of Directors of the Company its opinion, dated April
30, 2000 (the "Financial Advisor Opinion"), to the effect that, as of such
date, and based on and subject to the matters set forth therein, the $73.00 per
Share in cash to be received by holders of the Shares in the Offer and the
Merger is fair from a financial point of view to such holders. A copy of the
Financial Advisor Opinion, which sets forth the assumptions made, procedures
followed, matters considered and limits on the review undertaken is attached as
an exhibit to the Company's Solicitation/Recommendation Statement on Schedule
14D-9 (the "Schedule 14D-9"), which has been filed by the Company with the
Securities and Exchange Commission (the "SEC") in connection with the Offer and
which is being mailed to stockholders herewith. Stockholders are urged to, and
should, read the Financial Advisor Opinion carefully.
The Offer is conditioned upon, among other things, there being validly
tendered and not withdrawn a number of Shares representing at least a majority
of the outstanding Shares and the applicable waiting period under the Hart-
Scott-Rodino Antitrust Improvements Act of 1976, as amended, having expired or
been terminated. The Offer is also subject to the other conditions set forth in
this Offer to Purchase. See Section 13.
According to the Company, as of April 30, 2000 there were 27,012,963 Shares
outstanding and there were 3,022,844 Shares reserved for issuance under then-
exercisable stock options pursuant to the Company's stock option and incentive
plans. Based on such information, the Minimum Condition would be satisfied if
13,506,482 Shares were validly tendered and not withdrawn.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION AND THEY SHOULD BE READ IN THEIR ENTIRETY BEFORE ANY
DECISION IS MADE WITH RESPECT TO THE OFFER.
1. Terms of the Offer.
Upon the terms and subject to the conditions set forth in the Offer
(including the terms and conditions set forth in Section 13 (the "Offer
Conditions") and, if the Offer is extended or amended, the terms and conditions
of such extension or amendment), the Merger Sub will accept for payment, and
pay for, all Shares validly tendered on or prior to the Expiration Date (as
defined herein) and not withdrawn as permitted by Section 4. The term
"Expiration Date" means 12:00 Midnight, New York City time, on June 7, 2000,
unless and until the Merger Sub shall have extended the period for which the
Offer is open, in which event the term "Expiration Date" shall mean the latest
time and date on which the Offer, as so extended by the Merger Sub, shall
expire. The period from the date hereof until 12:00 Midnight, New York City
time, on June 7, 2000, as such period may be extended, is referred to as the
"Offering Period."
The Merger Sub may elect, in its sole discretion, to provide a subsequent
offering period of 3 to 20 business days (the "Subsequent Offering Period").
For purposes of the Offer, a "business day" means any day other than a
Saturday, Sunday or federal holiday and consists of the time period from 12:01
a.m. through 12:00 midnight, New York City time. A Subsequent Offering Period,
if one is provided, is not an extension of the Offering Period. A Subsequent
Offering Period would be an additional period of time, following the expiration
of the Offering Period, in which stockholders may tender Shares not tendered
during the Offering Period. Any decision to provide a Subsequent Offering
Period will be announced no later than 9:00 a.m., New York City time, on the
next business day after the expiration of the Offering Period. The Merger Sub
will announce the approximate number and percentage of the Shares deposited as
of the expiration of the Offering Period no later than 9:00 a.m., New York City
time, on the next business day following the expiration of the Offering Period,
and such securities will be immediately accepted and promptly paid for. All
Offer Conditions must be satisfied or waived prior to the commencement of any
Subsequent Offering Period.
The Rights presently are transferrable only with the certificates for the
Shares and the surrender for transfer of certificates for any Shares will also
constitute the transfer of the Rights associated with the Shares
2
<PAGE>
represented by such certificates. Pursuant to the terms of the Merger
Agreement, the Company has taken all necessary action so that the Offer will
not result in the grant of any Rights or enable or require any Rights to be
exercised, distributed or triggered.
Subject to the terms of the Merger Agreement (see Section 11) and applicable
rules and regulations of the SEC, the Merger Sub expressly reserves the right,
in its sole discretion, at any time or from time to time, to extend the
Offering Period by giving oral or written notice of such extension to the
Depositary. During any such extension of the Offering Period, all Shares
previously tendered and not withdrawn will remain subject to the Offer, subject
to the right of a tendering stockholder to withdraw such stockholder's Shares.
See Section 4. Subject to the applicable regulations of the SEC, the Merger Sub
also expressly reserves the right, in its sole discretion, at any time or from
time to time, (i) to delay acceptance for payment of, or payment for, any
tendered Shares not theretofore accepted for payment or paid for, (ii) subject
to limitations provided in the Merger Agreement, to terminate or amend the
Offer on the failure of any of the conditions specified in Section 13 and (iii)
to waive any condition (other than the Minimum Condition described herein and
the condition that the Merger Agreement not be terminated in accordance with
its terms) and to modify or change any other term and condition of the Offer
(subject to the consent of the Company in certain instances), by giving oral or
written notice of such delay, termination, amendment, waiver, modification or
change to the Depositary. The Merger Sub will make a public announcement of any
such delay, termination, amendment, waiver, modification or change. Unless
previously approved by the Company in writing, no term and condition of the
Offer may be modified or changed which decreases the Common Stock Price,
changes the form of consideration payable in the Offer (other than by adding
consideration), limits the number of Shares sought in the Offer, changes the
Minimum Condition, changes the material conditions to the Offer in a manner
adverse to the Company or its stockholders or option holders or imposes
additional material conditions to the Offer. If the Merger Sub elects to
provide a Subsequent Offering Period, it expressly reserves the right, in its
sole discretion, at any time or from time to time, to extend the Subsequent
Offering Period, not beyond a total of 20 business days, by giving oral or
written notice of such extension to the Depositary. Upon the terms and subject
to the conditions of the Offer (including the Offer Conditions and, if the
Offer is extended or amended, the terms and conditions of any such extension or
amendment), the Merger Sub will accept for payment, and will pay for, all
Shares validly tendered and not withdrawn promptly after the expiration of the
Offering Period. If there is a Subsequent Offering Period, all Shares tendered
during the Subsequent Offering Period will be immediately accepted for payment
and paid for as they are tendered.
Pursuant to the Merger Agreement, the Merger Sub may, without the consent of
the Company, (i) extend the Offer on one or more occasions for such period as
may be determined by the Merger Sub in its sole discretion (each such extension
period not to exceed 20 business days at a time), if at the then-scheduled
expiration date of the Offer any of the conditions to the Merger Sub's
obligations to accept for payment and pay for the Shares shall not be satisfied
or waived, (ii) extend the Offer for any period required by any rule,
regulation, interpretation or position of the SEC applicable to the Offer, and
(iii) extend the Offer on one or more occasions for an aggregate period of not
more than 20 business days if a number of Shares representing at least a
majority of the total number of outstanding Shares shall have been validly
tendered prior to the expiration of the Offer and not withdrawn (the "Minimum
Condition"), but less than 90% of the outstanding Shares have been validly
tendered and not properly withdrawn.
Any extension, delay, termination or amendment of the Offer will be followed
as promptly as practicable by public announcement thereof, such announcement in
the case of an extension to be issued no later than 9:00 A.M., New York City
time, on the next business day after the previously scheduled Expiration Date.
Subject to applicable law (including Rules 14d-4(d), 14d-6(c) and 14e-1 under
the Exchange Act, which require that any material change in the information
published, sent or given to stockholders in connection with the Offer be
promptly disseminated to stockholders in a manner reasonably designed to inform
stockholders of such change) and without limiting the manner in which the
Merger Sub may choose to make any public announcement, the Merger Sub shall
have no obligation to publish, advertise or otherwise communicate any such
public announcement other than by issuing a press release or other public
announcement.
3
<PAGE>
The Merger Sub confirms that if it makes a material change in the terms of
the Offer or the information concerning the Offer, or if it waives a material
condition of the Offer, the Merger Sub will extend the Offer to the extent
required by Rules 14d-4(d), 14d-6(c) and 14e-1 under the Exchange Act.
If, during the Offering Period, the Merger Sub, if previously approved by
the Company in writing, shall decrease the number of Shares sought pursuant to
the Offer or the Common Stock Price, such decrease shall be applicable to all
holders whose Shares are accepted for payment pursuant to the Offer and, if at
the time notice of any decrease is first published, sent or given to holders of
such Shares, the Offer is scheduled to expire at any time earlier than the
tenth business day from and including the date that such notice is first so
published, sent or given, the Offer will be extended until the expiration of
such ten-business day period.
Consummation of the Offer is also conditioned upon expiration or termination
of all waiting periods imposed by the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended, and the regulations thereunder (the "HSR Act"),
obtaining clearance from the German Federal Cartel Authority and the other
conditions set forth in Section 13. With respect to antitrust compliance, see
Section 15. The Merger Sub reserves the right but is not obligated, in
accordance with applicable rules and regulations of the SEC, to waive any or
all of those conditions. If, by the Expiration Date, any or all of those
conditions have not been satisfied, the Merger Sub may, in its sole discretion,
elect to: (i) extend the Offer and, subject to applicable withdrawal rights,
retain all tendered Shares until the expiration of the Offer, as extended,
subject to the terms of the Offer; (ii) waive all of the unsatisfied conditions
(other than the Minimum Condition and the condition that the Merger Agreement
not be terminated in accordance with its terms) and, subject to complying with
applicable rules and regulations of the SEC, accept for payment all Shares so
tendered; or (iii) terminate the Offer and not accept for payment any Shares
and return all tendered Shares to tendering stockholders. In the event that the
Merger Sub waives any condition set forth in Section 13, the SEC may, if the
waiver is deemed to constitute a material change to the information previously
provided to the stockholders, require that the Offer remain open for an
additional period of time and/or that the Merger Sub disseminate information
concerning such waiver.
The Company has provided the Merger Sub with the Company's stockholder lists
and security position listings for the purpose of disseminating the Offer to
holders of the Shares. This Offer to Purchase, the related Letter of
Transmittal and other relevant materials will be mailed by the Merger Sub to
record holders of the Shares and will be furnished by the Merger Sub to
brokers, dealers, banks, trust companies and similar persons whose names, or
the names of whose nominees, appear on the stockholder lists or, if applicable,
who are listed as participants in a clearing agency's security position
listing, for subsequent transmittal to beneficial owners of the Shares.
2. Acceptance for Payment and Payment for the Shares.
Upon the terms and subject to the conditions of the Offer (including the
Offer Conditions and, if the Offer is extended or amended, the terms and
conditions of any such extension or amendment), the Merger Sub will accept for
payment, and will pay for, all Shares validly tendered and not withdrawn
promptly after the expiration of the Offering Period. If there is a Subsequent
Offering Period, all Shares tendered during the Subsequent Offering Period will
be immediately accepted for payment and paid for as they are tendered.
For purposes of the Offer, the Merger Sub will be deemed to have accepted
for payment Shares validly tendered and not withdrawn as, if and when the
Merger Sub gives oral or written notice to the Depositary of its acceptance for
payment of such Shares pursuant to the Offer. Payment for any Shares accepted
for payment pursuant to the Offer will be made by deposit of the purchase price
therefor with the Depositary, which will act as agent for the tendering
stockholders for the purpose of receiving payments from the Merger Sub and
transmitting such payments to the tendering stockholders. In all cases, payment
for any Shares accepted for payment pursuant to the Offer will be made only
after timely receipt by the Depositary of (i) certificates for such Shares (or
a timely Book Entry Confirmation (as defined below) with respect thereto), (ii)
the Letter of Transmittal (or a manually signed facsimile thereof), properly
completed and duly executed, with any required
4
<PAGE>
signature guarantees, or, in the case of a book-entry transfer, an Agent's
Message (as defined below) and (iii) any other documents required by the Letter
of Transmittal. Accordingly, payment may be made to tendering stockholders at
different times if delivery of the certificates and other required documents
occur at different times. The price paid to any holder of the Shares pursuant
to the Offer will be the highest price per Shares paid to any other holder of
such Shares pursuant to the Offer.
Under no circumstances will interest on the Common Stock Price for the
Shares be paid, regardless of any extension of the Offer or any delay in making
such payment.
If any tendered Shares are not accepted for payment pursuant to the terms
and conditions of the Offer for any reason, or if certificates are submitted
for more Shares than are tendered, certificates for such unpurchased Shares
will be returned, without expense to the tendering stockholder, or such other
person as the tendering stockholder shall specify in the Letter of Transmittal,
as promptly as practicable following the expiration or termination of the
Offer. In the case of any Shares delivered by book-entry transfer into the
Depositary's account at the Book-Entry Transfer Facility (as defined below)
pursuant to the procedures set forth in Section 3, such Shares will be credited
to such account maintained at the Book-Entry Transfer Facility as the tendering
stockholder shall specify in the Letter of Transmittal, as promptly as
practicable following the expiration or termination of the Offer. If no such
instructions are given with respect to any Shares delivered by book-entry
transfer, any such Shares not tendered or not purchased will be returned by
crediting the account at the Book-Entry Transfer Facility designated in the
Letter of Transmittal as the account from which such Shares were delivered.
The Merger Sub reserves the right to transfer or assign in whole or in part
from time to time to one or more direct or indirect subsidiaries of Parent the
right to purchase all or any portion of the Shares tendered pursuant to the
Offer, but any such transfer or assignment will not relieve the Merger Sub of
its obligations under the Offer and will in no way prejudice the rights of
tendering stockholders to receive payment for any Shares validly tendered and
accepted for payment pursuant to the Offer.
3. Procedure for Tendering Shares.
Valid Tender. To tender Shares pursuant to the Offer, either (i) a Letter of
Transmittal (or a manually signed facsimile thereof) properly completed and
duly executed in accordance with the instructions of the Letter of Transmittal,
together with any required signature guarantees and certificates for the Shares
to be tendered, or, in the case of a book-entry transfer, an Agent's Message,
and any other required documents must be received by the Depositary prior to
the Expiration Date, or the expiration of any Subsequent Offering Period, at
one of its addresses set forth on the back cover of this Offer to Purchase or
(ii) the tendering stockholder must comply with the guaranteed delivery
procedures set forth below.
The Rights presently are transferred only with the certificates for the
Shares and the surrender for transfer of certificates for any Shares will also
constitute the transfer of the Rights associated with the Shares represented by
such certificates. Pursuant to the terms of the Merger Agreement, the Company
has taken all necessary action so that the Offer will not result in the grant
of any Rights or enable or require any Rights to be exercised, distributed or
triggered.
Book-Entry Delivery. The Depositary will establish accounts with respect to
the Shares at The Depository Trust Company (the "Book-Entry Transfer Facility")
for purposes of the Offer within two business days after the date of this Offer
to Purchase. Any financial institution that is a participant in the Book-Entry
Transfer Facility's systems may make book-entry transfer of the Shares by
causing the Book-Entry Transfer Facility to transfer such Shares into the
Depositary's account in accordance with the Book-Entry Transfer Facility's
procedures for such transfer. However, although delivery of the Shares may be
effected through book-entry transfer, either the Letter of Transmittal (or a
manually signed facsimile thereof), properly completed and duly executed,
together with any required signature guarantees, or an Agent's Message in lieu
of the Letter of Transmittal, and any other required documents, must, in any
case, be transmitted to and received by the
5
<PAGE>
Depositary at one of its addresses set forth on the back cover of this Offer to
Purchase by the Expiration Date, or the expiration of any Subsequent Offering
Period, or the tendering stockholder must comply with the guaranteed delivery
procedures described below. The confirmation of a book-entry transfer of the
Shares into the Depositary's account at the Book-Entry Transfer Facility as
described above is referred to herein as a "Book-Entry Confirmation." The term
"Agent's Message" means a message transmitted by the Book-Entry Transfer
Facility to, and received by, the Depositary and forming a part of a Book-Entry
Confirmation, which states that the Book-Entry Transfer Facility has received
an express acknowledgment from the participant in the Book-Entry Transfer
Facility tendering the Shares which are the subject of such Book-Entry
Confirmation, that such participant has received and agrees to be bound by the
terms of the Letter of Transmittal and that the Merger Sub may enforce such
agreement against the participant. Delivery of documents to a Book-Entry
Transfer Facility in accordance with such Book-Entry Transfer Facility's
procedures does not constitute delivery to the Depositary.
The method of delivery of any Shares, the Letter of Transmittal and all
other required documents, including delivery through the Book-Entry Transfer
Facility, is at the election and risk of the tendering stockholder. Shares will
be deemed delivered only when actually received by the Depositary (including,
in the case of a book-entry transfer, by Book-Entry Confirmation). If delivery
is by mail, it is recommended that the stockholder use properly insured
registered mail with return receipt requested. In all cases, sufficient time
should be allowed to ensure timely delivery.
Signature Guarantees. Except as otherwise provided below, all signatures on
a Letter of Transmittal must be guaranteed by a financial institution
(including most commercial banks, savings and loan associations and brokerage
houses) that is a participant in the Security Transfer Agents Medallion
Program, the New York Stock Exchange Medallion Signature Guarantee Program or
the Stock Exchange Medallion Program (each, an "Eligible Institution").
Signatures on a Letter of Transmittal need not be guaranteed (a) if the Letter
of Transmittal is signed by the registered holder (which term, for purposes of
this section, includes any participant in the Book-Entry Transfer Facility's
systems whose name appears on a security position listing as the owner of the
Shares) of the Shares tendered therewith and such registered holder has not
completed the box entitled "Special Payment Instructions" or the box entitled
"Special Delivery Instructions" on the Letter of Transmittal or (b) if such
Shares are tendered for the account of an Eligible Institution. See
Instructions 1 and 5 of the Letter of Transmittal. If the certificates for any
Shares are registered in the name of a person other than the signer of the
Letter of Transmittal, or if payment is to be made or certificates for any
Shares not tendered or not accepted for payment are to be returned to a person
other than the registered holder of the certificates surrendered, then the
tendered certificates must be endorsed or accompanied by appropriate stock
powers, in either case signed exactly as the name or names of the registered
holders or owners appear on the certificates, with the signatures on the
certificates or stock powers guaranteed as described above. See Instructions 1
and 5 of the Letter of Transmittal.
Guaranteed Delivery. A stockholder who desires to tender Shares pursuant to
the Offer and whose certificates for any Shares are not immediately available
or who cannot comply with the procedure for book-entry transfer on a timely
basis, or who cannot deliver all required documents to the Depositary prior to
the Expiration Date, or the expiration of any Subsequent Offering Period, may
tender such Shares by following all of the procedures set forth below:
(i) such tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by the Merger Sub, is received
by the Depositary, as provided below, prior to the Expiration Date, or the
expiration of any Subsequent Offering Period; and
(iii) the certificates for all tendered Shares, in proper form for
transfer (or a Book-Entry Confirmation with respect to all such Shares),
together with a properly completed and duly executed Letter of Transmittal
(or a manually signed facsimile thereof), with any required signature
guarantees (or, in the case of a book-entry transfer, an Agent's Message in
lieu of the Letter of Transmittal), and any other
6
<PAGE>
required documents, are received by the Depositary within three trading
days after the date of execution of such Notice of Guaranteed Delivery. A
"trading day" is any day on which the New York Stock Exchange, Inc. (the
"NYSE") is open for business.
The Notice of Guaranteed Delivery may be delivered by hand to the Depositary
or transmitted by telegram, facsimile transmission or mail to the Depositary
and must include a guarantee by an Eligible Institution in the form set forth
in such Notice of Guaranteed Delivery.
Other Requirements. Notwithstanding any provision of this document, payment
for the Shares accepted for payment pursuant to the Offer will in all cases be
made only after timely receipt by the Depositary of the instruments and
documents referred to in Section 2.
Tender Constitutes an Agreement. The valid tender of any Shares pursuant to
one of the procedures described above will constitute a binding agreement
between the tendering stockholder and the Merger Sub upon the terms and subject
to the conditions of the Offer.
Appointment. By executing a Letter of Transmittal as set forth above, the
tendering stockholder will irrevocably appoint designees of the Merger Sub as
such stockholder's attorneys-in-fact and proxies in the manner set forth in the
Letter of Transmittal, each with full power of substitution, to the full extent
of such stockholder's rights with respect to the Shares tendered by such
stockholder and accepted for payment by the Merger Sub and with respect to any
and all non-cash dividends, distributions, rights, and other shares of Common
Stock or other securities issued or issuable in respect of such Shares on or
after April 30, 2000 (collectively, "Distributions"). All such proxies will be
considered coupled with an interest in the tendered Shares. Such appointment
will be effective when, and only to the extent that, the Merger Sub deposits
the payment for such Shares with the Depositary. All such powers of attorney
and proxies will be irrevocable and will be deemed granted in consideration of
the acceptance for payment by the Merger Sub of the Shares tendered in
accordance with the terms of the Offer. Upon the effectiveness of such
appointment, all prior powers of attorney, proxies and consents given by such
stockholder will be revoked, and no subsequent powers of attorney, proxies and
consents may be given (and, if given, will not be deemed effective). The Merger
Sub's designees will be empowered to exercise all voting and other rights of
such stockholder with respect to such Shares (and any and all Distributions) as
they, in their sole discretion, may deem proper at any annual, special or
adjourned meeting of the stockholders of the Company, actions by written
consent in lieu of any such meeting or otherwise. The Merger Sub reserves the
right to require that, in order for any Shares to be deemed validly tendered,
immediately upon the Merger Sub's depositing the payment for such Shares with
the Depositary, the Merger Sub must be able to exercise full voting, consent
and other rights with respect to such Shares (and any and all Distributions).
Determination of Validity. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance of any tender of the
Shares will be determined by the Merger Sub in its sole discretion, which
determination will be final and binding. The Merger Sub reserves the absolute
right to reject any and all tenders determined by it not to be in proper form
or the acceptance for payment of or payment for which may, in the opinion of
the Merger Sub's counsel, be unlawful. The Merger Sub also reserves the
absolute right to waive any defect or irregularity in the tender of any Shares
of any particular stockholder whether or not similar defects or irregularities
are waived in the case of other stockholders. No tender of any Shares will be
deemed to have been validly made until all defects and irregularities relating
thereto have been cured or waived. None of Siemens AG, Parent, the Merger Sub,
the Depositary, the Information Agent, the Dealer Manager or any other person
will be under any duty to give notification of any defects or irregularities in
tenders or incur any liability for failure to give any such notification. The
Merger Sub's interpretation of the terms and conditions of the Offer (including
the Letter of Transmittal and Instructions thereto) will be final and binding.
Backup Withholding. In order to avoid "backup withholding" of Federal income
tax on payments of cash pursuant to the Offer, a stockholder surrendering
Shares in the Offer must, unless an exemption applies, provide the Depositary
with such stockholder's correct taxpayer identification number ("TIN") on a
Substitute
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<PAGE>
Form W-9 and certify under penalties of perjury that such TIN is correct and
that such stockholder is not subject to backup withholding. If a stockholder
does not provide such stockholder's correct TIN or fails to provide the
certifications described above, the Internal Revenue Service (the "IRS") may
impose a penalty on such stockholder and payment of cash to such stockholder
pursuant to the Offer may be subject to backup withholding of 31%. All
stockholders surrendering Shares pursuant to the Offer should complete and sign
the main signature form and the Substitute Form W-9 included as part of the
Letter of Transmittal to provide the information and certification necessary to
avoid backup withholding (unless an applicable exemption exists and is proved
in a manner satisfactory to the Merger Sub and the Depositary). Certain
stockholders (including, among others, all corporations and certain foreign
individuals and entities) are not subject to backup withholding. Non-corporate
foreign stockholders should complete and sign the main signature form and a
Form W-8, Certificate of Foreign Status, a copy of which may be obtained from
the Depositary, in order to avoid backup withholding. See Instruction 10 to the
Letter of Transmittal.
4. Rights of Withdrawal.
Tenders of the Shares made pursuant to the Offer are irrevocable except that
Shares tendered pursuant to the Offer may be withdrawn at any time prior to the
expiration of the Offering Period and, unless theretofore accepted for payment
by the Merger Sub pursuant to the Offer, may also be withdrawn at any time
after July 8, 2000. There will be no withdrawal rights during any Subsequent
Offering Period for any Shares tendered during the Subsequent Offering Period.
For a withdrawal to be effective, a written, telegraphic, telex or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
one of its addresses set forth on the back cover of this Offer to Purchase. Any
such notice of withdrawal must specify the name of the person having tendered
the Shares to be withdrawn, the number of the Shares to be withdrawn and the
names in which the certificate(s) evidencing the Shares to be withdrawn are
registered, if different from that of the person who tendered such Shares. The
signature(s) on the notice of withdrawal must be guaranteed by an Eligible
Institution, unless such Shares have been tendered for the account of an
Eligible Institution. If Shares have been tendered pursuant to the procedures
for book-entry tender as set forth in Section 3, any notice of withdrawal must
specify the name and number of the account at the Book-Entry Transfer Facility
to be credited with the withdrawn Shares. If certificates for the Shares to be
withdrawn have been delivered or otherwise identified to the Depositary, the
name of the registered holder and the serial numbers of the particular
certificates evidencing the Shares to be withdrawn must also be furnished to
the Depositary as aforesaid prior to the physical release of such certificates.
All questions as to the form and validity (including time of receipt) of any
notice of withdrawal will be determined by the Merger Sub, in its sole
discretion, which determination shall be final and binding. None of Siemens AG,
Parent, the Merger Sub, the Dealer Manager, the Depositary, the Information
Agent, or any other person will be under any duty to give notification of any
defects or irregularities in any notice of withdrawal or incur any liability
for failure to give such notification. Withdrawals of tendered Shares may not
be rescinded, and any Shares properly withdrawn will be deemed not to have been
validly tendered for purposes of the Offer. However, withdrawn Shares may be
retendered by following one of the procedures described in Section 3 at any
time prior to the Expiration Date, or the expiration of any Subsequent Offering
Period.
If the Merger Sub extends the Offer, is delayed in its acceptance for
payment of any Shares, or is unable to accept for payment any Shares pursuant
to the Offer, for any reason, then, without prejudice to the Merger Sub's
rights under this Offer, the Depositary may, nevertheless, on behalf of the
Merger Sub, retain tendered Shares, but such Shares may be withdrawn to the
extent that tendering stockholders are entitled to withdrawal rights as set
forth in this Section 4.
5. Certain Federal Income Tax Consequences of the Offer.
Sales of the Shares pursuant to the Offer and the exchange of the Shares for
cash pursuant to the Merger will be taxable transactions for Federal income tax
purposes and may also be taxable under applicable state,
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<PAGE>
local and other tax laws. For Federal income tax purposes, a stockholder whose
Shares are purchased pursuant to the Offer or who receives cash as a result of
the Merger will realize gain or loss equal to the difference between the
adjusted basis of the Shares sold or exchanged and the amount of cash received
therefor. Such gain or loss will be capital gain or loss if the Shares are held
as capital assets by the stockholder. Long-term capital gain of a non-corporate
stockholder is generally subject to a maximum tax rate of 20% in respect of
property held for more than one year.
The income tax discussion set forth above is included for general
information only and may not be applicable to stockholders in special
situations such as stockholders who received their Shares upon the exercise of
stock options or otherwise as compensation and stockholders who are not United
States persons. Stockholders should consult their own tax advisors with respect
to the specific tax consequences to them of the Offer and the Merger, including
the application and effect of federal, state, local, foreign or other tax laws.
6. Price Range of the Shares.
The Shares are listed on the NYSE under the symbol "SMS". The following
table sets forth, for the calendar quarters indicated, the high and low sales
prices for the Shares on the New York Stock Exchange based on public sources:
<TABLE>
<CAPTION>
Sales Price
-----------------
High Low Dividends
-------- -------- ---------
<S> <C> <C> <C>
Calendar Year
1998:
First Quarter................................ $79.375 $59.4375 $0.21
Second Quarter............................... 82.6875 67.00 $0.21
Third Quarter................................ 86.50 52.00 $0.21
Fourth Quarter............................... 56.625 40.0625 $0.21
1999:
First Quarter................................ 59.875 42.75 $0.21
Second Quarter............................... 73.50 53.00 $0.21
Third Quarter................................ 65.375 44.00 $0.21
Fourth Quarter............................... 55.125 35.50 $0.21
2000:
First Quarter (through May 9, 2000).......... 71.00 37.875 $0.21
</TABLE>
On April 28, 2000, the last full trading day prior to the public
announcement of the terms of the Offer and the Merger, the reported closing
price on the NYSE was $41.4375 per Share. On May 9, 2000, the last full trading
day prior to commencement of the Offer, the reported closing price of Common
Stock on the NYSE was $71.00 per Share. Stockholders are urged to obtain a
current market quotation for the Shares.
7. Effect of the Offer on the Market for the Shares; Stock Quotation, Margin
Regulations and Exchange Act Registration.
Market for the Shares. The purchase of any Shares by the Merger Sub pursuant
to the Offer will reduce the number of the Shares that might otherwise trade
publicly and may reduce the number of holders of the Shares, which could
adversely affect the liquidity and market value of the remaining Shares held by
the public.
Stock Quotation. Shares of Common Stock are listed on the NYSE. According to
the NYSE's published guidelines, the NYSE will consider delisting shares if,
among other things, the number of publicly held shares (excluding shares held
by officers, directors, their immediate families and other concentrated holders
of 10% or more ("NYSE Excluded Holdings")) is less than 600,000 (subject to
proportionate reduction if the unit of trading is less than 100 shares), there
are fewer than 400 stockholders (or, if the average trading volume for the
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<PAGE>
most recent 12 months is less than 100,000 shares, fewer than 1,200
stockholders), or the aggregate market value of publicly-held Shares (excluding
NYSE Excluded Holdings), subject to certain adjustments based upon market
conditions, is less than $8,000,000. According to information furnished to the
Merger Sub by the Company as of the close of business on April 30, 2000, there
were 5,493 holders of record of the Shares not including beneficial holders of
any Shares in street name, and there were 27,012,963 Shares outstanding. If the
Shares were to be delisted, the associated Rights would be delisted as well.
If the NYSE were to delist the Shares, the market for the Shares could be
adversely affected. It is possible that the Shares would be traded or quoted on
other securities exchanges or in the over-the-counter market, and that price
quotations would be reported by such exchanges, or other sources. The extent of
the public market for the Shares and the availability of such quotations would,
however, depend upon the number of stockholders and/or the aggregate market
value of the Shares remaining at such time, the interest in maintaining a
market in the Shares on the part of securities firms, the possible termination
of registration of the Shares under the Exchange Act and other factors.
Margin Regulations. The Shares are presently "margin securities" under the
regulations of the Board of Governors of the Federal Reserve Board (the
"Federal Reserve Board"), which has the effect, among other things, of allowing
brokers to extend credit on the collateral of such Shares. Depending upon
factors similar to those described above regarding listing and market
quotations, the Shares might no longer constitute "margin securities" for the
purposes of the Federal Reserve Board's margin regulations in which event the
Shares would be ineligible as collateral for margin loans made by brokers.
Exchange Act Registration. The Shares are currently registered under the
Exchange Act. Such registration may be terminated by the Company upon
application to the SEC if the outstanding Shares are not listed on a national
securities exchange and if there are fewer than 300 holders of record of such
shares. Termination of registration of the Shares under the Exchange Act would
reduce the information required to be furnished by the Company to its
stockholders and to the SEC and would make certain provisions of the Exchange
Act, such as the short-swing profit recovery provisions of Section 16(b) and
the requirement to furnish a proxy statement in connection with stockholders'
meetings pursuant to Section 14(a) and the related requirement to furnish an
annual report to stockholders, no longer applicable with respect to the Shares.
Furthermore, the ability of "affiliates" of the Company and persons holding
"restricted securities" of the Company to dispose of such securities pursuant
to Rule 144 under the Securities Act of 1933, as amended, may be impaired or
eliminated. If registration of the Shares under the Exchange Act were
terminated, the Shares would no longer be eligible for listing on the NYSE or
for continued inclusion on the Federal Reserve Board's list of "margin
securities". The Merger Sub intends to seek to cause the Company to apply for
termination of registration of the Shares as soon as possible after
consummation of the Offer if the requirements for termination of registration
are met. If registration of the Shares is not terminated prior to the Merger,
then the registration of such Shares under the Exchange Act and the listing of
such Shares on the NYSE will be terminated following the completion of the
Merger.
8. Certain Information Concerning the Company.
The Company is a Delaware corporation with its principal executive offices
located at 51 Valley Stream Parkway, Malvern, Pennsylvania (telephone number
610-219-6300).
The Company, incorporated in 1969, is a leading supplier of information
solutions to the health industry in over 20 countries and territories in North
America, Europe, and New Zealand. The Company's customers include hospitals and
public health institutions; physician groups, clinics, and diagnostic and
treatment centers; home health, assisted living, and hospice care providers;
rehabilitation, behavioral, and long-term care facilities; and health
enterprises, which are comprehensive networks composed of multiple health
providers.
The Company develops and delivers a wide range of comprehensive solutions to
meet the information technology needs of its customers. These solutions consist
of software and related services, professional
10
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services, and computer hardware. Software and related services include
clinical, financial and administrative, enterprise management, and decision
support systems; and related application processing, electronic data
interchange, enterprise systems management, managed Internet, and support
services. The Company also offers a variety of complementary professional
services including implementation; networking; customer education; specialized
clinical, financial and technology consulting; and information technology,
managed care administration and business office outsourcing. The Company's
information systems operate on hardware platforms that range from personal
computers, to client/server networks, minicomputers, and mainframes, which can
be remotely hosted at the Company's Information Services Center (ISC) via the
SMS Health Information Network or operated at the customer's site, depending on
the type of solution chosen and the operational needs of the customer.
The Company has two geographic segments, North America and International.
Financial information by business segment and geographic area can be found on
page 34 of the Company's 1999 Annual Report to Stockholders, Notes to
Consolidated Financial Statements, Business Segment Information (Note 9), which
may be obtained from the SEC. See "Available Information" below.
North America has historically been the Company's largest market, accounting
for 86% of 1999 revenues. The Company currently has contracts with health
providers in 47 states, the District of Columbia, Puerto Rico, Bermuda, and
Canada. The Company markets its information systems and provides implementation
services and ongoing technical, consulting and educational support with a field
staff working from branch offices. At its Corporate Headquarters and ISC, the
Company has customer service staff, applications specialists, and
communications and computer operations personnel who assist customers in their
day-to-day use of the Company's systems, and system designers and programmers
who work to improve existing software applications and develop additional
information systems.
The Company's international operations accounted for 14% of 1999 revenues.
The Company entered the health information market in Europe in 1981 and New
Zealand in 1997. The Company's international information systems and related
services are provided to customers in 14 European countries and New Zealand
primarily through twelve international branch offices.
Set forth below is certain summary consolidated financial information for
each of the Company's last three fiscal years for the period ended 1999 as
contained in the Company's 1999 Annual Report to Stockholders, and incorporated
by reference in its Annual Report on Form 10-K (the "Form 10-K"). More
comprehensive financial information is included in such reports (including
management's discussion and analysis of financial condition and results of
operation) and other documents filed by the Company with the SEC, and the
following summary is qualified in its entirety by reference to such reports and
other documents and all of the financial information and notes contained
therein. Copies of such reports and other documents may be examined at or
obtained from the SEC and the NYSE in the manner set forth below.
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<PAGE>
SHARED MEDICAL SYSTEMS CORPORATION
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(In thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended
March 31, 2000 Year Ended December 31,
------------------ ---------------------------
1999 1998 1997
(unaudited) --------- --------- -------
<S> <C> <C> <C> <C>
Income Statement Data
Revenues..................... 240,615 1,217,145 1,135,393 921,341
Income before income taxes... 4,286 122,535 114,199 98,551
Net income................... 2,657 75,972 70,803 61,102
Net income per common share:
Basic...................... 0.10 2.85 2.68 2.34
Diluted.................... 0.10 2.80 2.62 2.30
Balance Sheet Data (at period
end):
Current assets............... 435,814 479,542 411,205 319,260
Total assets................. 869,595 915,744 808,448 613,976
Current liabilities.......... 199,844 246,609 366,958 229,584
Stockholders' investment..... 456,781 457,134 399,350 329,857
</TABLE>
Except as otherwise set forth herein, the information concerning the Company
contained in this Offer to Purchase has been taken from or based upon publicly
available documents and records on file with the SEC and other public sources
and is qualified in its entirety by reference thereto. Although the Merger Sub,
Parent and the Dealer Manager have no knowledge that would indicate that any
statements contained herein based on such documents and records are untrue,
Siemens AG, Parent, the Merger Sub and the Dealer Manager cannot take
responsibility for the accuracy or completeness of the information contained in
such documents and records, or for any failure by the Company to disclose
events which may have occurred or may affect the significance or accuracy of
any such information but which are unknown to the Siemens AG, Parent, the
Merger Sub or the Dealer Manager.
Other Financial Information. During the course of the discussions and
information exchange between Siemens AG and the Company that led to the
execution of the Merger Agreement, the Company provided Siemens AG and its
financial advisors with certain information about the Company and its financial
performance which is not publicly available. The information provided included
financial projections for the Company as an independent company for fiscal
years 2000, 2001 and 2002 (i.e., without regard to the impact on the Company of
a transaction with Parent and Merger Sub) and the Company's budget for fiscal
year 2000. The financial projections included, among other things, the
following forecasts of the Company's consolidated revenues and net income,
respectively (in millions): in 2000, $1,274 and $77; in 2001, $1,450 and $97;
and in 2002, $1,725 and $130. After reviewing the Company's preliminary results
of operations for the quarter ended March 31, 2000, Company management revised
its forecasts of 2000 revenues and net income (in millions) to $1,200 and $70,
respectively, and provided such revisions to Siemens AG on April 20, 2000.
The Company has advised Siemens AG, Parent and the Merger Sub that it does
not as a matter of course make public any projections as to future performance
or earnings, and the aforementioned projections are included in this Offer to
Purchase solely because such information was provided to Siemens AG and its
financial advisors during the course of Siemens AG's and Parent's evaluation of
the Company. Siemens AG, Parent and the Merger Sub did not rely on such
information in their valuation of the Company. The projections were not
prepared with a view to public disclosure or compliance with the published
guidelines of the Commission or the guidelines established by the American
Institute of Certified Public Accountants regarding projections or forecasts.
The Company has advised Siemens AG, Parent and the Merger Sub that (i) its
internal operating projections are, in general, prepared solely for internal
use and capital budgeting and other management decisions and are subjective in
many respects and thus susceptible to various interpretations and periodic
revision based on actual experience and business developments and (ii) the
projections were based on
12
<PAGE>
a number of internal assumptions with respect to industry performance, general
business, economic, market and financial conditions and other matters that are
inherently subject to significant economic and competitive uncertainties, all
of which are difficult to predict and some of which are beyond the control of
the Company. Accordingly, there can be no assurance, and no representation or
warranty is or has been made by any of the Company, Siemens AG, Parent, the
Merger Sub or any of their representatives, that actual results will not vary
materially from those described above. The foregoing information is forward-
looking in nature and inherently subject to significant uncertainties and
contingencies, including industry performance, general business and economic
conditions, currency exchange rates, customer requirements, competition,
adverse changes in applicable laws, regulations or rules governing
environmental, tax and accounting matters and other matters. The inclusion of
this information should not be regarded as an indication that the Company,
Siemens AG, Parent, the Merger Sub or anyone who received this information then
considered, or now considers, it a reliable prediction of future events, and
this information should not be relied on as such. None of the Company, Siemens
AG, Parent, the Merger Sub or any of their respective financial advisors or the
Dealer Manager assumes any responsibility for the validity, reasonableness,
accuracy or completeness of the projections described above. None of the
Company, Siemens AG, Parent, the Merger Sub or any of their respective
financial advisors or the Dealer Manager intends to, and each of them disclaims
any obligation to, update, revise or correct such projections if they are or
become inaccurate (even in the short term). The projections have not been
adjusted to reflect the effects of the Offer or the Merger.
Available Information. The Company is subject to the information and
reporting requirements of the Exchange Act and in accordance therewith is
obligated to file reports and other information with the SEC relating to its
business, financial condition and other matters. Information, as of particular
dates, concerning the Company's directors and officers, their remuneration,
stock options granted to them, the principal holders of the Company's
securities, any material interests of such persons in transactions with the
Company and other matters is required to be disclosed in proxy statements
distributed to the Company's stockholders and filed with the SEC. Such reports,
proxy statements and other information should be available for inspection at
the public reference room at the SEC's offices at 450 Fifth Street, N.W.,
Washington, D.C., 20549 and also should be available for inspection and copying
at the regional offices of the SEC located at Seven World Trade Center, 13th
Floor, New York, New York 10048 and Citicorp Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60611. Copies may be obtained, by mail, upon
payment of the SEC's customary charges, by writing to its principal office at
450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549 and can be
obtained electronically on the SEC's Website at http://www.sec.gov. Such
material should also be available for inspection at the NYSE, 20 Broad Street,
New York, New York 10005.
9. Certain Information Concerning Siemens AG, Parent and the Merger Sub.
Siemens AG is a corporation organized under the laws of the Federal Republic
of Germany, with its principal executive offices at Wittelsbacherplatz 2, D-
80333 Munich, Federal Republic of Germany. The telephone number of Siemens AG
at such location is 011-49-89-636-00. Siemens AG's principal business is the
design, development, manufacture and marketing of a wide range of electrical
and electronic products and systems.
Parent is a corporation organized under the laws of the State of Delaware,
with its principal executive offices at 153 East 53rd Street, New York, NY
10022. All of the outstanding capital stock of Parent is held by Siemens
Beteiligungs Verwaltungs, GmbH, Siemens Nixdorf Informationssysteme AG and
OSRAM GmbH, each of which is a corporation organized under the laws of the
Federal Republic of Germany, and Siemens Building Technologies AG, a
corporation organized under the laws of Switzerland. All of these subsidiaries
in turn are direct wholly owned subsidiaries of Siemens AG.
The Merger Sub is a Delaware corporation and to date has engaged in no
activities other than those incident to its formation and the commencement of
the Offer.
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<PAGE>
Financial Information of Siemens AG. Siemens AG is not subject to the
informational reporting requirements of the Exchange Act, and, accordingly,
does not file reports or other information with the SEC relating to its
business, financial condition and other matters.
Other Information Regarding Siemens AG, Parent and the Merger Sub. The name,
citizenship, business address, business telephone number, current principal
occupation (including the name, principal business and address of the
organization in which such occupation is conducted), and material positions
held during the past five years (including the name, principal business and
address of the organization in which such occupation was conducted), of each of
the directors and executive officers of Siemens AG, Parent and the Merger Sub
are set forth in Schedule A to this Offer to Purchase.
None of Siemens AG, Parent or the Merger Sub, or, to the best of their
knowledge, any of the persons listed in Schedule A hereto nor any associate or
majority-owned subsidiary of any of the foregoing, beneficially owns or has a
right to acquire any Shares or has engaged in any transactions in the Shares in
the past 60 days. None of Siemens AG, Parent or the Merger Sub has purchased
any Shares during the past two years.
Except as set forth in Section 10, there have been no negotiations,
transactions or material contacts between Siemens AG, Parent or the Merger Sub,
or, to the best of their knowledge, any of the persons listed in Schedule A
hereto, on the one hand, and the Company or its affiliates, on the other hand,
concerning a merger, consolidation or acquisition, a tender offer or other
acquisition of securities, an election of directors, or a sale or other
transfer of a material amount of assets. Except as described in Section 10,
none of Siemens AG, Parent or the Merger Sub, or, to the best of their
knowledge, any of the persons listed in Schedule A hereto, had any transaction
with the Company or any of its executive officers, directors or affiliates that
would require disclosure under the rules and regulations of the SEC applicable
to the Offer.
10. Background of the Offer; Contacts with the Company.
As an ongoing part of its growth strategy, Siemens AG from time to time
considers acquisition opportunities of companies or assets that would
complement or expand its existing lines of business. In the summer of 1999,
representatives of Credit Suisse First Boston began discussions with certain
members of Siemens AG regarding the identification of strategic opportunities
in the healthcare information technology sector. The Company was one of the
potential acquisition opportunities identified by Credit Suisse First Boston.
On March 2, 2000, a third party publicly announced an unsolicited offer to
acquire the Company in a stock-for-stock transaction. During the next two
weeks, representatives of Credit Suisse First Boston met and held telephone
conferences with representatives of Siemens AG to evaluate and consider
submitting a competing offer to acquire the Company. On March 13, 2000, Prof.
Dr. Erich Reinhardt, Chief Executive Officer and Group President of Siemens
Medical Engineering, authorized representatives of Credit Suisse First Boston
to approach Goldman Sachs, the Company's financial advisor, to discuss Siemens
AG's interest in an acquisition of the Company. A representative of Credit
Suisse First Boston contacted Goldman Sachs for this purpose on March 13, 2000.
On March 17, 2000, at the invitation of Goldman Sachs, Siemens AG delivered
to Goldman Sachs a preliminary, non-binding letter, addressed to Marvin S.
Cadwell, President and Chief Executive Officer of the Company, indicating
Siemens AG's interest in acquiring all of the Company's outstanding equity for
cash at an estimated price of $72.00 per Share. On March 23, 2000, at the
request of the Company, Parent entered into a confidentiality agreement with
the Company that would permit Siemens AG and Parent to obtain confidential
information required to evaluate a potential transaction with the Company. In
late March and early April, representatives of Siemens AG and Parent and their
financial, accounting and legal advisors conducted a due diligence
investigation of the Company, which involved several meetings with
representatives of the Company and a review of public and non-public documents
provided by the Company.
14
<PAGE>
On April 13, 2000, Goldman Sachs delivered to Prof. Reinhardt a letter
inviting Siemens AG to submit to Goldman Sachs by April 26, 2000 a definitive
proposal for a business combination transaction involving Siemens AG and the
Company and setting forth the guidelines for such a proposal. On April 17, the
Company's legal counsel delivered to Siemens AG and Parent and their legal
counsel a draft proposed merger agreement on which Siemens AG and Parent were
requested to mark all of their suggested changes and which was to be included
with any acquisition proposal submitted by Siemens AG and Parent.
On April 14, 2000, certain members of Siemens AG management met with the
Executive Committee of the Management Board of Siemens AG (the "Siemens Board")
to present the findings of their due diligence inquiries regarding the possible
acquisition of the Company and to seek the Siemens Board's approval to submit a
proposal to acquire all of the outstanding shares of the Company. Upon
consideration of the issues presented by Siemens AG management, the Siemens
Board duly authorized the management of Siemens AG to submit an offer to
acquire the outstanding shares of the Company at an approved valuation.
After meetings and telephone conferences with its financial, accounting and
legal advisors from April 19 to April 25, Siemens AG submitted to the Company
through Goldman Sachs a written proposal pursuant to which a subsidiary of
Parent would acquire all of the Company's outstanding capital stock at a price
of $72.25 per Share in cash, subject to execution of a definitive, mutually
satisfactory merger agreement between the parties, completion of certain
confirmatory due diligence and other limited conditions. Siemens AG's proposal
also included a copy of the Company's proposed merger agreement, marked to show
Siemens AG's and Parent's proposed changes.
On April 28, 2000, representatives of Goldman Sachs contacted a
representative of Credit Suisse First Boston to invite Siemens AG and its
representatives to meet with representatives of the Company and its advisors to
review Siemens AG's acquisition proposal, including the proposed purchase
price, and to determine whether Siemens and the Company could agree to terms
for an acquisition.
On April 29 and 30, 2000, members of management of Siemens AG and the
Company, together with their respective legal and financial advisors, met in
Philadelphia and extensively negotiated the terms of the proposed acquisition
and the definitive documentation. The principal issues discussed among the
parties during these negotiations included the purchase price, the nature and
extent of the parties' representations and warranties, the conditions to the
Offer, the parties' respective rights to terminate the Agreement, the amount of
the termination payment that would be required of the Company and the
circumstances under which such termination payment would become payable, and
Parent's commitments with respect to the Company's benefit plans and awards for
employees and non-employee directors. In the course of these negotiations, in
response to the Company's request to increase the offered price, Siemens AG and
Parent increased the offered purchase price to $73.00 per Share.
After a meeting of the Board of Directors of the Company on April 30, 2000,
Parent, the Merger Sub and the Company executed the Merger Agreement and the
transaction was announced prior to the opening of trading in Shares on May 1,
2000.
11. Purpose of the Offer; Plans for the Company; the Merger.
Purpose. The purpose of the Offer and the Merger is to enable Siemens AG
indirectly to acquire control of, and the entire equity interest in, the
Company. The Offer is being made pursuant to the Merger Agreement and is
intended to increase the likelihood that the Merger will be effected. The
purpose of the Merger is to acquire all of the outstanding Shares not purchased
pursuant to the Offer. The Company will, as of the Effective Time (as defined
herein), be an indirect wholly owned subsidiary of Siemens AG.
Plans for the Company. Except as disclosed in this Offer to Purchase, none
of Siemens AG, Parent or the Merger Sub has any present plans or proposals that
would result in an extraordinary corporate transaction, such as a merger,
reorganization, liquidation, or sale or transfer of a material amount of
assets, involving the
15
<PAGE>
Company or any of its subsidiaries, or any material changes in the Company's
capitalization, corporate structure, business or composition of its management
or the Company Board. Parent and Siemens AG will continue to evaluate and
review the Company and its business, assets, corporate structure,
capitalization, operations, properties, policies, management and personnel with
a view towards determining how to optimally realize any potential benefits
which arise from the relationship of the operations of the Company with those
of other business units of Siemens AG and Parent. Such evaluation and review is
ongoing and is not expected to be completed until after the consummation of the
Offer and the Merger. If, as and to the extent that Parent and Siemens AG
acquire control of the Company, Parent and Siemens AG will complete such
evaluation and review of the Company and will determine what, if any, changes
would be desirable in light of the circumstances and the strategic business
portfolio which then exist. Such changes could include, among other things,
restructuring the Company through changes in the Company's business, corporate
structure, articles of incorporation, by-laws, capitalization or management or
could involve consolidating and streamlining certain operations and
reorganizing other businesses and operations. In addition, Parent currently
intends to terminate the declaration of dividends on the Common Stock after the
consummation of the Offer.
Assuming the Minimum Condition has been satisfied and the Merger Sub
purchases all Shares tendered pursuant to the Offer, the Merger Sub intends,
subject to Rule 14f-1 of the Exchange Act, promptly to exercise its rights
under the Merger Agreement to obtain majority representation on, and control
of, the Board of Directors of the Company. Under the Merger Agreement, the
Company has agreed, concurrently with the Merger Sub's acceptance for payment
and payment for such Shares, upon the request of Parent or the Merger Sub, to
increase the size of the Company's Board of Directors by such number as is
necessary to enable the Merger Sub to elect to the Board of Directors up to a
number of the Merger Sub's designees equal to the product of (i) the total
number of directors on the Board of Directors after giving effect to the
increase and (ii) the percentage that the number of the Shares then
beneficially owned by the Merger Sub and its affiliates bears to the number of
the Shares then outstanding. The Merger Sub presently intends to select such
designees to the Board of Directors from among individuals (who are currently
officers or directors of Parent, Siemens AG or affiliates thereof) identified
in a list that Parent had provided to the Company and that the Company has
included in its Schedule 14D-9. The Merger Agreement also provides that the
directors of the Company immediately prior to the Effective Time shall be the
directors of the Company after the consummation of the Merger (also referred to
as the "Surviving Corporation") at and after the Effective Time. The Merger Sub
or an affiliate of the Merger Sub may, following the consummation or
termination of the Offer, seek to acquire additional Shares through open market
purchases, privately negotiated transactions, a tender offer or exchange offer
or otherwise, upon such terms and at such prices as it shall determine, which
may be more or less than the price paid in the Offer. The Company's Board of
Directors has approved the Merger Agreement and the Merger Sub's acquisition of
the Shares pursuant to the Offer and, therefore, Section 203 of the DGCL is
inapplicable. The Merger Sub and its affiliates also reserve the right to
dispose of any or all Shares acquired by them, subject to the terms of the
Merger Agreement.
The Merger Agreement. The following is a summary of certain provisions of
the Merger Agreement. This summary is not a complete description of the terms
and conditions of the Merger Agreement and is qualified in its entirety by
reference to the full text of the Merger Agreement which is filed with the SEC
as an exhibit to the Tender Offer Statement on Schedule TO filed by Siemens AG,
Parent and the Merger Sub (the "Schedule TO") and is incorporated herein by
reference. Capitalized terms not otherwise defined below shall have the
meanings set forth in the Merger Agreement. The Merger Agreement may be
examined, and copies obtained, as set forth in Section 8 of this Offer to
Purchase.
The Offer. The Merger Agreement provides that Parent will cause the Merger
Sub to commence the Offer and that upon the terms and subject to prior
satisfaction or waiver (to the extent permitted to be waived) of the conditions
of the Offer, promptly after expiration of the Offer, Parent will cause the
Merger Sub to accept for payment, and pay for, all Shares validly tendered and
not withdrawn pursuant to the Offer that the Merger Sub is permitted to accept
and pay for under applicable law. The Merger Agreement provides that Merger Sub
has the right, in its sole discretion, to modify and make certain changes to
the terms and conditions of the Offer as described above in Section 1.
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<PAGE>
If the Merger Sub acquires 90% or more of the outstanding Shares pursuant to
the Offer, it will have the votes necessary under Delaware law to approve the
Merger without a meeting of the Company's stockholders. Under the DGCL, if the
Merger Sub owns at least 90% of the outstanding Shares, the Merger may be
effected without the vote of, or notice to, the Company's stockholders.
Therefore, if at least approximately 24,311,666 Shares (or such greater number
as may be necessary if options are exercised) are acquired pursuant to the
Offer or otherwise, the Merger Sub will be able to and intends to effect the
Merger without a meeting of holders of the Shares. The Merger Agreement
provides that, simultaneously with or as soon as practicable after expiration
of the Offer, receipt of any required approval by the Company's stockholders of
the Merger Agreement and the satisfaction or waiver of certain other
conditions, the Merger Sub will be merged into the Company. At the Effective
Time, each then outstanding Share not owned by Parent or any subsidiary of
Parent or held in treasury by the Company or any subsidiary of the Company
(other than Shares held by stockholders of the Company who properly exercise
dissenters' rights under the applicable provisions of the DGCL) will be
converted into the right to receive $73 in cash or any higher price which may
be paid for the Shares pursuant to the Offer, without interest (the "Merger
Consideration").
Vote Required to Approve Merger. The DGCL requires that the adoption of any
plan of merger or consideration of the Company must be approved by the holders
of a majority of the Company's outstanding Shares if the "short form" merger
procedure described above is not available. In such case, under the DGCL, the
affirmative vote of holders of a majority of the outstanding Shares (including
any shares owned by the Merger Sub) is required to approve the Merger. If the
Merger Sub acquires, through the Offer or otherwise, voting power with respect
to at least a majority of the outstanding Shares (which would be the case if
the Minimum Condition were satisfied and the Merger Sub were to accept for
payment, and pay for, Shares tendered pursuant to the Offer), it would have
sufficient voting power to effect the Merger without the vote of any other
stockholder of the Company.
Conditions to the Merger. The respective obligations of each party to effect
the Merger are subject to the satisfaction or waiver, where permissible, prior
to the Effective Time, of the following conditions:
(1) if required by the DGCL, the Merger Agreement shall have been
adopted by the requisite affirmative vote of the stockholders of the
Company in accordance with applicable law;
(2) no statute, rule, regulation, executive order, decree or injunction
shall have been enacted, entered, promulgated, or enforced by any court or
governmental agency or authority which is in effect and has the effect of
prohibiting the consummation of the Merger;
(3) the waiting period (and any extension thereof) applicable to the
consummation of the Merger under the HSR Act, if any, shall have expired or
been terminated and the consent of the Bundeskartellamt (the German Federal
Cartel Authority) shall have been obtained;
(4) in the case of the Company's obligations, (i) all other required
statutory approvals necessary for the consummation of the Merger and the
transactions contemplated by the Merger Agreement shall have been obtained
and be in effect at the Effective Time, and (ii) all other consents or
approvals of governmental authorities necessary for the consummation of the
Merger and the transactions contemplated by the Merger Agreement shall have
been obtained and be in effect at the Effective Time, except where the
failure to obtain any such consent or approval would not reasonably be
expected to have, individually or in the aggregate, a Company Material
Adverse Effect (defined as any change, event, violation, inaccuracy,
circumstance or effect, individually or when aggregated with other such
changes, events, violations, inaccuracies, circumstances or effects, that
is materially adverse to the business, assets, liabilities, financial
condition or results of operations of the Company and its subsidiaries
taken as a whole); and
(5) in the case of Parent's and the Merger Sub's obligations, (i) all
other required statutory approvals necessary for the consummation of the
Merger and the transactions contemplated by the Merger Agreement shall have
been obtained and be in effect at the Effective Time, and (ii) all other
consents or approvals of governmental authorities necessary for the
consummation of the Merger and the transactions contemplated by the Merger
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<PAGE>
Agreement shall have been obtained and be in effect at the Effective Time,
except where the failure to obtain any such consent or approval would not
prevent the consummation of the Offer or the Merger or materially impede
the operation or use of any of the Company's assets or business after the
Effective Time.
Termination of the Merger Agreement. The Merger Agreement may be terminated
at any time before the Effective Time, whether before or after approval of the
Merger Agreement and the Merger by the stockholders of the Company (if required
by applicable law):
(1) by mutual written consent duly authorized by the boards of directors
of Parent, the Merger Sub and the Company;
(2) by either Parent or the Company if:
. any court of competent jurisdiction or other governmental
authority shall have issued a final order, decree or ruling or
taken any other final action restraining, enjoining or otherwise
prohibiting the consummation of the Offer or the Merger and such
order, decree or ruling or other action is or shall have become
nonappealable (and the terminating party shall have used
reasonable best efforts to prevent the entry of such order); or
. the Offer is terminated or withdrawn pursuant to its terms
(including pursuant to the terms described in Section 13) without
any Shares being purchased pursuant to the Offer; provided that
Parent may not terminate the Merger Agreement pursuant to this
provision if Parent or the Merger Sub shall have materially
breached the Merger Agreement and the Company may not terminate
the Merger Agreement pursuant to this provision if it shall have
materially breached the Merger Agreement;
(3) by the Company if:
. the Merger Sub fails to commence the Offer in violation of the
Merger Agreement;
. the Merger Sub shall not have accepted for payment and paid for
any Shares pursuant to the Offer in accordance with the terms
thereof on or before August 1, 2000 unless such failure is by
reason of:
. any representations and warranties of the Company in the
Merger Agreement not being true and correct (except where the
failure of such representations and warranties would not
reasonably be expected to have, individually or in the
aggregate with all other breaches, a Company Material Adverse
Effect), and such breach not having been cured pursuant to the
terms of the Merger Agreement; or
. any covenant or agreement contained in the Agreement and
required to be performed or complied with by the Company not
having been performed and complied with (except where (A) the
failure to so perform or comply would not reasonably be
expected to have a Company Material Adverse Effect without
giving effect to any limitations as to materiality in any such
covenant or agreement and (B) such failure would not
reasonably be expected materially and adversely to affect the
benefits or value that would be obtained by Parent from the
consummation of the Offer and the Merger), and such breach not
having been cured pursuant to the terms of the Merger
Agreement;
. the Merger Sub fails to purchase validly tendered Shares in
violation of the terms of the Merger Agreement; or
. prior to the purchase of a majority of the Shares pursuant to the
Offer if:
. there shall have been a breach of any representation or
warranty in the Merger Agreement on the part of Parent or the
Merger Sub in any material respect; or
. Parent or the Merger Sub shall not have performed or complied
with any material covenant or agreement contained in the
Merger Agreement; and
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. any such breaches shall not have been cured prior to the
earlier of (i) 20 business days following notice of such
breach to Parent and the Merger Sub by the Company and (ii)
August 1, 2000; provided that Parent and the Merger Sub shall
have no right to cure any such breach and the Company may
immediately terminate the Merger Agreement in the event that
such breach by Parent or the Merger Sub was willful or in the
event such breach is not reasonably capable of being cured
within such period of time;
(4) by Parent if:
. the Company's Board of Directors shall have
. withdrawn, modified or changed (including by amendment of the
Schedule 14D-9) their recommendation of the Offer, the Merger
or the Merger Agreement;
. failed to publicly reconfirm such recommendation of the Offer
promptly upon request by Parent or the Merger Sub;
. endorsed, approved or recommended any other third party
acquisition proposal (as described below under "Acquisition
Proposal"); or
. resolved to do any of the foregoing; or
. prior to the purchase of a majority of the Shares pursuant to the
Offer the Company shall have breached its agreements described
below under "Acquisition Proposals" in any material respect.
Effect of Termination. In the event of termination of the Merger Agreement
by either Parent or the Company, the Merger Agreement shall become void and
there shall be no liability or further obligation on the part of the Company,
Parent, the Merger Sub or their respective officers or directors, except for
obligations enumerated below under "Fees and Expenses" and provisions of the
Merger Agreement with respect to confidentiality of and the return or
destruction of nonpublic data regarding the Company, the allocation of
liability for payment of expenses and fees, and the submission of the parties
to jurisdiction in the Chancery Court of Delaware, all of which would survive
the termination.
Fees and Expenses. The Company will be required to pay the Parent a
termination payment of $85,000,000 if the Merger Agreement is terminated:
(1) by Parent:
. because the Company breaches its obligations under the Merger
Agreement with respect to any third-party acquisition proposals
(as described below under "Acquisition Proposals");
. because the Company's Board of Directors withdraws, modifies or
changes, or fails to reconfirm upon request by Parent, their
recommendation of the Offer, the Merger, or the Merger Agreement;
. because the Company's Board of Directors endorses, recommends or
approves a third-party acquisition proposal;
. because of the termination of the Offer for the Company's willful
breach of any representations and warranties of the Company in the
Merger Agreement (except where the failure of such representations
and warranties to be true and correct would not reasonably be
expected to have, individually or in the aggregate with all other
breaches, a Company Material Adverse Effect), which breach shall
not have been cured pursuant to the terms of the Merger Agreement;
or
. because of the termination of the Offer for the Company's failure
to perform and comply with each covenant or agreement contained in
the Merger Agreement and required to be performed or complied with
by the Company (except where (A) the failure to so perform or
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comply would not reasonably be expected to have a Company Material
Adverse Effect without giving effect to any limitations as to
materiality in any such covenant or agreement and (B) such failure
would not reasonably be expected materially and adversely to
affect the benefits or value that would be obtained by Parent from
the consummation of the Offer and the Merger), which breach shall
not have been cured pursuant to the terms of the Merger Agreement;
or
(2) by Parent or the Company, if the Offer is terminated or withdrawn
pursuant to its terms (including pursuant to the terms described in Section
13) without any Shares being purchased and prior to such termination an
Acquisition Proposal (as defined below under "Acquisition Proposals") shall
have been publicly announced or otherwise have become generally known and
within nine months following such termination a definitive agreement with
respect to such Acquisition Proposal shall have been executed by the
Company.
Acquisition Proposals. The Company has agreed that neither it nor any of its
subsidiaries will, and that it will use its reasonable best efforts to cause
its and its subsidiaries' officers, directors and employees, and any attorney,
accountant, investment banker, financial advisor or other agent retained by it
or any of its subsidiaries, not to:
. initiate, solicit or encourage any inquiries or the making of any
proposal or offer (including, without limitation, any proposal or offer
to stockholders of the Company) with respect to a merger, consolidation
or similar transaction involving, or any purchase of all or any
substantial share of, or purchase of all or substantially all of the
assets of, the Company or any of its subsidiaries (any such transaction
being referred to herein as a "Company Acquisition Transaction"); or
. engage in any discussions or negotiations concerning, or provide any
confidential or non-public information or data to, or have any
discussions with any person (other than its professional advisors)
relating to any Company Acquisition Transaction, or otherwise facilitate
any effort or attempt to make or implement a Company Acquisition
Transaction.
Notwithstanding the foregoing restrictions, the Company has the right to
request from a Potential Acquiror (as defined below) such information as may be
reasonably necessary for the Board of Directors of the Company to inform
themselves as to the material terms of an Acquisition Proposal (as defined
below) for the sole purpose of determining whether an Acquisition Proposal
constitutes a Superior Proposal (as defined below) if:
. the Company receives from a financially capable corporation,
partnership, person or other entity or group that has not had any
discussions with, or been solicited by, the Company or its
representatives prior to the date of the Merger Agreement with respect
to a possible Company Acquisition Transaction (a "Potential Acquiror") a
bona fide written offer or proposal with respect to a Company
Acquisition Transaction (an "Acquisition Proposal") that
. was not solicited in violation of the Company's agreements described
in the preceding paragraph; and
. the Board of Directors of the Company determines, in good faith
after consultation with its financial advisors, is reasonably likely
to lead to a Superior Proposal (as defined below); and
. the Board of Directors of the Company shall have determined, in good
faith after being advised by legal and financial advisors, that taking
such action with respect to an Acquisition Proposal from such Potential
Acquiror is necessary in order for the Board of Directors of the Company
to discharge its fiduciary duties under applicable law; and
. prior to the Board of Directors of the Company making any determination
with respect to any withdrawal of or change to its recommendation of the
Offer in connection with or as a result of such
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an Acquisition Proposal described in the preceding paragraph, Parent
shall have had the right for a period of three calendar days to amend
the terms of the Offer in response to such Acquisition Proposal.
For purposes of the Merger Agreement, a "Superior Proposal" shall mean an
Acquisition Proposal that is more favorable than the Offer to the Company's
stockholders from a financial point of view and is reasonably likely to be
consummated.
The Board of Directors of the Company may also take and disclose to the
Company's stockholders a position contemplated by Rules 14d-9 and 14e-2 under
the Exchange Act with respect to an Acquisition Proposal.
The Company is required promptly to notify Parent after receipt of any
Acquisition Proposal, indication of interest or request for non-public
information relating to the Company or its subsidiaries in connection with an
Acquisition Proposal or for access to the properties, books or records of the
Company or any subsidiary by any person or entity that informs the Board of
Directors of the Company or such subsidiary that it is considering making, or
has made, an Acquisition Proposal (including the identity of the Potential
Acquiror) and the status of any discussions with respect to an Acquisition
Proposal.
Covenants. The Merger Agreement also contains certain other restrictions as
to the conduct of business by the Company pending the Merger, including
covenants restricting the Company's ability to take actions which would change
or affect the capital structure of the Company, as well as representations and
warranties of each of the parties customary in transactions of this kind.
Amendment of the Merger Agreement. The Merger Agreement may not be amended
except by action taken by the respective Boards of Directors of the Company,
Parent and the Merger Sub or duly authorized committees thereof, and then only
by an instrument in writing signed on behalf of each of the parties to the
Merger Agreement. Subject to the Merger Agreement and applicable law, such
amendment may take place at any time prior to the closing date of the Merger
and either before or after the Company stockholders approve the Offer;
provided, however, that after the approval of the Company stockholders is
obtained, no amendment may be made which would reduce the amount or change the
kind of consideration to be received by the holders of the Shares upon
consummation of the Merger, alter or change any term of the articles (or
certificate) of incorporation of Parent, Merger Sub or the Company (except as
expressly contemplated by the Merger Agreement), or alter or change any of the
terms and conditions of the Merger Agreement if such alteration or change
would adversely effect the holders of the Shares.
Treatment of Options and Restricted Shares. Upon the consummation of the
Merger, each option to acquire Shares outstanding immediately prior to the
Effective Time under the Company's stock option plans or similar arrangements,
whether vested or unvested (each, an "Option," and collectively, the
"Options"), will automatically, in accordance with the terms thereof or as
provided in the separate Change in Control (Stock Options) Agreement effective
as of the date of the Merger Agreement with respect to such Option, be
converted into, and each holder of an Option will have the right to receive
the value of the excess of (x) the value of the consideration which would be
paid to the holder of such Option had the Option been fully vested, over (y)
the exercise price which would have been paid assuming the Option were fully
vested and exercised (such excess is hereinafter referred to as the "Cash
Value") from the Company in respect of each outstanding Option (the "Option
Payments"); provided that, with respect to any person subject to Section 16 of
the Exchange Act, no Merger Consideration will be paid to such person until
payment can be made without liability to such person under Section 16(b) of
the Exchange Act. Option Payments shall be paid at the times, in such amounts
and with interest as provided in and subject to all other provisions of the
applicable Option or Change in Control (Stock Options) Agreement; provided,
however, that all portions of any Option Payments that would, pursuant to the
applicable Option or Change in Control (Stock Options) Agreement, be payable
more than 30 months after the Effective Time will instead be paid (subject to
the provisions of the applicable Option or Change in Control (Stock Options)
Agreement) in quarterly installments as nearly equal as possible,
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<PAGE>
with interest at the rate of 10% per annum, over the first 30 months after the
Effective Time. The purchase of the Shares pursuant to the Offer will
constitute a "change of control" for purposes of the change-in-control
provisions applicable to the Options held by Company employees and by the
Company's non-employee directors. The vesting schedules for options held by the
Company's non-employee directors and by Marvin S. Cadwell, the Company's
President and Chief Executive Officer, are to be accelerated, and such persons
will be entitled to the applicable cash payments in respect of their Company
Stock Options upon the consummation of the Merger or, in the case of the non-
employee directors, their subsequent removal from office. The Company will take
such actions (including, without limitation, giving requisite notices to
holders of Options advising them of such right to obtain payment for their
respective Options) as are necessary to fully advise holders of Options of
their rights. From and after the Effective Time, other than as expressly set
forth in the foregoing provisions, no holder of an Option will have any other
rights in respect thereof other than to receive Option Payments for his or her
Options as set forth herein, and the Company will take all reasonably necessary
actions to terminate the Company's stock option plans and similar arrangements.
The foregoing provisions are subject to the making of any necessary amendments
to the Company's stock option plans and other similar agreements. The Company
has agreed to use its reasonable efforts to make any such amendments.
Pursuant to the conversion of Options, based upon the Options outstanding at
April 30, 2000 and a $73 Common Stock Price, a total of approximately $97.6
million would be paid to optionees, excluding interest, including approximately
$35.1 million to executive officers and approximately $2.1 million to non-
employee directors of the Company.
Upon the consummation of the Merger, each holder of a restricted Share
outstanding at the Effective Time will be entitled to receive the Merger
Consideration payable with respect to such restricted Share in accordance with
the restricted stock agreement or other agreement applicable to such restricted
Share; provided that, with respect to any person subject to Section 16 of the
Exchange Act, no Merger Consideration will be paid to such person until payment
can be made without liability to such person under Section 16(b) of the
Exchange Act. The Company will make such payment to the holder, subject to the
conditions for vesting contained in the applicable restricted stock or other
agreement, on the date on which the restricted share was to have vested;
provided, however, that all such payments that would be payable because of
vesting dates more than 30 months after the Effective Time will instead be
paid, subject to the conditions for vesting contained in the applicable
restricted stock or other agreement, in quarterly installments as nearly equal
as possible, with interest at the rate of 10% per annum, over the first 30
months after the Effective Time.
Pursuant to the conversion of restricted Shares, based upon restricted
Shares outstanding at April 30, 2000 and a $73 Common Stock Price, a total of
approximately $13.1 million would be paid to holders of restricted Shares,
excluding interest, including approximately $5.4 million to executive officers
of the Company.
Indemnification of Officers and Directors. The indemnification (and
advancement of expenses) provisions of the certificate of incorporation and
bylaws of the Company as in effect at the Effective Time may not be amended,
repealed or otherwise modified for a period of seven years from the Effective
Time in any manner that would adversely affect the rights thereunder of
individuals who at any time prior to the Effective Time were directors,
officers, employees or agents of the Company. Parent shall assume, be jointly
and severally liable for, and honor, guaranty and stand surety for, and shall
cause the Company to honor, in accordance with their respective terms, each of
the covenants contained in this provision and each of the indemnification
agreements to which the Company and any of its affiliates, directors and
employees are a party as of the date of the Merger Agreement without limit as
to time.
Without limiting the aforementioned indemnification provisions, after the
Effective Time, Parent will, to the fullest extent not prohibited under
applicable law, guarantee all obligations of the Company for indemnification
and advancement of expenses pursuant to the certificate of incorporation and
bylaws of the Company in connection with any actual or threatened claim,
action, suit, proceeding or investigation, whether civil, criminal,
administrative or investigative, arising out of, relating to or in connection
with any action or omission occurring or alleged to occur prior to the
Effective Time (including, without limitation, acts or
22
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omissions in connection with such persons serving as an officer, director or
other fiduciary in any entity if such service was at the request or for the
benefit of the Company and the Offer, the Merger or the other transactions
contemplated by the Merger Agreement) or arising out of or pertaining to the
Offer, the Merger or the other transactions contemplated by the Merger
Agreement. In the event of any such actual or threatened claim, action, suit,
proceeding or investigation, whether arising before or after the Effective
Time, Parent has agreed to pay the reasonable fees and expenses of counsel
selected by the persons entitled to indemnification and advancement of expenses
pursuant to the certificate of incorporation or bylaws of the Company, and to
certain other customary indemnification provisions.
Prior to the Effective Time, the Company is permitted to purchase an
extension, for up to six years and one month from and after the Effective Time,
of the coverage offered under its existing policies of directors' and officers'
liability insurance. For a period of at least six years and one month after the
Effective Time, Parent has agreed, if necessary, to provide funds sufficient
for such policies to be in effect with respect to matters arising on or before
the Effective Time (provided that Parent may substitute therefor policies of at
least the same coverage and amounts containing terms and conditions that are no
less advantageous to the indemnified parties, and which coverages and amounts
shall be no less than the coverages and amounts provided at that time for
Parent's directors and officers, so long as such substitution does not result
in lapses of coverage); and provided, however, that Parent will not be required
to pay or cause to be paid an annual premium in excess of 200% of the last
annual premium paid by the Company prior to the date of the Merger Agreement,
and if Parent is unable to obtain the insurance required by this provision, it
shall obtain as much comparable insurance as possible for an annual premium
equal to such maximum amount.
Treatment of Employee Benefits. Following the Effective Time, Parent has
agreed to honor, and cause the Company to honor, each Company Plan (as defined
below) and the related funding arrangements of such Company Plan in accordance
with its terms and shall interpret such Company Plan in accordance with the
past practice of the Company. Without limiting the generality of the foregoing,
Parent will honor, and cause the Company to honor, all vacation, personal and
sick days accrued by employees of the Company and its subsidiaries under any
plans, policies, programs and arrangements of the Company and certain
affiliates immediately prior to the Effective Time. Parent has agreed that,
from the Effective Time until December 31, 2001, Parent will provide, and cause
the Company to provide, employee benefits under employee benefit plans to the
employees and former employees of the Company and its subsidiaries that are in
the aggregate no less favorable than those provided to such persons pursuant to
Company Plans on the date of the Merger Agreement (excluding equity and equity-
based compensation). "Company Plan" means (i) each employee pension benefit
plan (as such term is defined in Section 3(2) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA")), (ii) each employee welfare benefit
plan (as such term is defined in Section 3(1) of ERISA) maintained by the
Company and any of its affiliates (within the meaning of ERISA), and (iii) each
stock option, stock purchase, stock appreciation right and stock based plan and
each material deferred compensation, severance, incentive and bonus plan or
agreement maintained by the Company for the benefit of current or former
employees or current or former directors of the Company.
Composition of the Board of Directors. The directors of the Company in
office immediately prior to the Effective Time, which will include any
designees of the Merger Sub previously elected to the Board of Directors and
then serving as directors, will be the directors of the Surviving Corporation
after the Effective Time.
Appraisal Rights. Holders of the Shares do not have appraisal rights as a
result of the Offer. However, if the Merger is consummated, each holder of the
Shares who has neither voted in favor of the Merger nor consented thereto in
writing will be entitled to an appraisal by the Delaware Court of Chancery of
the fair value of his Shares, exclusive of any element of value arising from
the accomplishment or expectation of the Merger, together with a fair rate of
interest, if any, to be paid. In determining such fair value, the Court may
consider all relevant factors. The value so determined could be more or less
than the consideration to be paid in the Offer and the Merger. Any judicial
determination of the fair value could be based upon considerations other than
or in addition to the market value of the Shares, including, among other
things, asset values and earning capacity.
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If any holder of the Shares who demands appraisal under Section 262 of the
DGCL fails to perfect, or effectively withdraws or loses his right to appraisal
as provided in the DGCL, the Shares of such stockholder will be converted into
the Merger Consideration in accordance with the Merger Agreement. A stockholder
may withdraw his demand for appraisal by delivery to Parent of a written
withdrawal of his demand for appraisal and acceptance of the Merger.
The foregoing discussion is not a complete statement of law pertaining to
appraisal rights under the DGCL and is qualified in its entirety by the full
text of Section 262 of the DGCL.
Failure to follow the steps required by Section 262 of the DGCL for
perfecting appraisal rights may result in the loss of such rights.
Rule 13e-3. The Merger would have to comply with any applicable Federal law
operative at the time of its consummation. Rule 13e-3 under the Exchange Act is
applicable to certain "going private" transactions. The Merger Sub does not
believe that Rule 13e-3 will be applicable to the Merger unless the Merger is
consummated more than one year after the termination of the Offer. If
applicable, Rule 13e-3 would require, among other things, that certain
financial information concerning the Company and certain information relating
to the fairness of the Merger and the consideration offered to minority
stockholders be filed with the SEC and disclosed to minority stockholders prior
to consummation of the Merger.
The Rights presently are transferrable only with the certificates for the
Shares and the surrender for transfer of certificates for any Shares will also
constitute the transfer of the Rights associated with the Shares represented by
such certificates. Pursuant to the terms of the Merger Agreement, the Company
has taken all necessary action so that the Offer will not result in the grant
of any Rights or enable or require any Rights to be exercised, distributed or
triggered.
12. Source and Amount of Funds.
The Merger Sub estimates that the total amount of funds required to purchase
all of the outstanding Shares pursuant to the Offer and the Merger and to pay
related fees and expenses will be approximately $2.1 billion. Parent will
finance the Offer and the Merger with funds provided by Siemens AG and its
affiliates.
13. Certain Conditions of the Offer.
Notwithstanding any other provision of the Offer or the Merger Agreement, in
addition to (and not in limitation of) the Merger Sub's rights pursuant to the
Agreement to extend and amend the Offer in accordance with the Agreement, the
Merger Sub will not be required to accept for payment or, subject to Rule 14e-
1(c) of the Exchange Act, pay for, and may delay the acceptance for payment of
or, subject to Rule 14e-1(c) of the Exchange Act, the payment for, any tendered
Shares not theretofore accepted for payment or paid for, and Merger Sub may
terminate or amend the Offer (subject to the terms of the Offer described in
Section 1) if (i) the Minimum Condition shall not have been satisfied, (ii) any
applicable waiting period under the HSR Act shall not have expired or been
terminated or (iii) at any time on or after the date of the Merger Agreement
and prior to the time of acceptance of such Shares for payment or the payment
therefor, any of the following conditions has occurred and continues to exist:
(1) any representations and warranties of the Company in the Merger
Agreement shall not be true and correct as of such time (except where the
failure of such representations and warranties to be true and correct would
not reasonably be expected to have, individually or in the aggregate with
all other breaches, a Company Material Adverse Effect, without giving
effect to any limitations as to materiality in any such representations and
warranties) and which failure to be true and correct shall not have been
cured prior to the earlier of (i) 20 business days following notice of such
failure and (ii) August 1, 2000; provided, however, that the Company shall
have no right to cure such failure in the event that such breach by the
Company was willful or in the event such failure is not reasonably capable
of being cured within such period of time;
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(2) the Company shall not have performed and complied with each covenant
or agreement contained in the Agreement and required to be performed or
complied with by it (except where (A) the failure to so perform or comply
would not reasonably be expected to have a Company Material Adverse Effect,
without giving effect to any limitations as to materiality in any such
covenant or agreement and (B) such failure would not reasonably be expected
materially and adversely to affect the benefits or value that would be
obtained by Parent from the consummation of the Offer and the Merger) and
which failure to perform or comply shall not have been cured prior to the
earlier of (i) 20 business days following notice of such breach and (ii)
August 1, 2000; provided, however, that the Company shall have no right to
cure such failure to perform or comply in the event that such breach by the
Company was willful or in the event such failure is not reasonably capable
of being cured within such period of time;
(3) there shall be pending any suit, action, or proceeding which has a
reasonable possibility of success, (i) challenging the acquisition by
Parent or the Merger Sub of the Shares, seeking to make illegal, materially
delay, make materially more costly or otherwise directly or indirectly
restrain or prohibit the making or consummation of the Offer and the Merger
or the performance of any of the other transactions contemplated by the
Merger Agreement or seeking to obtain from the Company, Parent or the
Merger Sub any damages or penalties that are material in relation to the
Company and its subsidiaries taken as whole, (ii) seeking to prohibit or
materially limit the ownership or operation by the Company, Parent or any
of their respective subsidiaries or affiliates of any of the businesses or
assets of the Company, Parent or any of their respective subsidiaries or
affiliates, or to compel the Company, Parent or any of their respective
subsidiaries or affiliates to dispose of or hold separate all or any
material portion of the businesses or assets of the Company or Parent, as a
result of the Offer, the Merger or any of the other transactions
contemplated by the Merger Agreement, (iii) seeking to impose material
limitations on the ability of Parent or the Merger Sub to acquire or hold,
or exercise full rights of ownership of, any Shares accepted for payment
pursuant to the Offer including, without limitation, the right to vote the
Shares accepted for payment by it on all matters properly presented to the
stockholders of the Company, (iv) seeking to prohibit Parent or any of its
subsidiaries or affiliates from effectively controlling in any material
respect the business or operations of the Company or its subsidiaries, (v)
requiring divestiture by the Merger Sub or any of its affiliates of any
Shares or (vi) which otherwise is reasonably likely to have a Company
Material Adverse Effect;
(4) there shall be any statute, rule, regulation, judgment, order or
injunction (including with respect to competition or antitrust matters)
enacted, entered, enforced, promulgated or issued, or any statute, rule,
regulation, order or injunction which has been proposed by the relevant
legislative or regulatory body and is reasonably likely to be enacted,
entered, promulgated or issued with respect to or deemed applicable to, or
any material consent or approval withheld or any other action taken with
respect to (i) Parent, the Company or any of their respective subsidiaries
or affiliates or (ii) the Offer or the Merger or any of the other
transactions contemplated by the Merger Agreement by any governmental
authority or court, other than applicable waiting periods under the HSR Act
or the approval period applicable to the Bundeskartellamt, in any case,
that in the reasonable judgment of Parent, has resulted or is reasonably
likely to result, directly or indirectly, in any of the consequences
referred to in clauses (i) though (vi) of paragraph (3) above;
(5) except as disclosed in the Company's financial statements through
the quarter ended March 31, 2000, since the date of the Merger Agreement
there shall have occurred any events, changes, effects or developments
that, individually or in the aggregate, have had or are reasonably likely
to have a Company Material Adverse Effect;
(6) the Merger Agreement shall have been terminated in accordance with
its terms;
(7) any person or group (which includes a "person" or "group" as such
terms are defined in Section 13(d)(3) of the Exchange Act) other than
Parent, the Merger Sub, any of their affiliates, or any group of which any
of them is a member, shall have acquired beneficial ownership of more than
20% of the outstanding Shares;
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(8) all consents and approvals of and notices to or filings with
governmental authorities required in connection with the Offer, the Merger
and any of the other transactions contemplated by the Merger Agreement
shall not have been obtained or made as of the expiration of the Offer, as
the same may be extended from time to time in accordance with the Merger
Agreement, other than those the absence of which, individually or in the
aggregate, would not have a Company Material Adverse Effect or prevent or
materially delay consummation of any of the Offer, the Merger or any of the
other transactions contemplated by the Merger Agreement; or
(9) there shall have occurred (i) a declaration of a banking moratorium
or any suspension of payments in respect of banks in the United States or
Germany by any governmental entity or (ii) a commencement of a war, armed
hostilities or other national or international calamity directly or
indirectly involving the United States or Germany which could reasonably be
expected to have a Company Material Adverse Effect or materially adversely
affect or delay the consummation of the Offer.
The foregoing conditions are for the sole benefit of Parent and the Merger
Sub and may be asserted by Parent or the Merger Sub regardless of the
circumstances (including any action or inaction by Parent or the Merger Sub)
giving rise to any such conditions or may be waived by Parent or the Merger Sub
in whole or in part at any time and from time to time, other than the Minimum
Condition and the condition that the Merger Agreement not be terminated in
accordance with its terms. The failure by Parent or the Merger Sub at any time
to exercise any of the foregoing rights shall not be deemed a waiver of any
such right, and each such right shall be deemed an ongoing right which may be
asserted at any time and from time to time. Notwithstanding the fact that the
Merger Sub reserves the right to assert the occurrence of a condition following
acceptance for payment but prior to payment in order to delay payment or cancel
its obligation to pay for properly tendered Shares, the Merger Sub will either
promptly pay for such Shares or promptly return such Shares.
A public announcement shall be made of a material change in, or waiver of,
such conditions, and the Offer may, in certain circumstances, be extended in
connection with any such change or waiver. All Offer Conditions must be
satisfied or waived prior to the commencement of any Subsequent Offering
Period.
14. Dividends and Distributions.
Pursuant to the Merger Agreement, the Company has agreed that during the
term of the Merger Agreement the Company may not declare, set aside or pay any
dividend or any other distribution with respect to the Shares other than
normally occurring quarterly dividends not in excess of $0.21 per share.
15. Certain Legal Matters.
General. Except as otherwise disclosed herein, based upon an examination of
publicly available filings with respect to the Company, Parent and the Merger
Sub are not aware of any licenses or other regulatory permits which appear to
be material to the business of the Company and which might be adversely
affected by the acquisition of the Shares by the Merger Sub pursuant to the
Offer or of any approval or other action by any governmental, administrative or
regulatory agency or authority which would be required for the acquisition or
ownership of the Shares by the Merger Sub pursuant to the Offer. Should any
such approval or other action be required, it is currently contemplated that
such approval or action would be sought or taken. There can be no assurance
that any such approval or action, if needed, would be obtained or, if obtained,
that it will be obtained without substantial conditions or that adverse
consequences might not result to the Company's or Parent's business or that
certain parts of the Company's or Parent's business might not have to be
disposed of in the event that such approvals were not obtained or such other
actions were not taken, any of which might enable the Merger Sub to elect to
terminate the Offer without the purchase of the Shares thereunder, if the
relevant conditions to termination were met. The Merger Sub's obligation under
the Offer to accept for payment and pay for the Shares is subject to certain
conditions. See Section 13.
Antitrust Compliance. Under the HSR Act and the rules that have been
promulgated thereunder by the Federal Trade Commission ("FTC"), certain
acquisition transactions may not be consummated unless certain
26
<PAGE>
information has been furnished to the Antitrust Division of the Department of
Justice (the "Antitrust Division") and the FTC and certain waiting period
requirements have been satisfied. The acquisition of the Shares by the Merger
Sub is subject to these requirements. See Section 2 of this Offer to Purchase
as to the effect of the HSR Act on the timing of the Merger Sub's obligation to
accept Shares for payment.
Pursuant to the HSR Act, Parent expects to file a Notification and Report
Form with respect to the acquisition of the Shares pursuant to the Offer and
the Merger with the Antitrust Division and the FTC on or about May 11, 2000.
Under the provisions of the HSR Act applicable to the purchase of the Shares
pursuant to the Offer, such purchases may not be made until the expiration of a
15-calendar day waiting period following the filing by Parent. Accordingly, the
waiting period under the HSR Act will expire at 11:59 p.m., New York City time,
on or about May 26, 2000, unless early termination of the waiting period is
granted or Parent receives a request for additional information or documentary
material prior thereto. Pursuant to the HSR Act, Parent will request early
termination of the waiting period applicable to the Offer. There can be no
assurances given, however, that the 15-day HSR Act waiting period will be
terminated early. If either the FTC or the Antitrust Division were to request
additional information or documentary material from Parent, the waiting period
would expire at 11:59 p.m., New York City time, on the tenth calendar day after
the date of substantial compliance by Parent with such request unless the
waiting period is sooner terminated by the FTC or the Antitrust Division.
Thereafter, the waiting period could be extended only by agreement or by court
order. See Section 2. Only one extension of such waiting period pursuant to a
request for additional information is authorized by the rules promulgated under
the HSR Act, except by agreement or by court order. Any such extension of the
waiting period will not give rise to any withdrawal rights not otherwise
provided for by applicable law. See Section 4. Parent expects the waiting
period under the HSR Act to expire at the end of the 15-day period, if not
earlier terminated.
The Antitrust Division and the FTC frequently scrutinize the legality under
the antitrust laws of transactions such as the proposed acquisition of the
Shares by the Merger Sub pursuant to the Offer. At any time before or after the
Merger Sub's purchase of the Shares, the Antitrust Division or the FTC could
take such action under the antitrust laws as it deems necessary or desirable in
the public interest, including seeking to enjoin the acquisition of the Shares
pursuant to the Offer or seeking divestiture of the Shares acquired by the
Merger Sub or the divestiture of substantial assets of Parent, the Company or
any of their respective subsidiaries. Private parties may also bring legal
action under the antitrust laws under certain circumstances. There can be no
assurance that a challenge to the Offer on antitrust grounds will not be made
or, if a challenge is made, what the result will be. See Section 13 of this
Offer to Purchase for certain conditions to the Offer that could become
applicable in the event of such a challenge.
German Antitrust. Under German laws and regulations relating to the
regulation of monopolies and competition, certain acquisition transactions may
not be consummated in Germany unless certain information has been furnished to
the German Federal Cartel Office (the "FCO" or Bundeskartellamt) and certain
waiting period requirements have been satisfied without issuance by the FCO of
an order to refrain. The purchase of the Shares by Merger Sub pursuant to the
Offer and the consummation of the Merger may be subject to such requirements.
Under such laws, the FCO has one month (unless earlier terminated by the FCO)
from the time of filing of such information with the FCO to clear the Offer and
the Merger or to advise the parties of its intention to investigate the Offer
and the Merger in-depth, in which case the FCO has four months from the date of
filing in which to take steps to oppose the Offer and the Merger. According to
the German law against restraints of competition, the purchase of the Shares
pursuant to the Offer may not be consummated before the end of the one-month
period, and, provided that the FCO has informed the parties about the
initiation of an in-depth review within such period, before the end of the
four-month period or its agreed-upon extension, unless the FCO has given its
clearance to the transaction in writing before the end of such periods. In the
course of its reviews, the FCO will examine whether the proposed acquisition of
the Shares by Merger Sub pursuant to the Offer would create a dominant market
position or strengthen an already-existing dominant position in Germany. If the
FCO makes such a finding, it will act to prohibit the transaction. While
Siemens AG, Parent and the Merger Sub do not believe that there is any basis
for the FCO to investigate the Offer and the Merger in-depth,
27
<PAGE>
there can be no assurance that the FCO will not investigate or oppose the
transactions or that the FCO will not extend the waiting period.
Siemens AG expects to file the information with the FCO on or about May 11,
2000. Siemens AG and Parent currently expect to obtain the requisite clearance
by the FCO prior to the scheduled Expiration Date. In the event that such
clearance is not obtained prior to the Expiration Date, the Merger Sub will
extend the Offer until the end of the applicable one-month waiting period (on
or about June 11, 2000) and, if Parent and the Merger Sub deem it necessary,
for such longer period as Parent and the Merger Sub may determine in their sole
discretion.
State Takeover Laws.
Section 203 of the DGCL limits the ability of a Delaware corporation to
engage in business combinations with "interested stockholders" (defined
generally as any beneficial owner of 15% or more of the outstanding voting
stock in the corporation) unless, among other things, the corporation's board
of directors has given its prior approval to either the business combination or
the transaction which resulted in the stockholder becoming an "interested
stockholder." The Company's Board of Directors has approved the Merger
Agreement and the Merger Sub's acquisition of the Shares pursuant to the Offer
and, therefore, Section 203 of the DGCL is inapplicable to the Offer and the
Merger.
Based on information supplied by or on behalf of the Company, the Merger Sub
does not believe that any state takeover laws purport to apply to the Offer or
the Merger. None of Siemens AG, Parent or the Merger Sub has currently complied
with any state takeover statute or regulation. The Merger Sub reserves the
right to challenge the applicability or validity of any state law purportedly
applicable to the Offer or the Merger and nothing in this Offer to Purchase or
any action taken in connection with the Offer or the Merger is intended as a
waiver of such right. If it is asserted that any state takeover statute is
applicable to the Offer or the Merger and if an appropriate court does not
determine that it is inapplicable or invalid as applied to the Offer or the
Merger, the Merger Sub might be required to file certain information with, or
to receive approvals from, the relevant state authorities, and the Merger Sub
might be unable to accept for payment or pay for any Shares tendered pursuant
to the Offer, or be delayed in consummating the Offer or the Merger. In such
case, the Merger Sub may not be obliged to accept for payment or pay for any
shares tendered pursuant to the Offer.
16. Fees and Expenses.
Credit Suisse First Boston is acting as Dealer Manager in connection with
the Offer and has provided certain financial advisory services to the Merger
Sub in connection therewith. The Merger Sub has agreed to pay Credit Suisse
First Boston reasonable and customary compensation for its services as Dealer
Manager and as financial advisors in connection with the Offer. The Merger Sub
has agreed to reimburse Credit Suisse First Boston for its reasonable out-of-
pocket expenses, including the fees and expenses of its counsel, in connection
with the Offer, and has agreed to indemnify Credit Suisse First Boston against
certain liabilities and expenses in connection with the Offer, including
liabilities under the federal securities laws. At any time Credit Suisse First
Boston and its affiliates may actively trade the Shares for their own account
or for the account of customers and, accordingly, may at any time hold a long
or short position in the Shares.
Georgeson Shareholder Communications Inc. is acting as Information Agent in
connection with the Offer. The Information Agent may contact holders of the
Shares by personal interview, mail, telephone, telex, telegraph and other
methods of electronic communication and may request brokers, dealers, banks,
trust companies and other nominees to forward the Offer materials to beneficial
holders. The Information Agent will receive reasonable and customary
compensation for its services, be reimbursed for certain reasonable out-of-
pocket expenses and be indemnified against certain liabilities and expenses in
connection with its services, including certain liabilities under the Federal
securities laws.
The Merger Sub will pay the Depositary reasonable and customary compensation
for its services in connection with the Offer, plus reimbursement for out-of-
pocket expenses, and will indemnify the Depositary
28
<PAGE>
against certain liabilities and expenses in connection therewith, including
liabilities under the federal securities laws. Brokers, dealers, commercial
banks and trust companies will be reimbursed by the Merger Sub for customary
mailing and handling expenses incurred by them in forwarding material to their
customers.
17. Miscellaneous.
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of the Shares in any jurisdiction in which the making of the
Offer or the acceptance thereof would not be in compliance with the laws of
such jurisdiction. However, the Merger Sub may, in its sole discretion, take
such action as it may deem necessary to make the Offer in any such jurisdiction
and extend the Offer to holders of the Shares in such jurisdiction.
None of Siemens AG, Parent or the Merger Sub is aware of any jurisdiction in
which the making of the Offer or the acceptance of the Shares in connection
therewith would not be in compliance with the laws of such jurisdiction.
Parent and the Merger Sub have filed a Schedule TO with the SEC pursuant to
Rule l4d-3 of the General Rules and Regulations under the Exchange Act,
furnishing certain additional information with respect to the Offer, and may
file amendments thereto. The Schedule TO and any amendments thereto, including
exhibits, may be examined and copies may be obtained from the principal office
of the SEC in Washington, D.C. and the NYSE in the manner set forth in Section
8.
No person has been authorized to give any information or make any
representation on behalf of Siemens AG, Parent or the Merger Sub not contained
in this Offer to Purchase or in the Letter of Transmittal and, if given or
made, such information or representation must not be relied upon as having been
authorized.
Autobahn Acquisition Corporation
May 10, 2000
29
<PAGE>
SCHEDULE A
INFORMATION CONCERNING DIRECTORS AND
EXECUTIVE OFFICERS OF SIEMENS AG, PARENT AND MERGER SUB
1. Directors and Executive Officers of Siemens AG. The following table sets
forth the name and present principal occupation or employment, and material
occupations, positions, offices or employments for the past five years, of each
member of the Supervisory Board and the Board of Managing Directors and
executive officers of Siemens AG. Unless otherwise indicated, each such person
is a citizen of the Federal Republic of Germany and the business address of
each such person is c/o Siemens AG, Wittelsbacherplatz 2, D-80333 Munich,
Federal Republic of Germany. Unless otherwise indicated, each such person has
held his or her present occupation as set forth below, or has been an executive
officer at Siemens AG for the past five years.
<TABLE>
<CAPTION>
Present Principal Occupation or Employment;
Material Positions Held During the Past Five
Name and Address Years
---------------- ------------------------------------------------
<S> <C>
Supervisory Board
Dr. Karl-Hermann Baumann...... Chairman of the Supervisory Board since February
1998. Chief Financial Officer until February
1998.
Alfons Graf................... First Deputy Chairman of the Supervisory Board.
Chairman of the Central Works Council.
Dr. Rolf-E. Breuer............ Second Deputy Chairman of the Supervisory Board.
Taunusanlage 12 Spokesman of the Board of Managing Directors of
D-60325 Frankfurt am Main Deutsche Bank AG, Frankfurt am Main.
Federal Republic of Germany
Helmut Cors................... Member of the Supervisory Board. Member of the
Johannes-Brahms-Platz 1 Federal Executive Committee, Deutsche
D-20355 Hamburg Angestellten Gewerkschaft.
Federal Republic of Germany
Bertin Eichler................ Member of the Supervisory Board. Executive
Lyoner Strabe 32 Member of the Board of Management of
D-60528 Frankfurt Industriegewerkschaft Metall since September
Federal Republic of Germany 1996. First Representative of
Industriegewerkschaft Metall, Amberg until
September 1996.
Jean Gandois.................. Member of the Supervisory Board. Independent
72 rue du Faubourg Saint consultant since April 1999. President of
Honore Cockerill Sambre S.A., Belgium, until April
75008 Paris 1999. Citizen of France.
France
Birgit Grube.................. Member of the Supervisory Board. Member of the
Works Council.
Heinz Hawreliuk............... Member of the Supervisory Board. Union
Laubenheimer Strabe 88 Secretary, Industriegewerkschaft Metall.
D-55130 Mainz
Federal Republic of Germany
</TABLE>
A-1
<PAGE>
<TABLE>
<CAPTION>
Present Principal Occupation or Employment;
Material Positions Held During the Past Five
Name and Address Years
---------------- ------------------------------------------------
<S> <C>
Ralf Heckmann.................. Member of the Supervisory Board. Chairman of the
Combined Works Council.
Robert M. Kimmitt.............. Member of the Supervisory Board. President and
1600 Riviera Ave. Vice Chairman of the Board of Commerce One, Inc.
Suite 200 Senior partner, Wilmer, Cutler & Pickering,
Walnut Creek, CA 94596 Washington D.C., until February 2000. Banker,
Lehman Brothers until April 1997. Citizen of the
United States of America.
Dr. Heinz Kriwet............... Member of the Supervisory Board. Chairman of the
August-Thyssen-Strabe 1 Supervisory Board of Thyssen Krupp AG since
D-40211 Dusseldorf March 1999. Chairman of the Supervisory Board of
Federal Republic of Germany Thyssen AG from March 1996 until March 1999.
Chairman of the Board of Management of Thyssen
AG until March 1996.
Prof. Dr. Hubert Markl......... Member of the Supervisory Board. President of
Hofgartenstrabe 8 the Max-Planck-Gesellschaft, Munich, since 1996.
D-80539 Munich Professor at the University of Konstanz until
Federal Republic of Germany 1996.
Georg Nassauer................. Member of the Supervisory Board. Member of the
Siemensdamm 50-54 Works Council.
D-13629 Berlin
Federal Republic of Germany
Dr. Albrecht Schmidt........... Member of the Supervisory Board. Spokesman for
Am Tucherpark 16 the Managing Directors, Bayerische Hypo-und
D-80538 Munich Vereinsbank AG, Munich.
Federal Republic of Germany
Dr. Henning Schulte-Noelle..... Member of the Supervisory Board. Chairman of the
Koniginstrabe 28 Board of Managing Directors, Allianz AG, Munich.
D-80790 Munich
Federal Republic of Germany
Georg Seubert.................. Member of the Supervisory Board. Member of the
Humboldtstrabe 64 Works Council.
D-90459 Nuremberg
Federal Republic of Germany
Peter von Siemens.............. Member of the Supervisory Board.
Dr. Daniel L. Vasella.......... Member of the Supervisory Board. President of
CH-4002 Basel Novartis International AG, Basel, Switzerland.
Switzerland Citizen of Switzerland.
Klaus Wigand................... Member of the Supervisory Board. Head of
Department Information and Communication of
Central Human Resources.
Erwin Zahl .................... Member of the Supervisory Board. Member of the
Von-der-Taan-Strabe 30 Works
D-90439 Nuremberg Council.
Federal Republic of Germany
</TABLE>
A-2
<PAGE>
<TABLE>
<CAPTION>
Present Principal Occupation or Employment;
Material Positions Held During the Past Five
Name and Address Years
---------------- ------------------------------------------------
<S> <C>
Board of Managing
Directors
Dr. Heinrich v. Pierer.. President and Chief Executive Officer.
Dr. Volker Jung......... Member of the Board of Managing Directors.
Roland Koch............. Member of the Board of Managing Directors since
Hofmannstrabe 51 1997. Member of the Group Executive Committee
D-81359 Munich for Public Networks since 1995.
Federal Republic of
Germany
Dr. Edward G. Krubasik.. Member of the Board of Managing Directors since
Werner-von-Siemens- 1997. Director at McKinsey & Company Inc.,
Strabe 50 Munich, until January 1997.
D-91052 Erlangen
Federal Republic of
Germany
Rudi Lamprecht......... Member of the Board of Managing Directors and
Hofmannstrabe 51 Chief Executive Officer and Group President of
D-81359 Munich the Information and Communication Mobile
Federal Republic of Division of Siemens AG since April 2000. Chief
Germany Executive Officer and Group President of the
Information and Communication Products Division
of Siemens AG from September 1998 until April
2000. Chairman of the Group Executive Committee
of the Private Communication Systems Division of
Siemens AG from June 1998 until September 1998.
Member of the Board of Managing Directors of
Siemens Nixdorf Informationssysteme AG from
January 1998 until June 1998. President of
Region Europe Siemens Nixdorf
Informationssysteme AG prior to January 1998.
Heinz-Joachim Member of the Board of Managing Directors and
Neuburger.............. Head of the Corporate Finance Department since
1997. Executive Director at Siemens Ltd.,
Bombay, from April 1996 until November 1997.
Head of Treasury Department until April 1996.
Prof. Peter Pribilla.... Member of the Board of Managing Directors.
Jurgen Radomski......... Member of the Board of Managing Directors.
Werner-von-Siemens-
Strabe 50
D-91052 Erlangen
Federal Republic of
Germany
Dr. Gunter Wilhelm...... Member of the Board of Managing Directors.
Werner-von-Siemens-
Strabe 50
D-91052 Erlangen
Federal Republic of
Germany
Prof. Dr. Claus Member of the Board of Managing Directors since
Weyrich................ 1996. Head of Corporate Research since 1994.
Otto-Hahn-Ring 6
D-81739 Munich
Federal Republic of
Germany
Dr. Klaus Wucherer...... Member of the Board of Managing Directors since
Gleiwitzer Strabe 555 August 1999. President of the Automation &
D-90475 Nuremberg Drives Group since September 1998. Vice
Federal Republic of President of the Automation & Drives Group since
Germany 1996. Division Head until 1996.
</TABLE>
A-3
<PAGE>
2. Directors and Executive Officers of Parent. The following table sets
forth the name and present principal occupation or employment, and material
occupations, positions, offices or employments for the past five years, of each
director and executive officer of Parent. Each such person is a citizen of the
United States of America, unless otherwise noted, and the business address of
each such person is c/o Siemens Corporation, 153 East 53rd Street, New York, NY
10022.
<TABLE>
<CAPTION>
Present Principal Occupation or Employment;
Material Positions
Name and Address Held During the Past Five Years
---------------- ------------------------------------------------
<S> <C>
Prof. Peter Pribilla........... Director and Chairman of the Board of Directors
Siemens AG of Parent and Member of the Board of Managing
Wittelsbacherplatz Z Directors of Siemens AG. Citizen of Federal
D-80333 Munich Republic of Germany.
Federal Republic of Germany
Heinz-Joachim Neuburger........ Member of the Board of Managing Directors and
Siemens AG Head of the Corporate Finance Department of
Wittelsbacherplatz Z Siemens AG since 1997. Executive Director at
D-80333 Munich Siemens Ltd., Bombay, from April 1996 until
Federal Republic of Germany November 1997. Head of Treasury Department until
April 1996.
Gerhard Schulmeyer............. Director, President and Chief Executive Officer
of Parent. Formerly President and Chief
Executive Officer of Siemens Nixdorf
Informationssysteme AG, Munich. Citizen of the
Federal Republic of Germany.
Gerald Wright.................. Executive Vice President and Chief Financial
Officer of Parent since October 1998. Executive
Vice President and Chief Financial Officer of
Siemens Business Communication Systems until
October 1998. Citizen of Germany.
Michael W. Schiefen............ Vice President--Corporate Development of Parent.
E. Robert Lupone............... Vice President, General Counsel and Secretary of
Parent since September 1999. Associate General
Counsel of Parent from 1998 until September
1999. Senior Counsel of Parent until 1998.
Ruth Fattori................... Vice President of Human Resources of Parent
since September 1999. Managing Director,
Operations Europe of GE Capital until September
1999.
Dana Scott Deasy............... Vice President and Chief Information Officer of
Parent since September 1999. Chief Information
Officer of Locomotive Group of General Motors
until September 1999.
Dr. Doris Larmann.............. Vice President (Acting) of Corporate
Communications of Parent since October 1999.
Chief Communications and Marketing Consultant to
Information and Communication Products Group of
Siemens AG until October 1999.
</TABLE>
A-4
<PAGE>
3. Directors and Executive Officers of Merger Sub. The following table sets
forth the name and present principal occupation or employment, and material
occupations, positions, offices or employments for the past five years, of each
director and executive officer of Merger Sub. Each such person is a citizen of
the United States of America, unless otherwise noted, and the business address
of each such person is c/o Siemens Corporation, 153 East 53rd Street, New York,
NY 10022.
<TABLE>
<CAPTION>
Present Principal Occupation or Employment;
Material Positions
Name and Address Held During the Past Five Years
---------------- ------------------------------------------------
<S> <C>
Michael W. Schiefen.............. Director and President of Merger Sub. Vice
President-- Corporate Development of Siemens
Corporation.
E. Robert Lupone................. Director and Vice President of Merger Sub.
Secretary of Merger Sub. Legal counsel to
Kenneth R. Meyers................ Parent.
</TABLE>
A-5
<PAGE>
Manually signed facsimile copies of the Letter of Transmittal, properly
completed and duly executed, will be accepted. The Letter of Transmittal,
certificates for the Shares and any other required documents should be sent or
delivered by each stockholder of the Company or his broker-dealer, commercial
bank, trust company or other nominee to the Depositary as follows:
The Depositary for the Offer is:
ChaseMellon Shareholder Services, L.L.C.
By Registered Mail: By Hand Delivery: By Overnight Courier:
Reorganization Reorganization Reorganization
Department Department Department
Post Office Box 3301 120 Broadway 85 Challenger Road
South Hackensack, NJ 13th Floor Mail Stop-Reorg
07606 New York, NY 10271 Ridgefield Park, NJ
07660
By Facsimile Transmission:
(201) 296-4293
(for eligible institutions only)
Confirm Facsimile by Telephone Only:
(201) 296-4860
Any questions or requests for assistance or additional copies of the Offer
to Purchase and the Letter of Transmittal, the Notice of Guaranteed Delivery
and related materials may be directed to the Information Agent or the Dealer
Manager at their respective telephone numbers and locations listed below. You
may also contact your broker, dealer, commercial bank or trust company or other
nominee for assistance concerning the Offer.
The Information Agent for the Offer is:
[Georgeson][LOGO]
17 State Street, 10th Floor
New York, New York 10004
Call Collect (212) 440-9800
Call Toll Free (800) 223-2064
The Dealer Manager for the Offer is:
Credit Suisse First Boston Corporation
Eleven Madison Avenue
New York, NY 10010-3629
Call Toll Free: (800) 646-4543
<PAGE>
EXHIBIT (a) (2)
Letter of Transmittal
To Tender Shares of Common Stock
(Including the Associated Rights to Purchase
Series A Junior Participating Preferred Stock)
of
Shared Medical Systems Corporation
Pursuant to the Offer to Purchase Dated May 10, 2000
by
Autobahn Acquisition Corporation
a wholly owned subsidiary of
Siemens Corporation
an indirect wholly owned subsidiary of
Siemens Aktiengesellschaft
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON WEDNESDAY, JUNE 7, 2000 UNLESS THE OFFER IS EXTENDED.
The Depositary for the Offer is:
ChaseMellon Shareholder Services, L.L.C.
By Registered Mail: By Hand Delivery: By Overnight
Reorganization Department Courier:
Reorganization
Reorganization 120 Broadway Department
Department 13th Floor 85 Challenger Road
Post Office Box 3301 New York, NY 10271 Mail Stop-Reorg
South Hackensack, NJ Ridgefield Park, NJ
07606 07660
By Facsimile Transmission: Confirm Facsimile by Telephone
Only:
(201) 296-4860
(201) 296-4293
(for eligible institutions only)
DESCRIPTION OF THE SHARES TENDERED
Shares Tendered (Attach additional signed list if necessary)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Name(s) and Address(es) of
Registered Holder(s)
(Please fill in, if blank,
exactly as name(s) Number of Shares Number
appear(s) Certificate Represented by of Shares
on Certificate(s)) Number(s)(1) Certificate(s)(1) Tendered(2)
- ------------------------------------------------------------------------------
--------------------------------------------------
<S> <C> <C> <C>
--------------------------------------------------
--------------------------------------------------
--------------------------------------------------
--------------------------------------------------
--------------------------------------------------
Total Shares
</TABLE>
- --------------------------------------------------------------------------------
(1) Need not be completed by Book-Entry Stockholders.
(2) Unless otherwise indicated, all shares represented by share certificates
delivered to the depositary will be deemed to have been tendered. See
instruction 4.
[_]Check here if certificates have been lost, destroyed or mutilated. See
instruction 11. Number of shares represented by lost, destroyed or
mutilated certificates: .
<PAGE>
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE WILL NOT CONSTITUTE A VALID DELIVERY TO THE DEPOSITARY. YOU MUST SIGN
THIS LETTER OF TRANSMITTAL IN THE APPROPRIATE SPACE THEREFOR PROVIDED BELOW AND
COMPLETE THE SUBSTITUTE FORM W-9 SET FORTH BELOW.
THE INSTRUCTIONS CONTAINED WITHIN THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be used by stockholders of Shared Medical
Systems Corporation if certificates for the Shares (as defined below) are to be
forwarded herewith or, unless an Agent's Message (as defined in Instruction 2
below) is utilized, if delivery of the Shares is to be made by book-entry
transfer to an account maintained by the Depositary at the Book-Entry Transfer
Facility (as defined in and pursuant to the procedures set forth in Section 3
of the Offer to Purchase). Holders who deliver Shares by book-entry transfer
are referred to herein as "Book-Entry Stockholders" and other stockholders who
deliver Shares are referred to herein as "Certificate Stockholders."
Stockholders whose certificates for the Shares are not immediately available
or who cannot deliver either the certificates for, or a Book-Entry Confirmation
(as defined in Section 3 of the Offer to Purchase) with respect to, their
Shares and all other documents required hereby to the Depositary prior to the
Expiration Date, or the expiration of any subsequent offering period (as
defined in Section 1 of the Offer to Purchase) must tender their Shares
pursuant to the guaranteed delivery procedures set forth in Section 3 of the
Offer to Purchase. See Instruction 2. DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY
TRANSFER FACILITY WILL NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
[_]CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO
THE DEPOSITARY'S ACCOUNT AT THE BOOK-ENTRY TRANSFER FACILITY AND COMPLETE
THE FOLLOWING (ONLY PARTICIPANTS IN THE BOOK-ENTRY TRANSFER FACILITY MAY
DELIVER SHARES BY BOOK-ENTRY TRANSFER):
Name of Tendering Institution _______________________________________________
Account Number ______________________________________________________________
Transaction Code Number _____________________________________________________
[_]CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING:
Name(s) of Registered Owner(s) ______________________________________________
Window Ticket Number (if any) _______________________________________________
Date of Execution of Notice of Guaranteed Delivery __________________________
Name of Institution that Guaranteed Delivery ________________________________
If delivered by Book-Entry Transfer, check box: [_]
Account Number ______________________________________________________________
Transaction Code Number _____________________________________________________
2
<PAGE>
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE INSTRUCTIONS SET FORTH IN
THIS LETTER OF TRANSMITTAL CAREFULLY
Ladies and Gentlemen:
The undersigned hereby tenders to Autobahn Acquisition Corporation, a
Delaware corporation ("Purchaser") and a wholly owned subsidiary of Siemens
Corporation ("Parent"), a Delaware corporation and an indirect wholly owned
subsidiary of Siemens Aktiengesellschaft, a corporation formed under the laws
of the Federal Republic of Germany ("Siemens AG"), the above-described shares
of common stock, par value $0.01 per share (the "Common Stock"), of Shared
Medical Systems Corporation, a Delaware corporation (the "Company"), together
with the associated rights to purchase Series A Junior Participating Preferred
Stock (the "Rights") issued pursuant to the Rights Agreement, dated as of May
1, 1991, as amended (the "Rights Agreement"), between the Company and
ChaseMellon Shareholder Services, L.L.C. (the Common Stock and the Rights
together being referred to herein as the "Shares"), at $73 per Share, net to
the seller in cash (the "Common Stock Price"), upon the terms and subject to
the conditions set forth in the Offer to Purchase dated May 10, 2000 and in
this related Letter of Transmittal (which, together with any amendments or
supplements hereto or thereto, collectively constitute the "Offer"). The
undersigned understands that Purchaser reserves the right to transfer or
assign, in whole at any time, or in part from time to time, to one or more of
its affiliates, the right to purchase all or any portion of the Shares tendered
pursuant to the Offer, but any such transfer or assignment will not relieve
Purchaser of its obligations under the Offer and will in no way prejudice the
rights of tendering stockholders to receive payment for any Shares validly
tendered and accepted for payment pursuant to the Offer. Receipt of the Offer
is hereby acknowledged.
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
as of April 30, 2000 (the "Merger Agreement"), by and among Parent, Purchaser
and the Company.
Upon the terms and subject to the conditions of the Offer (and if the Offer
is extended or amended, the terms of any such extension or amendment), subject
to, and effective upon, acceptance for payment of the Shares tendered herewith
in accordance with the terms of the Offer, the undersigned hereby sells,
assigns and transfers to, or upon the order of, Purchaser all right, title and
interest in and to all the Shares that are being tendered hereby (and any and
all non-cash dividends, distributions, rights, other shares of common stock or
other securities issued or issuable in respect thereof on or after April 30,
2000 (collectively, "Distributions")) and irrevocably constitutes and appoints
the Depositary the true and lawful agent and attorney-in-fact of the
undersigned with respect to such Shares (and all Distributions), with full
power of substitution (such power of attorney being deemed to be an irrevocable
power coupled with an interest), to (i) deliver certificates for such Shares
(and any and all Distributions), or transfer ownership of such Shares (and any
and all Distributions) on the account books maintained by the Book-Entry
Transfer Facility, together, in any such case, with all accompanying evidences
of transfer and authenticity, to or upon the order of Purchaser, (ii) present
such Shares (and any and all Distributions) for transfer on the books of the
Company, and (iii) receive all benefits and otherwise exercise all rights of
beneficial ownership of such Shares (and any and all Distributions), all in
accordance with the terms of the Offer.
By executing this Letter of Transmittal, the undersigned hereby irrevocably
appoints Michael W. Schiefen and E. Robert Lupone in their respective
capacities as officers of Purchaser, and any individual who shall thereafter
succeed to any such offices of Purchaser, and each of them, and any other
designees of Purchaser, the attorneys-in-fact and proxies of the undersigned,
each with full power of substitution, (i) to vote at any annual or special
meeting of the Company's stockholders or any adjournment or postponement
thereof or otherwise in such manner as each such attorney-in-fact and proxy or
his substitute shall in his sole discretion deem proper with respect to, (ii)
to execute any written consent concerning any matter as each such attorney-in-
fact and proxy or his substitute shall in his sole discretion deem proper with
respect to, and (iii) to otherwise act as each such attorney-in-fact and proxy
or his substitute shall in his sole discretion deem proper with respect to, all
of the Shares (and any and all Distributions) tendered hereby and accepted for
payment by Purchaser. This appointment will be effective if and when, and only
to the extent that, Purchaser accepts such Shares for payment pursuant to the
Offer. This power of attorney and proxy are irrevocable and are granted in
consideration of the acceptance for payment of such Shares in accordance with
the terms of the Offer. Such acceptance for payment shall, without further
action, revoke any prior powers of attorney and proxies granted by the
undersigned at any time with respect to such Shares (and any and all
Distributions), and no subsequent powers of attorney, proxies, consents or
3
<PAGE>
revocations may be given by the undersigned with respect thereto (and, if
given, will not be deemed effective). Purchaser reserves the right to require
that, in order for the Shares to be deemed validly tendered, immediately upon
Purchaser's acceptance for payment of such Shares, Purchaser must be able to
exercise full voting, consent and other rights with respect to such Shares (and
any and all Distributions), including voting at any meeting of the Company's
stockholders.
The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender, sell, assign and transfer the Shares tendered
hereby and all Distributions, that the undersigned owns the Shares tendered
hereby within the meaning of Rule 14e-4 promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), that the tender of the
tendered Shares complies with Rule 14e-4 under the Exchange Act, and that when
the same are accepted for payment by Purchaser, Purchaser will acquire good,
marketable and unencumbered title thereto and to all Distributions, free and
clear of all liens, restrictions, charges and encumbrances and the same will
not be subject to any adverse claims. The undersigned will, upon request,
execute and deliver any additional documents deemed by the Depositary or
Purchaser to be necessary or desirable to complete the sale, assignment and
transfer of the Shares tendered hereby and all Distributions. In addition, the
undersigned shall remit and transfer promptly to the Depositary for the account
of Purchaser all Distributions in respect of the Shares tendered hereby,
accompanied by appropriate documentation of transfer, and, pending such
remittance and transfer or appropriate assurance thereof, Purchaser shall be
entitled to all rights and privileges as owner of each such Distribution and
may withhold the entire purchase price of the Shares tendered hereby or deduct
from such purchase price the amount or value of such Distribution as determined
by Purchaser in its sole discretion.
All authority herein conferred or agreed to be conferred shall survive the
death or incapacity of the undersigned, and any obligation of the undersigned
hereunder shall be binding upon the heirs, executors, administrators, personal
representatives, trustees in bankruptcy, successors and assigns of the
undersigned. This tender is irrevocable; provided that Shares tendered pursuant
to the Offer may be withdrawn at any time on or prior to the Expiration Date
and, unless theretofore accepted for payment as provided in the Offer to
Purchase, may also be withdrawn at any time after July 8, 2000, subject to the
withdrawal rights set forth in Section 4 of the Offer to Purchase.
The undersigned understands that the valid tender of the Shares pursuant to
any one of the procedures described in Section 3 of the Offer to Purchase and
in the Instructions hereto will constitute a binding agreement between the
undersigned and Purchaser upon the terms and subject to the conditions of the
Offer (and if the Offer is extended or amended, the terms or conditions of any
such extension or amendment). Without limiting the foregoing, if the price to
be paid in the Offer is amended in accordance with the terms of the Merger
Agreement, the price to be paid to the undersigned will be the amended price
notwithstanding the fact that a different price is stated in this Letter of
Transmittal. The undersigned recognizes that under certain circumstances set
forth in the Offer to Purchase, Purchaser may not be required to accept for
payment any of the Shares tendered hereby.
Unless otherwise indicated under "Special Payment Instructions," please
issue the check for the purchase price of all Shares purchased and/or return
any certificates for any Shares not tendered or accepted for payment in the
name(s) of the registered holder(s) appearing above under "Description of the
Shares Tendered." Similarly, unless otherwise indicated under "Special Delivery
Instructions," please mail the check for the purchase price of all Shares
purchased and/or return any certificates for any Shares not tendered or not
accepted for payment (and any accompanying documents, as appropriate) to the
address(es) of the registered holder(s) appearing above under "Description of
the Shares Tendered." In the event that the boxes entitled "Special Payment
Instructions" and "Special Delivery Instructions" are both completed, please
issue the check for the purchase price of all Shares purchased and/or return
any certificates evidencing Shares not tendered or not accepted for payment
(and any accompanying documents, as appropriate) in the name(s) of, and deliver
such check and/or return any such certificates (and any accompanying documents,
as appropriate) to, the person(s) so indicated. Unless otherwise indicated
herein in the box entitled "Special Payment Instructions," please credit any
Shares tendered herewith by book-entry transfer that are not accepted for
payment by crediting the account at the Book-Entry Transfer Facility designated
above. The undersigned recognizes that Purchaser has no obligation pursuant to
the "Special Payment Instructions" to transfer any Shares from the name of the
registered holder thereof if Purchaser does not accept for payment any of the
Shares so tendered.
4
<PAGE>
SPECIAL PAYMENT INSTRUCTIONS (See SPECIAL DELIVERY INSTRUCTIONS
Instructions 1, 5, 6 and 7) (See Instructions 1, 5, 6 and 7)
To be completed ONLY if the To be completed ONLY if
check for the purchase price of certificates for any Shares not
the Shares accepted for payment tendered or not accepted for
is to be issued in the name of payment and/or the check for the
someone other than the purchase price of any Shares
undersigned, if certificates for accepted for payment is to be
any Shares not tendered or not sent to someone other than the
accepted for payment are to be undersigned or to the undersigned
issued in the name of someone at an address other than that
other than the undersigned or if shown under "Description of the
any Shares tendered hereby and Shares Tendered." Mail check
delivered by book-entry transfer and/or stock certificates to:
that are not accepted for payment
are to be returned by credit to Mail check and/or stock certifi-
an account maintained at a Book- cates to:
Entry Transfer Facility other
than the account indicated above. Name______________________________
(Please Print)
Issue check and/or stock certifi-
cate(s) to: Address __________________________
(Include Zip Code)
Name _____________________________
(Please Print) __________________________________
(Taxpayer Identification or
Address __________________________ Social Security Number)
(Zip Code) (See Substitute Form W-9)
__________________________________
(Tax Identification or Social
Security Number)
(See Substitute Form W-9)
[_]Credit Shares delivered by
book-entry transfer and not
purchased to the Book-Entry
Transfer Facility account.
Account number ___________________
5
<PAGE>
IMPORTANT
STOCKHOLDER: SIGN HERE
(Complete Substitute Form W-9 below)
(Signature(s) of Owner(s))
Name(s) ......................................................................
Name of Firm .................................................................
(Please Print)
Capacity (full title) ........................................................
(See Instruction 5)
Address ......................................................................
..............................................................................
(Zip Code)
Area Code and Telephone Number ...............................................
Taxpayer Identification or Social Security Number ............................
(See Substitute Form W-9)
Dated: ........... , 2000
(Must be signed by registered holder(s) exactly as name(s) appear(s) on
stock certificate(s) or on a security position listing or by the person(s)
authorized to become registered holder(s) by certificates and documents
transmitted herewith. If signature is by a trustee, executor, administrator,
guardian, attorney-in-fact, agent, officer of a corporation or other person
acting in a fiduciary or representative capacity, please set forth full title
and see Instruction 5).
GUARANTEE OF SIGNATURE(S)
(See Instructions 1 and 5)
FOR USE BY FINANCIAL INSTITUTIONS ONLY. PLACE MEDALLION GUARANTEE IN SPACE
BELOW.
Authorized signature(s) ......................................................
Name(s) ......................................................................
Name of Firm .................................................................
(Please Print)
Address ......................................................................
(Zip Code)
Area Code and Telephone Number ...............................................
Dated: ........... , 2000
6
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. Guarantee of Signatures. No signature guarantee is required on this
Letter of Transmittal (a) if this Letter of Transmittal is signed by the
registered holder(s) (which term, for purposes of this Section, includes any
participant in any of the Book-Entry Transfer Facility's systems whose name
appears on a security position listing as the owner of the Shares) of the
Shares tendered herewith, unless such registered holder(s) has completed either
the box entitled "Special Payment Instructions" or the box entitled "Special
Delivery Instructions" on the Letter of Transmittal or (b) if such Shares are
tendered for the account of a financial institution (including most commercial
banks, savings and loan associations and brokerage houses) that is a
participant in the Security Transfer Agents Medallion Program, the New York
Stock Exchange Medallion Signature Guarantee Program or the Stock Exchange
Medallion Program or by any other "eligible guarantor institution," as such
term is defined in Rule 17Ad-15 under the Exchange Act (each, an "Eligible
Institution"). In all other cases, all signatures on this Letter of Transmittal
must be guaranteed by an Eligible Institution. See Instruction 5.
2. Requirements of Tender. This Letter of Transmittal is to be completed by
stockholders of the Company either if certificates are to be forwarded herewith
or, unless an Agent's Message is utilized, if delivery of the Shares is to be
made by book-entry transfer pursuant to the procedures set forth herein and in
Section 3 of the Offer to Purchase. For a stockholder validly to tender Shares
pursuant to the Offer, either (a) a properly completed and duly executed Letter
of Transmittal (or a manually signed facsimile thereof), together with any
required signature guarantees or an Agent's Message (in connection with book-
entry transfer of the Shares) and any other required documents, must be
received by the Depositary at one of its addresses set forth herein prior to
the Expiration Date, or the expiration of any Subsequent Offering Period, and
either (i) certificates for tendered Shares must be received by the Depositary
at one of such addresses prior to the Expiration Date, or the expiration of any
Subsequent Offering Period, or (ii) Shares must be delivered pursuant to the
procedures for book-entry transfer set forth herein and in Section 3 of the
Offer to Purchase and a Book-Entry Confirmation must be received by the
Depositary prior to the Expiration Date, or the expiration of any Subsequent
Offering Period, or (b) the tendering stockholder must comply with the
guaranteed delivery procedures set forth herein and in Section 3 of the Offer
to Purchase.
Stockholders whose certificates for the Shares are not immediately available
or who cannot deliver their certificates and all other required documents to
the Depositary prior to the Expiration Date, or the expiration of any
Subsequent Offering Period, or who cannot comply with the book-entry transfer
procedures on a timely basis may tender their Shares by properly completing and
duly executing the Notice of Guaranteed Delivery pursuant to the guaranteed
delivery procedures set forth herein and in Section 3 of the Offer to Purchase.
Pursuant to such guaranteed delivery procedures, (i) such tender must be
made by or through an Eligible Institution, (ii) a properly completed and duly
executed Notice of Guaranteed Delivery, substantially in the form provided by
Purchaser, must be received by the Depositary prior to the Expiration Date, or
the expiration of any Subsequent Offering Period, and (iii) the certificates
for all tendered Shares, in proper form for transfer (or a Book-Entry
Confirmation with respect to all tendered Shares), together with a properly
completed and duly executed Letter of Transmittal (or a manually signed
facsimile thereof), with any required signature guarantees, or, in the case of
a book-entry transfer, an Agent's Message, and any other required documents
must be received by the Depositary within three trading days after the date of
execution of such Notice of Guaranteed Delivery. A "trading day" is any day on
which the New York Stock Exchange is open for business.
The term "Agent's Message" means a message, transmitted by the Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that such Book-Entry Transfer Facility
has received an express acknowledgment from the participant in such Book-Entry
Transfer Facility tendering the Shares, that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that Purchaser
may enforce such agreement against the participant.
The signatures on this Letter of Transmittal cover the Shares tendered
hereby.
The method of delivery of the Shares, this Letter of Transmittal and all
other required documents, including delivery through the Book-Entry Transfer
Facility, is at the election and risk of the tendering stockholder. The
7
<PAGE>
Shares will be deemed delivered only when actually received by the Depositary
(including, in the case of a book-entry transfer, by Book-Entry Confirmation).
If delivery is by mail, registered mail with return receipt requested, properly
insured, is recommended. In all cases, sufficient time should be allowed to
ensure timely delivery.
No alternative, conditional or contingent tenders will be accepted, and no
fractional Shares will be purchased. All tendering stockholders, by executing
this Letter of Transmittal (or a manually signed facsimile thereof), waive any
right to receive any notice of acceptance of their Shares for payment.
3. Inadequate Space. If the space provided herein under "Description of
Shares Tendered" is inadequate, the number of Shares tendered and the
certificate numbers with respect to such Shares should be listed on a separate
signed schedule attached hereto.
4. Partial Tenders (Not applicable to stockholders who tender by book-entry
transfer). If fewer than all the Shares evidenced by any certificate delivered
to the Depositary herewith are to be tendered hereby, fill in the number of
Shares that are to be tendered in the box entitled "Number of Shares Tendered."
In any such case, new certificate(s) for the remainder of the Shares that were
evidenced by the old certificates will be sent to the registered holder, unless
otherwise provided in the appropriate box on this Letter of Transmittal, as
soon as practicable after the Expiration Date, or the expiration of any
subsequent offering period, or the termination of the Offer. All Shares
represented by certificates delivered to the Depositary will be deemed to have
been tendered unless otherwise indicated.
5. Signatures On Letter Of Transmittal; Stock Powers And Endorsements. If
this Letter of Transmittal is signed by the registered holder(s) of the Shares
tendered hereby, the signature(s) must correspond with the name(s) as written
on the face of the certificate(s) without alteration, enlargement or any change
whatsoever.
If any of the Shares tendered hereby are held of record by two or more joint
owners, all such owners must sign this Letter of Transmittal.
If any of the tendered Shares are registered in different names on several
certificates, it will be necessary to complete, sign and submit as many
separate Letters of Transmittal as there are different registrations of
certificates.
If this Letter of Transmittal or any stock certificate or stock power is
signed by a trustee, executor, administrator, guardian, attorney-in-fact,
officer of a corporation or other person acting in a fiduciary or
representative capacity, such person should so indicate when signing, and
proper evidence satisfactory to Purchaser of the authority of such person to so
act must be submitted. If this Letter of Transmittal is signed by the
registered holder(s) of the Shares listed and transmitted hereby, no
endorsements of certificates or separate stock powers are required unless
payment or certificates for any Shares not tendered or not accepted for payment
are to be issued in the name of a person other than the registered holder(s).
Signatures on any such certificates or stock powers must be guaranteed by an
Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Shares evidenced by certificates listed and
transmitted hereby, the certificates must be endorsed or accompanied by
appropriate stock powers, in either case signed exactly as the name(s) of the
registered holder(s) appear(s) on the certificates. Signature(s) on any such
certificates or stock powers must be guaranteed by an Eligible Institution.
6. Stock Transfer Taxes. Except as otherwise provided in this Instruction 6,
Purchaser will pay all stock transfer taxes with respect to the transfer and
sale of any Shares to it or its order pursuant to the Offer. If, however,
payment of the purchase price of any Shares purchased is to be made to, or if
certificates for any Shares not tendered or not accepted for payment are to be
registered in the name of, any person other than the registered holder(s), or
if tendered certificates are registered in the name of any person other than
the person(s) signing this Letter of Transmittal, the amount of any stock
transfer taxes (whether imposed on the registered holder(s) or such other
person) payable on account of the transfer to such other person will be
deducted from the purchase price of such Shares purchased unless evidence
satisfactory to Purchaser of the payment of such taxes, or exemption therefrom,
is submitted.
Except as provided in this Instruction 6, it will not be necessary for
transfer tax stamps to be affixed to the certificates evidencing the Shares
tendered hereby.
7. Special Payment And Delivery Instructions. If a check for the purchase
price of any Shares accepted for payment is to be issued in the name of, and/or
certificates for any Shares not accepted for payment or not tendered are to
8
<PAGE>
be issued in the name of and/or returned to, a person other than the signer of
this Letter of Transmittal or if a check is to be sent, and/or such
certificates are to be returned, to a person other than the signer of this
Letter of Transmittal, or to an address other than that shown above, the
appropriate boxes on this Letter of Transmittal should be completed. Any
stockholder(s) delivering Shares by book-entry transfer may request that Shares
not purchased be credited to such account maintained at the Book-Entry Transfer
Facility as such stockholder(s) may designate in the box entitled "Special
Payment Instructions." If no such instructions are given, any such Shares not
purchased will be returned by crediting the account at the Book-Entry Transfer
Facility designated above as the account from which such Shares were delivered.
8. Backup Withholding. In order to avoid "backup withholding" of Federal
income tax on payments of cash pursuant to the Offer, a stockholder
surrendering Shares in the Offer must, unless an exemption applies, provide the
Depositary with such stockholder's correct taxpayer identification number
("TIN") on Substitute Form W-9 in this Letter of Transmittal and certify, under
penalties of perjury, that such TIN is correct. If a tendering stockholder is
subject to backup withholding, such stockholder must cross out item (2) of the
Certification box on the Substitute Form W-9.
Backup withholding is not an additional income tax. Rather, the amount of
the backup withholding can be credited against the Federal income tax liability
of the person subject to the backup withholding, provided that the required
information is given to the IRS. If backup withholding results in an
overpayment of tax, a refund can be obtained by the stockholder upon filing an
income tax return.
The stockholder is required to give the Depositary the TIN (i.e., social
security number or employer identification number) of the record owner of the
Shares. If the Shares are held in more than one name or are not in the name of
the actual owner, consult the enclosed "Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9" for additional guidance
on which number to report.
If the tendering stockholder has not been issued a TIN and has applied for a
TIN or intends to apply for a TIN in the near future, such stockholder should
write "Applied For" in the space provided for the TIN in Part 1 of the
Substitute Form W-9 and sign and date the Substitute Form W-9, and the
stockholder or other payee must also complete the Certificate of Awaiting
Taxpayer Identification Number below in order to avoid backup withholding.
Notwithstanding that the Certificate of Awaiting Taxpayer Identification Number
is completed, the Depositary will withhold 31% on all payments made prior to
the time a properly certified TIN is provided to the Depositary. However, such
amounts will be refunded to such stockholder if a TIN is provided to the
Depositary within 60 days.
Certain stockholders (including, among others, all corporations and certain
foreign individuals and entities) are not subject to backup withholding.
Noncorporate foreign stockholders should complete and sign the main signature
form and a Form W-8, Certificate of Foreign Status, a copy of which may be
obtained from the Depositary, in order to avoid backup withholding. See the
enclosed "Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9" for more instructions.
9. Requests For Assistance Or Additional Copies. Questions and requests for
assistance or additional copies of the Offer to Purchase, this Letter of
Transmittal, the Notice of Guaranteed Delivery and the Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9 may be
directed to the Information Agent or the Dealer Manager at the addresses and
phone numbers set forth below, or from brokers, dealers, commercial banks or
trust companies.
10 Waiver Of Conditions. Subject to the Merger Agreement, Purchaser
reserves the absolute right in its sole discretion to waive, at any time or
from time to time, any of the specified conditions of the Offer, in whole or in
part, in the case of any Shares tendered.
11 Lost, Destroyed Or Stolen Certificates. If any certificate(s)
representing Shares has been lost, destroyed or stolen, the stockholder should
promptly notify the Depositary by checking the box immediately preceding the
special payment/special delivery instructions and indicating the number of
Shares lost. The stockholder will then be instructed as to the steps that must
be taken in order to replace the certificate(s). This Letter of Transmittal and
related documents cannot be processed until the procedures for replacing lost,
destroyed or stolen certificates have been followed.
9
<PAGE>
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A MANUALLY SIGNED FACSIMILE
HEREOF) TOGETHER WITH ANY REQUIRED SIGNATURE GUARANTEES, OR, IN THE CASE OF A
BOOK-ENTRY TRANSFER, AN AGENT'S MESSAGE, AND ANY OTHER REQUIRED DOCUMENTS, MUST
BE RECEIVED BY THE DEPOSITARY PRIOR TO THE EXPIRATION DATE, OR THE EXPIRATION
OF ANY SUBSEQUENT OFFERING PERIOD, AND EITHER CERTIFICATES FOR TENDERED SHARES
MUST BE RECEIVED BY THE DEPOSITARY OR SHARES MUST BE DELIVERED PURSUANT TO THE
PROCEDURES FOR BOOK-ENTRY TRANSFER, IN EACH CASE PRIOR TO THE EXPIRATION DATE,
OR THE EXPIRATION OF ANY SUBSEQUENT OFFERING PERIOD, OR THE TENDERING
STOCKHOLDERS MUST COMPLY WITH THE PROCEDURES FOR GUARANTEED DELIVERY.
IMPORTANT TAX INFORMATION
Under Federal income tax law, a stockholder whose tendered Shares are
accepted for payment is required to provide the Depositary (as payer) with such
stockholder's correct taxpayer identification number on Substitute Form W-9
below. If such stockholder is an individual, the taxpayer identification number
is his social security number. If the Depositary is not provided with the
correct taxpayer identification number, the stockholder may be subject to a $50
penalty imposed by the Internal Revenue Service. In addition, payments that are
made to such stockholder with respect to Shares purchased pursuant to the Offer
may be subject to backup withholding of 31%.
Certain stockholders (including, among others, all corporations, and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. In order for a foreign individual to qualify as an exempt
recipient, that stockholder must submit a statement, signed under penalties of
perjury, attesting to that individual's exempt status. Such statements can be
obtained from the Depositary. Exempt stockholders, other than foreign
individuals, should furnish their TIN, write "Exempt" on the face of the
Substitute Form W-9 below, and sign, date and return the Substitute Form W-9 to
the Depositary. See the enclosed Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 for additional instructions.
If backup withholding applies, the Depositary is required to withhold 31% of
any payments made to the stockholder. Backup withholding is not an additional
tax. Rather, the tax liability of persons subject to backup withholding will be
reduced by the amount of tax withheld. If withholding results in an overpayment
of taxes, a refund may be obtained from the Internal Revenue Service.
Purpose of Substitute Form W-9
To prevent backup withholding on payments that are made to a stockholder
with respect to Shares purchased pursuant to the Offer, the stockholder is
required to notify the Depositary of such stockholder's correct taxpayer
identification number by completing the form contained herein certifying that
the taxpayer identification number provided on Substitute Form W-9 is correct
(or that such stockholder is awaiting a taxpayer identification number).
What Number to Give the Depositary
The stockholder is required to give the Depositary the social security
number or employer identification number of the record owner of the Shares. If
the Shares are in more than one name or are not in the name of the actual
owner, consult the enclosed Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 for additional guidance on which
number to report. If the tendering stockholder has not been issued a TIN and
has applied for a TIN or intends to apply for a TIN in the near future, such
stockholder should write "Applied For" in the space provided for the TIN in
Part 1 of the Substitute Form W-9 and sign and date the Substitute Form W-9,
and the stockholder or other payee must also complete the Certificate of
Awaiting Taxpayer Identification Number below in order to avoid backup
withholding. Notwithstanding that the Certificate of Awaiting Taxpayer
Identification Number is completed, the Depositary will withhold 31% on all
payments made prior to the time a properly certified TIN is provided to the
Depositary. However, such amounts will be refunded to such stockholder if a TIN
is provided to the Depositary within 60 days.
10
<PAGE>
PAYOR'S NAME: CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
Name _________________________________________________
SUBSTITUTE Address ______________________________________________
Form W-9 (Number and Street)
-----------------------------------------------------
Department of (Zip Code) (City) (State)
the Treasury
Internal
Revenue
Service
--------------------------------------------------------
TIN ___________________
Part 1(a)--PLEASE PROVIDE _______________________
YOUR TIN IN THE BOX AT Social security number
RIGHT AND CERTIFY BY OR
Payer's Request for SIGNING AND DATING BELOW Employer identification
Taxpayer TIN number
Identification --------------------------------------------------------
Number (TIN) and --------------------------------------------------------
Certification Part 1(b)--PLEASE CHECK THE BOX AT RIGHT IF YOU HAVE
APPLIED FOR, AND ARE AWAITING RECEIPT OF YOUR TIN [_]
--------------------------------------------------------
Part 3--CERTIFICATION UNDER PENALTIES OF PERJURY, I
CERTIFY THAT (X) The number shown on this form is my
correct TIN (or I am waiting for a number to be
issued to me), and (Y) I am not subject to backup
withholding because: (a) I am exempt from backup
withholding, or (b) I have not been notified by the
Internal Revenue Service (the "IRS") that I am
subject to backup withholding as a result of a
failure to report all interest or dividends, or (c)
the IRS has notified me that I am no longer subject
to backup withholding.
Part 2--FOR PAYEES EXEMPT FROM BACKUP WITHHOLDING
PLEASE WRITE "EXEMPT" HERE (SEE INSTRUCTIONS)
Sign Here^
SIGNATURE ____________________________________________
DATE _________________________________________________
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW
THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
Certification of Instructions--You must cross out
Item (Y) of Part 3 above if you have been notified by
the IRS that you are currently subject to backup
withholding because of underreporting interest or
dividends on your tax return. However, if after being
notified by the IRS that you were subject to backup
withholding you received another notification from
the IRS that you are no longer subject to backup
withholding, do not cross out such Item (Y).
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 1(b)
OF THE SUBSTITUTE FORM W-9 INDICATING YOU HAVE APPLIED FOR, AND ARE AWAITING
RECEIPT OF, YOUR TIN.
CERTIFICATION OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification
number has not been issued to me, and that (1) I mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or
(2) I intend to mail or deliver an application in the near future. I
understand that, if I do not provide a taxpayer identification number to
the Payor by the time of payment, 31 percent of all reportable payments
made to me pursuant to this Offer will be withheld.
--------------------------------------------------------
____________________________________ ____________________________________
Signature Date
11
<PAGE>
MANUALLY SIGNED FACSIMILE COPIES OF THE LETTER OF TRANSMITTAL WILL BE
ACCEPTED. THE LETTER OF TRANSMITTAL, CERTIFICATES FOR THE SHARES AND ANY OTHER
REQUIRED DOCUMENTS SHOULD BE SENT OR DELIVERED BY EACH STOCKHOLDER OF THE
COMPANY OR SUCH STOCKHOLDER'S BROKER, DEALER, COMMERCIAL BANK, TRUST COMPANY OR
OTHER NOMINEE TO THE DEPOSITARY AT ONE OF ITS ADDRESSES SET FORTH ON THE FIRST
PAGE.
Questions and requests for assistance or for additional copies of the Offer
to Purchase, the Letter of Transmittal, the Notice of Guaranteed Delivery and
other tender offer materials may be directed to the Information Agent or the
Dealer Manager at their respective telephone numbers and locations listed
below, and will be furnished promptly at Purchaser's expense. You may also
contact your broker, dealer, commercial bank, trust company or other nominee
for assistance concerning the Offer.
The Information Agent for the Offer is:
17 State Street, 10th Floor
New York, New York 10004
Call Collect (212) 440-9800
Call Toll Free (800) 223-2064
The Dealer Manager for the Offer is:
Credit Suisse First Boston Corporation
Eleven Madison Avenue
New York, New York 10010-3629
Call Toll Free: (800) 646-4543
<PAGE>
Exhibit (a)(3)
Notice of Guaranteed Delivery
for
Tender of Shares of Common Stock
(Including the Associated Rights to Purchase Series A Junior Participating
Preferred Stock)
of
Shared Medical Systems Corporation
to
Autobahn Acquisition Corporation
a wholly owned subsidiary of
Siemens Corporation
an indirect wholly owned subsidiary of
Siemens Aktiengesellschaft
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON WEDNESDAY, JUNE 7, 2000 UNLESS THE OFFER IS EXTENDED.
This Notice of Guaranteed Delivery, or a form substantially equivalent
hereto, must be used to accept the Offer (as defined below) (i) if certificates
for the Shares (as defined below) are not immediately available, (ii) if the
procedure for book-entry transfer cannot be completed prior to the Expiration
Date, or the expiration of any subsequent offering period (as defined in
Section 1 of the Offer to Purchase described below), or (iii) if time will not
permit all required documents to reach the Depositary prior to the Expiration
Date, or the expiration of any subsequent offering period. Such form may be
delivered by hand, transmitted by facsimile transmission or mailed to the
Depositary. See Section 3 of the Offer to Purchase.
The Depositary for the Offer is:
ChaseMellon Shareholder Services, L.L.C.
By Registered Mail: By Hand Delivery: By Overnight Courier:
Reorganization Reorganization Reorganization
Department Department Department
Post Office Box 3301 120 Broadway 85 Challenger Road
South Hackensack, NJ 13th Floor Mail Stop-Reorg
07606 New York, NY 10271 Ridgefield Park, NJ
07660
By Facsimile Transmission: Confirm Facsimile by Telephone Only:
(201) 296-4293 (201) 296-4860
(for eligible institutions only)
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE NUMBER OTHER THAN
AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
THIS FORM IS NOT TO BE USED TO GUARANTEE SIGNATURES. IF A SIGNATURE ON A
LETTER OF TRANSMITTAL IS REQUIRED TO BE GUARANTEED BY AN "ELIGIBLE INSTITUTION"
UNDER THE INSTRUCTIONS THERETO, SUCH SIGNATURE GUARANTEE MUST APPEAR IN THE
APPLICABLE SPACE PROVIDED IN THE SIGNATURE BOX ON THE LETTER OF TRANSMITTAL.
1
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to Autobahn Acquisition Corporation, a
Delaware corporation ("Purchaser") and a wholly owned subsidiary of Siemens
Corporation ("Parent"), a Delaware corporation and an indirect wholly owned
subsidiary of Siemens Aktiengesellschaft, a corporation formed under the laws
of the Federal Republic of Germany ("Siemens AG"), upon the terms and subject
to the conditions set forth in Purchaser's Offer to Purchase dated May 10, 2000
(the "Offer to Purchase") and the related Letter of Transmittal (which,
together with any amendments or supplements thereto, constitute the "Offer"),
receipt of which is hereby acknowledged, the number of shares set forth below
of common stock, par value $0.01 per share (the "Common Stock"), of Shared
Medical Systems Corporation, a Delaware corporation (the "Company"), together
with the associated rights to purchase Series A Junior Participating Preferred
Stock (the "Rights"), issued pursuant to the Rights Agreement, dated as of May
1, 1991, as amended (the "Rights Agreement"), between the Company and
ChaseMellon Shareholder Services, L.L.C. (the Common Stock and the Rights
together being referred to herein as the "Shares"), pursuant to the guaranteed
delivery procedures set forth in Section 3 of the Offer to Purchase.
Signature(s) ___________________________________________________________________
- --------------------------------------------------------------------------------
Name(s) of Record Holder(s) ____________________________________________________
Please Print or Type
Number of Shares _______________________________________________________________
Certificate No.(s) (If Available) ______________________________________________
Dated ________________________ , 2000
Address(es)_____________________________________________________________________
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Zip Code
Area Code and Tel. No.(s) ______________________________________________________
Taxpayer Identification or Social Security Number ______________________________
Check box if Shares will be tendered by book-entry transfer: [_]
Account Number _________________________________________________________________
2
<PAGE>
THE GUARANTEE SET FORTH BELOW MUST BE COMPLETED
GUARANTEE
(Not to be used for signature guarantee)
The undersigned, a participant in the Security Transfer Agents Medallion
Program, the New York Stock Exchange Medallion Signature Guarantee Program, the
Stock Exchange Medallion Program or an "eligible guarantor institution" as such
term is defined in Rule 17Ad-15 under the Securities Exchange Act of 1934, as
amended, hereby (a) represents that the above named person(s) "own(s)" the
Shares tendered hereby within the meaning of Rule 14e4 under the Securities
Exchange Act of 1934, as amended ("Rule 14e-4"), (b) represents that such
tender of Shares complies with Rule 14e-4 and (c) guarantees to deliver to the
Depositary either certificates representing the Share tendered hereby, in
proper form for transfer, or confirmation of book-entry transfer of such Share
into the Depositary's accounts at The Depository Trust Company, in each case
with delivery of a properly completed and duly executed Letter of Transmittal
(or a manually signed facsimile thereof), with any required signature
guarantees, or an Agent's Message (as defined in the Offer to Purchase), and
any other required documents, within three trading days (as defined in the
Offer to Purchase) after the date hereof.
- --------------------------------------------------------------------------------
Name of Firm
- --------------------------------------------------------------------------------
Address
- --------------------------------------------------------------------------------
Zip Code
Area Code and Tel. No. _________________________________________________________
- --------------------------------------------------------------------------------
Authorized Signature
Name ___________________________________________________________________________
Please Print or Type
Title __________________________________________________________________________
Date _________________________ , 2000
NOTE: DO NOT SEND CERTIFICATES FOR THE SHARES WITH THIS NOTICE. CERTIFICATES
SHOULD BE SENT ONLY WITH YOUR LETTER OF TRANSMITTAL.
3
<PAGE>
EXHIBIT (a) (4)
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
Guidelines for Determining the Proper Identification Number to Give the Payer--
Social Security numbers have nine digits separated by two hyphens: i.e. 000-00-
0000. Employer identification numbers have nine digits separated by only one
hyphen: i.e. 00-0000000. The table below will help determine the number to give
the payer.
- ------------------------------------- -------------------------------------
<TABLE>
<CAPTION>
Give the name and
SOCIAL SECURITY
For this type of account: number of--
- -----------------------------------------------
<S> <C>
1. An individual's account The individual
2. Two or more individuals The actual owner of
(joint account) the account or, if
combined funds, any
one of the
individuals(2)
3. Husband and wife (joint The actual owner of
account) the account or, if
joint funds, either
person(2)
4. Custodian account of a The minor(3)
minor (Uniform Gift to
Minors Act)
5. Adult and minor (joint The adult or, if
account) the minor is only
contributor, the
minor(1)
6. Account in the name of The ward, minor, or
guardian or committee incompetent
for a designated ward, person(4)
minor, or incompetent
person
7.a. The usual revocable The grantor-
savings trust account trustee(1)
(grantor is also
trustee)
b. So-called trust account The actual owner(1)
that is not a legal or
valid trust under State
law
8. Sole proprietorship The owner(5)
account
- -----------------------------------------------
-----
</TABLE>
<TABLE>
<CAPTION>
Give the name and
EMPLOYER
IDENTIFICATION
For this type of account: number of--
------
<S> <C>
9. A valid trust, estate, Legal entity (Do
or pension trust not furnish the
identifying number
of the personal
representative or
trustee unless the
legal entity itself
is not designated
in the account
title.)(1)
10. Corporate account The organization
11. Religious, charitable, The organization
or educational
organization account
12. Partnership account The partnership
held in the name of the
business
13. Association, club, or The organization
other tax-exempt
organization
14. A broker or registered The broker or
nominee nominee
15. Account with the The public entity
Department of
Agriculture in the name
of a public entity
(such as a State or
local government,
school district, or
prison) that receives
agricultural program
payments
</TABLE>
(1) List first and circle the name of the legal trust, estate, or pension
trust. If only one person on a joint account has a social security number,
that person's number must be furnished.
(2) List first and circle the name of the person whose number you furnish.
(3) Circle the minor's name and furnish the minor's social security number.
(4) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(5) Show the name of the owner.
NOTE: If no name is circled when there is more than one name, the number will
be considered to be that of the first name listed.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
Page 2
Obtaining a Number
If you don't have a taxpayer identification number or you don't know your
number, obtain Internal Revenue Service Form SS-5, Application for a Social
Security Number Card, or Form SS-4, Application for Employer Identification
Number, at your local office of the Social Security Administration or the
Internal Revenue Service and apply for a number.
Payees Exempt from Backup Withholding
Payees specifically exempted from backup withholding on ALL payments include
the following:
. A corporation.
. A financial institution.
. An organization exempt from tax under section 501(a), or an individual
retirement plan.
. The United States or any agency or instrumentality thereof.
. A State, the District of Columbia, a possession of the United States, or
any subdivision or instrumentality thereof.
. A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof.
. An international organization, or any agency or instrumentality thereof.
. A registered dealer in securities or commodities registered in the U.S. or
a possession of the U.S.
. A real estate investment trust.
. A common trust fund operated by a bank under section 584(a).
. An exempt charitable remainder trust, or a non-exempt trust described in
section 4947(a)(1).
. An entity registered at all times under the Investment Company Act of
1940.
. A foreign central bank of issue.
. A middleman known in the investment community as a nominee or who is
listed in the most recent publication of the American Society of Corporate
Secretaries, Inc., Nominee List.
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
. Payments to nonresident aliens subject to withholding under section 1441.
. Payments to partnerships not engaged in a trade or business in the U.S.
and which have at least one nonresident partner.
. Payments of patronage dividends where the amount received is not paid in
money.
. Payments made by certain foreign organizations.
. Payments made to a nominee.
Payments of interest not generally subject to backup withholding include the
following:
. Payments of interest on obligations issued by individuals. Note: You may
be subject to backup withholding if this interest is $600 or more and is
paid in the course of the payer's trade or business and you have not
provided your correct taxpayer identification number to the payer.
. Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
. Payments described in section 6049(b)(5) to nonresident aliens.
. Payments on tax-free covenant bonds under section 1451.
. Payments made by certain foreign organizations.
. Payments made to a nominee.
Exempt payees described above should file Form W-9 to avoid possible erroneous
backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER
IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT
TO THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS,
ALSO SIGN AND DATE THE FORM. IF YOU ARE A NONRESIDENT ALIEN OR A FOREIGN
ENTITY NOT SUBJECT TO BACKUP WITHHOLDING, FILE WITH PAYER A COMPLETED INTERNAL
REVENUE FORM W-8 (CERTIFICATE OF FOREIGN STATUS).
Certain payments other than interest dividends, and patronage dividends, that
are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under sections 6041, 6041A(a),
6045, and 6050A.
Privacy Act Notice.--Section 6109 requires most recipients of dividend,
interest, or other payments to give taxpayer identification numbers to payers
who must report the payments to IRS. IRS uses the numbers for identification
purposes. Payers must be given the numbers whether or not recipients are
required to file tax returns. Beginning January 1, 1984, payers must generally
withhold 31% of taxable interest, dividend, and certain other payments to a
payee who does not furnish a taxpayer identification number to a payer.
Certain penalties may also apply.
Penalties
(1) Penalty for Failure to Furnish Taxpayer Identification Number.--If you
fail to furnish your taxpayer identification number to a payer, you are
subject to a penalty of $50 for each such failure unless your failure is due
to reasonable cause and not to willful neglect.
(2) Failure to Report Certain Dividend and Interest Payments.--If you fail to
include any portion of an includible payment for interest, dividends, or
patronage dividends in gross income, such failure will be treated as being due
to negligence and will be subject to a penalty of 5% on any portion of an
under-payment attributable to that failure unless there is clear and
convincing evidence to the contrary.
(3) Civil Penalty for False Information With Respect To Withholding.--If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(4) Criminal Penalty for Falsifying Information.--Falsifying certifications or
affirmations may subject you to criminal penalties including fines and/or
imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE.
<PAGE>
EXHIBIT (a) (5)
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
(Including the Associated Rights to Purchase Series A Junior Participating
Preferred Stock)
of
Shared Medical Systems Corporation
at
$73.00 Net Per Share
by
Autobahn Acquisition Corporation
a wholly owned subsidiary of
Siemens Corporation
an indirect wholly owned subsidiary of
Siemens Aktiengesellschaft
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON WEDNESDAY, JUNE 7, 2000 UNLESS THE OFFER IS EXTENDED.
May 10, 2000
To Brokers, Dealers, Commercial Banks,
Trust Companies And Other Nominees:
We have been appointed by Autobahn Acquisition Corporation, a Delaware
corporation ("Purchaser") and a wholly owned subsidiary of Siemens Corporation
("Parent"), a Delaware corporation and an indirect wholly owned subsidiary of
Siemens Aktiengesellschaft, a corporation formed under the laws of the Federal
Republic of Germany ("Siemens AG"), to act as Dealer Manager in connection with
Purchaser's offer to purchase all outstanding shares of common stock, par value
$0.01 per share (the "Common Stock"), of Shared Medical Systems Corporation, a
Delaware corporation (the "Company"), together with the associated rights to
purchase Series A Junior Participating Preferred Stock (the "Rights") issued
pursuant to the Rights Agreement, dated as of May 1, 1991, as amended (the
"Rights Agreement"), between the Company and ChaseMellon Shareholder Services,
L.L.C. (the Common Stock and the Rights together being referred to herein as
the "Shares"), at $73 per Share, net to the seller in cash (the "Common Stock
Price"), upon the terms and subject to the conditions set forth in the Offer to
Purchase dated May 10, 2000, and in the related Letter of Transmittal (which,
together with any amendments or supplements hereto or thereto, collectively
constitute the "Offer"). Please furnish copies of the enclosed materials to
those of your clients for whose accounts you hold Shares registered in your
name or in the name of your nominee.
The Offer is conditioned upon, among other things, (i) there being validly
tendered and not withdrawn immediately prior to the expiration of the Offer a
number of Shares representing at least a majority of the outstanding Shares and
(ii) any applicable waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, having expired or been terminated. The
Offer is also subject to the other conditions set forth in the Offer to
Purchase. See Sections 1 and 15 of the Offer to Purchase.
1
<PAGE>
The Board of Directors of the Company by unanimous vote of directors present
at a meeting of the Board of Directors held on April 30, 2000, determined that
the terms of the Offer and the Merger are fair to, and in the best interest of,
the stockholders of the Company, approved the merger and the other transactions
contemplated by the Merger and approved the Merger Agreement. The Board of
Directors recommends that the Company's stockholders accept the Offer and
tender their Shares in the Offer.
For your information and for forwarding to your clients for whom you hold
Shares registered in your name or in the name of your nominee, we are enclosing
the following documents:
1. Offer to Purchase dated May 10, 2000;
2. Letter of Transmittal for your use in accepting the Offer and
tendering Shares and for the information of your clients;
3. Notice of Guaranteed Delivery to be used to accept the Offer if
certificates for the Shares and all other required documents cannot be
delivered to ChaseMellon Shareholder Services, L.L.C. (the "Depositary"),
or if the procedures for book-entry transfer cannot be completed, by the
Expiration Date, or the expiration of any subsequent offering period (as
defined in the Offer to Purchase);
4. A printed form of letter which may be sent to your clients for whose
accounts you hold Shares registered in your name or in the name of your
nominee, with space provided for obtaining such clients' instructions with
regard to the Offer;
5. A letter to stockholders of the Company from Marvin S. Cadwell,
President and Chief Executive Officer of the Company, together with a
Solicitation/Recommendation Statement on Schedule 14D-9 dated May 10, 2000,
which has been filed by the Company with the Securities and Exchange
Commission which includes the recommendation of the Board of Directors of
the Company that stockholders accept the Offer and tender their Shares to
Purchaser pursuant to the Offer;
6. Guidelines of the Internal Revenue Service for Certification of
Taxpayer Identification Number on Substitute Form W-9; and
7. A return envelope addressed to the Depositary.
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any such extension or
amendment), Purchaser will accept for payment and pay for any Shares which are
validly tendered prior to the Expiration Date, or any Subsequent Offering
Period, and not theretofore properly withdrawn, when permitted, when, as and if
Purchaser gives oral or written notice to the Depositary of Purchaser's
acceptance of such Shares for payment pursuant to the Offer. Payment for any
Shares purchased pursuant to the Offer will in all cases be made only after
timely receipt by the Depositary of (i) certificates for the Shares, or timely
confirmation of a book-entry transfer of such Shares into the Depositary's
account at The Depository Trust Company, pursuant to the procedures described
in Section 3 of the Offer to Purchase, (ii) a properly completed and duly
executed Letter of Transmittal (or a properly completed and manually signed
facsimile thereof) or an Agent's Message (as defined in the Offer to Purchase)
in connection with a book-entry transfer and (iii) all other documents required
by the Letter of Transmittal.
Purchaser will not pay any fees or commissions to any broker or dealer or
other person (other than the Depositary, the Information Agent and the Dealer
Manager as described in the Offer to Purchase) for soliciting tenders of the
Shares pursuant to the Offer. Purchaser will, however, upon request, reimburse
brokers, dealers, commercial banks and trust companies for customary mailing
and handling costs incurred by them in forwarding the enclosed materials to
their customers.
Purchaser will pay or cause to be paid all stock transfer taxes applicable
to its purchase of the Shares pursuant to the Offer, except as otherwise
provided in Instruction 6 of the Letter of Transmittal.
We urge you to contact your clients as promptly as possible. Please note
that the Offer and withdrawal rights expire at 12:00 Midnight, New York City
time, on June 7, 2000 unless the Offer is extended.
2
<PAGE>
In order to take advantage of the Offer, a duly executed and properly
completed Letter of Transmittal (or a manually signed facsimile thereof), with
any required signature guarantees, or an Agent's Message in connection with a
book-entry transfer of the Shares, and any other required documents, should be
sent to the Depositary, and certificates representing the tendered Shares
should be delivered or tendered by book-entry transfer, all in accordance with
the Instructions set forth in the Letter of Transmittal and in the Offer to
Purchase.
If holders of the Shares wish to tender, but it is impracticable for them to
forward their certificates or other required documents or to complete the
procedures for delivery by book-entry transfer prior to the expiration of the
Offer, a tender may be effected by following the guaranteed delivery procedures
specified in Section 3 of the Offer to Purchase.
Any inquiries you may have with respect to the Offer should be addressed to,
and additional copies of the enclosed materials may be obtained from, the
Information Agent or the undersigned at the addresses and telephone numbers set
forth on the back cover of the Offer to Purchase.
Very truly yours,
Credit Suisse First Boston
Corporation
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU THE
AGENT OF SIEMENS AG, PURCHASER, MERGER SUB, THE COMPANY, THE DEALER MANAGER,
THE INFORMATION AGENT, THE DEPOSITARY, OR ANY AFFILIATE OF ANY OF THE
FOREGOING, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY
STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE
DOCUMENTS ENCLOSED HEREWITH AND THE STATEMENTS CONTAINED THEREIN.
3
<PAGE>
EXHIBIT (a) (6)
Offer to Purchase for Cash
All Outstanding Shares of Common Stock
(Including the Associated Rights to Purchase Series A Junior Participating
Preferred Stock)
of
Shared Medical Systems Corporation
at
$73.00 Net Per Share
by
Autobahn Acquisition Corporation
a wholly owned subsidiary of
Siemens Corporation
an indirect wholly owned subsidiary of
Siemens Aktiengesellschaft
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON WEDNESDAY, JUNE 7, 2000 UNLESS THE OFFER IS EXTENDED.
May 10, 2000
To Our Clients:
Enclosed for your consideration are the Offer to Purchase dated May 10, 2000
(the "Offer to Purchase") and the related Letter of Transmittal (which,
together with any amendments or supplements thereto, collectively constitute
the "Offer") in connection with the offer by Autobahn Acquisition Corporation,
a Delaware corporation ("Purchaser") and a wholly owned subsidiary of Siemens
Corporation ("Parent"), a Delaware corporation and an indirect wholly owned
subsidiary of Siemens Aktiengesellschaft, a corporation formed under the laws
of the Federal Republic of Germany ("Siemens AG"), to purchase all outstanding
shares of common stock, par value $0.01 per share (the "Common Stock"), of
Shared Medical Systems Corporation, a Delaware corporation (the "Company"),
together with the associated rights to purchase Series A Junior Participating
Preferred Stock (the "Rights") issued pursuant to the Rights Agreement, dated
as of May 1, 1991, as amended (the "Rights Agreement"), between the Company and
ChaseMellon Shareholder Services, L.L.C. (the Common Stock and the Rights
together being referred to herein as the "Shares"), at $73 per Share, net to
the seller in cash (the "Common Stock Price"), upon the terms and subject to
the conditions set forth in the Offer to Purchase.
We are the holder of record of the Shares held for your account. A tender of
such Shares can be made only by us as the holder of record and pursuant to your
instructions. The enclosed Letter of Transmittal is furnished to you for your
information only and cannot be used by you to tender Shares held by us for your
account.
We request instructions as to whether you wish us to tender any or all of
the Shares held by us for your account, upon the terms and subject to the
conditions set forth in the Offer to Purchase. Your attention is invited to the
following:
1. The tender price is $73.00 per Share, net to you in cash without
interest.
2. The Offer is being made for all outstanding Shares.
1
<PAGE>
3. The Board of Directors of the Company, by unanimous vote of the
directors present at a meeting of the Board of Directors held on April 30,
2000, determined that the terms of the Offer and the Merger are fair to,
and in the best interest of, the stockholders of the Company, approved the
Merger and the other transactions contemplated by the Merger Agreement and
approved the Merger Agreement. The Board of Directors recommends that the
Company's stockholders accept the Offer and tender their Shares in the
Offer.
4. The Offer and withdrawal rights expire at 12:00 Midnight, New York
City time, on June 7, 2000, unless the Offer is extended.
5. The Offer is conditioned upon, among other things, (i) there being
validly tendered and not withdrawn immediately prior to the expiration of
the Offer a number of Shares representing at least a majority of the
outstanding Shares and (ii) any applicable waiting period under the Hart-
Scott-Rodino Antitrust Improvements Act of 1976, as amended, having expired
or been terminated. The Offer is also subject to the other conditions set
forth in the Offer to Purchase. See Sections 1 and 15 of the Offer to
Purchase.
6. Any stock transfer taxes applicable to the sale of the Shares to
Purchaser pursuant to the Offer will be paid by Purchaser, except as
otherwise provided in Instruction 6 of the Letter of Transmittal.
The Offer is being made solely by the Offer to Purchase and the related
Letter of Transmittal and is being made to all holders of the Shares. Purchaser
is not aware of any state where the making of the Offer is prohibited by
administrative or judicial action pursuant to any valid state statute. If
Purchaser becomes aware of any valid state statute prohibiting the making of
the Offer or the acceptance of the Shares pursuant thereto, Purchaser shall
make a good faith effort to comply with such statute or seek to have such
statute declared inapplicable to the Offer. If, after such good faith effort,
Purchaser cannot comply with such state statute, the Offer will not be made to
(nor will tenders be accepted from or on behalf of) holders of the Shares in
such state. In those jurisdictions where the Shares, blue sky or other laws
require the Offer to be made by a licensed broker or dealer, the Offer is being
made on behalf of Purchaser by the Dealer Manager or one or more registered
brokers or dealers licensed under the laws of such jurisdictions.
If you wish to have us tender any or all of your Shares, please so instruct
us by completing, executing and returning to us the instruction form set forth
on the reverse side of this letter. An envelope to return your instructions to
us is enclosed. If you authorize the tender of your Shares, all such Shares
will be tendered unless otherwise specified on the reverse side of this letter.
Your instructions should be forwarded to us in ample time to permit us to
submit a tender on your behalf prior to the expiration of the Offer.
2
<PAGE>
INSTRUCTIONS WITH RESPECT TO THE
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
Shared Medical Systems Corporation
(INCLUDING THE ASSOCIATED RIGHTS TO PURCHASE SERIES A
JUNIOR PARTICIPATING PREFERRED STOCK)
by
Autobahn Acquisition Corporation
a wholly owned subsidiary of
Siemens Corporation
an indirect wholly owned subsidiary of
Siemens Aktiengesellschaft
The undersigned acknowledge(s) receipt of your letter and the enclosed Offer
to Purchase dated May 10, 2000 and the related Letter of Transmittal in
connection with the Offer by Autobahn Acquisition Corporation, a Delaware
corporation and a wholly owned subsidiary of Siemens Corporation ("Parent"), a
Delaware corporation and an indirect wholly owned subsidiary of Siemens
Aktiengesellschaft, a corporation formed under the laws of the Federal Republic
of Germany ("Siemens AG"), to purchase all outstanding shares of common stock,
par value $0.01 per share (the "Common Stock"), of Shared Medical Systems
Corporation, a Delaware corporation (the "Company"), together with the
associated rights to purchase Series A Junior Participating Preferred Stock
(the "Rights") issued pursuant to the Rights Agreement, dated as of May 1,
1991, as amended (the "Rights Agreement"), between the Company and ChaseMellon
Shareholder Services, L.L.C. (the Common Stock and the Rights together being
referred to herein as the "Shares"), at $73 per Share, net to the seller in
cash (the "Common Stock Price"), upon the terms and subject to the conditions
set forth in the Offer to Purchase, dated May 10, 2000 and in the related
Letter of Transmittal (which, together with any amendments or supplements
hereto or thereto, collectively constitute the "Offer").
This will instruct you to tender the number of Shares indicated below (or if
no number is indicated below, all Shares) held by you for the account of the
undersigned, upon the terms and subject to the conditions set forth in the
Offer.
Number of Shares tendered:*__________________________________________________
Certificate Nos. (if available): _______________________________________________
Check the box if Shares will be tendered by book-entry transfer: [_]
Account No: ____________________________________________________________________
Dated: __________________________________________________________________ , 2000
SIGN HERE
Signature(s): __________________________________________________________________
Please type or print address(es): ______________________________________________
Area Code and Telephone Number: ________________________________________________
Taxpayer Identification or Social Security Number(s): __________________________
- --------
* Unless otherwise indicated, it will be assumed that all Shares held by us for
your account are to be tendered.
3
<PAGE>
EXHIBIT (a)(7)
This announcement is neither an offer to purchase nor a solicitation of an offer
to sell Shares (as defined below). The Offer (as defined below) is made
only by the Offer to Purchase, dated May 10, 2000, and the related Letter of
Transmittal and any amendments or supplements thereto, and is
being made to all holders of Shares. The Offer is not being made to (nor will
tenders be accepted from or on behalf of) holders of Shares in
any jurisdiction in which the making of the Offer or the acceptance thereof
would not be in compliance with the securities, blue sky or other
laws of such jurisdiction. However, the Purchaser (as defined below) may, in its
discretion, take such action as it may deem necessary
to make the Offer in any jurisdiction and extend the Offer to holders of Shares
in such jurisdiction. In those jurisdictions where
securities, blue sky or other laws require the Offer to be made by a licensed
broker or dealer, the Offer shall be deemed to be
made on behalf of the Purchaser by Credit Suisse First Boston Corporation
("Credit Suisse First Boston" or the "Dealer
Manager") or one or more registered brokers or dealers licensed under the laws
of such jurisdiction.
Notice of Offer to Purchase for Cash
All of the Outstanding Shares of Common Stock
(and the accompanying Rights (as defined below))
of
Shared Medical Systems Corporation
at
$73.00 Net Per Share
by
Autobahn Acquisition Corporation
a wholly owned subsidiary of
Siemens Corporation
an indirect wholly owned subsidiary of
Siemens Aktiengesellschaft
Autobahn Acquisition Corporation, a Delaware corporation (the "Purchaser") and a
wholly owned subsidiary of Siemens Corporation, a Delaware corporation
("Parent"), an indirect wholly owned subsidiary of Siemens Aktiengesellschaft, a
corporation formed under the laws of the Federal Republic of Germany ("Siemens
AG") is offering to purchase all of the outstanding shares of common stock, par
value $0.01 per share (together with the associated rights to purchase Series A
Junior Participating Preferred Stock (the "Rights"), the "Shares"), of Shared
Medical Systems Corporation, a Delaware corporation (the "Company"), at a price
of $73.00 per Share, net to the seller in cash (less any required withholding
taxes), without interest thereon, on the terms and subject to the conditions set
forth in the Offer to Purchase, dated May 10, 2000 (the "Offer to Purchase"),
and in the related Letter of Transmittal (which, together with any amendments or
supplements thereto, collectively constitute the "Offer"). Tendering
stockholders who have Shares registered in their names and who tender directly
to ChaseMellon Shareholder Services, L.L.C. (the "Depositary") will not be
charged brokerage fees or commissions or, subject to Instruction 6 of the Letter
of Transmittal, transfer taxes on the purchase of Shares pursuant to the Offer.
Stockholders who hold their Shares through a broker, dealer, commercial bank,
trust company or other nominee should consult such institution as to whether it
charges any service fees. Purchaser will pay all charges and expenses of the
Dealer Manager, the Depositary and Georgeson Shareholder Communications Inc.,
which is acting as the information
<PAGE>
agent (the "Information Agent"), incurred in connection with the Offer.
Following the consummation of the Offer, the Purchaser intends to effect the
Merger described below.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON WEDNESDAY, JUNE 7, 2000, UNLESS THE OFFER IS EXTENDED.
The Offer is conditioned upon, among other things, (1) there being validly
tendered prior to the expiration date of the Offer and not withdrawn in
accordance with the terms of the Offer, a number of Shares representing at least
a majority of the total number of outstanding Shares (the "Minimum Condition")
and (2) the expiration or termination of the applicable waiting periods under
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. The Offer
is also subject to the satisfaction of certain other conditions. See Section 13
of the Offer to Purchase.
The Offer is being made pursuant to the Agreement and Plan of Merger, dated as
of April 30, 2000 (the "Merger Agreement"), by and among Parent, the Purchaser
and the Company. The purpose of the Offer is for Siemens AG, indirectly through
the Purchaser, to acquire a majority voting interest in the Company as the first
step in a business combination. The Merger Agreement provides that, among other
things, the Purchaser will make the Offer and that simultaneously with or as
soon as practicable after expiration of the Offer, receipt of any required
approval by the Company's stockholders of the Merger Agreement and the
satisfaction or waiver of the other conditions set forth in the Merger
Agreement, the Purchaser will be merged with and into the Company in accordance
with relevant provisions of the General Corporation Law of the State of Delaware
(the "DGCL"), with the Company continuing as the surviving corporation (the
"Merger"). At the effective time of the Merger (the "Effective Time"), each then
outstanding Share not owned by Parent or any subsidiary of Parent or held in
treasury by the Company or any subsidiary of the Company (other than Shares held
by stockholders of the Company who properly exercise dissenters' rights under
the applicable provisions of the DGCL) will be converted into the right to
receive $73.00 in cash or any higher price which may be paid for Shares pursuant
to the Offer, without interest (the "Merger Consideration").
The Board of Directors of the Company, by unanimous vote of the directors
present at a meeting of the Board of Directors held on April 30, 2000,
determined that the terms of the Offer and the Merger are fair to, and in the
best interest of, the stockholders of the Company, approved the Merger and the
other transactions contemplated by the Merger and approved the Merger Agreement.
The Board of Directors recommends that the Company's stockholders accept the
Offer and tender their Shares in the Offer.
For purposes of the Offer, the Purchaser will be deemed to have accepted for
payment, and thereby purchased, Shares validly tendered and not properly
withdrawn as, if and when the Purchaser gives oral or written notice to the
Depositary of the Purchaser's acceptance for payment of such Shares pursuant to
the Offer. On the terms and subject to the conditions of the Offer, payment for
Shares accepted for payment pursuant to the Offer will be made by deposit of the
purchase price with the Depositary, which will act as agent for tendering
stockholders for the purpose of receiving payment from the Purchaser and
transmitting such payment to tendering stockholders. Under no circumstances will
interest on the purchase price of Shares be paid by the Purchaser because of any
extension of the Offer or delay in making any payment. In all cases, payment for
Shares tendered and accepted for payment pursuant to the Offer will be made only
after timely receipt by the Depositary of (i) certificates for such Shares or
timely confirmation of a book-entry transfer of such Shares into the
Depositary's account at the Book-Entry Transfer Facility (as defined in the
Offer to Purchase), pursuant to the procedures set forth in the Offer to
Purchase, (ii) a properly completed and duly executed Letter of Transmittal (or
manually signed facsimile thereof) with any
<PAGE>
required signature guarantees or, in the case of a book-entry transfer, an
Agent's Message (as defined in the Offer to Purchase), and (iii) any other
documents required by the Letter of Transmittal.
If any of the conditions set forth in the Offer to Purchase that relate to the
Purchaser's obligations to purchase the Shares are not satisfied by 12:00
Midnight, New York City time, on Wednesday, June 7, 2000 (or any other time then
set as the Expiration Date), the Purchaser may, in its sole discretion, subject
to the Merger Agreement as described below, elect to, (i) extend the Offer and,
subject to applicable withdrawal rights, retain all tendered Shares until the
expiration of the Offer, as extended, (ii) subject to complying with applicable
rules and regulations of the Securities and Exchange Commission, accept for
payment all Shares so tendered and not extend the Offer, or (iii) terminate the
Offer and not accept for payment any Shares and return all tendered Shares to
tendering stockholders. The term "Expiration Date" means 12:00 Midnight, New
York City time, on Wednesday, June 7, 2000, unless the Purchaser shall have
extended the period of time for which the Offer is open, in which event the term
"Expiration Date" shall mean the latest time and date at which the Offer, as so
extended by the Purchaser shall expire. The Purchaser does not currently intend
to make a subsequent offering period available following the Expiration Date
(the "Subsequent Offering Period") pursuant to Rule 14d-11 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), although it reserves the
right to do so in its sole discretion.
Subject to the terms of the Merger Agreement and applicable rules and
regulations of the SEC, the Purchaser expressly reserves the right, in its sole
discretion, at any time or from time to time, to extend the offering period by
giving oral or written notice of such extension to the Depositary. During any
such extension of the Offering Period, all Shares previously tendered and not
withdrawn will remain subject to the Offer, subject to the right of a tendering
stockholder to withdraw such stockholder's Shares. Subject to the applicable
regulations of the SEC, the Purchaser also expressly reserves the right, in its
sole discretion, at any time or from time to time, (i) to delay acceptance for
payment of or payment for, any tendered Shares not theretofore accepted for
payment or paid for, (ii) subject to limitations provided in the Merger
Agreement, to terminate or amend the Offer on the failure of any of the
conditions specified therein and (iii) to waive any condition (other than the
Minimum Condition described herein) and to modify or change any other term and
condition of the Offer (subject to the consent of the Company in certain
instances), by giving oral or written notice of such delay, termination,
amendment, waiver, modification or change to the Depositary. The Purchaser will
make a public announcement of any such delay, termination, amendment, waiver,
modification or change. Unless previously approved by the Company in writing, no
term and condition of the Offer may be modified or changed which decreases the
price per Share payable in the Offer, changes the form of consideration payable
in the Offer (other than by adding consideration), limits the number of Shares
sought in the Offer, changes the material conditions to the Offer in a manner
adverse to the Company or its stockholders or imposes additional material
conditions to the Offer. If the Purchaser elects to provide a Subsequent
Offering Period, it expressly reserves the right, in its sole discretion, at any
time or from time to time, to extend the Subsequent Offering Period, not beyond
a total of 20 business days, by giving oral or written notice of such extension
to the Depositary. On the terms and subject to the conditions of the Offer,
including but not limited to the Offer Conditions, promptly after expiration of
the Offer, the Purchaser will accept for payment and pay for all Shares validly
tendered during the offering period and not withdrawn pursuant to the Offer that
the Purchaser is permitted to accept and pay for under applicable law. The
Purchaser will immediately accept for payment and promptly pay for all Shares as
they are tendered in any Subsequent Offering Period. Shares tendered in any
Subsequent Offering Period and accepted for payment may not be withdrawn. The
Purchaser
<PAGE>
confirms that its reservation of the right to delay payment for Shares
which it has accepted for payment is limited by Rule 14e-1(c) under the Exchange
Act, which requires that a tender offeror pay the consideration offered or
return the tendered securities promptly after the termination or withdrawal of a
tender offer.
Any decision to provide a Subsequent Offering Period will be announced at least
five business days prior to the expiration of the Offering Period and the
Purchaser will announce the approximate number and percentage of Shares
deposited as of the expiration of the Offering Period no later than 9:00 a.m.,
New York City time, on the next business day following the expiration of the
Offering Period, and such securities will be immediately accepted and promptly
paid for. All Offer Conditions must be satisfied or waived prior to the
commencement of any Subsequent Offering Period.
Shares tendered pursuant to the Offer may be withdrawn at any time prior to the
Expiration Date and, unless theretofore accepted for payment pursuant to the
Offer, also may be withdrawn at any time after Saturday, July 8, 2000. Except as
otherwise provided in Section 4 of the Offer to Purchase, tenders of Shares made
pursuant to the Offer are irrevocable. For a withdrawal of Shares tendered
pursuant to the Offer to be effective, a written, telegraphic or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
one of its addresses set forth on the back cover of the Offer to Purchase. Any
notice of withdrawal must specify the name of the person who tendered the Shares
to be withdrawn, the number of Shares to be withdrawn and the name in which the
certificates representing such Shares are registered if different from that of
the person who tendered the Shares. If certificates for Shares to be withdrawn
have been delivered or otherwise identified to the Depositary, the name of the
registered holder and the serial numbers of the particular certificates
evidencing the Shares to be withdrawn must also be furnished to the Depositary
as aforesaid prior to the physical release of such certificates. All questions
as to the form and validity (including time of receipt) of any notice of
withdrawal will be determined by the Purchaser, in its sole discretion, which
determination shall be final and binding. None of the Purchaser, Parent, the
Dealer Manager, the Depositary, the Information Agent, or any other person will
be under any duty to give notification of any defects or irregularities in any
notice of withdrawal or incur any liability for failure to give such
notification. Withdrawals of tender for Shares may not be rescinded, and any
Shares properly withdrawn will be deemed not to have been validly tendered for
purposes of the Offer. However, withdrawn Shares may be retendered by following
one of the procedures described in Section 3 of the Offer to Purchase at any
time prior to the Expiration Date.
Sales of Shares pursuant to the Offer and the exchange of Shares for cash
pursuant to the Merger will be taxable transactions for Federal income tax
purposes and may also be taxable under applicable state, local and other tax
laws. For Federal income tax purposes, a stockholder whose Shares are purchased
pursuant to the Offer or who receives cash as a result of the Merger will
realize gain or loss equal to the difference between the adjusted basis of the
Shares sold or exchanged and the amount of cash received therefor. Such gain or
loss will be capital gain or loss if the Shares are held as capital assets by
the stockholder. Long-term capital gain of a non-corporate stockholder is
generally subject to a maximum tax rate of 20% in respect of property held for
more than one year. The income tax discussion set forth above is included for
general information only and may not be applicable to stockholders in special
situations such as stockholders who received their Shares upon the exercise of
stock options or otherwise as compensation and stockholders who are not United
States persons. Stockholders should consult their own tax advisors with respect
to the specific tax consequences to them of the Offer and the Merger, including
the application and effect of federal, state, local, foreign or other tax laws.
<PAGE>
The information required to be disclosed by Paragraph (d)(1) of Rule 14d-6 of
the General Rules and Regulations under the Exchange Act, is contained in the
Offer to Purchase and is incorporated herein by reference.
The Company has provided to the Purchaser its list of stockholders and security
position listing for the purpose of disseminating the Offer to holders of
Shares. The Offer to Purchase, the related Letter of Transmittal and other
related materials will be mailed to record holders of Shares and will be mailed
to brokers, dealers, commercial banks, trust companies and similar persons whose
names, or the names of whose nominees, appear on the stockholder list or, if
applicable, who are listed as participants in a clearing agency's security
position listing, for subsequent transmittal to beneficial owners of Shares.
The Offer to Purchase and the related Letter of Transmittal contain important
information that should be read carefully before any decision is made with
respect to the Offer.
Questions and requests for assistance and copies of the Offer to Purchase, the
Letter of Transmittal and all other tender offer materials may be directed to
the Information Agent or the Dealer Manager at their respective addresses and
telephone numbers set forth below, and will be furnished promptly at the
Purchaser's expense. The Purchaser will not pay any fees or commissions to any
broker or dealer or any other person (other than the Dealer Manager and the
Information Agent) for soliciting tenders of Shares pursuant to the Offer.
The Information Agent for the Offer is
Georgeson logo
17 State Street, 10th Floor
New York, New York 10004
Call Collect: (212) 440-9800
Call Toll Free: (800) 223-2064
The Dealer Manager for the Offer is:
Credit Suisse/First Boston logo
Eleven Madison Avenue
New York, New York 10010-3629
Call Toll Free: (800) 646-4543
May 10, 2000
<PAGE>
EXHIBIT (d)(1)
Execution Copy
AGREEMENT AND PLAN OF MERGER
Dated as of April 30, 2000
By and among
Siemens Corporation,
Autobahn Acquisition Corporation
and
Shared Medical Systems Corporation
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I THE OFFER............................................. 2
SECTION 1.1 The Offer............................................. 2
SECTION 1.2 Company Actions....................................... 3
SECTION 1.3 Stockholder Lists..................................... 4
SECTION 1.4 Directors; Section 14(f).............................. 5
ARTICLE II THE MERGER............................................ 6
SECTION 2.1 The Merger............................................ 6
SECTION 2.2 Effective Time of the Merger.......................... 6
SECTION 2.3 Effects of the Merger................................. 7
SECTION 2.4 Closing............................................... 7
ARTICLE III THE SURVIVING AND PARENT CORPORATIONS................. 7
SECTION 3.1 Certificate of Incorporation.......................... 7
SECTION 3.2 Bylaws................................................ 7
SECTION 3.3 Directors............................................. 7
SECTION 3.4 Officers.............................................. 7
ARTICLE IV EFFECT OF THE MERGER ON THE STOCK OF THE
CONSTITUENT CORPORATIONS; SURRENDER OF
CERTIFICATES.......................................... 8
SECTION 4.1 Conversion of Shares in the Merger.................... 8
SECTION 4.2 Conversion of Subsidiary Shares....................... 8
SECTION 4.3 Surrender of Certificates............................. 8
SECTION 4.4 Tax Withholding....................................... 9
SECTION 4.5 Closing of the Company's Transfer Books............... 10
SECTION 4.6 Option Plans; Restricted Stock........................ 10
SECTION 4.7 Dissenting Shares..................................... 11
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE COMPANY......... 12
SECTION 5.1 Organization and Qualification........................ 12
SECTION 5.2 Capitalization........................................ 12
SECTION 5.3 Subsidiaries.......................................... 13
SECTION 5.4 Authority; Non-Contravention; Approvals............... 14
SECTION 5.5 Reports and Financial Statements...................... 15
SECTION 5.6 Absence of Undisclosed Liabilities.................... 16
SECTION 5.7 Absence of Certain Changes or Events.................. 17
SECTION 5.8 Litigation............................................ 17
SECTION 5.9 Proxy Statement....................................... 17
SECTION 5.10 Offer Documents; Schedule 14D-9 ...................... 17
SECTION 5.11 No Violation of Law .................................. 18
SECTION 5.12 Compliance with Agreements ........................... 18
SECTION 5.13 Taxes ................................................ 19
SECTION 5.14 Employee Benefit Plans; ERISA ........................ 20
i
<PAGE>
TABLE OF CONTENTS
Page
SECTION 5.15 Labor Controversies .................................. 21
SECTION 5.16 Environmental Matters ................................ 22
SECTION 5.17 Title to Assets ...................................... 22
SECTION 5.18 Intellectual Property; Software ...................... 23
SECTION 5.19 Brokers and Finders .................................. 24
SECTION 5.20 Opinion of Financial Advisor ......................... 25
SECTION 5.21 Section 203 of the DGCL .............................. 25
SECTION 5.22 Affiliate Transactions ............................... 25
SECTION 5.23 Insurance ............................................ 25
SECTION 5.24 Company Rights Agreement ............................. 25
SECTION 5.25 Contracts ............................................ 25
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF PARENT
AND SUBSIDIARY........................................ 27
SECTION 6.1 Organization and Qualification........................ 27
SECTION 6.2 Authority; Non-Contravention; Approvals............... 27
SECTION 6.3 Proxy Statement....................................... 28
SECTION 6.4 Offer Documents; Schedule 14D-9....................... 29
SECTION 6.5 Financing............................................. 29
SECTION 6.6 Subsidiary............................................ 29
ARTICLE VII COVENANTS OF THE PARTIES.............................. 29
SECTION 7.1 Mutual Covenants...................................... 30
SECTION 7.2 Covenants of the Company.............................. 32
ARTICLE VIII ADDITIONAL AGREEMENTS OF THE PARTIES.................. 35
SECTION 8.1 Access to Information................................. 35
SECTION 8.2 Acquisition Transactions.............................. 36
SECTION 8.3 Expenses and Fees..................................... 37
SECTION 8.4 Directors' and Officers' Indemnification.............. 37
SECTION 8.5 Employee Benefits..................................... 39
SECTION 8.6 Litigation............................................ 41
ARTICLE IX CONDITIONS............................................ 41
SECTION 9.1 Conditions to Each Party's Obligation to Effect the Me 41
SECTION 9.2 Conditions to Obligations of Parent and Subsidiary to
Merger................................................ 41
ARTICLE X TERMINATION, AMENDMENT AND WAIVER..................... 42
SECTION 10.1 Termination .......................................... 42
SECTION 10.2 Effect of Termination ................................ 43
SECTION 10.3 Amendment ............................................ 43
SECTION 10.4 Extension; Waiver .................................... 44
ii
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE XI GENERAL PROVISIONS.................................... 44
SECTION 11.1 Non-Survival of Representations and Warranties ....... 44
SECTION 11.2 Notices .............................................. 44
SECTION 11.3 Governing Law ........................................ 45
SECTION 11.4 Parties Agreement .................................... 45
SECTION 11.5 Interpretation ....................................... 46
SECTION 11.6 Severability ......................................... 46
SECTION 11.7 Assignment ........................................... 46
SECTION 11.8 Enforcement .......................................... 46
SECTION 11.9 Submission to Jurisdiction; Waivers .................. 47
SECTION 11.10 Counterparts ........................................ 47
SECTION 11.11 Entire Agreement .................................... 47
iii
<PAGE>
AGREEMENT AND PLAN OF MERGER
----------------------------
THIS AGREEMENT AND PLAN OF MERGER, dated as of April 30, 2000 (this
"Agreement"), is made and entered into by and among Siemens Corporation, a
Delaware corporation ("Parent"), Autobahn Acquisition Corporation, a Delaware
corporation and a wholly-owned subsidiary of Parent ("Subsidiary"), and Shared
Medical Systems Corporation, a Delaware corporation (the "Company").
BACKGROUND
----------
WHEREAS, the Boards of Directors of Parent, Subsidiary and the Company
have approved the acquisition of the Company by Parent upon the terms and
subject to the conditions set forth in this Agreement;
WHEREAS, in furtherance of such acquisition, Parent, Subsidiary and
the Company have agreed that, upon the terms and subject to the conditions set
forth in this Agreement, Subsidiary shall commence an offer (as amended or
supplemented in accordance with this Agreement, the "Offer") to purchase for
cash all of the issued and outstanding shares of common stock, par value $.01
per share, of the Company (the "Company Common Stock," which term as used herein
shall include the associated Company Rights (as defined in Section 5.2(a)
hereof), unless the context otherwise requires), at a price per share of $73.00,
net to the seller in cash (the "Common Stock Price");
WHEREAS, the Boards of Directors of Parent, Subsidiary and the Company
have each approved the merger of Subsidiary with and into the Company (the
"Merger"), upon the terms and subject to the conditions set forth in this
Agreement, whereby each of the shares of Company Common Stock, other than the
shares of Company Common Stock owned directly or indirectly by Parent,
Subsidiary or the Company and Dissenting Shares (as defined in Section 4.7
hereof), will be converted into the right to receive the Common Stock Price;
WHEREAS, the Board of Directors of the Company has resolved to
recommend that the holders of shares of Company Common Stock tender their shares
pursuant to the Offer and approve and adopt this Agreement and the Merger upon
the terms and subject to the conditions set forth in this Agreement; and
WHEREAS, Parent, Subsidiary and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Offer and the Merger;
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements contained herein, the
parties hereto, intending to be legally bound, agree as follows:
1
<PAGE>
ARTICLE I
THE OFFER
SECTION 1.1 The Offer.
---------
(a) Subject to the provisions of this Agreement, and provided that this
Agreement shall not have been terminated in accordance with Section 10.1 and so
long as none of the events or circumstances set forth in Annex A hereto shall
have occurred and be continuing, not later than the seventh business day from
the date of public announcement of the execution of this Agreement, Parent shall
cause Subsidiary to commence (within the meaning of Rule 14d-2 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act")), the Offer at
a price equal to the Common Stock Price for each share of Company Common Stock.
The obligation of Subsidiary to consummate the Offer, to accept for payment and
to pay for any shares of Company Common Stock tendered pursuant to the Offer
shall be subject solely to those conditions set forth in Annex A. It is agreed
that the conditions to the Offer set forth on Annex A are for the benefit of
Subsidiary and may be asserted by Subsidiary regardless of the circumstances
giving rise to any such condition, and Subsidiary expressly reserves the right,
in its sole discretion, to waive any such condition; provided that, without the
prior written consent of the Company, Subsidiary shall not waive the Minimum
Condition (as defined in Annex A) or the condition set forth in paragraph (f) of
Annex A. The initial expiration date of the Offer shall be the 20th business day
following the commencement of the Offer (within the meaning of Rule 14d-2 under
the Exchange Act).
(b) Subsidiary expressly reserves the right, in its sole discretion, to
modify and make changes to the terms and conditions of the Offer, provided, that
without the prior written consent of the Company, no modification or change may
be made which (i) decreases the Common Stock Price (except as permitted by this
Agreement), (ii) changes the form of consideration payable in the Offer (other
than by adding consideration), (iii) changes the Minimum Condition, (iv) limits
the number of shares of Company Common Stock sought pursuant to the Offer, (v)
changes the material conditions to the Offer in a manner adverse to the Company
or its stockholders or option holders, or (vi) imposes additional material
conditions to the Offer. Notwithstanding the foregoing, Subsidiary may (but
shall not be required under this Agreement or otherwise to), without the consent
of the Company, (i) extend the Offer on one or more occasions for such period as
may be determined by Subsidiary in its sole discretion (each such extension
period not to exceed 20 business days at a time), if at the then-scheduled
expiration date of the Offer any of the conditions to Subsidiary's obligations
to accept for payment and pay for shares of Company Common Stock shall not be
satisfied or waived, (ii) extend the Offer for any period required by any rule,
regulation, interpretation or position of the Securities and Exchange Commission
(the "SEC") or the staff thereof applicable to the Offer, and (iii) extend the
Offer on one or more occasions for an aggregate period of not more than 20
business days if the Minimum Condition has been satisfied but less than 90% of
the Company Common Stock has been validly tendered and not properly withdrawn.
On the terms and subject to the conditions of the Offer and this Agreement,
promptly after expiration of the Offer, Subsidiary shall accept for payment and
pay for, and Parent shall cause Subsidiary to accept for payment and pay for,
all shares of Company Common Stock validly tendered and not withdrawn
2
<PAGE>
pursuant to the Offer that Subsidiary is permitted to accept and pay for under
applicable law. Notwithstanding the foregoing, Subsidiary may in its sole
discretion elect to provide for a subsequent offering period pursuant to, and on
the terms required by, Rule 14d-11 under the Exchange Act.
(c) On the date of commencement of the Offer, Parent and Subsidiary shall
file with the SEC with respect to the Offer a Tender Offer Statement on Schedule
TO (together with all amendments and supplements thereto and including the
exhibits thereto, the "Schedule TO") with respect to the Offer which will comply
in all material respects with the provisions of applicable federal securities
laws, and will contain the offer to purchase relating to the Offer and forms of
related letters of transmittal and summary advertisement (such Schedule TO and
the documents included therein pursuant to which the Offer shall be made,
together with any supplements or amendments thereto and including the exhibits
thereto, are referred to herein collectively as the "Offer Documents"). Parent
shall deliver copies of the proposed forms of the Offer Documents to the Company
as far in advance of the commencement of the Offer as is reasonably practicable
under the circumstances for review and comment by the Company and its counsel.
The Company and its counsel shall be given a reasonable opportunity to review
any amendments and supplements to the Offer Documents prior to their filing with
the SEC or dissemination to the Company's stockholders. Parent shall provide the
Company and its counsel in writing any comments that Subsidiary, Parent or their
counsel may receive from the SEC or its staff with respect to the Offer
Documents promptly after the receipt thereof. Each of the Company, Parent and
Subsidiary shall promptly correct any information provided by it for use in the
Offer Documents that shall have become false or misleading in any material
respect and Parent and Subsidiary further agree to take all steps necessary to
cause the Schedule TO as so corrected to be filed with the SEC and the other
Offer Documents as so corrected to be disseminated to the stockholders of the
Company, in each case, as and to the extent required by applicable federal
securities laws.
SECTION 1.2 Company Actions
---------------
(a) The Company hereby consents to the Offer and represents and warrants
that (i) its Board of Directors, at a meeting duly called and held on April 30,
2000, has duly adopted resolutions declaring the advisability of this Agreement
and approving the Offer, the Merger, this Agreement and the other transactions
contemplated hereby, determining that the terms of the Offer and the Merger are
fair to, and in the best interests of, the Company's stockholders and
recommending acceptance of the Offer, adoption of this Agreement and approval of
the Merger by the stockholders of the Company, (ii) the Company has taken all
necessary action to ensure that the restrictions contained in Section 203 of the
Delaware General Corporation Law (the "DGCL") applicable to an "interested
stockholder" or a "business combination" (as defined in Section 203) will not
apply to the transactions contemplated by this Agreement and (iii) the Company
has taken all necessary action so that the execution of this Agreement and the
consummation of the Offer, the Merger and the other transactions contemplated
hereby do not and will not result in the grant of any rights to any person under
the Company Rights Agreement (as defined in Section 5.2 hereof) or enable or
require any outstanding rights thereunder to be exercised, distributed or
triggered. The Company hereby
3
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consents to the inclusion in the Offer Documents of the recommendations of the
Company's Board of Directors described in this Section 1.2. The Company shall
use reasonable efforts to cause all of its directors and executive officers to
vote in favor of the Merger.
(b) The Company shall file with the SEC on the date of the commencement of
the Offer a Solicitation/Recommendation Statement on Schedule 14D-9 (together
with all amendments and supplements thereto and including the exhibits thereto,
the "Schedule 14D-9") which shall comply in all material respects with the
provisions of applicable federal securities laws, and will contain the
recommendations of the Board in favor of the Offer and the Merger, and shall
disseminate the Schedule 14D-9 to the Company's stockholders. The Company shall
deliver the proposed forms of the Schedule 14D-9 to Parent as far in advance of
the commencement of the Offer as is reasonably practicable under the
circumstances for review and comment by Parent and its counsel. Parent and its
counsel shall be given a reasonable opportunity to review any amendments and
supplements to the Schedule 14D-9 prior to their filing with the SEC or
dissemination to the Company's stockholders. The Company shall provide Parent
and its counsel in writing any comments that the Company or its counsel may
receive from the SEC or its staff with respect to the Schedule 14D-9 promptly
after receipt thereof. Each of the Company, Parent and Subsidiary shall promptly
correct any information provided by it for use in the Schedule 14D-9 that shall
have become false or misleading in any material respect and the Company further
agrees to take all steps necessary to cause such Schedule 14D-9 as so corrected
to be filed with the SEC and disseminated to the Company's stockholders, as and
to the extent required by applicable federal securities laws. Goldman Sachs &
Co. has rendered to the Company's Board of Directors its opinion that as of the
date hereof the Common Stock Price to be received pursuant to the Offer and the
Merger by the Company's stockholders is fair, from a financial point of view, to
such stockholders. The Company has been informed that Goldman Sachs & Co. will
permit the inclusion of the fairness opinion (and, subject to prior review and
consent by Goldman Sachs & Co., a reference thereto) in the Schedule 14D-9 and
the Proxy Statement (as defined in Section 7.1(d) hereof) unless Goldman Sachs &
Co. concludes that such inclusion would be inappropriate under the
circumstances. The Company hereby consents to the inclusion in the Offer
Documents of the recommendations of the Company's Board of Directors described
in this Section 1.2.
SECTION 1.3 Stockholder Lists. In connection with the Offer, the Company shall
-----------------
promptly furnish to, or cause to be furnished to, Parent and Subsidiary mailing
labels, security position listings, a list of non-objecting beneficial owners
and any available listing or computer file containing the names and addresses of
the record holders of the shares of Company Common Stock as of a recent date and
of those persons becoming record holders subsequent to such date (to the extent
available), together with all other relevant, material information in the
Company's possession or control regarding the beneficial owners of shares of
Company Common Stock and shall furnish Parent and Subsidiary with such
additional information and assistance as Parent, Subsidiary or their respective
agents may reasonably request in communicating the Offer to the record and
beneficial holders of shares of Company Common Stock. Subject to the
requirements of law, and except for such steps as are necessary to disseminate
the Offer Documents and any other documents necessary to consummate the Offer
and the Merger (including, without
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limitation, the solicitation of stockholder votes), Parent and Subsidiary shall,
and shall cause each of their affiliates to, hold the information contained in
any of such labels and lists in confidence, use such information only in
connection with the Offer and the Merger, and, if this Agreement is terminated,
deliver to the Company all copies of such information or extracts therefrom then
in their possession or under their control.
SECTION 1.4 Directors; Section 14(f).
------------------------
(a) Immediately upon the acceptance for payment of and payment for shares
of Company Common Stock by Subsidiary or any of its affiliates pursuant to the
Offer, Subsidiary shall be entitled to designate such number of directors,
rounded up to the next whole number, for election or appointment to the Board of
Directors of the Company as will give Subsidiary, subject to compliance with
Section 14(f) of the Exchange Act, representation on the Board of Directors of
the Company equal to the product of (i) the total number of directors on the
Board of Directors of the Company (giving effect to the increase in the size of
such Board pursuant to this Section 1.4) and (ii) the percentage that the number
of shares of Company Common Stock beneficially owned by Subsidiary and its
affiliates (including shares of Company Common Stock so accepted for payment and
purchased) bears to the number of shares of Company Common Stock then
outstanding. In furtherance thereof, concurrently with such acceptance for
payment and payment for such shares of Company Common Stock the Company shall,
upon request of Parent or Subsidiary and in compliance with Section 14(f) of the
Exchange Act and Rule 14f-1 promulgated thereunder, promptly increase the size
of its Board of Directors by such number as is necessary to enable such
designees of Subsidiary to be so elected or appointed to the Company's Board of
Directors, and, subject to applicable law, the Company shall take all reasonable
actions available to the Company to cause such designees of Subsidiary to be so
elected or appointed. At such time, the Company shall, if requested by Parent or
Subsidiary and subject to applicable law, also take all reasonable action
necessary to cause persons designated by Subsidiary to constitute at least the
same percentage (rounded up to the next whole number) as is on the Company's
Board of Directors of (i) each committee of the Company's Board of Directors,
(ii) each board of directors (or similar body) of each subsidiary of the Company
and (iii) each committee (or similar body) of each such board. Subject to
applicable law, the Company shall promptly take all action reasonably requested
by Parent necessary to effect any such election or appointment, including
mailing to its stockholders the information required by Section 14(f) of the
Exchange Act and Rule 14(f)-1 promulgated thereunder (or, at Parent's request,
furnishing such information to Parent for inclusion in the Offer Documents
initially filed with the SEC and distributed to the stockholders of the Company)
as is necessary to enable Subsidiary's designees to be elected to the Company's
Board of Directors. To the extent that any member of the Company's Board of
Directors, who is not an employee of the Company, resigns pursuant to this
Section 1.4, the vesting of any stock options or shares of restricted stock
granted to such director prior to the date hereof shall immediately accelerate
and such resignation shall be treated as a removal following a change-of-control
transaction for the purposes of the agreements governing such stock options or
restricted shares of Common Stock.
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(b) Notwithstanding the foregoing, the Company shall use its reasonable
best efforts to ensure that, if Subsidiary's designees are elected to the Board
of Directors of the Company, such Board of Directors shall have, at all times
prior to the Effective Time (as defined in Section 2.2 hereof), at least two
directors who are directors on the date of this Agreement and who are not
officers or affiliates of the Company (it being understood that for purposes of
this sentence, a director of the Company shall not be deemed an affiliate of the
Company solely as a result of his status as a director of the Company), Parent
or any of their respective subsidiaries (the "Independent Directors"); and
provided further, that, (i) if the number of Independent Directors shall be
reduced below two for any reason whatsoever, the remaining Independent Director
may designate a person to fill such vacancy who is not an officer or affiliate
of the Company, Parent, or any of their respective subsidiaries and such person
shall be deemed to be an Independent Director for purposes of this Agreement or
(ii) if no Independent Directors then remain, the other directors may designate
two persons to fill such vacancies who shall not be officers or affiliates of
the Company, Parent or any of their respective subsidiaries, and such persons
shall be deemed to be Independent Directors for purposes of this Agreement.
(c) Prior to the Effective Time and from and after the time that
Subsidiary's designees constitute a majority of the Company's Board of
Directors, if applicable, any amendment or any termination of this Agreement by
the Company, any extension of time for performance of any of the obligations of
Parent or Subsidiary hereunder, and any waiver by the Company of any condition
or of any of the Company's rights hereunder may be effected only by the action
of a majority of the Independent Directors of the Company, which action shall be
deemed to constitute the action of the full Board of Directors of the Company
(and any committee specifically designated by the Board of Directors of the
Company) to approve the actions contemplated hereby; provided, that, if there
shall be no Independent Directors, such actions may be effected by majority vote
of the entire Board of Directors of the Company.
ARTICLE II
THE MERGER
SECTION 2.1 The Merger. Upon the terms and subject to the conditions of this
----------
Agreement, at the Effective Time in accordance with the DGCL, Subsidiary shall
be merged with and into the Company and the separate existence of Subsidiary
shall thereupon cease. The Company shall continue its existence under the laws
of the State of Delaware and, in its capacity as the surviving corporation in
the Merger, the Company is hereinafter sometimes referred to as the "Surviving
Corporation."
SECTION 2.2 Effective Time of the Merger. The Merger shall become effective
----------------------------
(i) upon the filing of a certificate of merger (in such form as required by and
executed in accordance with the relevant provisions of the DGCL) with the
Secretary of State of the State of Delaware in accordance with the DGCL (the
"Merger Filing") or (ii) at such time as shall be stated in the Merger Filing
(such time, the "Effective Time"). The Merger Filing shall be made
simultaneously with or as soon as practicable after the satisfaction or waiver
of the conditions set forth in Article IX. The parties acknowledge that it is
their mutual desire and intent to consummate the Merger as soon as practicable
after the consummation of the Offer. Accordingly,
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the parties shall, subject to the provisions hereof and to the fiduciary duties
of their respective boards of directors, use all reasonable efforts to
consummate, as soon as practicable, the Merger in accordance with Section 2.4.
SECTION 2.3 Effects of the Merger. The Merger shall have the effects set forth
---------------------
in Section 259 of the DGCL. Without limiting the generality of the foregoing,
and subject thereto, at the Effective Time, except as otherwise provided herein,
all the property, rights, privileges, powers and franchises, and all and every
other interest, of Subsidiary and the Company shall vest in the Surviving
Corporation, and all debts, liabilities and duties of Subsidiary and the Company
shall become the debts, liabilities and duties of the Surviving Corporation.
SECTION 2.4 Closing. Upon the terms and subject to the conditions hereof, as
-------
soon as practicable after consummation of the Offer, and, to the extent required
by the DGCL, after the Company Stockholders' Approval (as defined in Section
7.1(d) hereof) has been obtained, the Company and Subsidiary (or Parent if
appropriate) shall execute and file the Merger Filing, and the parties shall
take all such other and further actions as may be required by law to make the
Merger effective. Prior to the filing referred to in this Section 2.4, a
closing will be held at a location mutually agreeable to Parent and the Company
to confirm the satisfaction or waiver, as the case may be, of the conditions set
forth in Article IX. The date on which the Closing occurs is referred to in
this Agreement as the "Closing Date."
ARTICLE III
THE SURVIVING AND PARENT CORPORATIONS
SECTION 3.1 Certificate of Incorporation. The Certificate of Incorporation of
----------------------------
the Company as in effect immediately prior to the Effective Time shall be the
Certificate of Incorporation of the Surviving Corporation after the Effective
Time, and (subject to Section 8.4 hereof) thereafter may be amended in
accordance with its terms and as provided in the DGCL.
SECTION 3.2 Bylaws. The Bylaws of the Company as in effect immediately prior
------
to the Effective Time shall be the Bylaws of the Surviving Corporation after the
Effective Time and (subject to Section 8.4(a) hereof) thereafter may be amended
in accordance with their terms and as provided by the Certificate of
Incorporation of the Surviving Corporation and the DGCL.
SECTION 3.3 Directors.
---------
(a) The directors of the Company in office immediately prior to the
Effective Time shall be the directors of the Surviving Corporation after the
Effective Time and shall serve in accordance with the Bylaws of the Surviving
Corporation until their respective successors are duly elected or appointed and
qualified or until their earlier death, resignation or removal.
SECTION 3.4 Officers. The officers of Subsidiary in office immediately prior
--------
to the Effective Time shall be the officers of the Surviving Corporation
immediately after the
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Effective Time, and such officers shall serve in accordance with the Bylaws of
the Surviving Corporation until their respective successors are duly elected or
appointed and qualified or until their earlier death, resignation or removal.
ARTICLE IV
EFFECT OF THE MERGER ON THE STOCK OF THE CONSTITUENT CORPORATIONS; SURRENDER OF
CERTIFICATES
SECTION 4.1 Conversion of Shares in the Merger. At the Effective Time, by
----------------------------------
virtue of the Merger and without any action on the part of any holder of any
capital stock of Parent, Subsidiary or the Company:
(a) each share of Company Common Stock (other than shares canceled pursuant
to Section 4.1(b) and any Dissenting Shares (as defined in Section 4.7 hereof))
shall be converted into the right to receive the Common Stock Price or any
higher price that may be paid for shares of Company Common Stock pursuant to the
Offer (the "Merger Consideration"), payable to the holder thereof, in each case
without interest, upon surrender of the certificate formerly representing such
share and such other documents as may be reasonably required in the manner
provided in Section 4.3, less any required withholding taxes; and
(b) each share of capital stock of the Company, if any, owned by Parent or
any subsidiary of Parent or held in treasury by the Company or any subsidiary of
the Company immediately prior to the Effective Time shall be canceled and no
consideration shall be paid in exchange therefor and shall cease to exist from
and after the Effective Time.
SECTION 4.2 Conversion of Subsidiary Shares. At the Effective Time, by virtue
-------------------------------
of the Merger and without any action on the part of Parent as the sole
stockholder of Subsidiary, each issued and outstanding share of common stock,
par value $.01 per share, of Subsidiary ("Subsidiary Common Stock") shall be
converted into one share of common stock, par value $.01 per share, of the
Surviving Corporation.
SECTION 4.3 Surrender of Certificates.
-------------------------
(a) Prior to the Effective Time, Parent shall designate a bank or trust
company who shall be reasonably satisfactory to the Company to act as paying
agent in the Merger ("Paying Agent"), and prior to the Effective Time, Parent
shall make available, or cause the Surviving Corporation to make available, to
the Paying Agent cash in the amounts necessary for the payment of the Merger
Consideration as provided in Section 4.1 upon surrender as part of the Merger of
certificates formerly representing shares of Company Common Stock in the manner
provided in Section 4.3(b). Funds made available to the Paying Agent shall be
invested by the Paying Agent as directed by Parent (it being understood that any
and all interest or income earned on funds made available to the Paying Agent
pursuant to this Agreement shall be turned over to Parent).
(b) As promptly as practicable, after the Effective Time, Parent shall
cause the Paying Agent to mail to each holder of record of a certificate or
certificates that
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immediately prior to the Effective Time represented outstanding shares of
Company Common Stock (the "Company Certificates") (i) a letter of transmittal
reasonably satisfactory to the Company and approved by the Company prior to the
Closing which shall specify that delivery shall be effected, and risk of loss
and title to the Company Certificates shall pass, only upon actual delivery of
the Company Certificates to the Paying Agent, and (ii) instructions for use in
effecting the surrender of the Company Certificates in exchange for the Merger
Consideration. Upon surrender of Company Certificates for cancellation to the
Paying Agent, together with a duly executed letter of transmittal and such other
documents as the Paying Agent shall reasonably require, the holder of such
Company Certificates shall be entitled to receive in exchange therefor the
Merger Consideration for each share of Company Common Stock formerly represented
thereby, in accordance with Section 4.1, and the Company Certificates so
surrendered shall be canceled.
(c) Promptly following the date which is twelve (12) months after the
Effective Time, the Paying Agent shall deliver to Parent all cash and any
documents in its possession relating to the transactions described in this
Agreement, and the Paying Agent's duties shall terminate. Thereafter, each
holder of a Company Certificate may surrender such Company Certificate to the
Surviving Corporation or Parent and (subject to applicable abandoned property,
escheat and similar laws) receive in exchange therefor the Merger Consideration,
without any interest thereon. Notwithstanding the foregoing, none of the Paying
Agent, Parent, Subsidiary, the Company or the Surviving Corporation shall be
liable to a holder of shares of Company Common Stock for any amounts delivered
to a public official pursuant to applicable abandoned property, escheat or
similar laws.
(d) If any Company Certificate shall have been lost, stolen or destroyed,
upon the making of an affidavit of that fact by the person claiming such Company
Certificate to be lost, stolen or destroyed, the Surviving Corporation shall
issue in exchange for such lost, stolen or destroyed Company Certificate the
Merger Consideration deliverable in respect thereof determined in accordance
with this Article IV. When authorizing such issuance in exchange therefor, the
Board of Directors of the Surviving Corporation may, in its discretion and as a
condition precedent to the issuance thereof, require the owner of such lost,
stolen or destroyed Company Certificate to give the Surviving Corporation such
indemnity as it may reasonably direct as protection against any claim that may
be made against the Surviving Corporation with respect to the Company
Certificate alleged to have been lost, stolen or destroyed.
SECTION 4.4 Tax Withholding. Parent (or any affiliate thereof) shall be
---------------
entitled to deduct and withhold from the consideration otherwise payable
pursuant to this Agreement to any former holder of shares of Company Common
Stock such amounts as Parent (or any affiliate thereof) is required to deduct
and withhold with respect to the making of such payment under the Internal
Revenue Code of 1986, as amended (the "Code"), or any other provision of
federal, state, local or foreign tax law. To the extent that amounts are so
withheld by Parent, such withheld amounts shall be treated for all purposes of
this Agreement as having been paid to the former holder of the shares of Company
Common Stock in respect of which such deduction and withholding was made by
Parent.
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SECTION 4.5 Closing of the Company's Transfer Books. At and after the
---------------------------------------
Effective Time, holders of Company Certificates shall cease to have any rights
as stockholders of the Company, except for the right to receive the Merger
Consideration pursuant to Section 4.1. At the Effective Time, the stock
transfer books of the Company shall be closed and no transfer of shares of
Company Common Stock which were outstanding immediately prior to the Effective
Time shall thereafter be made. If, after the Effective Time, subject to the
terms and conditions of this Agreement, Company Certificates formerly
representing shares of Company Common Stock are presented to the Surviving
Corporation, they shall be canceled and exchanged for the Merger Consideration
in accordance with this Article IV.
SECTION 4.6 Option Plans; Restricted Stock.
------------------------------
(a) Upon the consummation of the Merger, each option to acquire shares of
Company Common Stock outstanding immediately prior to the Effective Time under
the Company's stock option plans or similar arrangements, whether vested or
unvested (each, an "Option," and collectively, the "Options"), shall
automatically, in accordance with the terms thereof or as provided in the
separate Change in Control (Stock Options) Agreement effective as of the date
hereof with respect to such Option, be converted into, and each holder of an
Option shall have, the right to receive the "Cash Value" (as defined in the
Change in Control (Stock Options) Agreement) from the Surviving Corporation in
respect of each outstanding Option (the "Option Payments"); provided that, with
respect to any person subject to Section 16 of the Exchange Act, no Merger
Consideration shall be paid to such person until payment can be made without
liability to such person under Section 16(b) of the Exchange Act. Option
Payments shall be paid at the times, in such amounts and with interest as
provided in and subject to all other provisions of the applicable Option or
Change in Control (Stock Options) Agreement; provided, however, that all
portions of any Option Payments that would, pursuant to the applicable Option or
Change in Control (Stock Options) Agreement, be payable more than thirty months
after the Effective Time shall instead be paid (subject to the provisions of the
applicable Option or Change in Control (Stock Options) Agreement) in quarterly
installments as nearly equal as possible, with interest at the rate of 10% per
annum, over the first thirty months after the Effective Time. The Company shall
take such actions (including, without limitation, giving requisite notices to
holders of Options advising them of such right to obtain payment for their
respective Options) as are necessary to fully advise holders of Options of their
rights. From and after the Effective Time, other than as expressly set forth in
this Section 4.6, no holder of an Option shall have any other rights in respect
thereof other than to receive Option Payments for his or her Options as set
forth herein, and the Company shall take all reasonably necessary actions to
terminate the Company's stock option plans and similar arrangements. The
provisions of this Section 4.6(a) shall be subject to the making of any
necessary amendments to the Company's stock option plans and other similar
agreements. The Company shall use its reasonable efforts to obtain any such
consents and make any such amendments. Within twenty days from the date hereof,
the Company shall deliver to Parent true, correct and complete copies of all
Change in Control (Stock Options) Agreements and a list of all stock options,
the holders thereof and the vesting schedules relating thereto.
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(b) Upon the consummation of the Merger, each holder of a restricted share
of Company Common Stock outstanding at the Effective Time shall be entitled to
receive the Merger Consideration payable with respect to such restricted share
in accordance with the restricted stock agreement or other agreement applicable
to such restricted share; provided that, with respect to any person subject to
Section 16 of the Exchange Act, no Merger Consideration shall be paid to such
person until payment can be made without liability to such person under Section
16(b) of the Exchange Act. The Surviving Corporation shall make such payment to
the holder, subject to the conditions for vesting contained in the applicable
restricted stock or other agreement, on the date on which the restricted share
was to have vested; provided, however, that all such payments that would be
payable because of vesting dates more than thirty months after the Effective
Time shall instead be paid, subject to the conditions for vesting contained in
the applicable restricted stock or other agreement, in quarterly installments as
nearly equal as possible, with interest at the rate of 10% per annum, over the
first thirty months after the Effective Time. Within twenty days from the date
hereof, the Company shall deliver to Parent true, complete and correct copies of
all restricted stock agreements and a list of all restricted stock grants, the
holders thereof and the vesting schedules relating thereto.
SECTION 4.7 Dissenting Shares.
-----------------
(a) Notwithstanding any provision of this Agreement to the contrary, any
issued and outstanding shares of Company Common Stock ("Dissenting Shares") held
by a Dissenting Stockholder (as defined below) shall not be converted into the
Merger Consideration but shall become the right to receive such consideration as
may be determined to be due to such Dissenting Stockholder pursuant to the DGCL;
provided, however, that each share of Company Common Stock outstanding
immediately prior to the Effective Time and held by a Dissenting Stockholder
who, after the Effective Time, loses his or her right of appraisal, pursuant to
the DGCL, shall be deemed to be converted as of the Effective Time into the
right to receive the Merger Consideration, without any interest thereon. As used
in this Agreement, the term "Dissenting Stockholder" means any record holder or
beneficial owner of shares of Company Common Stock who complies with all
provisions of the DGCL (including all provisions of Section 262 of the DGCL)
concerning the right of holders of Company Common Stock to dissent from the
Merger and obtain fair value for their shares.
(b) The Company shall give Parent (i) prompt notice of any demands for
appraisal pursuant to the applicable provisions of the DGCL received by the
Company, withdrawals of such demands, and any other instruments served pursuant
to the DGCL and received by the Company and (ii) the opportunity to participate
in all negotiations and proceedings with respect to demands for appraisal under
the DGCL. The Company shall not, except with the prior written consent of Parent
(not to be unreasonably withheld), make any payment with respect to any such
demands for appraisal or offer to settle or settle any such demands.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and Subsidiary that,
except as set forth in the disclosure schedule dated as of the date hereof and
signed by an authorized officer of the Company (the "Company Disclosure
Schedule"), it being agreed that disclosure of any item on the Company
Disclosure Schedule shall be deemed disclosure with respect to all sections of
this Article V if the relevance of such item to all such other sections is
apparent from the face of the Company Disclosure Schedule:
SECTION 5.1 Organization and Qualification. The Company is a corporation duly
------------------------------
organized, validly existing and in good standing under the laws of the State of
Delaware and has the requisite corporate power and authority to own, lease and
operate its assets and properties and to carry on its business as it is now
being conducted. The Company is qualified to transact business and is in good
standing in each jurisdiction in which the properties owned, leased or operated
by it or the nature of the business conducted by it makes such qualification
necessary, except where the failure to be so qualified and in good standing has
not had and would not reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect. For purposes of this Agreement, a
"Company Material Adverse Effect" means any change, event, violation,
inaccuracy, circumstance or effect, individually or when aggregated with other
such changes, events, violations, inaccuracies, circumstances or effects, that
is materially adverse to the business, assets, liabilities, financial condition
or results of operations of the Company and its subsidiaries taken as a whole;
provided, that in no event shall either of the following (alone or in
combination with another event identified in this proviso) be deemed to
constitute, nor shall either of the following be taken into account in
determining whether there has been or will be, a Company Material Adverse
Effect: (i) any change in the Company's stock price or trading volume not
arising from or out of another change, event or occurrence that would
independently constitute a Company Material Adverse Effect or (ii) any change,
event, violation, inaccuracy, circumstance or effect that results from (A)
changes affecting the industry in which the Company operates generally, (B)
changes affecting the United States economy generally or (C) the public
announcement or pendency of the Offer, the Merger or the other transactions
contemplated hereby. True, accurate and complete copies of the Company's
certificate of incorporation and bylaws, in each case as in effect on the date
hereof, including all amendments thereto, have heretofore been delivered to
Parent.
SECTION 5.2 Capitalization.
--------------
(a) The authorized capital stock of the Company consists of 120,000,000
shares of Company Common Stock and 1,000,000 shares of preferred stock, par
value $.10 per share ("Company Preferred Stock"), of which 60,000 shares have
been designated as Series A Junior Participating Preferred Stock. As of March
31, 2000, (i) 26,971,875 shares of Company Common Stock were issued and
outstanding (each, together with a preferred stock purchase right (the "Company
Rights") issued pursuant to the Rights Agreement dated as of May 1, 1991, by and
between the Company and Pittsburgh National Bank (as amended and restated as of
March 27, 2000, the "Company Rights Agreement")), all of which were validly
issued and are
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fully paid, nonassessable and free of preemptive rights, (ii) no shares of
Company Preferred Stock were issued and outstanding, (iii) 3,884,920 shares of
Company Common Stock and no shares of Company Preferred Stock were held in the
treasury of the Company, and (iv) 3,073,293 shares of Company Common Stock were
reserved for issuance upon exercise of options issued and outstanding pursuant
to the stock option plans of the Company. Since March 31, 2000, except as
permitted by this Agreement, no shares of capital stock of the Company have been
issued except in connection with exercise or conversion of the instruments
referred to in the preceding sentence.
(b) No bonds, debentures, notes or other indebtedness of the Company having
the right to vote on any matters on which stockholders of the Company may vote
are issued or outstanding.
(c) Except as disclosed in Section 5.2(a), as of the date hereof, there are
no outstanding subscriptions, options, calls, contracts, commitments,
understandings, restrictions, arrangements, rights or warrants, including any
right of conversion or exchange under any outstanding security, instrument or
other agreement, obligating the Company or any subsidiary of the Company to
issue, deliver or sell, redeem or repurchase, or cause to be issued, delivered
or sold, additional shares of the capital stock of the Company or obligating the
Company or any subsidiary of the Company to grant, extend or enter into any such
agreement or commitment. Except as disclosed in the Company SEC Reports (as
defined in Section 5.5(a) hereof) or as otherwise contemplated by this
Agreement, there are no voting trusts, proxies or other agreements or
understandings to which the Company or any subsidiary of the Company is a party
or is bound with respect to the voting of any shares of capital stock of the
Company. The Company Common Stock (including the associated Company Rights)
constitutes the only class of equity securities of Company or its subsidiaries
registered or required to be registered under the Exchange Act.
SECTION 5.3 Subsidiaries. The only subsidiaries of the Company are those set
------------
forth in Section 5.3 of the Company Disclosure Schedule. Except in all cases
where the failure to be so qualified and in good standing has not had and would
not reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect, each direct and indirect subsidiary of the Company that
is a Significant Subsidiary (as defined in Regulation S-X of the SEC) is duly
formed or organized, validly existing and in good standing under the laws of its
jurisdiction of formation or incorporation and has the requisite power and
authority to own, lease and operate its assets and properties and to carry on
its business as it is now being conducted and each such subsidiary of the
Company is qualified to transact business, and is in good standing, in each
jurisdiction in which the properties owned, leased or operated by it or the
nature of the business conducted by it makes such qualification necessary. All
of the outstanding shares of capital stock of each corporate subsidiary of the
Company are validly issued, fully paid, nonassessable and free of preemptive
rights and are owned directly or indirectly by the Company free and clear of any
material liens, claims, encumbrances and security interests. There are no
subscriptions, options, warrants, rights, calls, contracts, voting trusts,
proxies or other commitments, understandings, restrictions or arrangements
relating to the issuance, sale, voting, transfer, ownership or other rights with
respect to any shares of capital stock of or interest in any
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subsidiary of the Company, including any right of conversion or exchange under
any outstanding security, instrument or agreement. As used in this Agreement,
the term "subsidiary" shall mean, when used with reference to any person or
entity, any corporation, partnership, limited liability company, joint venture
or other entity of which such person or entity (either acting alone or together
with its other subsidiaries) owns or controls, directly or indirectly, 50% or
more of the stock or other voting interests, the holders of which are entitled
to vote for the election of a majority of the board of directors or any similar
governing body of such corporation, partnership, limited liability company,
joint venture or other entity or acts as general partner.
SECTION 5.4 Authority; Non-Contravention; Approvals.
---------------------------------------
(a) The Company has full corporate power and authority to enter into this
Agreement and, subject to the Company Stockholders' Approval, if required, to
consummate the transactions contemplated hereby. This Agreement has been
approved by the Board of Directors of the Company, and no other corporate
proceedings on the part of the Company are necessary to authorize the execution
and delivery of this Agreement or, except for the Company Stockholders'
Approval, if required, the consummation by the Company of the transactions
contemplated hereby. This Agreement has been duly executed and delivered by the
Company, and, assuming the due authorization, execution and delivery hereof by
Parent and Subsidiary, constitutes a valid and legally binding agreement of the
Company, enforceable against the Company in accordance with its terms, except
that such enforcement may be subject to (a) bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting or relating to
enforcement of creditors' rights generally and (b) general equitable principles.
(b) The execution, delivery and performance of this Agreement by the
Company and the consummation of the Offer, the Merger and the other transactions
contemplated hereby do not and will not violate, conflict with or result in a
breach of any provision of, or constitute a default (or an event which, with
notice or lapse of time or both, would constitute a default) under, or result in
the termination of, or accelerate the performance required by, or result in a
right of termination or acceleration under, or result in the creation of any
lien, security interest or encumbrance upon any of the properties or assets of
the Company or any of its subsidiaries under any of the terms, conditions or
provisions of (i) the respective certificates of incorporation or bylaws of the
Company or any of its subsidiaries (or, in the case of any subsidiary that is
not a corporation, its equivalent constituent documents), (ii) any statute, law,
ordinance, rule, regulation, judgment, decree, order, injunction, writ, permit
or license of any court or governmental authority applicable to the Company or
any of its subsidiaries or any of their respective properties or assets, or
(iii) any note, bond, mortgage, indenture, deed of trust, license, franchise,
permit, concession, contract, lease or other instrument, obligation or agreement
of any kind to which the Company or any of its subsidiaries is now a party or by
which the Company or any of its subsidiaries or any of their respective
properties or assets may be bound or affected; subject (x) in the case of the
terms, conditions or provisions described in clause (ii) above, to obtaining
(prior to the Effective Time) the Company Required Statutory Approvals (as
defined in Section 5.4(c) hereof) and the Company Stockholders' Approval, if
required, and (y) in the case of the terms, conditions or provisions described
in clause (iii) above, to obtaining (prior to the Effective Time) consents
required from commercial lenders, lessors or
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other third parties. Excluded from the foregoing sentences of this paragraph
(b), insofar as they apply to the terms, conditions or provisions described in
clauses (ii) and (iii) of the first sentence of this paragraph (b) (and whether
resulting from such execution and delivery or consummation), are such
violations, conflicts, breaches, defaults, terminations, accelerations or
creations of liens, security interests or encumbrances that have not had and
would not reasonably be expected to have, individually or in the aggregate, a
Company Material Adverse Effect. Except as set forth in Section 5.4(b) of the
Company Disclosure Schedule, (i) none of the Contracts (as defined in Section
5.25 hereof) described in Section 5.25(h) requires the consent of a third party
to enter into this Agreement or the transactions contemplated hereby, and (ii)
except for third party consents the failure of which to obtain would not
reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect, the Company is not a party to any contract (excluding
for purposes of this representation any Contract described in Section 5.25(h))
requiring the consent of a third party to enter into this Agreement or the
transactions contemplated hereby.
(c) Except for (i) the filings by the Company required by the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), (ii) the competition filings required before the Bundeskartellamt, (iii)
the filing of the Offer Documents, the Schedule 14D-9, the Information Statement
(as defined in Section 5.10 hereof) and the Proxy Statement with the SEC
pursuant to the Exchange Act, and the Securities Act of 1933, as amended (the
"Securities Act"), and (iv) the making of the Merger Filing with the Secretary
of State of the State of Delaware in connection with the Merger (the filings and
approvals referred to in clauses (i) through (iv) are collectively referred to
as the "Company Required Statutory Approvals"), no declaration, filing or
registration with, or notice to, or authorization, consent or approval of, any
governmental or regulatory body, agency or authority (including, without
limitation, any governmental or regulatory body, agency or authority outside of
the United States) (a "Governmental Authority") is necessary for the execution
and delivery of this Agreement by the Company or the consummation by the Company
of the transactions contemplated hereby, other than such declarations, filings,
registrations, notices, authorizations, consents or approvals which, if not made
or obtained, as the case may be, have not had and would not reasonably be
expected to have, individually or in the aggregate, a Company Material Adverse
Effect.
SECTION 5.5 Reports and Financial Statements.
--------------------------------
(a) Since December 31, 1998, the Company has filed with the SEC all forms,
statements, reports and documents (including all exhibits, post-effective
amendments and supplements thereto) required to be filed by it under each of the
Securities Act, the Exchange Act and the respective rules and regulations
thereunder, all of which, as amended (if applicable), complied when filed in all
material respects with all applicable requirements of the appropriate act and
the rules and regulations thereunder. The Company has previously delivered or
made available to Parent copies (including all exhibits, post-effective
amendments and supplements thereto) of its (i) Annual Reports on Form 10-K for
the years ended December 31, 1998 and 1999, as filed with the SEC, (ii) proxy
and information statements relating to all meetings of its stockholders (whether
annual or special) from December 31, 1998 until the date hereof, and (iii)
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all other reports, including quarterly reports, and registration statements
filed by the Company with the SEC since December 31, 1998 (other than
registration statements filed on Form S-8) (the documents referred to in clauses
(i), (ii) and (iii) filed prior to the date of this Agreement and such documents
filed with the SEC subsequent to the date of this Agreement and prior to the
consummation of the Offer are collectively referred to as the "Company SEC
Reports"). As of their respective dates, the Company SEC Reports did not or will
not (as the case may be) contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. The audited consolidated financial statements of the
Company included in the Company's Annual Report on Form 10-K for the years ended
December 31, 1998 and 1999, the preliminary interim consolidated financial
statements of the Company for the quarter ending March 31, 2000 (previously
furnished to Parent by the Company) and the unaudited consolidated interim
financial statements to be included in the Company's Quarterly Report on Form
10-Q for the quarter ending March 31, 2000 (collectively, the "Company Financial
Statements") have been or will be, as the case may be, prepared in accordance
with generally accepted accounting principles applied on a consistent basis
(except as may be indicated therein or in the notes thereto) and fairly present
or will fairly present, as the case may be, the financial position of the
Company and its subsidiaries as of the dates thereof and the results of their
operations and changes in financial position for the periods then ended
(subject, in the case of unaudited interim statements to normal year-end
adjustments and the absence of footnotes, none of which, individually or in the
aggregate, would have or disclose a Company Material Adverse Effect). Since
December 31, 1998, the Company has maintained consistent accounting policies
with respect to the recording on its books of accounts and notes receivable.
(b) As of the date of this Agreement, except as set forth in the Company
SEC Reports filed prior to the date of this Agreement, neither the Company nor
any of its subsidiaries is a party to or bound by (i) any "material contract"
(as such term is defined in Item 601(b)(10) of Regulation S-K of the SEC) or
(ii) any non-competition agreement or any other agreement or arrangement that
similarly limits the Company or any of its subsidiaries or any of their
respective affiliates, or that would, after the Effective Time, to the knowledge
of the Company, similarly limit Parent or the Surviving Corporation or any
successor thereto, from engaging or competing in any line of business or in any
geographic area, which agreement or arrangement would reasonably be expected to
have a Company Material Adverse Effect, after giving effect to the Merger.
SECTION 5.6 Absence of Undisclosed Liabilities. Except as disclosed in the
----------------------------------
Company SEC Reports, neither the Company nor any of its subsidiaries had at
December 31, 1999, or since that date and as of the date hereof, has incurred
any liabilities or obligations (whether absolute, accrued, contingent or
otherwise) of any nature, except (a) liabilities, obligations or contingencies
(i) which are accrued or reserved against in the Company Financial Statements or
reflected in the notes thereto or (ii) which were incurred after December 31,
1999 in the ordinary course of business and consistent with past practices, (b)
liabilities, obligations or contingencies which (i) have not had and would not
reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect, or (ii) have been discharged or paid prior to the date
hereof, and (c) liabilities and obligations which are of a nature not required
to be
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reflected in the consolidated financial statements of the Company and its
subsidiaries prepared in accordance with generally accepted accounting
principles consistently applied and which were incurred in the ordinary course
of business.
SECTION 5.7 Absence of Certain Changes or Events. Except as disclosed in the
------------------------------------
Company Financial Statements, since December 31, 1999, there has not been any
change, event, violation, inaccuracy, circumstance or effect that has had or
would reasonably be expected to have, individually or in the aggregate, a
Company Material Adverse Effect. Except as heretofore disclosed to Parent in
writing or as contemplated by the Agreement, since December 31, 1999, the
Company and its subsidiaries have not taken any action which, if taken after the
date hereof, would require Parent's consent under Section 7.2(a).
SECTION 5.8 Litigation. There are no claims, suits, actions or proceedings
----------
pending or, to the knowledge of the Company, threatened in writing against,
relating to or affecting the Company or any of its subsidiaries (including,
without limitation, any claim based on a theory of product liability), or any of
their respective directors or officers, before any court, governmental
department, commission, agency, instrumentality or authority, or any arbitrator
that seek to restrain the consummation of the Merger or which if adversely
determined would reasonably by expected to have, individually or in the
aggregate, a Company Material Adverse Effect. Except as referred to in the
Company SEC Reports, neither the Company nor any of its subsidiaries is subject
to any judgment, decree, injunction, rule or order of any court, governmental
department, commission, agency, instrumentality or authority, or any arbitrator
which prohibits or restricts the consummation of the transactions contemplated
hereby or has had or would reasonably be expected to have, individually or in
the aggregate, a Company Material Adverse Effect.
SECTION 5.9 Proxy Statement. None of the information to be supplied by the
---------------
Company or its subsidiaries for inclusion or incorporation by reference in the
Proxy Statement will, at the time of its mailing, or at the time of the
Stockholders Meeting (as defined in Section 7.1(d) hereof), if any, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
the light of the circumstances under which they are made, not misleading. The
Proxy Statement will, as of its mailing date, comply as to form in all material
respects with all applicable laws, including the provisions of the Securities
Act and the Exchange Act and the rules and regulations promulgated thereunder,
except that no representation or warranty is made by the Company with respect to
statements made or incorporated by reference therein based on information
supplied by Parent or any of its subsidiaries for inclusion or incorporation by
reference therein.
SECTION 5.10 Offer Documents; Schedule 14D-9. Neither (a) the information
-------------------------------
provided by the Company for inclusion or incorporation by reference in the Offer
Documents (b) any information to be filed by the Company in connection with the
Offer pursuant to Rule 14f-1 promulgated under the Exchange Act (the
"Information Statement") nor (c) the Schedule 14D-9 shall, at the respective
times the Offer Documents, the Information Statement or the Schedule 14D-9 or
any amendments or supplements thereto are filed with the SEC or are first
published, sent or given to stockholders of the Company, as the case may be,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in
17
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order to make the statements therein, in light of the circumstances under which
they are made, not misleading. The Offer Documents, the Information Statement
and the Schedule 14D-9, in each case as of the date of mailing, will comply as
to form in all material respects with all applicable laws, including the
provisions of the Exchange Act and the rules and regulations promulgated
thereunder. Notwithstanding the foregoing, no representation or warranty is made
by the Company with respect to statements made or incorporated by reference
therein based on information supplied by Parent or any of its subsidiaries for
inclusion or incorporation by reference therein.
SECTION 5.11 No Violation of Law. Neither the Company nor any of its
-------------------
subsidiaries is or, since December 31, 1997, has been in violation of or has
been charged with any violation of, any law, statute, order, rule, regulation,
ordinance or judgment (including, without limitation, any applicable
environmental law, ordinance or regulation) of any Governmental Authority,
except for violations which have not had and would not reasonably be expected to
have, individually or in the aggregate, a Company Material Adverse Effect. The
Company and its subsidiaries have all permits, licenses, franchises, variances,
exemptions, orders and other governmental authorizations, consents and approvals
necessary to conduct their businesses as presently conducted (collectively, the
"Company Permits"), which are listed on Section 5.11 of the Company Disclosure
Schedule, except for permits, licenses, franchises, variances, exemptions,
orders, authorizations, consents and approvals the absence of which have not had
and would not reasonably be expected to have, individually or in the aggregate,
a Company Material Adverse Effect. The Company and its subsidiaries are not in
violation of the terms of any Company Permit, except for delays in filing
reports or such other violations which have not had and would not reasonably be
expected to have, individually or in the aggregate, a Company Material Adverse
Effect.
SECTION 5.12 Compliance with Agreements. The Company and each of its
--------------------------
subsidiaries are not in breach or violation of or in default in the performance
or observance of any term or provision of, and no event has occurred which, with
lapse of time or action by a third party, would result in a default under, (a)
the respective certificates of incorporation, bylaws or similar organizational
instruments of the Company or any of its subsidiaries, or (b) any contract,
commitment, agreement, indenture, mortgage, loan agreement, note, lease, bond,
license, approval or other instrument to which the Company or any of its
subsidiaries is a party or by which any of them is bound or to which any of
their property is subject, other than, in the case of clause (b) of this Section
5.12, breaches, violations and defaults which have not had and would not
reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect.
SECTION 5.13 Taxes.
-----
(a) The Company and its subsidiaries have (i) duly filed with the
appropriate Governmental Authorities all Tax Returns required to be filed by
them for all periods ending on or prior to the Effective Time, other than those
Tax Returns the failure of which to file have not had and would not reasonably
be expected to have, individually or in the aggregate, a Company Material
Adverse Effect, and (ii) duly paid in full or made adequate provision in
accordance with generally accepted accounting principles for the payment of all
Taxes for all
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past and current periods. There are no unresolved issues of law or fact arising
out of a notice of deficiency, proposed deficiency or assessment from the United
States Internal Revenue Service or any other governmental taxing authority with
respect to Taxes of the Company or any of its subsidiaries other than such which
have not had or would not reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect.
(b) Neither the Company nor any subsidiary has obtained an extension of the
time within which to file any United States Federal Tax Return which has not yet
been filed.
(c) The Company and its subsidiaries have withheld and paid all material
Taxes required to have been withheld and paid in connection with amounts paid or
owing to any employee, creditor or independent contractor.
(d) There are no material liens for Taxes upon the assets of the Company or
any of its subsidiaries other than liens for Taxes not yet due.
(e) Neither the Company nor any subsidiary has any liability for the Taxes
of any other person which is not included in the Company's consolidated United
States Federal Tax Return (i) under Section 1.1502-6 of the Treasury
regulations, (ii) as a transferee or successor, (iii) by contract or (iv)
otherwise. Neither the Company nor any subsidiary has agreed to make nor is
required to make any adjustment under Section 481 of the Code by reason of a
change in accounting method.
(f) Neither the Company nor any subsidiary is a party to or bound by any
obligations under any tax sharing, tax allocation, tax indemnity or similar
agreement or arrangement with any person or entity which is not included in the
Company's consolidated United States Federal Tax Return.
(g) Neither the Company nor any subsidiary has made any payments, is
obligated to make any payments, or is a party to any contract that could require
it to make any payments, that are not deductible as a result of the provisions
set forth in Section 280G of the Code or the proposed Treasury regulations
thereunder or would result in an excise tax liability with respect to any such
payment under Section 4999 of the Code.
(h) All material elections with respect to income Taxes affecting the
Company and its subsidiaries are set forth in Section 5.13 of the Company
Disclosure Schedule.
(i) The Company is not nor has it ever been a United States real property
holding corporation within the meaning of Section 897(c)(1)(A)(ii) of the Code.
(j) For purposes of this Agreement, the term "Taxes" shall mean all taxes,
including, without limitation, income, gross receipts, excise, property, sales,
withholding, social security, occupation, use, service, license, payroll,
franchise, transfer and recording taxes, fees and charges, windfall profits,
severance, customs, import, export, employment or similar taxes, charges, fees,
levies or other assessments imposed by the United States, or any state, local
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or foreign government or subdivision or agency thereof, whether computed on a
separate, consolidated, unitary, combined, or any other basis, and such term
shall include any interest, fines, penalties or additional amounts of any
interest in respect of any additions, fines or penalties attributable or imposed
or with respect to any such taxes, charges, fees, levies or other assessments.
(k) For purposes of this Agreement, the term "Tax Return" shall mean any
return, report or other document required to be supplied to a taxing authority
in connection with Taxes.
SECTION 5.14 Employee Benefit Plans; ERISA. For purposes of this Section 5.14,
-----------------------------
(i) "Company Plan" shall mean (x) each employee pension benefit plan (as such
term is defined in Section 3(2) of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA")) ("Pension Plan"); (y) each employee welfare
benefit plan (as such term is defined in Section 3(1) of ERISA) ("Welfare Plan")
maintained by the Company and any of its ERISA Affiliates, and (z) each stock
option, stock purchase, stock appreciation right and stock based plan and each
material deferred compensation, severance, incentive and bonus plan or agreement
maintained by the Company for the benefit of current or former employees or
current or former directors of the Company; and (ii) "ERISA Affiliate" shall
mean any trade or business whether or not incorporated, under common control
with the Company within the meaning of Section 414(b), (c), (m), or (o) of the
Code or Section 4001(b) of ERISA. All Company Plans and all severance plans and
agreements of general applicability to the Company's executive officers and
other employees are listed in Section 5.14 of the Company Disclosure Schedule.
(a) With respect to each Company Plan, the Company has made available to
Parent a true, correct and complete copy of: (i) any current plan documents,
trust agreements, insurance contracts and other funding vehicles, and amendments
thereto; (ii) for the most recently ended plan year, all IRS Form 5500 series
forms (and any financial statements and other schedules attached thereto) filed
with respect to any Company Plan; (iii) all current summary plan descriptions
and subsequent summaries of material modifications with respect to each Company
Plan for which such descriptions and modifications are required under ERISA; and
(iv) the most recent IRS determination letter for each Pension Plan which is
intended to be qualified under Section 401(a) of the Code.
(b) Neither the Company nor any of its ERISA Affiliates maintains or has,
within the previous six years, maintained a Pension Plan which is subject to
Title IV of ERISA.
(c) Neither the Company nor any of its ERISA Affiliates currently maintains
or has, within the previous six years, maintained or been obligated to
contribute to any multiemployer plan, as defined in Section 3(37) of ERISA.
(d) Neither the Company nor any of its ERISA Affiliates is bound by any
collective bargaining agreement or similar agreement to maintain or contribute
to any Company Plan.
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(e) Each Company Plan (i) has been administered in material compliance with
its terms and is in material compliance with the applicable provisions of ERISA
and has been administered in material compliance with the applicable provisions
of ERISA, the Code and other applicable laws; (ii) which is intended to be a
qualified plan within the meaning of Section 401(a) of the Code has a favorable
determination from the IRS as to its qualified status or is within the remedial
amendment period for making any required changes and the Company is not aware of
any circumstances likely to result in revocation of any such favorable
determination letter; and (iii) may, without liability, be amended, terminated
or otherwise discontinued, except as specifically prohibited by applicable law.
(f) With respect to each Company Plan, (i) there are no inquiries or
proceedings pending or threatened by the IRS, the Department of Labor, or any
participant or beneficiary (other than claims for benefits in the ordinary
course) with respect to the design or operation of the Company Plans; (ii) the
Company has made or provided for all contributions required under the material
terms of such Company Plans and any applicable laws for all periods through the
Closing Date; and (iii) there have been no "prohibited transactions" (as
described in Section 4975 of the Code or in Part 4 of Subtitle B of Title I of
ERISA) for which a statutory, administrative, or regulatory exemption is not
available.
(g) Section 5.14(g) of the Company Disclosure Schedule contains a true and
complete summary or list of or otherwise describe all material employment
contracts and other employee benefit arrangements with "change of control" or
similar provisions and all severance agreements, in each case with executive
officers of the Company. Except as set forth in Section 5.14(g) of the Company
Disclosure Schedule, the consummation of the transactions contemplated by this
Agreement, without regard to any other event, will not (w) entitle any employees
of the Company or any of its subsidiaries to severance pay, (x) accelerate the
time of payment or vesting or trigger any payment or funding (through a grantor
trust or otherwise) of compensation or benefits under, increase the amount
payable or trigger any other material obligation pursuant to, any of the Company
Plans, (y) result in any payments under any of the Company Plans which would not
be deductible under Section 280G of the Code, or (z) cause any payments under
any Company Plan to cease to be excluded from "applicable employee remuneration"
for purposes of Section 162(m) of the Code. Neither the Company nor any of its
subsidiaries has any material obligations for the health and life benefits under
any Company Plan, nor any obligations under non-qualified retirement plans
except as set forth on Section 5.14 of the Company Disclosure Schedule.
SECTION 5.15 Labor Controversies. There are no significant controversies
-------------------
pending or, to the knowledge of the Company, threatened between the Company or
its subsidiaries and any of their respective employees, except for such
controversies which have not had and would not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect. The
Company and its subsidiaries are in compliance with applicable laws respecting
employment and employment practices, terms, and conditions of employment, and
wages and hours and has not engaged in any unfair labor practices, except for
any noncompliance or practices that have not had and would not reasonably be
expected to have, individually or in the aggregate, a Company Material Adverse
Effect. Neither the Company nor
21
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any of its subsidiaries is a party to any collective bargaining agreement or
other labor union contract applicable to persons employed by the Company or its
subsidiaries, nor does the Company know of any activities or proceedings of any
labor union to organize any such employees. The Company has no knowledge of any
strikes, slowdowns, work stoppages, lockouts or threats thereof, by or with
respect to any employees of the Company or any of its subsidiaries. The Company
has no knowledge of any actions or events taken by it or its subsidiaries that
would give rise to obligations of the Company or any of its subsidiaries under
the Workers Adjustment and Retraining Notification Act, 29 U.S.C. (S)2101, et
seq. -- ----
SECTION 5.16 Environmental Matters.
---------------------
(a) Each of the Company and its subsidiaries is in compliance with all
applicable federal, state, local and foreign laws and regulations relating to
pollution or protection of human health or the environment (including, without
limitation, ambient air, surface water, ground water, land surface or subsurface
strata) (collectively, "Environmental Laws"), except for non- compliance that
has not had and would not reasonably be expected to have, individually or in the
aggregate, a Company Material Adverse Effect, which compliance includes, but is
not limited to, the possession by the Company and its subsidiaries of all
material permits and other governmental authorizations required under applicable
Environmental Laws, and compliance with the terms and conditions thereof; none
of the Company or its subsidiaries has received written notice of, or, to the
knowledge of the Company, is the subject of, any action, cause of action, claim,
investigation, demand or notice by any person or entity alleging liability under
or non-compliance with any Environmental Law (an "Environmental Claim") that
could reasonably be expected to have a Company Material Adverse Effect; and to
the knowledge of the Company, there are no circumstances that are reasonably
likely to result in such liability or prevent such compliance in the future.
(b) There are no Environmental Claims which could reasonably be expected to
have a Company Material Adverse Effect that are pending or, to the knowledge of
the Company, threatened against the Company or its subsidiaries or, to the
knowledge of the Company, against any person or entity whose liability for any
Environmental Claim the Company or any of its subsidiaries has or may have
retained or assumed either contractually or by operation of law.
SECTION 5.17 Title to Assets. The Company and each of its subsidiaries has
---------------
good and marketable title in fee simple to all its real property and good title
to all its leasehold interests and other assets and properties, as reflected in
the most recent balance sheet included in the Company Financial Statements,
except for properties and assets that have been disposed of in the ordinary
course of business since the date of such balance sheet, free and clear of all
mortgages, liens, pledges, charges or encumbrances, except (a) liens for current
taxes, payments of which are not yet delinquent, (b) such imperfections in title
and easements and encumbrances, if any, as are not substantial in character,
amount or extent and do not detract from the value, or interfere with the
present use of the property subject thereto or affected thereby, or otherwise
impair the Company's business operations (in the manner presently carried on by
the Company), and (c) as disclosed in the Company SEC Reports, and except for
such matters which have not had and would not reasonably be expected to have,
individually or in the aggregate, a Company
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Material Adverse Effect. All leases under which the Company leases any real or
personal property are in good standing, valid and effective in accordance with
their respective terms, and there is not, under any of such leases, any existing
default or event which with notice or lapse of time or both would become a
default other than failures to be in good standing, valid and effective and
defaults under such leases which have not had and would not reasonably be
expected to have, individually or in the aggregate, a Company Material Adverse
Effect.
SECTION 5.18 Intellectual Property; Software.
-------------------------------
(a) (i) Each of the Company and its subsidiaries owns, or possesses
adequate licenses or other valid rights to use, all existing United States and
foreign patents, trademarks, trade names, service marks, copyrights, trade
secrets and applications therefor that are material to its business as currently
conducted (the "Company Intellectual Property Rights"); (ii) all Company
Intellectual Property Rights are either owned by the Company or its subsidiaries
free and clear of all material liens and encumbrances or are used pursuant to a
license agreement; (iii) to the knowledge of the Company, each such license
agreement is valid and enforceable and in full force and effect; (iv) neither
the Company nor its subsidiaries is in default thereunder in any material
respect, and to the knowledge of the Company, no corresponding licensor is in
default thereunder in any material respect; (v) to the knowledge of the Company,
none of the Company Intellectual Property Rights infringes or otherwise
conflicts with any material right of any person; (vi) there is no pending or, to
the knowledge of the Company, threatened (in writing) litigation, adversarial
proceeding, administrative action or other material challenge or claim relating
to any Company Intellectual Property Rights; (vii) there is no outstanding order
of a Governmental Authority relating to any Company Intellectual Property
Rights; (viii) to the knowledge of Company, there is currently no infringement
by any person of any Company Intellectual Property Rights; and (ix) the Company
Intellectual Property Rights owned, used or possessed by the Company and its
subsidiaries is sufficient and adequate to conduct the business of the Company
and the Company Intellectual Property Rights in all material respects as such
business is currently conducted.
(b) The Company and its subsidiaries have taken reasonable steps to
protect, maintain and safeguard the Company Intellectual Property Rights,
including any Company Intellectual Property Rights for which improper or
unauthorized disclosure would impair its value or validity, and have executed
and required nondisclosure agreements and made any required filings and
registrations in connection with the foregoing, except, in each case, where the
failure to take such steps or actions has not had and would not reasonably be
expected to have, individually or in the aggregate, a Company Material Adverse
Effect.
(c) The conduct of the business of the Company and its subsidiaries as now
conducted does not, to the Company's knowledge, infringe any valid patents,
trademarks, trade names, service marks or copyrights of others in any material
respect. The consummation of the transactions contemplated hereby will not
result in the loss or impairment of any Company Intellectual Property Rights.
(d) To the knowledge of the Company, all material third party software
currently used by the Company and its subsidiaries is Year 2000 Compliant. For
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purposes of this Section 5.18(d), "software" means and includes all computer
programs, whether in source code, object code or other form (including without
limitation any embedded in or otherwise constituting part of a computer hardware
device), algorithms, edit controls, methodologies, applications, flow charts and
any and all systems documentation (including, but not limited to, data entry and
data processing procedures, report generation and quality control procedures),
logic and designs for all programs, and file layouts and written narratives of
all procedures used in the coding or maintenance of the foregoing.
(e) Neither the Company nor any subsidiary has licensed (or otherwise
entered into any agreement permitting) any Person to use or market any of its
computer software (whether or not copyrighted) other than marketing and
distribution agreements in the ordinary course of business and licenses to
end-users to use (but not market, distribute, sell or transfer) the computer
software which have not had and would not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect.
(f) Each of the Company and its subsidiaries considers its computer
software as trade secrets, and each has taken steps it believes appropriate to
protect and maintain the same as such, except in cases where the Company has
elected to rely on patent or copyright protection in lieu of trade secret
protection.
(g) The hardware and software of the Company and its subsidiaries has, in
all material respects, (i) accurately and consistently processed date
information before, during and after January 1, 2000, including, but not limited
to accepting input, providing date output and performing calculations on dates
or portions of dates, and (ii) functioned accurately and without interruption
before, during and after January 1, 2000 without any change in operations
associated with the advent of the new century. There are no disputes concerning
the functionality of any software products of the Company which, individually or
in the aggregate, are or would be material to the Company.
(h) To the knowledge of the Company, no employee of the Company or any of
its subsidiaries is in material violation or breach of any term of any
employment contract, patent disclosure agreement or any other contract or
agreement with the Company or any other party, which is a breach or violation of
provisions relating to the nondisclosure or confidentiality of intellectual
property rights or of noncompete covenants designed to protect intellectual
property rights.
SECTION 5.19 Brokers and Finders. Except for its obligation to pay fees and
-------------------
expenses pursuant to its agreement with Goldman Sachs & Co., a copy of which has
previously been furnished to Parent, the Company has not entered into any
contract, arrangement or understanding with any person or firm which may result
in the obligation of the Company to pay any finder's fees, brokerage or agent
commissions or other like payments in connection with the transactions
contemplated hereby. Except for the fees and expenses payable to Goldman Sachs
& Co., there is no claim for payment by the Company of any investment banking
fees, finder's fees, brokerage or agent commissions or other like payments in
connection with the negotiations leading to this Agreement or the consummation
of the transactions contemplated hereby.
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SECTION 5.20 Opinion of Financial Advisor. The financial advisor of the
----------------------------
Company, Goldman Sachs & Co., has rendered an opinion to the Board of Directors
of the Company, dated as of the date hereof, to the effect that, as of the date
hereof, the Common Stock Price is fair from a financial point of view to the
holders of Company Common Stock; it being understood and acknowledged by Parent
and Subsidiary that such opinion has been rendered for the benefit of the Board
of Directors of the Company and is not intended to, and may not, be relied upon
by Parent, its affiliates or their respective subsidiaries.
SECTION 5.21 Section 203 of the DGCL. The Board of Directors of the Company
-----------------------
has taken all actions so that the restrictions contained in Section 203 of the
DGCL applicable to an "interested stockholder" or a "business combination" (as
defined in Section 203) will not apply to the execution, delivery or performance
of this Agreement or the consummation of the Offer, the Merger or the other
transactions contemplated by this Agreement.
SECTION 5.22 Affiliate Transactions. Except to the extent disclosed in any of
----------------------
the Company SEC Reports, there are no other transactions, agreements,
arrangements or understandings between the Company or its subsidiaries, on the
one hand, and the Company's affiliates (other than wholly-owned subsidiaries of
the Company) or other Persons, on the other hand, that would be required to be
disclosed under Item 404 of Regulation S-K under the Securities Act.
SECTION 5.23 Insurance. The Company and its subsidiaries maintain policies of
---------
fire and casualty, liability and other forms of insurance in such amounts, with
such deductibles and against such risks and losses as are customary in the
Company's industry, and also maintain all policies of insurance which are
required by their material commercial contracts, in such amounts as specified in
the respective contracts. All such policies which are material to the Company
and its business are in full force and effect, all premiums due and payable
thereon have been paid, and no notice of cancellation or termination has been
received with respect to any such policy.
SECTION 5.24 Company Rights Agreement. The Company has taken all necessary
------------------------
action so that the execution of this Agreement and the consummation of the
Offer, the Merger and the other transactions contemplated hereby do not and will
not result in the grant of any rights to any person under the Company Rights
Agreement or enable or require any outstanding rights thereunder to be
exercised, distributed or triggered.
SECTION 5.25 Contracts. Section 5.25 of the Company Disclosure Schedule lists,
---------
under the relevant heading, all oral or written contracts, agreements,
arrangements, guarantees, licenses, leases and executory commitments (each a
"Contract"), other than Company Plans disclosed in Section 5.14 of the Company
Disclosure Schedule and any Contracts heretofore filed as an exhibit to any
Company SEC Reports, that exist as of the date hereof to which the Company or
any of its subsidiaries is a party or by which it or such subsidiary is bound
and which fall within any of the following categories: (a) material Contracts
not entered into in the ordinary course of the Company's and its subsidiaries'
businesses; (b) material joint venture and partnership agreements; (c) Contracts
which contain requirements for payments in excess of $500,000, other than
contracts under which the Company purchases and then resells hardware to
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its customers; (d) Contracts relating to any outstanding commitment for capital
expenditures in excess of $500,000; (e) indentures, mortgages, promissory notes,
loan agreements or guarantees of borrowed money, letters of credit or other
agreements or instruments of the Company or its subsidiaries or commitments for
the borrowing or the lending by the Company of amounts in excess of $250,000 in
the aggregate or providing for the creation of any charge, security interest,
encumbrance or lien upon any of the assets of the Company with an aggregate
value in excess of $250,000; (f) Contracts providing for "earn-outs" or other
contingent payments by the Company involving more than $250,000 per contract
over the terms of all such Contracts; (g) Contracts associated with off balance
sheet financing in excess of $250,000 in the aggregate, including but not
limited to arrangements for the sale of receivables; (h) the following customer
Contracts:
(i) Contracts with United States customers which produced more than $3
million of Company service fee revenues in 1999,
(ii) Contracts with United States customers which produced more than
$2 million of Company perpetual license fee revenues in 1999,
(iii) Contracts with United States customers which produced more than
$1 million of Company support fee revenues in 1999,
(iv) Contracts with United States customers which produced more than
$2 million of Company outsourcing fee revenues in 1999,
(v) Contracts with United States customers which produced more than
$1.5 million of Company Strategic Services Group (consulting) revenues in 1999,
(vi) Contracts with United States customers which produced more than
$2 million of Company installation fee revenues in 1999, and
(vii) Contracts with customers of the Company's international
operations, each of which produced in 1999, or is scheduled to produce in 2000,
more than $1 million in revenue;
(i) stock purchase agreements, asset purchase agreements or other acquisition or
divestiture agreements where the consideration in any individual transaction
exceeds $250,000 since January 1, 1998; or (j) any other agreement which is
material to the Company, irrespective of amount. All Contracts to which the
Company or any of its subsidiaries is a party or by which it or such subsidiary
is bound are valid and binding obligations of the Company or such subsidiary
and, to the knowledge of the Company, the valid and binding obligation of each
other party thereto except such Contracts which, if not so valid and binding,
have not had and would not reasonably be expected to have, individually or in
the aggregate, a Company Material Adverse Effect. Neither the Company nor, to
the knowledge of the Company, any other party thereto is in violation of or in
default in respect of, nor has there occurred an event or condition which with
the passage of time or giving of notice (or both) would constitute a default
under or permit the termination of, any such Contract except such violations or
defaults under or terminations which
26
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have not had and would not be reasonably be expected to have, individually or in
the aggregate, a Company Material Adverse Effect.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF PARENT AND SUBSIDIARY
Parent and Subsidiary each represent and warrant to the Company that:
SECTION 6.1 Organization and Qualification. Each of Parent and Subsidiary is a
------------------------------
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation and has the requisite corporate power
and authority to own, lease and operate its assets and properties and to carry
on its business as it is now being conducted. Each of Parent and Subsidiary is
qualified to transact business and is in good standing in each jurisdiction in
which the properties owned, leased or operated by it or the nature of the
business conducted by it makes such qualification necessary, except where the
failure to be so qualified and in good standing could not reasonably be expected
to prevent or delay the consummation of the Offer or the Merger.
SECTION 6.2 Authority; Non-Contravention; Approvals.
---------------------------------------
(a) Parent and Subsidiary each have full corporate power and authority to
enter into this Agreement and to consummate the Offer, the Merger and the other
transactions contemplated hereby. This Agreement has been approved by the Boards
of Directors of Parent and Subsidiary and the sole stockholder of Subsidiary,
and no other corporate proceedings on the part of Parent or Subsidiary are
necessary to authorize the execution and delivery of this Agreement or the
consummation by Parent and Subsidiary of the transactions contemplated hereby.
This Agreement has been duly executed and delivered by each of Parent and
Subsidiary, and, assuming the due authorization, execution and delivery hereof
by the Company, constitutes a valid and legally binding agreement of each of
Parent and Subsidiary enforceable against each of them in accordance with its
terms, except that such enforcement may be subject to (i) bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting or
relating to enforcement of creditors' rights generally and (ii) general
equitable principles.
(b) The execution, delivery and performance of this Agreement by each of
Parent and Subsidiary and the consummation of the Offer and the Merger and the
other transactions contemplated hereby do not and will not violate, conflict
with or result in a breach of any provision of, or constitute a default (or an
event which, with notice or lapse of time or both, would constitute a default)
under, or result in the termination of, or accelerate the performance required
by, or result in a right of termination or acceleration under, or result in the
creation of any lien, security interest or encumbrance upon any of the
properties or assets of Parent or any of its subsidiaries under any of the
terms, conditions or provisions of (i) the respective certificates of
incorporation or bylaws of Parent or any of its subsidiaries, (ii) any statute,
law, ordinance, rule, regulation, judgment, decree, order, injunction, writ,
permit or license of any court or Governmental Authority applicable to Parent or
any of its subsidiaries or any of their respective properties or assets, or
(iii) any note, bond, mortgage, indenture, deed of trust, license, franchise,
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permit, concession, contract, lease or other instrument, obligation or agreement
of any kind to which Parent or any of its subsidiaries is now a party or by
which Parent or any of its subsidiaries or any of their respective properties or
assets may be bound or affected; subject (x) in the case of the terms,
conditions or provisions described in clause (ii) above, to obtaining (prior to
the Effective Time) the Parent Required Statutory Approvals (as defined in
Section 6.2(c) hereof), and (y) in the case of the terms, conditions or
provisions described in clause (iii) above, to obtaining (prior to the Effective
Time) consents required from commercial lenders, lessors or other third parties.
Excluded from the foregoing sentences of this paragraph (b), insofar as they
apply to the terms, conditions or provisions described in clauses (ii) and (iii)
of the first sentence of this paragraph (b) (and whether resulting from such
execution and delivery or consummation), are such violations, conflicts,
breaches, defaults, terminations, accelerations or creations of liens, security
interests or encumbrances that could not reasonably be expected to prevent or
delay the consummation of the Offer or the Merger.
(c) Except for (i) the filings by Parent required by the HSR Act, (ii) the
merger filing required by the Bundeskartellamt and (iii) publication after
consummation of the Offer of an "ad hoc" disclosure pursuant to Section 15 of
the German Securities Trading Act, (iv) the filing of the Offer Documents, the
Information Statement, the Schedule 14D-9 and the Proxy Statement with the SEC
pursuant to the Exchange Act and the Securities Act, (v) the making of the
Merger Filing with the Secretary of State of the State of Delaware in connection
with the Merger, and (vi) the filing of reports with the U.S. Department of
Commerce regarding foreign direct investment in the United States (the filings
and approvals referred to in clauses (i) through (vi) are collectively referred
to as the "Parent Required Statutory Approvals"), no declaration, filing or
registration with, or notice to, or authorization, consent or approval of, any
Governmental Authority is necessary for the execution and delivery of this
Agreement by Parent or Subsidiary or the consummation by Parent or Subsidiary of
the transactions contemplated hereby.
SECTION 6.3 Proxy Statement. None of the information to be supplied by Parent
---------------
or its subsidiaries for inclusion or incorporation by reference in the Proxy
Statement to be distributed in connection with the Stockholders Meeting, if any,
will, at the time of its mailing, at the time of the Stockholders Meeting or at
the Effective Time, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
are made, not misleading. The Proxy Statement will, as of its mailing date,
comply as to form in all material respects with all applicable laws, including
the provisions of the Securities Act and the Exchange Act and the rules and
regulations promulgated thereunder, except that no representation or warranty is
made by Parent or Subsidiary with respect to statements made or incorporated by
reference therein based on information supplied by the Company or the
stockholders of the Company for inclusion or incorporation by reference therein.
SECTION 6.4 Offer Documents; Schedule 14D-9. Neither (a) the Offer Documents
-------------------------------
(b) any information supplied by Parent or Subsidiary in writing for inclusion or
incorporation by reference in the Information Statement nor (c) any information
supplied by Parent or Subsidiary in writing for inclusion or incorporation by
reference in the Schedule 14D-9
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<PAGE>
shall, at the respective times the Offer Documents, the Information Statement or
the Schedule 14D-9 or any amendments or supplements thereto are filed with the
SEC or are first published, sent or given to stockholders of the Company, as the
case may be, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they are made,
not misleading. The Offer Documents and the Information Statement will, in each
case as of the date of mailing, comply as to form in all material respects with
all applicable laws, including the provisions of the Exchange Act and the rules
and regulations promulgated thereunder. Notwithstanding the foregoing, no
representation or warranty is made by Parent or Subsidiary with respect to
statements made or incorporated by reference therein based on information
supplied by the Company for inclusion or incorporation by reference therein.
SECTION 6.5 Financing. Parent has and will have at each of (i) the time of
---------
acceptance for purchase by Subsidiary of the shares of Company Common Stock
pursuant to the Offer and (ii) the Effective Time, and will make available to
Subsidiary (or cause to be made available), the funds necessary to consummate
the Offer and the Merger on the terms contemplated by this Agreement.
SECTION 6.6 Subsidiary. Subsidiary was formed solely for the purposes of
----------
engaging in the transactions contemplated hereby, and has engaged in no other
business activities and has conducted its operations only as contemplated
hereby.
ARTICLE VII
COVENANTS OF THE PARTIES
SECTION 7.1 Mutual Covenants.
----------------
(a) General. Subject to the terms and conditions hereof, each of the
-------
parties shall (and shall cause its respective subsidiaries to) use its
reasonable best efforts to take all actions and to do all things necessary,
proper or advisable to consummate the Offer and the Merger and the other
transactions contemplated by this Agreement (subject to the fiduciary duties of
the Company's Board of Directors and Section 8.2(b)), including, without
limitation, using its reasonable best efforts to (i) prepare, execute and
deliver such instruments and take or cause to be taken such actions as any other
party shall reasonably request, and (ii) after consultation with the other
parties, obtain any consent, waiver, approval or authorization from any third
party reasonably requested by such other party in order to maintain in full
force and effect any of the Company's contracts, permits, licenses or other
rights following the Offer, the Merger and the other transactions contemplated
hereby.
(b) HSR Act. Without limiting the foregoing, each of the parties undertakes
-------
and agrees to file as soon as practicable, and in any event within seven
business days after the date hereof, a Notification and Report Form under the
HSR Act with the United States Federal Trade Commission (the "FTC") and the
United States Department of Justice, Antitrust Division (the "Antitrust
Division") and the Bundeskartellamt. Each of the parties shall (i) respond as
promptly as practicable to any inquiries received from the FTC, the Antitrust
Division or the Bundeskartellamt for additional information or documentation and
to all inquiries and requests received from any State Attorney General or other
governmental authority in connection with antitrust matters, and (ii) take all
commercially reasonable steps to avoid any extension of the waiting period under
the HSR Act and (iii) refrain from entering into any agreement with the FTC, the
Antitrust Division
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<PAGE>
or the Bundeskartellamt not to consummate the transactions contemplated by this
Agreement, except with the prior written consent of the other parties hereto.
Parent shall use its reasonable best efforts to avoid or eliminate impediments
under any antitrust, competition, or trade regulation law that may be asserted
by the FTC, the Antitrust Division, any State Attorney General, the
Bundeskartellamt or any other Governmental Authority with respect to the Offer
or the Merger so as to enable the Closing to occur as soon as reasonably
possible. Each of the parties or its counsel shall promptly notify the other
party or its counsel of any written or oral communication to that party or
counsel from the FTC, the Antitrust Division, any State Attorney General, the
Bundeskartellamt or any other Governmental Authority and permit the other party
or its counsel to review in advance any proposed written communication to any of
the foregoing.
(c) Other Governmental Matters. Without limiting the foregoing, and subject
--------------------------
to the terms and conditions hereof, each of the parties hereto shall (and shall
cause its subsidiaries to) use its reasonable best efforts to take any
additional action that may be necessary, proper or advisable to (i) obtain from
any Governmental Authority any consent, license, permit, waiver, approval,
authorization (including, without limitation, SEC "no- action" letters) required
or appropriate to be obtained by either Parent or the Company or any of their
subsidiaries in connection with the authorization, execution and delivery of
this Agreement and the consummation of the Offer and the Merger and the other
transactions contemplated hereby, (ii) make all necessary filings, and
thereafter make any required submissions with respect to the Offer and the
Merger and the other transactions contemplated hereby required under the
Securities Act and the Exchange Act and the rules and regulations thereunder,
and any other applicable federal or state securities or other laws, and (iii)
effect all other necessary registrations, filings and submissions. Each of the
parties shall (and shall cause each of their respective subsidiaries to)
cooperate and use reasonable best efforts vigorously to contest and resist any
action, including legislative, administrative or judicial action, and to have
vacated, lifted, reversed or overturned any decree, judgment, injunction or
other order whether temporary, preliminary or permanent that is in effect and
restricts, prevents, prohibits or otherwise bars the consummation of the Offer
or the Merger or any other transaction contemplated hereby.
(d) Stockholder Approval; Preparation of Proxy Statement.
----------------------------------------------------
(i) If the approval of the Company's stockholders of the Merger
("Company Stockholders' Approval") is required by law, the Company shall, at
Parent's request, as soon as practicable following the expiration of the Offer
in accordance with the terms of Section 1.1 of this Agreement, so long as
permitted by law, duly call, give notice of, convene and hold a meeting of its
stockholders (the "Stockholders Meeting") for the purpose of obtaining such
approval. Notwithstanding the foregoing, if Subsidiary shall acquire 90% or more
of the then outstanding shares of Company Common Stock, the Company shall at the
request of Parent take all necessary and appropriate actions to cause the
Merger, pursuant to the terms thereof, to
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become effective as promptly as practicable after such acquisition without a
meeting of the stockholders of the Company and otherwise in accordance with
Section 253 of the DGCL (including, without limitation, adoption by the board of
directors of Subsidiary of a short-form plan of merger in accordance with the
DGCL and consistent with the terms of the Merger).
(ii) If the Company Stockholders' Approval is required by law, the
Company shall at Parent's request, as soon as practicable following the
expiration of the Offer in accordance with the terms of Section 1.1 and to the
extent permitted by law, prepare and file a preliminary proxy statement or
Information Statement (as amended and supplemented, the "Proxy Statement") with
the SEC and shall use all reasonable efforts to respond to any comments of the
SEC or its staff, and, to the extent permitted by law, to cause the Proxy
Statement to be mailed to the Company's stockholders as promptly as practicable
after responding to all such comments to the satisfaction of the staff. The
Company shall notify Parent promptly of the receipt of any comments from the SEC
or its staff and of any request by the SEC or its staff for amendments or
supplements to the Proxy Statement or for additional information and shall
supply Parent with copies of all correspondence between the Company or any of
its representatives, on the one hand, and the SEC or its staff, on the other
hand, with respect to the Proxy Statement or the Merger. If at any time prior to
the Stockholders Meeting there shall occur any event that should be set forth in
an amendment or supplement to the Proxy Statement, the Company shall promptly
prepare and mail to its stockholders such an amendment or supplement. Parent
shall cooperate with the Company in the preparation of the Proxy Statement or
any amendment or supplement thereto and shall furnish the Company with all
information required to be included therein with respect to Parent or
Subsidiary. Parent and its counsel shall be given a reasonable opportunity to
review and comment upon the Proxy Statement and any such correspondence prior to
its filing with the SEC or dissemination to the Company's stockholders.
(iii) Parent agrees to cause all shares of Company Common Stock
purchased pursuant to the Offer and all other shares of the Company Common Stock
owned by Parent or Subsidiary to be voted in favor of the Merger.
(iv) Without limiting the generality of the foregoing, each of the
parties shall correct promptly any information provided by it to be used
specifically in the Proxy Statement, if required, that shall have become false
or misleading in any material respect and shall take all steps necessary to file
with the SEC and have declared effective or cleared by the SEC any amendment or
supplement to the Proxy Statement so as to correct the same and to cause the
Proxy Statement as so corrected to be disseminated to the stockholders of the
Company, in each case to the extent required by applicable law.
(e) Notification of Certain Matters. Each of the parties agrees to (and to
-------------------------------
cause their respective subsidiaries to) give prompt notice to each other of, and
to use reasonable best efforts to remedy, (i) the occurrence or failure to occur
of any event which occurrence or failure to occur would be likely to cause any
of its representations or warranties in this Agreement to be untrue or
inaccurate in any material respect at the Effective Time, and (ii) any material
failure on its part to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by it hereunder; provided, however,
that the delivery of any notice
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pursuant to this Section 7.1(e) shall not limit or otherwise affect the remedies
available hereunder to the party receiving such notice.
(f) Public Statements. Unless otherwise required by applicable law or by
-----------------
obligations pursuant to any listing agreement with or rules of any securities
exchange, (i) the initial press release with respect to the Offer, the Merger
and the other transactions contemplated by this Agreement shall require the
prior mutual agreement and approval of both Parent and the Company and (ii) any
subsequent press releases or other public statements with respect to the Offer
or the Merger or the other transactions contemplated by this Agreement shall
require prior consultation between Parent and the Company.
SECTION 7.2 Covenants of the Company.
------------------------
(a) Conduct of Business. Except as otherwise contemplated by this Agreement
-------------------
or disclosed in the Company Disclosure Schedule, after the date hereof and prior
to the Closing Date or earlier termination of this Agreement, unless Parent
shall otherwise agree in writing, the Company shall (and shall cause its
subsidiaries to):
(i) conduct its business in the ordinary course of business in all
material respects, in substantially the same manner as conducted prior to the
date of this Agreement;
(ii) not
(A) amend or propose to amend its Certificate of Incorporation or
bylaws or equivalent constituent documents; or
(B) authorize for issuance, issue, sell, deliver or agree or
commit to issue, sell or deliver any subscriptions, options, calls, contracts,
commitments, understandings, restrictions, arrangements, rights or warrants,
including any right of conversion or exchange under any outstanding security,
instrument or other agreement, obligating the Company or any of its subsidiaries
to issue, deliver or sell, redeem or repurchase, or cause to be issued,
delivered or sold, additional shares of the capital stock of the Company or
other securities (except commercial loans) or equity equivalents (including,
without limitation, stock options and any stock appreciation rights) or
obligating the Company or any of its subsidiaries to grant, extend or enter into
any such agreement or commitment, except that (1) the Company may issue shares
upon exercise of options outstanding on the date hereof (which are exercised in
accordance with their respective terms as in effect on the date hereof), (2) any
subsidiary of the Company may issue capital stock or other securities to the
Company or to another subsidiary of the Company, and (3) the Company may issue
securities pursuant to the Company Rights Agreement but not with respect to or
as a result of the consummation of the transactions contemplated hereby;
(iii) not split, combine or reclassify its outstanding capital stock or
declare, set aside or pay any dividend or distribution payable in cash, stock,
property or otherwise, except for (1) the payment of dividends or distributions
to the Company or a wholly-
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owned direct or indirect subsidiary of the Company by a wholly-owned direct or
indirect subsidiary of the Company and (2) the payment of regular quarterly
dividends not exceeding $0.21 per share by the Company;
(iv) not, except as required by law or existing contract, adopt or
agree to adopt or amend or agree to amend in any material respect any Company
Plan;
(v) not adopt a plan of complete or partial liquidation, dissolution,
merger, consolidation, restructuring, recapitalization or other reorganization
of the Company or any of its subsidiaries (other than (A) as permitted pursuant
to Section 7.2(b), and (B) the Merger);
(vi) not
(A) redeem, purchase, acquire or offer to redeem, purchase or
acquire any shares of its capital stock or any options, warrants or rights to
acquire any of its capital stock or any security convertible into or
exchangeable for its capital stock;
(B) acquire any assets or businesses other than (1) expenditures
for current assets in the ordinary course of business, (2) expenditures for
fixed or capital assets not in excess of $10 million in the aggregate and (3)
expenditures in connection with acquisitions of assets or businesses permitted
under Section 7.2(b);
(C) sell, pledge or encumber any assets or businesses other than
(1) sales of assets in the ordinary course of business, (2) sales of businesses
or assets disclosed as such in the Company Disclosure Schedule, and (3) pledges
or encumbrances entered into in the ordinary course of business; or
(D) enter into any letter of intent or binding contract,
agreement, commitment or arrangement with respect of any of the foregoing;
(vii) use reasonable best efforts to preserve intact its business
organizations and goodwill, keep available the services of its respective
present officers and key employees, and preserve the goodwill and business
relationships with customers and others having business relationships with it;
(viii) other than as contemplated in this Agreement or by the Company
Disclosure Schedule, or as required by an existing contract or agreement as in
effect on the date of this Agreement, not (A) increase the amount of
compensation of any director or executive officer or other employee of the
Company or its subsidiaries, other than in the ordinary course of business
consistent in time schedule and amount with the Company's past practices, (B)
grant any severance or termination pay to, or enter into any employment or
severance agreement with, any current director or executive officer or other
employee of the Company or its subsidiaries other than in the ordinary course of
business consistent with past practice, (C) make any material increase in or
commitment to increase materially any employee benefits, or
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(D) make any material contribution, grant or award, other than regularly
scheduled contributions, to any Company Plan;
(ix) use reasonable best efforts to maintain with financially
responsible insurance companies insurance on its tangible assets and its
businesses in such amounts and against such risks and losses as are consistent
with past practice;
(x) not make, change or revoke any material Tax election or make any
material agreement or settlement regarding Taxes with any taxing authority;
(xi) not voluntarily delist any securities from the New York Stock
Exchange;
(xii) not adopt any material change in accounting policies or
practices, except to the extent required by generally accepted accounting
principles;
(xiii) not purchase any derivative securities, except for purchases to
hedge interest rate exposure in the ordinary course of business;
(xiv) except in the ordinary course of business, not settle or
compromise any material claims or litigation or modify or amend or terminate any
of its material contracts or waive, release or assign any material right or
claims; and
(xv) not authorize or enter into an agreement to do any of the
foregoing.
(b) Notwithstanding the foregoing nothing in this Section 7.2 or any other
provision of this Agreement shall prohibit (i) the Company from acquiring any
assets or businesses so long as such acquisitions are disclosed in the Company
Disclosure Schedule and are consummated on substantially similar terms as
described in the Company Disclosure Schedule, and (ii) any wholly- owned direct
or indirect subsidiary of the Company from combining, consolidating or merging
with or into the Company or any other wholly-owned subsidiary of the Company,
issuing any shares of its capital stock to the Company or any other wholly-owned
subsidiary of the Company, paying dividends or making other distributions of
assets to the Company or any wholly-owned direct or indirect subsidiary of the
Company, or making loans to or incurring or borrowing from the Company or any
other wholly-owned direct or indirect subsidiary of the Company, or (iii) the
Company (or any subsidiary of the Company) from fulfilling its obligations under
any agreement or contract disclosed in the Company Disclosure Schedule.
(c) Recommendation of the Company's Board of Directors. Subject to Section
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8.2(b), the Board of Directors of the Company shall not withdraw or modify in
any manner adverse to Parent its recommendations to the stockholders of the
Company provided for in Section 1.2(a)(i), and the Company shall use its
reasonable best efforts to solicit the acceptance of the Offer, and, if
required, the adoption of the Merger Agreement and approval of the Merger by the
stockholders of the Company.
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ARTICLE VIII
ADDITIONAL AGREEMENTS OF THE PARTIES.
SECTION 8.1 Access to Information.
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(a) Subject to applicable law and to the terms and conditions of the
Confidentiality Agreement dated March 23, 2000 between the Company and Parent
(the "Confidentiality Agreement"), the Company and its subsidiaries shall afford
to Parent and Subsidiary and Parent's accountants, counsel, financial advisors
and other representatives (the "Parent Representatives") reasonable access
during normal business hours with reasonable notice throughout the period prior
to the Effective Time to all of the Company's properties, books, contracts,
commitments and records (including, but not limited to, Tax Returns) and, during
such period, shall furnish promptly to Parent or the Parent Representatives (i)
a copy of each report, schedule and other document filed by the Company pursuant
to the requirements of federal or state securities laws or filed by the Company
with the SEC in connection with the transactions contemplated by this Agreement,
and (ii) such other information concerning the Company's business, properties
and personnel as Parent shall reasonably request; provided, that the Company in
responding to requests from Parent or any Parent Representative for access to
records or other information of a confidential and competitively sensitive
nature may, prior to expiration or termination of the waiting period under the
HSR Act, limit such access to the Parent's outside accountants, counsel,
financial advisors and other outside representatives. Parent and its
subsidiaries shall hold and shall use their reasonable best efforts to cause the
Parent Representatives to hold in strict confidence all nonpublic documents and
information furnished to Parent, Subsidiary and any Parent Representative in
connection with the transactions contemplated by this Agreement in accordance
with the Confidentiality Agreement.
(b) If this Agreement is terminated, Parent shall promptly redeliver to the
Company all nonpublic written material provided pursuant to this Section 8.1 and
shall not retain any copies, extracts or other reproductions in whole or in part
of such written material. In such event all documents, memoranda, notes and
other writings (including all electronic versions thereof) prepared by Parent
based on the information in such material shall be destroyed (and Parent shall
use its reasonable best efforts to cause the Parent Representatives to similarly
destroy the documents, memoranda and notes), and such destruction (and
reasonable best efforts) shall be certified in writing by an authorized officer
supervising such destruction.
SECTION 8.2 Acquisition Transactions.
------------------------
(a) After the date hereof and prior to the Effective Time or earlier
termination of this Agreement, the Company shall not, and shall not permit any
of its subsidiaries to, and the Company shall use its reasonable best efforts to
cause its and its subsidiaries' officers, directors or employees, and any
attorney, accountant, investment banker, financial advisor or other agent
retained by it or any of its subsidiaries, not to, initiate, solicit or
encourage, directly or indirectly, any inquiries or the making of any proposal
or offer (including, without limitation, any proposal or offer to stockholders
of the Company) with respect to a merger, consolidation or similar transaction
involving, or any purchase of all or any substantial share of, or purchase of
all or substantially all of the assets of, the Company or any of its
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subsidiaries (any such transactions being referred to herein as a "Company
Acquisition Transaction") or engage in any discussions or negotiations
concerning, or provide any confidential or non-public information or data to, or
have any discussions with any person (other than its professional advisors)
relating to any Company Acquisition Transaction, or otherwise facilitate any
effort or attempt to make or implement a Company Acquisition Transaction.
(b) Notwithstanding the provisions of paragraph (a) above or of this
Agreement, (i) if, after the date of this Agreement, the Company receives from a
financially capable corporation, partnership, person or other entity or group
that has not had any discussions with, or been solicited by, the Company or its
representatives prior to the date hereof with respect to a possible Company
Acquisition Transaction (a "Potential Acquiror") a bona fide written offer or
proposal with respect to a Company Acquisition Transaction (an "Acquisition
Proposal") that (A) was not solicited in violation of paragraph (a) of this
Section 8.2 and (B) the Board of Directors of the Company determines, in good
faith after consultation with its financial advisors, is reasonably likely to
lead to a "Superior Proposal" (as defined below), the Company may request from
the Potential Acquiror such information as may be reasonably necessary for the
Board of Directors of the Company to inform themselves as to the material terms
of such Acquisition Proposal for the sole purpose of determining whether such
Acquisition Proposal constitutes a Superior Proposal, provided, that (w) the
--------
Board of Directors of the Company shall have determined, in good faith after
being advised by legal and financial advisors, that taking such action with
respect to an Acquisition Proposal from such Potential Acquiror is necessary in
order for the Board of Directors of the Company to discharge its fiduciary
duties under applicable law, (x) upon receipt of such information requested from
the Potential Acquiror, neither the Company nor any of its directors, officers
or representatives shall be permitted to engage in any further discussions or
negotiations with any such Potential Acquiror that would otherwise violate
paragraph (a) of this Section 8.2, (y) the Company shall comply with paragraph
(c) of this Section 8.2 with respect to any such Acquisition Proposal and (z)
prior to the Board of Directors of the Company making any determination with
respect to any withdrawal of or change to its recommendation of the Offer in
connection with or as a result of such Acquisition Proposal, Parent shall have
the right for a period of three calendar days to amend the terms of the Offer in
response to such Acquisition Proposal and (ii) the Board of Directors of the
Company may take and disclose to the Company's stockholders a position
contemplated by Rules 14d-9 and 14e-2 under the Exchange Act with respect to an
Acquisition Proposal. It is understood and agreed that activities conducted in
accordance with this paragraph (b) shall not constitute a violation of paragraph
(a) of this Section 8.2 or any other provision of this Agreement. For purposes
of this Agreement, a "Superior Proposal" shall mean an Acquisition Proposal that
is more favorable than the Offer to the Company's stockholders from a financial
point of view and is reasonably likely to be consummated.
(c) The Company shall promptly notify Parent after receipt of any
Acquisition Proposal, indication of interest or request for non-public
information relating to the Company or its subsidiaries in connection with an
Acquisition Proposal or for access to the properties, books or records of the
Company or any subsidiary by any person or entity that informs the Board of
Directors of the Company or such subsidiary that it is considering making,
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or has made, an Acquisition Proposal (including the identity of the potential
acquiror) and the status of any discussions with respect to an Acquisition
Proposal.
(d) The Company shall promptly request each person that has heretofore
executed a confidentiality agreement in connection with its consideration of
acquiring it or any of its subsidiaries to return all confidential information
heretofore furnished to such persons. The Company agrees that it will
immediately cease and cause to be terminated any existing activities,
discussions or negotiations with any parties conducted heretofore with respect
to any proposed Company Acquisition Transaction.
SECTION 8.3 Expenses and Fees. Whether or not the Merger is consummated, all
-----------------
costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such
expenses, except that the expenses incurred in connection with the filing,
printing and mailing of the Proxy Statement and the Offer Documents shall be
shared equally by Parent and the Company.
SECTION 8.4 Directors' and Officers' Indemnification.
----------------------------------------
(a) The indemnification (and advancement of expenses) provisions of the
certificate of incorporation and bylaws of the Surviving Corporation as in
effect at the Effective Time shall not be amended, repealed or otherwise
modified for a period of seven years from the Effective Time in any manner that
would adversely affect the rights thereunder of individuals who at any time
prior to the Effective Time were directors, officers, employees or agents of the
Company. Parent shall assume, be jointly and severally liable for, and honor,
guaranty and stand surety for, and shall cause the Surviving Corporation to
honor, in accordance with their respective terms, each of the covenants
contained in this Section 8.4 and each of the indemnification agreements to
which the Company and any of its affiliates, directors and employees are a party
as of the date hereof without limit as to time.
(b) Without limiting Section 8.4(a), after the Effective Time, Parent
shall, to the fullest extent not prohibited under applicable law, guarantee all
obligations of the Surviving Corporation for indemnification and advancement of
expenses pursuant to the certificate of incorporation and bylaws of the
Surviving Corporation in connection with any actual or threatened claim, action,
suit, proceeding or investigation, whether civil, criminal, administrative or
investigative, arising out of, relating to or in connection with any action or
omission occurring or alleged to occur prior to the Effective Time (including,
without limitation, acts or omissions in connection with such persons serving as
an officer, director or other fiduciary in any entity if such service was at the
request or for the benefit of the Company and the Offer, the Merger or the other
transactions contemplated by this Agreement) or arising out of or pertaining to
the Offer, the Merger or the other transactions contemplated by this Agreement.
In the event of any such actual or threatened claim, action, suit, proceeding or
investigation (whether arising before or after the Effective Time), (i) Parent
and the Surviving Corporation shall jointly and severally pay the reasonable
fees and expenses of counsel selected by the persons entitled to indemnification
and advancement of expenses pursuant to the certificate of incorporation or
bylaws of the Surviving Corporation (each, together with such person's heirs,
executors or administrators, an "Indemnified Party" and collectively, the
"Indemnified Parties"),
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which counsel shall be reasonably satisfactory to Parent and the Surviving
Corporation, promptly after statements therefor are received and shall pay all
other reasonable expenses in advance of the final disposition of such action,
(ii) the Parent and the Surviving Corporation will cooperate and use all
reasonable efforts to assist in the vigorous defense of any such matter, and
(iii) to the extent any determination is required to be made with respect to
whether an Indemnified Party's conduct complies with the standards set forth
under the DGCL and the Surviving Corporation's certificate of incorporation or
bylaws, such determination shall be made by independent legal counsel acceptable
to the Surviving Corporation and the Indemnified Party; provided, however, that
neither Parent nor the Surviving Corporation shall be liable for any settlement
effected without its written consent (which consent shall not be unreasonably
withheld) and, provided further, that if Parent or the Surviving Corporation
advances or pays any amount to any person under this paragraph (b) and if it
shall thereafter be finally determined by a court of competent jurisdiction that
such person was not entitled to be indemnified hereunder for all or any portion
of such amount, to the extent required by law, such person shall repay such
amount or such portion thereof, as the case may be, to Parent or the Surviving
Corporation, as the case may be.
(c) If the Surviving Corporation or Parent or any of their successors or
assigns (i) consolidates with or merges into any other person and shall not be
the continuing or surviving corporation or entity of such consolidation or
merger, or (ii) transfers all or substantially all of its properties and assets
to any person, then and in each such case, proper provisions shall be made so
that the successors and assigns of the Surviving Corporation or Parent shall
assume the obligations of the Surviving Corporation or Parent, as the case may
be, set forth in this Section 8.4.
(d) Prior to the Effective Time, the Company may purchase an extension, for
up to six years and one month from and after the Effective Time, of the coverage
offered under its existing policies of directors' and officers' liability
insurance. For a period of at least six years and one month after the Effective
Time, Parent shall, if necessary, provide funds sufficient for such policies to
be in effect with respect to matters arising on or before the Effective Time
(provided that Parent may substitute therefor policies of at least the same
coverage and amounts containing terms and conditions that are no less
advantageous to the Indemnified Parties, and which coverages and amounts shall
be no less than the coverages and amounts provided at that time for Parent's
directors and officers, so long as such substitution does not result in lapses
of coverage); and provided, however, that Parent shall not be required to pay or
cause to be paid an annual premium in excess of 200% of the last annual premium
paid by the Company prior to the date hereof, and if the Parent is unable to
obtain the insurance required by this Section 8.4(d), it shall obtain as much
comparable insurance as possible for an annual premium equal to such maximum
amount.
(e) Parent shall pay all reasonable expenses, including reasonable
attorneys' fees, that may be incurred by any Indemnified Party in enforcing the
indemnity and other obligations provided in Section 8.4.
(f) The rights of each Indemnified Party hereunder shall be in addition to
and not in limitation of, any other rights such Indemnified Party may have under
the certificate of incorporation or bylaws of the Company, under the DGCL or
otherwise. The provisions of
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this Section 8.4 shall survive the consummation of the Merger and expressly are
intended to benefit each of the Indemnified Parties.
(g) Each Indemnified Party shall have rights as a third party beneficiary
under this Section 8.4 with separate contractual rights for its, his or her
benefit and such rights shall be enforceable by such Indemnified Party, its, his
or her heirs and personal representatives and shall be binding on the Surviving
Corporation and Parent and their successors and assigns. If requested by an
Indemnified Party, the Surviving Corporation and Parent shall enter into an
indemnity agreement with such Indemnified Party evidencing the Surviving
Corporation's and Parent's obligations under this Section 8.4.
SECTION 8.5 Employee Benefits.
-----------------
(a) Following the Effective Time, Parent shall honor, and cause the
Surviving Corporation to honor, each Company Plan and the related funding
arrangements of such Company Plan in accordance with its terms and shall
interpret such Company Plan in accordance with the past practice of the Company.
Without limiting the generality of the foregoing, Parent shall honor, and cause
the Surviving Corporation to honor, all vacation, personal and sick days accrued
by employees of the Company and its subsidiaries under any plans, policies,
programs and arrangements of the Company and its ERISA Affiliates immediately
prior to the Effective Time. From the Effective Time until December 31, 2001,
Parent shall provide, and cause the Surviving Corporation to provide, employee
benefits under employee benefit plans to the employees and former employees of
the Company and its subsidiaries that are in the aggregate no less favorable
than those provided to such persons pursuant to Company Plans on the date of
this Agreement (excluding equity and equity-based compensation). Nothing herein
shall prohibit any changes to any Company Plan that are (i) required by law
(including, without limitation, any applicable qualification requirements of
Section 401(a) of the Code), (ii) necessary as a technical matter to reflect the
transactions contemplated hereby or (iii) required for the Surviving Corporation
to provide for or permit investment in its securities or Parent's securities.
Furthermore, nothing herein shall require Parent to continue any particular
Company Plan or prevent the amendment or termination thereof (subject to the
maintenance, in the aggregate, of the benefits as provided in this Section
8.5(a) and to the obligation to provide severance pay and benefits as provided
above).
(b) With respect to any employee benefit plans in which any employees of
the Company or its subsidiaries first become eligible to participate, on or
after the Effective Time, and in which the Company employees did not participate
prior to the Effective Time, Parent shall: (i) waive all pre- existing
conditions, exclusions and waiting periods with respect to participation and
coverage requirements applicable to the employees of the Company and its
subsidiaries under any such new plans in which such employees may be eligible to
participate after the Effective Time, except to the extent such pre-existing
conditions, exclusions or waiting periods would apply under the analogous
Company Plan; (ii) provide each employee of the Company and its subsidiaries
with credit for any co-payments and deductibles paid prior to the Effective Time
(to the same extent such credit was given under the analogous Company Plan prior
to the Effective Time) in satisfying any applicable deductible or out-of-pocket
requirements under any such new plan in which such employees may be eligible to
participate after the Effective Time; (iii) recognize all service of such
employees for all purposes (including, without limitation, purposes of
eligibility to participate, vesting, and, except with respect to grandfathered
provisions contained in Parent's health plans applicable to employees hired
prior to September 30, 1991, entitlement to benefits, and, except with respect
to defined benefit pension plans, benefit accrual) in any such new plan in which
such employees may be eligible to participate after the
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Effective Time, and (iv) with respect to flexible spending accounts, provide
each employee of the Company and its subsidiaries with a credit for any salary
reduction contributions made thereto and a debit for any expenses incurred
thereunder with respect to the plan year in which the Effective Time occurs;
provided, that the foregoing shall not apply to the extent it would result in
duplication of benefits.
(c) If all, or any portion of the amounts payable to, or benefits provided
to, any employee of the Company previously disclosed to Parent in Section
5.13(g) of the Company Disclosure Schedule, either alone or in the aggregate,
constitute an excess "parachute payment" within the meaning of Section 280G of
the Code (whether or not under an existing plan, arrangement or other agreement)
(each such excess parachute payment, a "Parachute Payment"), and would result in
the imposition on any such employee of an excise tax under Section 4999 of the
Code, then, in addition to any other payments or benefits to which the employee
is entitled, the employee shall be paid an amount in cash equal to the sum of
the excise tax payable by the employee by reason of receiving Parachute Payments
plus a gross-up amount necessary to offset any and all applicable federal, state
and local excise, income or other taxes incurred by the employee by reason of
the payments made pursuant to this Section 8.5(c).
SECTION 8.6 Litigation. The Company shall give Parent the opportunity to
----------
participate in the defense or settlement of any shareholder litigation against
the Company and its directors relating to the Offer, the Merger and the other
transactions contemplated by this Agreement until the consummation of the Offer,
and thereafter, Parent shall direct the defense of such litigation and shall
give the Company and its directors an opportunity to participate in such
litigation; provided, however, that no settlement shall be agreed to prior to
the consummation of the Offer without Parent's consent, which consent shall not
be unreasonably withheld; and provided further that no settlement requiring a
payment or an admission of any wrongdoing by a director shall be agreed to
without such director's consent.
ARTICLE IX
CONDITIONS
SECTION 9.1 Conditions to Each Party's Obligation to Effect the Merger. The
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respective obligations of each party to effect the Merger are subject to the
satisfaction or waiver, where permissible, prior to the Effective Time, of the
following conditions:
(a) if required by the DGCL, this Agreement shall have been adopted by the
requisite affirmative vote of the stockholders of the Company in accordance with
applicable law;
(b) no statute, rule, regulation, executive order, decree or injunction
shall have been enacted, entered, promulgated, or enforced by any court or
Governmental
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Authority which is in effect and has the effect of prohibiting the consummation
of the Merger; and
(c) the waiting period (and any extension thereof) applicable to the
consummation of the Merger under the HSR Act, if any, shall have expired or been
terminated and the consent of the Bundeskartellamt shall have been obtained and
(i) in the case of the Company's obligations, (x) all other Company Required
Statutory Approvals necessary for the consummation of the Merger and the
transactions contemplated hereby shall have been obtained and be in effect at
the Effective Time and (y) all other consents or approvals of Governmental
Authorities necessary for the consummation of the Merger and the transactions
contemplated hereby shall have been obtained and be in effect at the Effective
Time, except where the failure to obtain any such consent or approval would not
reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect, and (ii) in the case of Parent's and Subsidiary's
obligations, (x) all other Parent Required Statutory Approvals necessary for the
consummation of the Merger and the transactions contemplated hereby shall have
been obtained and be in effect at the Effective Time, and (y) all other consents
or approvals of Governmental Authorities necessary for the consummation of the
Merger and the transactions contemplated hereby shall have been obtained and be
in effect at the Effective Time, except where the failure to obtain any such
consent or approval would not prevent the consummation of the Offer or the
Merger or materially impede the operation or use of any of the Company's assets
or business, after the Closing.
SECTION 9.2 Conditions to Obligations of Parent and Subsidiary to Effect the
----------------------------------------------------------------
Merger. The obligations of Parent and Subsidiary to effect the Merger are
- ------
further subject to the satisfaction or waiver pursuant to Section 1.1, prior to
the Effective Time, of the condition that Subsidiary shall have accepted for
payment and paid for the shares of Company Common Stock tendered pursuant to the
Offer. Neither Parent nor Subsidiary may invoke this condition if Subsidiary
fails to purchase shares of Company Common Stock so tendered and not withdrawn
in violation of the terms of this Agreement or the Offer.
ARTICLE X
TERMINATION, AMENDMENT AND WAIVER
SECTION 10.1 Termination. This Agreement may be terminated at any time before
-----------
the Effective Time, whether before or after approval of this Agreement and the
Merger by the stockholders of the Company (if required by applicable law):
(a) by mutual written consent duly authorized by the Boards of Directors of
Parent, Subsidiary and the Company;
(b) by Parent or the Company if any court of competent jurisdiction or
other Governmental Authority shall have issued a final order, decree or ruling
or taken any other final action restraining, enjoining or otherwise prohibiting
the consummation of the Offer or the Merger and such order, decree or ruling or
other action is or shall have become nonappealable (and the terminating party
shall have used reasonable best efforts to prevent the entry of such order);
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(c) by the Company if (i) Subsidiary fails to commence the Offer in
violation of Section 1.1 hereof, (ii) Subsidiary shall not have accepted for
payment and paid for shares of Company Common Stock pursuant to the Offer in
accordance with the terms thereof on or before August 1, 2000 unless such
failure is by reason of the nonsatisfaction of paragraphs (a) or (b) of Annex A
or (iii) Subsidiary fails to purchase validly tendered shares of Company Common
Stock in violation of the terms of this Agreement;
(d) by Parent or the Company if the Offer is terminated or withdrawn
pursuant to its terms (including pursuant to the terms set forth on Annex A)
without any shares of Company Common Stock being purchased thereunder; provided,
that Parent may not terminate this Agreement pursuant to this Section 10.1(d) if
Parent or Subsidiary shall have materially breached this Agreement and the
Company may not terminate this Agreement pursuant to this Section 10.1(d) if it
shall have materially breached this Agreement;
(e) by the Company prior to the purchase of a majority of the shares of
Company Common Stock pursuant to the Offer if (i) there shall have been a breach
of any representation or warranty in this Agreement on the part of Parent or
Subsidiary in any material respect or (ii) Parent or Subsidiary shall not have
performed or complied with any material covenant or agreement contained in this
Agreement, and which breach, in the case of both clause (i) and clause (ii)
above, shall not have been cured prior to the earlier of (x) 20 business days
following notice of such breach to Parent and Subsidiary by the Company and (y)
August 1, 2000; provided, that Parent and Subsidiary shall have no right to cure
such breach and the Company may immediately terminate this Agreement in the
event that such breach by Parent or Subsidiary was willful or in the event such
breach is not reasonably capable of being cured within such period of time;
(f) by Parent prior to the purchase of a majority of the shares of Company
Common Stock pursuant to the Offer if the Company shall have breached its
agreements contained in Section 8.2 in any material respect; and
(g) by Parent if the Company's Board of Directors shall have (i) withdrawn,
or modified or changed (including by amendment of the Schedule 14D-9) their
recommendation of the Offer, the Merger or this Agreement, (ii) failed to
publicly reconfirm such recommendation of the Offer promptly upon request by
Parent or Subsidiary, (iii) endorsed, approved or recommended any other
Acquisition Proposal, or (iv) resolved to do any of the foregoing.
SECTION 10.2 Effect of Termination.
---------------------
(a) In the event of termination of this Agreement by either Parent or the
Company pursuant to the provisions of Section 10.1, this Agreement shall
forthwith become void and there shall be no liability or further obligation on
the part of the Company, Parent, Subsidiary or their respective officers or
directors (except for obligations in this Section 10.2(a), in the second
sentence of Section 8.1(a) and in Sections 8.1(b), 8.3, 10.2(b) and 11.9, all of
which shall survive the termination). Nothing in this Section 10.2 shall relieve
any party from
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liability for any willful and intentional breach of any covenant or agreement of
such party contained in this Agreement.
(b) If this Agreement is terminated (i) by Parent pursuant to Section
10.1(f) or 10.1(g), (ii) by Parent pursuant to Section 10.1(d) as a result of
the termination of the Offer by Parent pursuant to paragraphs (a) (only as to a
willful breach), (b) of Annex A or (iii) by the Company or Parent pursuant to
Section 10.1(d) and prior to such termination an Acquisition Proposal shall have
been publicly announced or otherwise have become generally known and within nine
months following such termination a definitive agreement with respect to such
Acquisition Proposal shall have been executed by the Company, then Parent and
Subsidiary would suffer substantial damages, which damages cannot be determined
with reasonable certainty. To compensate Parent and Subsidiary for such damages
the Company shall pay to Parent the amount of $85,000,000. The parties agree
that any amount to be paid pursuant to this Section 10.2(b) in respect of
termination of this Agreement pursuant to Section 10.1(g); pursuant to 10.1(d)
as a result of the termination of the Offer by Parent pursuant to paragraph (f)
of Annex A; or pursuant to Section 10.1(d) in the circumstances described in
clause (iii) of this Section 10.2(b) shall represent liquidated damages and not
a penalty.
SECTION 10.3 Amendment. This Agreement may not be amended except by action
---------
taken by the parties' respective Boards of Directors or duly authorized
committees thereof and then only by an instrument in writing signed on behalf of
each of the parties hereto and in compliance with applicable law and Section
1.4(c). Subject to Section 1.4(c) and applicable law, such amendment may take
place at any time prior to the Closing Date and whether before or after the
Company Stockholders' Approval is obtained; provided, however, that after the
Company Stockholders' Approval is obtained, no amendment may be made which would
reduce the amount or change the kind of consideration to be received by the
holders of Company Common Stock upon consummation of the Merger, alter or change
any term of the articles (or certificate) of incorporation of Parent, Subsidiary
or the Surviving Corporation (except as expressly contemplated hereby), or alter
or change any of the terms and conditions of this Agreement if such alteration
or change would adversely effect the holders of any class or series of
securities of the Company.
SECTION 10.4 Extension; Waiver. At any time prior to the Effective Time,
-----------------
subject to Section 1.4(c), any party hereto may (a) extend the time for the
performance of any of the obligations or other acts of the other party, (b)
waive any inaccuracies in the representations and warranties of the other party
contained herein or in any document, certificate or writing delivered pursuant
hereto, or (c) waive compliance by the party with any of the agreements or
conditions contained herein. Any agreement on the part of any party hereto to
any such extension or waiver shall be valid only if set forth in an instrument
in writing signed on behalf of such party. The failure of any party hereto to
assert any of its rights hereunder shall not constitute a waiver of such rights.
43
<PAGE>
ARTICLE XI
GENERAL PROVISIONS
SECTION 11.1 Non-Survival of Representations and Warranties. No
----------------------------------------------
representations, warranties or agreements in this Agreement or in any instrument
delivered pursuant to this Agreement shall survive the Merger, and after
effectiveness of the Merger none of the Company, Parent, Subsidiary or their
respective officers or directors shall have any further obligation with respect
thereto except for the representations, warranties and agreements that by their
terms apply or are to be performed in whole in part after the Effective Time.
SECTION 11.2 Notices. All notices and other communications hereunder shall be
-------
in writing and shall be deemed given if delivered personally, mailed by
registered or certified mail (return receipt requested) or sent via facsimile to
the parties at the following addresses (or at such other address for a party as
shall be specified by like notice):
If to Parent or Subsidiary, to:
Siemens Corporation
153 E. 53rd Street
New York, New York 10022
Telecopier: (212) 258-4490
Attention: General Counsel
with a copy to:
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Telecopier: (212) 558-3588
Attention: Benjamin F. Stapleton, Esq.
If to the Company, to:
Shared Medical Systems Corporation
51 Valley Stream Parkway
Malvern, PA 19355-1406
Telecopier: (610) 251-8333
Attention: Bonnie L. Shuman, Esq., General Counsel
with a copy to:
Drinker Biddle & Reath LLP
1000 Westlakes Drive, Suite 300
Berwyn, PA 19312-2409
Telecopier: (610) 993-8585
Attention: Thomas E. Wood, Esq.
44
<PAGE>
SECTION 11.3 Governing Law. THIS AGREEMENT SHALL BE GOVERNED IN ALL RESPECTS,
-------------
INCLUDING VALIDITY, INTERPRETATION AND EFFECT, BY THE LAWS OF THE STATE OF
DELAWARE APPLICABLE TO CONTRACTS EXECUTED AND TO BE PERFORMED WHOLLY WITHIN SUCH
STATE.
SECTION 11.4 Parties Agreement. This Agreement shall be binding upon and inure
-----------------
solely to the benefit of each party hereto, and except as set forth in Sections
4.6 and 8.4 (which are intended to and shall create third party beneficiary
rights if the Offer and the Merger are consummated), nothing in this Agreement,
express or implied, is intended to confer upon any other person any rights or
remedies of any nature whatsoever under or by reason of this Agreement. The
rights of any third party beneficiary hereunder are not subject to any defense,
offset or counterclaim. Each of the Indemnified Parties referred to in Section
8.4 shall be entitled to enforce the provisions hereof directly against Parent
or the Surviving Corporation, to the same extent as if such Indemnified Party
were a party hereto.
SECTION 11.5 Interpretation. When a reference is made in this Agreement to an
--------------
Article, Section or Exhibit, such reference shall be to an Article or Section
of, or an Exhibit to, this Agreement unless otherwise indicated. The table of
contents and headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement. Whenever the words "include," "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation." The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement. All terms defined in this
Agreement shall have the defined meanings when used in any certificate or other
document made or delivered pursuant hereto unless otherwise defined therein.
The definitions contained in this Agreement are applicable to the singular as
well as the plural forms of such terms and to the masculine as well as to the
feminine and neuter genders of such term. Any agreement, instrument or statute
defined or referred to herein or in any agreement or instrument that is referred
to herein means such agreement, instrument or statute as from time to time
amended, modified or supplemented, including (in the case of agreements or
instruments) by waiver or consent and (in the case of statutes) by succession of
comparable successor statutes and references to all attachments thereto and
instruments incorporated therein. References to a person are also to its
permitted successors and assigns.
SECTION 11.6 Severability. If any term or other provision of this Agreement is
------------
invalid, illegal or incapable of being enforced by any law or public policy, all
other terms and provisions of this Agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner materially adverse to any
party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner in order that the
transactions contemplated hereby are consummated as originally contemplated to
the greatest extent possible.
SECTION 11.7 Assignment. Neither this Agreement nor any of the rights,
----------
interests or obligations under this Agreement shall be assigned, in whole or in
part, by operation
45
<PAGE>
of law or otherwise by any of the parties hereto without the prior written
consent of the other parties. Any assignment in violation of the preceding
sentence shall be void. Subject to the preceding sentence, this Agreement will
be binding upon, inure to the benefit of, and be enforceable by, the parties and
their respective successors and assigns.
SECTION 11.8 Enforcement. The parties agree that irreparable damage would
-----------
occur and that the parties would not have any adequate remedy at law in the
event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement, this being in addition to any other
remedy to which they are entitled at law or in equity; provided, however, that
if Parent is entitled to receive any payment pursuant to Section 10.2(b), it
shall not be entitled to specific performance to compel the consummation of the
Offer or the Merger.
SECTION 11.9 Submission to Jurisdiction; Waivers. Each of Parent, Subsidiary
-----------------------------------
and the Company irrevocably agrees that any legal action or proceeding with
respect to this Agreement or for recognition and enforcement of any judgment in
respect hereof brought by any other party hereto or its successors or assigns
may be brought and determined in the Chancery or other Courts of the State of
Delaware, and each of Parent, Subsidiary and the Company hereby irrevocably
submits with regard to any such action or proceeding for itself and in respect
to its property, generally and unconditionally, to the nonexclusive jurisdiction
of the aforesaid courts. Each of Parent, Subsidiary and the Company hereby
irrevocably waives, and agrees not to assert, by way of motion, as a defense,
counterclaim or otherwise, in any action or proceeding with respect to this
Agreement, (a) any claim that it is not personally subject to the jurisdiction
of the above-named courts for any reason other than the failure to lawfully
serve process, (b) that it or its property is exempt or immune from jurisdiction
of any such court or from any legal process commenced in such courts (whether
through service of notice, attachment prior to judgment, attachment in aid of
execution of judgment, execution of judgment or otherwise), or (c) to the
fullest extent permitted by applicable law, that (i) the suit, action or
proceeding in any such court is brought in an inconvenient forum, (ii) the venue
of such suit, action or proceeding is improper or (iii) this Agreement, or the
subject matter hereof, may not be enforced in or by such courts.
SECTION 11.10 Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same agreement.
SECTION 11.11 Entire Agreement. This Agreement (including Annex A and the
----------------
documents and instruments referred to herein) and the Confidentiality Agreement
constitute the entire agreement, and supersede all prior agreements and
understandings, both oral and written, among the parties with respect to the
subject matter of this Agreement.
[Signature Page Follows]
46
<PAGE>
IN WITNESS WHEREOF, Parent, Subsidiary and the Company have caused
this Agreement to be signed by their respective officers as of the date first
written above.
SIEMENS CORPORATION
By: /s/ E. Robert Lupone
---------------------
Name: E. Robert Lupone
Title: Vice President and General Counsel
By: /s/ Michael W. Schiefen
-----------------------
Name: Michael W. Schiefen
Title: Vice President, Corporate Development
AUTOBAHN ACQUISITION CORPORATION
By: /s/ Michael W. Schiefen
-------------------------
Name: Michael W. Schiefen
Title: President
By: /s/ E. Robert Lupone
--------------------
Name: E. Robert Lupone
Title: Vice President
SHARED MEDICAL SYSTEMS
CORPORATION
By: /s/ Marvin S. Cadwell
---------------------
Name: Marvin S. Cadwell
Title: President and CEO
[Signature Page to Agreement and Plan of Merger]
47
<PAGE>
Acquisition Proposal .....................................................36
Agreement ................................................................ 1
Antitrust Division .......................................................29
Closing Date ............................................................. 7
Code ..................................................................... 9
Common Stock Price ....................................................... 1
Company .................................................................. 1
Company Acquisition Transaction ..........................................36
Company Certificates ..................................................... 9
Company Common Stock ..................................................... 1
Company Disclosure Schedule ..............................................12
Company Financial Statements .............................................16
Company Intellectual Property Rights .....................................23
Company Material Adverse Effect ..........................................12
Company Permits ..........................................................18
Company Plan .............................................................20
Company Preferred Stock ..................................................12
Company Required Statutory Approvals .....................................15
Company Rights ...........................................................12
Company Rights Agreement .................................................12
Company SEC Reports ......................................................16
Company Stockholders' Approval ...........................................30
Confidentiality Agreement ................................................35
Contract .................................................................25
DGCL ..................................................................... 3
Dissenting Shares ........................................................11
Dissenting Stockholder ...................................................11
Effective Time ........................................................... 6
Environmental Claim ......................................................22
Environmental Laws .......................................................22
ERISA ....................................................................20
ERISA Affiliate ..........................................................20
Exchange Act ............................................................. 2
FTC ......................................................................29
Governmental Authority ...................................................15
HSR Act ..................................................................15
Indemnified Parties ......................................................37
Indemnified Party ........................................................37
Independent Directors .................................................... 6
Information Statement ....................................................17
Material Contract ........................................................16
Merger ................................................................... 1
Merger Consideration ..................................................... 8
Merger Filing ............................................................ 6
Offer .................................................................... 1
1
<PAGE>
Offer Documents .......................................................... 3
Option ...................................................................10
Option Payments ..........................................................10
Options ..................................................................10
Parachute Payment ........................................................40
Parent ................................................................... 1
Parent Representatives ...................................................35
Parent Required Statutory Approvals ......................................28
Paying Agent ............................................................. 8
Pension Plan .............................................................20
Potential Acquiror .......................................................36
Proxy Statement ..........................................................31
Schedule 14D-9 ........................................................... 4
Schedule TO .............................................................. 3
SEC ...................................................................... 2
Securities Act ...........................................................15
software .................................................................24
Stockholders Meeting .....................................................30
Subsidiary ............................................................... 1
Subsidiary Common Stock .................................................. 8
Superior Proposal ........................................................36
Surviving Corporation .................................................... 6
Tax Return ...............................................................20
Taxes ....................................................................19
Welfare Plan .............................................................20
2
<PAGE>
ANNEX A
to
Agreement and Plan of Merger
----------------------------
Conditions to the Offer. Notwithstanding any other provision of the
Offer or the Agreement, in addition to (and not in limitation of) Subsidiary's
rights pursuant to the Agreement to extend and amend the Offer in accordance
with the Agreement, Subsidiary shall not be required to accept for payment or,
subject to Rule 14e-1(c) of the Exchange Act, pay for and may delay the
acceptance for payment of or, subject to Rule 14e-1(c) of the Exchange Act, the
payment for, any tendered shares of Company Common Stock not theretofore
accepted for payment or paid for, and Subsidiary may terminate or amend the
Offer (subject to Section 1.1 of the Agreement) if (i) a number of shares of
Company Common Stock representing at least a majority of the total number of
outstanding shares of Company Common Stock shall not have been validly tendered
prior to the expiration of the Offer and not withdrawn or otherwise acquired by
Parent or any of its affiliates prior to the expiration of the Offer ("Minimum
Condition"), (ii) any applicable waiting period under the HSR Act shall not have
expired or been terminated, (iii) the approval period with respect to the
Bundeskartellamt shall not have been terminated or (iv) at any time on or after
the date of the Agreement and prior to the time of acceptance of such shares of
Company Common Stock for payment or the payment therefor, any of the following
conditions has occurred and continues to exist:
(a) any representations and warranties of the Company in the Agreement
shall not be true and correct as of such time (except where the failure of such
representations and warranties to be true and correct would not reasonably be
expected to have, individually or in the aggregate with all other breaches, a
Company Material Adverse Effect without giving effect to any limitations as to
materiality in any such representations and warranties) and which breach shall
not have been cured prior to the earlier of (i) 20 business days following
notice of such breach and (ii) August 1, 2000; provided, however, that the
-------- -------
Company shall have no right to cure such breach in the event that such breach by
the Company was willful or in the event such breach is not reasonably capable of
being cured within such period of time;
(b) the Company shall not have performed and complied with each covenant or
agreement contained in the Agreement and required to be performed or complied
with by it (except where (A) the failure to so perform or comply would not
reasonably be expected to have a Company Material Adverse Effect without giving
effect to any limitations as to materiality in any such covenant or agreement
and (B) such failure would not reasonably be expected materially and adversely
to affect the benefits or value that would be obtained by Parent from the
consummation of the Offer and the Merger) and which breach shall not have been
cured prior to the earlier of (i) 20 business days following notice of such
breach and (ii) August 1, 2000; provided, however, that the Company shall have
-------- -------
no right to cure such breach in the event that such breach by the Company was
willful or in the event such breach is not reasonably capable of being cured
within such period of time;
(c) there shall be pending any suit, action, or proceeding which has a
reasonable possibility of success, (i) challenging the acquisition by Parent or
Subsidiary of the shares of Company Common Stock, seeking to make illegal,
materially delay, make materially more costly or otherwise directly or
indirectly restrain or prohibit the making or consummation of the Offer and the
Merger or the performance of any of the other transactions contemplated by this
Agreement or seeking to obtain from the Company, Parent or Subsidiary any
damages or penalties that are material in relation to the Company and its
subsidiaries taken as whole, (ii) seeking to prohibit or materially limit the
ownership or operation by the Company, Parent or any of their respective
subsidiaries or affiliates of any of the businesses or assets of the Company,
Parent or any of their respective subsidiaries or affiliates, or to compel the
Company, Parent or any of their respective subsidiaries or affiliates to dispose
of or hold separate all or any material portion of the businesses or assets of
the Company or Parent, as a result of the Offer, the Merger or any of the other
transactions contemplated by this Agreement, (iii) seeking to impose material
limitations on the ability of Parent or Subsidiary to acquire or hold, or
exercise full rights of ownership of, any shares of Company Common Stock
accepted for payment pursuant to the Offer including, without limitation, the
right to vote the shares of Company Common Stock accepted for payment by it on
all matters properly presented to the stockholders of the Company, (iv) seeking
to prohibit Parent or any of its subsidiaries or affiliates from effectively
controlling in any material respect the business or operations of the Company or
its subsidiaries, (v) requiring divestiture by Subsidiary or any of its
affiliates of any shares of Company Common Stock or (vi) which otherwise is
reasonably likely to have a Company Material Adverse Effect;
1
<PAGE>
(d) there shall be any statute, rule, regulation, judgment, order or
injunction (including with respect to competition or antitrust matters) enacted,
entered, enforced, promulgated or issued, or any statute, rule, regulation,
order or injunction which has been proposed by the relevant legislative or
regulatory body and is reasonably likely to be enacted, entered, promulgated or
issued with respect to or deemed applicable to, or any material consent or
approval withheld or any other action taken with respect to (i) Parent, the
Company or any of their respective subsidiaries or affiliates or (ii) the Offer
or the Merger or any of the other transactions contemplated by this Agreement,
by any Governmental Authority or court, other than applicable waiting periods
under the HSR Act as specified in the introductory paragraph above or the
approval period applicable to the Bundeskartellamt, in any case, that in the
reasonable judgment of Parent, has resulted or is reasonably likely to result,
directly or indirectly, in any of the consequences referred to in clauses (i)
though (vi) of paragraph (c) above;
(e) except as disclosed in the Company Financial Statements, since the date
of the Agreement there shall have occurred any events, changes, effects or
developments that, individually or in the aggregate, have had or are reasonably
likely to have, a Company Material Adverse Effect;
(f) the Agreement shall have been terminated in accordance with its terms;
(g) any person or group (which includes a "person" or "group" as such terms
are defined in Section 13(d)(3) of the Exchange Act) other than Parent,
Subsidiary, any of their affiliates, or any group of which any of them is a
member, shall have acquired beneficial ownership of more than 20% of the
outstanding shares of Company Common Stock;
(h) all consents and approvals of and notices to or filings with
Governmental Authorities required in connection with the Offer, the Merger and
any of the other transactions contemplated by the Agreement shall not have been
obtained or made as of the expiration of the Offer, as the same may be extended
from time to time in accordance with this Agreement, other than those the
absence of which, individually or in the aggregate, would not have a Company
Material Adverse Effect or prevent or materially delay consummation of any of
the Offer, the Merger or any of the other transactions contemplated by the
Agreement; or
(i) there shall have occurred (i) a declaration of a banking moratorium or
any suspension of payments in respect of banks in the United States or Germany
by any Governmental Authority or (ii) a commencement of a war, armed hostilities
or other national or international calamity directly or indirectly involving the
United States or Germany which could reasonably be expected to have a Company
Material Adverse Effect or materially adversely affect or delay the consummation
of the Offer.
2
