<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO SECTION 14(D)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934 AND
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
---------------------
PROXIMA CORPORATION
(Name of Subject Company)
BD ACQUISITION CORP.
ASK ASA
(Bidders)
---------------------
COMMON STOCK, PAR VALUE $.001
(Title of Class of Securities)
---------------------
744287103
(CUSIP Number of Class of Securities)
---------------------
OLE J. FREDRIKSEN
PRESIDENT AND CHIEF EXECUTIVE OFFICER
ASK ASA
K.G. MELDAHLSVEI 9
N-1602 FREDRIKSTAD
NORWAY
(47 69) 34 0155
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications on Behalf of Bidder)
---------------------
COPY TO:
JOHN A. HEALY, ESQ.
ROGERS & WELLS LLP
200 PARK AVENUE
NEW YORK, NEW YORK 10166
(212)878-8000
---------------------
CALCULATION OF FILING FEE
<TABLE>
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==================================================================================================================
TRANSACTION VALUATION* AMOUNT OF FILING FEE
- ------------------------------------------------------------------------------------------------------------------
<S> <C>
$83,915,923.00 $16,785.00
==================================================================================================================
</TABLE>
* For purposes of calculating fee only. This amount assumes the purchase of (i)
7,175,445 outstanding shares of common stock of Proxima Corporation and (ii)
909,292 shares of common stock of Proxima Corporation which may be issued upon
exercise of outstanding options (whose per option exercise price is less than
$11.00), in each case at $11.00, in cash per share. The amount of the filing
fee calculated in accordance with Regulation 240.0-11 of the Securities
Exchange Act of 1934, as amended, equals 1/50 of one percentum of the value of
shares to be purchased.
[ ] Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form
or Schedule and the date of its filing.
Amount Previously Paid: Not applicable Filing Party: Not Applicable
Form or Registration No.: Not Applicable Date Filed: Not Applicable
================================================================================
<PAGE> 2
CUSIP No. 744287103
Page 2 of 9
14D-1 AND 13D
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------
<C> <S> <C>
1. Name of Reporting Persons
S.S. or I.R.S. Identification Nos. of Above Persons
BD ACQUISITION CORP.
- -----------------------------------------------------------------------------------
2. Check the Appropriate Box if a Member of a Group
(a)[ ]
(b)[ ]
- -----------------------------------------------------------------------------------
3. SEC Use Only
- -----------------------------------------------------------------------------------
4. Sources of Funds
BK, AF
- -----------------------------------------------------------------------------------
5. Check if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(e) or 2(f)
[ ]
- -----------------------------------------------------------------------------------
6. Citizenship or Place of Organization
DELAWARE
- -----------------------------------------------------------------------------------
7. Aggregate Amount Beneficially Owned by Each Reporting Person
1,647,710
(See the Offer to Purchase)
- -----------------------------------------------------------------------------------
8. Check if the Aggregate Amount in Row 7 Excludes Certain
Shares
[ ]
- -----------------------------------------------------------------------------------
9. Percent of Class Represented by Amount in Row 7
19.15%
- -----------------------------------------------------------------------------------
10. Type of Reporting Person
CO
- -----------------------------------------------------------------------------------
</TABLE>
<PAGE> 3
CUSIP No. 744287103
Page 3 of 9
14D-1 AND 13D
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------
<C> <S> <C>
1. Name of Reporting Persons
S.S. or I.R.S. Identification Nos. of Above Persons
ASK asa
- -----------------------------------------------------------------------------------
2. Check the Appropriate Box if a Member of a Group
(a)[ ]
(b)[ ]
- -----------------------------------------------------------------------------------
3. SEC Use Only
- -----------------------------------------------------------------------------------
4. Sources of Funds
BK, WC
- -----------------------------------------------------------------------------------
5. Check if Disclosure of Legal Proceedings is Required
Pursuant to Items 2(e) or 2(f)
[ ]
- -----------------------------------------------------------------------------------
6. Citizenship or Place of Organization
KINGDOM OF NORWAY
- -----------------------------------------------------------------------------------
7. Aggregate Amount Beneficially Owned by Each Reporting Person
1,647,710
(See the Offer to Purchase)
- -----------------------------------------------------------------------------------
8. Check if the Aggregate Amount in Row 7 Excludes Certain
Shares
[ ]
- -----------------------------------------------------------------------------------
9. Percent of Class Represented by Amount in Row 7
19.15%
- -----------------------------------------------------------------------------------
10. Type of Reporting Person
CO
- -----------------------------------------------------------------------------------
</TABLE>
<PAGE> 4
TENDER OFFER
This Tender Offer Statement on Schedule 14D-1 (this "Statement") relates to
the offer by BD Acquisition Corp., a Delaware corporation (the "Purchaser") and
a wholly owned subsidiary of ASK asa, a corporation organized under the laws of
the Kingdom of Norway ("Parent"), to purchase all of the outstanding shares (the
"Shares") of common stock, par value $.001 per share (the "Common Stock"), of
Proxima Corporation, a Delaware corporation (the "Company"), at $11.00 per
Share, net to the seller in cash, upon the terms and subject to the conditions
set forth in the Offer to Purchase dated March 13, 1998 (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 together constitute the "Offer").
ITEM 1. SECURITY AND SUBJECT COMPANY.
(a) The name of the subject company is Proxima Corporation, a Delaware
corporation, and the address of its principal executive offices is 9440 Carroll
Park Drive, San Diego, California 92121-2298.
(b) The class of securities to which this Statement relates is the Common
Stock. The Company has represented that as of March 8, 1998 there were 7,175,445
shares of Common Stock, issued and outstanding and outstanding options to
purchase an aggregate of 997,781 shares of Common Stock. The Company has
indicated that, as of the date of this Statement, 909,292 of the options
referred to above have a per option exercise price of less than $11.00
(c) The information set forth in "Section 6--Price Range of the Shares;
Dividends" of the Offer to Purchase is incorporated herein by reference.
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(d), (g) This Statement is being filed by Parent and the Purchaser. The
information set forth in "INTRODUCTION" and "Section 8--Certain Information
Concerning the Purchaser and Parent" of the Offer to Purchase is incorporated
herein by reference. The name, business address, present principal occupation or
employment, the material occupations, positions, offices or employments for the
past five years and citizenship of each director and executive officer of the
Purchaser and Parent and the name, principal business and address of any
corporation or other organization in which such occupations, positions, offices
and employments are or were carried on are set forth in Schedule I of the Offer
to Purchase and incorporated herein by reference.
(e)-(f) During the last five years neither the Purchaser or Parent, nor, to
the best knowledge of the Purchaser and Parent, any of the persons listed in
Schedule I of the Offer to Purchase has been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) or was party to a civil
proceeding of a judicial or administrative body of competent jurisdiction as a
result of which any such person was or is subject to a judgment, decree or final
order enjoining future violations of, or prohibiting activities subject to,
federal or state securities laws or finding any violation of such laws.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH THE SUBJECT COMPANY.
(a)(1) Other than the transactions described in Item 3(b) below, none of
the Purchaser, Parent, or, to the best knowledge of the Purchaser and Parent,
any of the persons listed in Schedule I of the Offer to Purchase, has entered
into any transaction with the Company, or any of the Company's affiliates which
are corporations, since the commencement of the Company's third full fiscal year
preceding the date of this Statement, the aggregate amount of which was equal to
or greater than one percent of the consolidated revenues of the Company for (i)
the fiscal year in which such transaction occurred or (ii) the portion of the
current fiscal year which has occurred if the transaction occurred in such year.
(a)(2) Other than the transactions described in Item 3(b) below, none of
the Purchaser, Parent, or, to the best knowledge of the Purchaser and Parent,
any of the persons listed in Schedule I of the Offer to
Page 4 of 9
<PAGE> 5
Purchase, has entered into any transaction since the commencement of the
Company's third full fiscal year preceding the date of this Statement, with the
executive officers, directors or affiliates of the Company which are not
corporations, in which the aggregate amount involved in such transaction or in a
series of similar transactions, including all periodic installments in the case
of any lease or other agreement providing for periodic payments or installments,
exceeded $40,000.
(b) The information set forth in the "INTRODUCTION," "Section 8--Certain
Information Concerning Purchaser and Parent," "Section 10--Background of the
Offer; Contacts with the Company" and "Section 11--Purpose of the Offer; Merger
Agreements; Plans for the Company" of the Offer to Purchase is incorporated
herein by reference.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a)-(b) The information set forth in "Section 9--Source and Amount of
Funds" of the Offer to Purchase is incorporated herein by reference.
(c) Not applicable.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER.
(a)-(e) The information set forth in "INTRODUCTION," "Section
10--Background of the Offer; Contacts with the Company" and "Section 11--Purpose
of the Offer; Merger Agreement; Plans for the Company" of the Offer to Purchase
is incorporated herein by reference.
(f)-(g) The information set forth in "Section 13--Effect of the Offer on
the Market for the Shares; Inclusion in the Nasdaq National Market and Exchange
Act Registration" of the Offer to Purchase is incorporated herein by reference.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a)-(b) The information set forth in "Section 8--Certain Information
Concerning the Purchaser and Parent" and "Section 10--Background of the Offer;
Contacts with the Company" and Section 11--Purpose of the Offer; Merger
Agreement; Plans for the Company" of the Offer to Purchase is incorporated
herein by reference.
ITEM 7. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
THE SUBJECT COMPANY'S SECURITIES.
The information set forth in "INTRODUCTION," "Section 9--Source and Amount
of Funds." "Section 10--Background of the Offer; Contacts with the Company,"
"Section 11--Purpose of the Offer; Merger Agreement; Plans for the Company." and
"Section 16--Fees and Expenses" of the Offer to Purchase is incorporated herein
by reference.
ITEM 8. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth in "Section 16--Fees and Expenses" of the Offer
to Purchase is incorporated herein by reference.
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
The information set forth in "Section 8--Certain Information Concerning the
Purchaser and Parent" of the Offer to Purchase is incorporated herein by
reference.
Page 5 of 9
<PAGE> 6
ITEM 10. ADDITIONAL INFORMATION.
(a) Except as disclosed in Items 3 and 7 above, there are no present or
proposed material contracts, arrangements, understandings or relationships
between the Purchaser or Parent, or to the best knowledge of the Purchaser and
Parent, any of the persons listed in Schedule I of the Offer to Purchase, and
the Company, or any of its executive officers, directors, controlling persons or
subsidiaries.
(b)-(c) The information set forth in the "INTRODUCTION," "Section
14--Certain Conditions of the Offer" and "Section 15--Certain Legal Matters and
Regulatory Approvals" of the Offer to Purchase is incorporated herein by
reference.
(d) The information set forth in "Section 13--Effect of the Offer on the
Market for Shares; Inclusion in the Nasdaq National Market and Exchange Act
Registration" and "Section 15--Certain Legal Matters and Regulatory Approvals"
of the Offer to Purchase is incorporated herein by reference.
(e) The information set forth in "Section 15--Certain Legal Matters and
Regulatory Approvals" of the Offer to Purchase is incorporated hereby by
reference.
(f) The information set forth in the Offer to Purchase and the Letter of
Transmittal, to the extent not otherwise incorporated herein by reference, is
incorporated herein by reference.
ITEM 11. MATERIALS TO BE FILED AS EXHIBITS.
(a)(1) Offer to Purchase dated March 13, 1998.
(a)(2) Letter of Transmittal.
(a)(3) Letter for use by Brokers, Dealers, Banks, Trust Companies and
Nominees to their Clients.
(a)(4) Letter to Clients.
(a)(5) Notice of Guaranteed Delivery.
(a)(6) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(a)(7) Press Release issued by Parent, dated March 9, 1998.
(a)(8) Press Release issued by the Company, dated March 8, 1998.
(a)(9) Form of Summary Advertisement, dated March 13, 1998.
(a)(10) Financial Statements of Parent for the fiscal years ended December
31, 1997, 1996 and 1995.
(b)(1) Commitment Letter, dated March 5, 1998, between Parent and Bankers
Trust International PLC.
(c)(1) Agreement and Plan of Merger, dated March 8, 1998, by and among
Parent, the Purchaser and the Company.
(c)(2) Stockholders Agreement, dated March 8, 1998, by and among Parent,
the Purchaser and certain Stockholders of the Company.
(c)(3) Option Agreement, dated March 8, 1998, by and among Parent, the
Purchaser and the Company.
(d) None.
(e) Not applicable.
(f) None.
(g) Complaint in Tisch v. Proxima Corporation, et al., Civil Action No.
16234NC, Court of Chancery in the State of Delaware.
Page 6 of 9
<PAGE> 7
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.
BD ACQUISITION CORP.
By: /s/ OLE J. FREDRIKSEN
------------------------------------
Name: Ole J. Fredriksen
Title: President
Dated: March 13, 1998
Page 7 of 9
<PAGE> 8
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.
ASK asa
By: /s/ OLE J. FREDRIKSEN
------------------------------------
Name: Ole J. Fredriksen
Title: President and Chief
Executive Officer
Dated: March 13, 1998
Page 8 of 9
<PAGE> 9
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT
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<S> <C> <C>
(a)(1) Offer to Purchase dated March 13, 1998.
(a)(2) Letter of Transmittal.
(a)(3) Letter for use by Brokers, Dealers, Banks, Trust Companies
and Nominees to their Clients.
(a)(4) Letter to Clients.
(a)(5) Notice of Guaranteed Delivery.
(a)(6) Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.
(a)(7) Press Release issued by Parent, dated March 9, 1998.
(a)(8) Press Release issued by the Company, dated March 8, 1998.
(a)(9) Form of Summary Advertisement, dated March 13, 1998.
(a)(10) Financial Statements of Parent for the fiscal years ended
December 31, 1997, 1996 and 1995.
(b)(1) Commitment Letter, dated March 5, 1998, between Parent and
Bankers Trust International PLC.
(c)(1) Agreement and Plan of Merger, dated March 8, 1998, by and
among Parent, the Purchaser and the Company.
(c)(2) Stockholder Agreement dated March 8, 1998 by and among
Parent, the Purchaser and certain stockholders of the
Company.
(c)(3) Option Agreement dated March 8, 1998, by and among Parent,
the Purchaser and the Company.
(d) None.
(e) Not applicable.
(f) None.
(g) Complaint in Tisch v. Proxima Corporation, et al., Civil
Action No. 16234NC, Court of Chancery in the State of
Delaware.
</TABLE>
Page 9 of 9
<PAGE> 1
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
PROXIMA CORPORATION
AT
$11.00 NET PER SHARE
BY
BD ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY OF
ASK ASA
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON THURSDAY, APRIL 9, 1998, UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
THE OFFER IS BEING MADE PURSUANT TO AN AGREEMENT AND PLAN OF MERGER DATED
MARCH 8, 1998, AMONG ASK ASA, BD ACQUISITION CORP. AND PROXIMA CORPORATION. THE
BOARD OF DIRECTORS OF PROXIMA CORPORATION (THE "COMPANY") HAS APPROVED THE
OFFER, THE MERGER AND THE MERGER AGREEMENT BY UNANIMOUS VOTE OF THOSE PRESENT
(ONE MEMBER BEING ABSENT FROM THE MEETING) AND DETERMINED THAT THE MERGER
AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING THE OFFER AND THE
MERGER, TAKEN TOGETHER, ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE COMPANY'S
STOCKHOLDERS AND RECOMMENDS THAT THE COMPANY'S STOCKHOLDERS TENDER THEIR SHARES
PURSUANT TO THE OFFER.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER A NUMBER OF
SHARES REPRESENTING (TOGETHER WITH ANY SHARES PURCHASED UNDER THE OPTION
AGREEMENT (AS DEFINED HEREIN)) AT LEAST A MAJORITY OF THE OUTSTANDING SHARES OF
THE COMPANY ON A FULLY DILUTED BASIS ON THE DATE OF PURCHASE. THE OFFER IS ALSO
SUBJECT TO CERTAIN OTHER TERMS AND CONDITIONS. SEE SECTION 14.
---------------------
IMPORTANT
Any stockholder desiring to tender all or any portion of such stockholder's
Shares (as defined herein) should either (i) complete and sign the Letter of
Transmittal (or a facsimile thereof) in accordance with the instructions in the
Letter of Transmittal (including the instructions regarding signature
guarantees) and mail or deliver the Letter of Transmittal (or such facsimile)
together with any other required documents to the Depositary and either deliver
the certificates for the tendered Shares to the Depositary along with the Letter
of Transmittal or tender such Shares pursuant to the procedures for book-entry
transfer set forth in Section 3 of this Offer to Purchase or (ii) request such
stockholder's broker, dealer, commercial bank, trust company or other nominee to
effect the transaction for such stockholder. Stockholders whose Shares are
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.
A stockholder who desires to tender Shares and whose certificates for those
Shares are not immediately available, or who cannot comply with the procedures
for book-entry transfer described in this Offer to Purchase on a timely basis,
may tender those Shares by following the procedures for guaranteed delivery set
forth in Section 3 of this Offer to Purchase.
Questions and requests for assistance, or for additional copies of this
Offer to Purchase, the Letter of Transmittal or other offer materials, may be
directed to the Dealer Manager or the Information Agent at their respective
addresses and telephone numbers set forth on the back cover of this Offer to
Purchase. Stockholders also may contact brokers, dealers, commercial banks or
trust companies for assistance concerning the Offer.
---------------------
THE DEALER MANAGER FOR THE OFFER IS:
BT ALEX. BROWN INCORPORATED
---------------------
March 13, 1998
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
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PAGE
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<S> <C> <C>
INTRODUCTION........................................................................ 1
THE OFFER........................................................................... 4
Section 1. Terms of the Offer; Expiration Date......................... 4
Section 2. Acceptance for Payment and Payment for Shares............... 5
Section 3. Procedure for Tendering Shares.............................. 7
Section 4. Withdrawal Rights........................................... 9
Section 5. Certain U.S. Federal Income Tax Matters..................... 10
Section 6. Price Range of Shares; Dividends............................ 11
Section 7. Certain Information Concerning the Company.................. 11
Section 8. Certain Information Concerning the Purchaser and Parent..... 14
Section 9. Source and Amount of Funds.................................. 16
Section 10. Background of the Offer; Contacts with the Company.......... 18
Section 11. Purpose of the Offer; Merger Agreement; Plans for the
Company..................................................... 20
Section 12. Dividends and Distributions................................. 31
Section 13. Effect of the Offer on the Market for the Shares; Inclusion
in the Nasdaq National Market and Exchange Act
Registration................................................ 31
Section 14. Certain Conditions of the Offer............................. 33
Section 15. Certain Legal Matters and Regulatory Approvals.............. 35
Section 16. Fees and Expenses........................................... 39
Section 17. Miscellaneous............................................... 39
SCHEDULE I -- Information Regarding the Directors and Executive Officers of Parent
and the Purchaser..................................................... S-1
</TABLE>
<PAGE> 3
TO THE HOLDERS OF COMMON STOCK OF PROXIMA CORPORATION:
INTRODUCTION
BD Acquisition Corp., a Delaware corporation (the "Purchaser") and a wholly
owned subsidiary of ASK asa, a corporation organized under the laws of the
Kingdom of Norway ("Parent"), hereby offers to purchase all of the outstanding
shares (the "Shares") of common stock, par value $.001 per share ("Common
Stock"), of Proxima Corporation, a Delaware corporation (the "Company"), at a
purchase price of $11.00 per Share, net to the seller in cash, without interest
thereon, 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
supplements or amendments, collectively constitute the "Offer").
Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, stock transfer taxes on the transfer and sale of Shares pursuant to
the Offer. The Purchaser will pay all fees and expenses of BT Alex. Brown
Incorporated, which is acting as the Dealer Manager (the "Dealer Manager"),
ChaseMellon Shareholder Services, L.L.C. which is acting as Depositary (the
"Depositary"), and Beacon Hill Partners, Inc., which is acting as the
Information Agent (the "Information Agent"), incurred in connection with the
Offer. See Section 16.
THE COMPANY'S BOARD OF DIRECTORS HAS APPROVED THE OFFER, THE MERGER (AS
DEFINED BELOW) AND THE MERGER AGREEMENT (AS DEFINED BELOW) BY UNANIMOUS VOTE OF
THOSE PRESENT (ONE MEMBER BEING ABSENT FROM THE MEETING) AND DETERMINED THAT THE
MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING THE OFFER
AND THE MERGER, TAKEN TOGETHER, ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE
COMPANY'S STOCKHOLDERS AND RECOMMENDS THAT THE COMPANY'S STOCKHOLDERS TENDER
THEIR SHARES PURSUANT TO THE OFFER.
THE COMPANY'S FINANCIAL ADVISOR, BROADVIEW ASSOCIATES LLC ("BROADVIEW"),
HAS DELIVERED TO THE COMPANY'S BOARD OF DIRECTORS ITS WRITTEN OPINION, DATED
MARCH 8, 1998, TO THE EFFECT THAT, AS OF THAT DATE, THE CONSIDERATION TO BE
RECEIVED BY HOLDERS OF SHARES IN THE OFFER AND THE MERGER IS FAIR, FROM A
FINANCIAL POINT OF VIEW, TO THOSE HOLDERS. THE FULL TEXT OF THE OPINION, WHICH
SETS FORTH THE ASSUMPTIONS MADE, MATTERS CONSIDERED AND LIMITATIONS ON THE
REVIEW UNDERTAKEN IN RENDERING THE OPINION, IS SET FORTH IN AN ANNEX TO THE
COMPANY'S SOLICITATION/RECOMMENDATION STATEMENT ON SCHEDULE 14D-9 (THE "SCHEDULE
14D-9") FILED WITH THE SECURITIES AND EXCHANGE COMMISSION (THE "COMMISSION") IN
CONNECTION WITH THE OFFER. A COPY OF THE SCHEDULE 14D-9 IS BEING PROVIDED TO
STOCKHOLDERS CONCURRENTLY WITH THIS OFFER TO PURCHASE.
The Offer is conditioned upon, among other things, there having been
validly tendered and not withdrawn prior to the expiration of the Offer a number
of Shares representing (together with any shares of Common Stock purchased by
the Purchaser under the Option Agreement (as defined below)) at least a majority
of the Shares outstanding on a fully diluted basis on the date of purchase (the
"Minimum Condition"). As used in this Offer to Purchase, "fully diluted basis"
takes into account the conversion or exercise of all outstanding options (other
than the Option (as defined below)) and other rights and securities exercisable
or convertible into shares of Common Stock. The Company has informed the
Purchaser that as of March 8, 1998, there were (i) 7,175,445 Shares issued and
outstanding and outstanding options and other rights to purchase an aggregate of
997,781 shares of Common Stock, and that no other voting stock of the Company or
right to acquire voting stock of the Company is outstanding. Based on this
information, the Purchaser believes that if no outstanding options are exercised
before the expiration of the Offer, the Minimum Condition will be satisfied if
the Purchaser acquires at least 3,587,723 Shares in the Offer, and that, if all
outstanding options (excluding the Option) are exercised before the expiration
of the Offer, the Minimum Condition will be satisfied if the Purchaser acquires
at least 4,088,489 Shares in the Offer. Certain other conditions to the Offer
are described in Section 14.
As a condition and inducement to Parent and the Purchaser to enter into the
Merger Agreement, all directors of the Company (each, a "Stockholder"), who
together share voting power and dispositive power with respect to 219,796
Shares, concurrently with the execution and delivery of the Merger Agreement
entered into a Stockholders Agreement dated March 8, 1998 (the "Stockholders
Agreement"), with Parent
1
<PAGE> 4
and the Purchaser. Pursuant to the Stockholders Agreement, the Stockholders have
agreed, among other things, to (i) tender the Shares held by them in the Offer,
(ii) grant Parent an option to purchase such shares at any time after the Offer
is consummated and prior to the termination of the Stockholders Agreement and
(iii) grant Parent a proxy with respect to the voting of such Shares in favor of
the Merger with respect to such Shares upon the terms and subject to the
conditions set forth therein. See Section 11.
As a condition and further inducement to Parent and the Purchaser to enter
into the Merger Agreement, concurrently with the execution and delivery of the
Merger Agreement, Parent, the Purchaser and the Company entered into an Option
Agreement dated March 8, 1998 (the "Option Agreement"), pursuant to which, among
other things, the Company has granted the Purchaser an option (the "Option") to
purchase 1,427,914 newly issued shares of Common Stock at $11.00 per share. The
Option can be exercised only in certain circumstances. See Section 11.
The Offer is being made pursuant to an Agreement and Plan of Merger dated
as of March 8, 1998 (the "Merger Agreement"), among the Company, Parent and the
Purchaser. The Merger Agreement provides, among other things, that as soon as
practicable after the consummation of the Offer and satisfaction or, to the
extent permitted under the Merger Agreement, waiver of all conditions to the
Merger, the Purchaser will be merged with and into the Company (the "Merger").
Following the consummation of the Merger, the Company will continue as the
surviving corporation of the Merger and a direct wholly owned subsidiary of
Parent. At the effective time of the Merger (the "Effective Time"), each
outstanding Share (other than treasury Shares, Shares held by Parent, the
Purchaser or any other subsidiary of Parent and Shares held by stockholders who
properly perfect their dissenters' rights under Delaware law) will be converted
into and represent the right to receive $11.00 in cash, or any higher price that
may be paid per Share in the Offer, without interest. See Section 11.
The consummation of the Merger is subject to the satisfaction or waiver of
certain conditions, including, if required by law, the approval and adoption of
the Merger Agreement by the requisite vote of the stockholders of the Company.
See Section 11 and Section 14. Under the Company's Restated Certificate of
Incorporation and the Delaware General Corporation Law, except as otherwise
described below, the affirmative vote of the holders of a majority of the
outstanding Shares is required to approve and adopt the Merger Agreement and the
Merger. Consequently, if the Minimum Condition is satisfied and the Purchaser
acquires (pursuant to the Offer or otherwise) at least a majority of the then
outstanding Shares, the Purchaser will have sufficient voting power to approve
and adopt the Merger Agreement and the Merger without the vote of any other
stockholders. Under Delaware law, if the Purchaser acquires, pursuant to the
Offer or otherwise, at least 90% of the then outstanding Shares, the Purchaser
will be able to approve and adopt the Merger Agreement and the transactions
contemplated thereby, including the Merger, without a vote of the Company's
stockholders. In such event, Parent and the Purchaser intend to take all
necessary and appropriate action to cause the Merger to become effective as soon
as practicable after such acquisition, without a meeting of the Company's
stockholders. If, however, the Purchaser does not acquire at least 90% of the
then outstanding Shares pursuant to the Offer or otherwise, and a vote of the
Company's stockholders is required under Delaware law, a longer period of time
will be required to effect the Merger. See Section 11.
The Merger Agreement provides that, commencing upon the purchase of Shares
pursuant to the Offer or pursuant to the Option, and from time to time
thereafter, Purchaser shall be entitled to designate on the Board of Directors
of the Company the number of directors, rounded up to the next whole number,
that equals the product of (i) the total number of directors on the Board
(giving effect to any directors elected as described in this sentence) and (ii)
percentage that (A) the aggregate number of Shares beneficially owned by the
Purchaser or any affiliate of the Purchaser (including Shares accepted for
payment in the Offer, provided funds therefor have been deposited with the
Depositary, and shares of Common Stock purchased pursuant to the Option
Agreement) represents of (B) the total number of shares of Common Stock then
outstanding. In the Merger Agreement, the Company, subject to certain
limitations, has agreed to take all actions necessary to cause the Purchaser's
designees to be elected or appointed as directors of the Company, including
increasing the size of the Board or securing the resignation of incumbent
directors or both. The Company also has agreed to use its best efforts to cause
persons designated by the Purchaser to constitute the same percentage of each
committee of the Board of Directors of the Company, each board of directors of
each subsidiary of the
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Company and each committee of each such board as such persons represent on the
Board of Directors of the Company. However, the Merger Agreement further
provides that until the Effective Time, the Company will retain as members of
its Board of Directors at least two directors who are directors of the Company
at the date of the Merger Agreement ("Company Designees") and that in the event
of the death, resignation or removal of any of the Company Designees (or, if no
other Company Designee will remain on the Board, the last remaining Company
Designee and, if no Company Designee will remain on the Board, a majority of the
other members of the Board) will have the right to appoint a successor or
successors to fill the vacancies so created, which successor or successors will
not be an affiliate or associate of Parent or the Purchaser and who will be
deemed to be a Company Designee for purposes of the Merger Agreement. In the
Merger Agreement, the Company has agreed to take all actions necessary to cause
the Purchaser's designees to be so elected, including mailing to the Company's
stockholders an Information Statement containing the information required by
Section 14(f) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and Rule 14f-1 promulgated thereunder, and, if necessary, seeking the
resignation of one or more existing directors. See Section 11.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION AND SHOULD BE READ CAREFULLY AND IN THEIR ENTIRETY BEFORE
ANY DECISION IS MADE WITH RESPECT TO THE OFFER.
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THE OFFER
SECTION 1. TERMS OF THE OFFER; EXPIRATION DATE.
Upon the terms and subject to the conditions of the Offer, the Purchaser
will accept for payment and pay for all Shares validly tendered on or prior to
the Expiration Date and not properly withdrawn as permitted by Section 4 of this
Offer to Purchase. For purposes of the Offer, the term "Expiration Date" means
12:00 Midnight, New York City time, on Thursday, April 9, 1998, unless and until
the Purchaser, in accordance with the terms of the Merger Agreement), shall have
extended the period of time during 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 Offer is conditioned upon, among other things, satisfaction of the
Minimum Condition and the 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"). The Offer also is subject to
certain other conditions set forth in Section 14 (together with the Minimum
Condition, the "Offer Conditions"). If any of the Offer Conditions is not
satisfied or any events specified in Section 14 have occurred or are determined
by the Purchaser to have occurred prior to the Expiration Date, subject to its
obligations under the Merger Agreement, the Purchaser reserves the right (but
will not be obligated) (i) to decline to purchase any of the Shares tendered in
the Offer, terminate the Offer and return all tendered Shares to the tendering
stockholders, (ii) to waive or amend any or all conditions to the Offer, to the
extent permitted by applicable law and, subject to complying with applicable
rules and regulations of the Commission, purchase all Shares validly tendered or
(iii) to extend the Offer and, subject to the right of stockholders to withdraw
Shares until the Expiration Date, retain the Shares which have been tendered
during the period or periods for which the Offer is extended.
In the Merger Agreement, the Purchaser has agreed that it will not, without
the prior written consent of the Company, (i) decrease the number of Shares
sought or the price payable in the Offer, (ii) change the form of consideration
payable in the Offer, (iii) add to the Offer Conditions, (iv) amend any Offer
Condition, (v) amend any other term of the Offer in any manner that is
materially adverse to the holders of Shares or (vi) except as provided below,
extend the Offer.
The Merger Agreement also provides that, notwithstanding the foregoing, the
Purchaser may, in its sole discretion and without the consent of the Company,
(i) extend the Offer, at any time up until May 5, 1998 (the "Outside Termination
Date") for one or more periods of not more than ten business days each, if at
the then scheduled Expiration Date of the Offer any Offer Condition is not
satisfied, (ii) extend the Offer at any time (but on not more than one occasion)
for a period of not more than ten business days, if at that time the number of
Shares duly tendered pursuant to the Offer and not subsequently withdrawn
represents less than 90% of the Shares then outstanding or (iii) extend the
Offer for any period required by any rule, regulation, interpretation or
position of the Commission or the staff of the Commission applicable to the
Offer. If at any scheduled Expiration Date of the Offer any Offer Condition has
not been satisfied or waived by the Purchaser, at the written request of the
Company delivered no later than the scheduled Expiration Date of the Offer, the
Purchaser shall, and shall continue to, extend the Offer from time to time for
one or more periods of not more than five business days each until a date not
later than the Outside Termination Date.
The Purchaser expressly reserves the right, in its sole discretion, at any
time or from time to time, subject to its obligations under the Merger Agreement
and regardless of whether or not any of the events set forth in Section 14 shall
have occurred or shall have been determined by the Purchaser to have occurred,
to amend the Offer in any respect by giving oral or written notice of such
amendment to the Depositary. The rights reserved by the Purchaser in this
paragraph are in addition to the Purchaser's right to terminate the Offer
pursuant to Section 14. Any extension, amendment or termination will be followed
as promptly as practicable by a public announcement thereof. In the case of an
extension, Rule 14e-1(d) under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), requires that the announcement be issued no later than
9:00 A.M., New York City time, on the next business day after the previously
scheduled Expiration Date in accordance with the public announcement
requirements of Rule 14d-4(c) under the Exchange Act. Subject to applicable
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<PAGE> 7
law (including Rules 14d-4(c) and 14d-6(d) 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 Purchaser may choose to
make any public announcement, the Purchaser will not have any obligation to
publish, advertise or otherwise communicate any such public announcement other
than by making a release to the Dow Jones News Service.
If the Purchaser extends the Offer or if the Purchaser is delayed in its
acceptance for payment of or payment for Shares (whether before or after its
acceptance for payment of Shares) or it is unable to pay for Shares pursuant to
the Offer for any reason, then, without prejudice to the Purchaser's rights
under the Offer, the Depositary may retain tendered Shares on behalf of the
Purchaser, and such Shares may not be withdrawn except to the extent tendering
stockholders are entitled to withdrawal rights as described in Section 4. The
ability of the Purchaser to delay payment for Shares that the Purchaser has
accepted for payment is limited, however, by Rule 14e-1(c) under the Exchange
Act, which requires that a bidder pay the consideration offered or return the
securities deposited by or on behalf of holders of securities promptly after the
termination or withdrawal of such bidder's offer, and by the terms of the Merger
Agreement, which require that Purchaser pay for Shares accepted for payment as
soon as reasonably practicable after it is permitted to do so under applicable
law.
If the Purchaser makes a material change in the terms of the Offer or if it
waives a material condition of the Offer, the Purchaser will extend the Offer
and, if necessary, disseminate additional tender offer materials to the extent
required by Rules 14d-4(c), 14d-6(d) and 14e-1 under the Exchange Act. The
minimum period during which an offer must remain open following material changes
in the terms of the offer, other than a change in price or a change in the
percentage of securities sought, will depend upon the facts and circumstances,
including the materiality, of the changes. With respect to a change in price or,
subject to certain limitations, a change in the percentage of securities sought,
a minimum ten business-day period from the day of such change is generally
required to allow for adequate dissemination to stockholders. Accordingly, if
prior to the Expiration Date the Purchaser decreases the number of Shares being
sought or increases or decreases the consideration offered pursuant to the
Offer, and if the Offer is scheduled to expire at any time earlier than the
period ending on the tenth business day from the date that notice of such
increase or decrease is first published, sent or given to stockholders, then the
Offer will be extended at least until the expiration of such ten business-day
period. For purposes of the Offer, a "business day" means any day other than a
Saturday, Sunday or a federal holiday and consists of the time period from 12:01
A.M. through 12:00 Midnight, New York City time.
The Company has provided the Purchaser with the Company's list of
stockholders and securities position listings for the purpose of disseminating
the Offer to holders of Shares. This Offer to Purchase, the related Letter of
Transmittal and other relevant materials will be mailed to record holders of
Shares whose names appear on the Company's stockholder lists and will be
furnished, for subsequent transmittal to beneficial owners of Shares, to
brokers, dealers, commercial banks, trust companies and similar persons whose
names, or the names of whose nominees, appear on the list of stockholders or, if
applicable, who are listed as participants in a clearing agency's security
position listing.
SECTION 2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES.
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), the Purchaser will accept for payment and will pay for all Shares
validly tendered and not properly withdrawn on or prior to the Expiration Date
promptly after the later to occur of (i) the Expiration Date and (ii) the
satisfaction or waiver of the conditions of the Offer set forth in Section 14,
including without limitation the expiration or termination of the waiting period
applicable to the acquisition of Shares pursuant to the Offer under the HSR Act.
All questions as to the satisfaction of such terms and conditions will be
determined by the Purchaser in its sole discretion, which determination will be
final and binding. The Purchaser expressly reserves the right, in its sole
discretion, to delay acceptance for payment of or payment for Shares in order to
comply in whole or in part with any applicable law, including, without
limitation, the HSR Act. Any such delays will be effected in compliance
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<PAGE> 8
with 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
termination or withdrawal of a tender offer.
Parent intends to file on the date hereof with the Federal Trade Commission
(the "FTC") and the Antitrust Division of the Department of Justice (the
"Antitrust Division") a Premerger Notification and Report Form under the HSR Act
with respect to the Offer. Accordingly, the waiting period under the HSR Act
applicable to the Offer would expire at 12:00 Midnight, New York City time, on
March 28, 1998 unless prior to the expiration or termination of the waiting
period the FTC or the Antitrust Division extends the waiting period by
requesting additional information or documentary material from Parent. If such a
request is made, the waiting period applicable to the Offer will expire on the
tenth calendar day after the date of substantial compliance by Parent with such
request. Thereafter, the waiting period may be extended by court order or by
consent of Parent. The waiting period under the HSR Act may be terminated by the
FTC and the Antitrust Division prior to its expiration. See Section 15.
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) the
certificates evidencing such Shares (the "Share Certificates") or timely
confirmation (a "Book-Entry Confirmation") of a book-entry transfer of such
Shares, if such procedure is available, into the Depositary's account at The
Depository Trust Company (the "Book-Entry Transfer Facility") pursuant to the
procedures set forth in Section 3, (ii) the Letter of Transmittal (or a
facsimile thereof), properly completed and duly executed with any required
signature guarantees, or an Agent's Message (as defined below) in connection
with a book-entry transfer and (iii) any other documents required by the Letter
of Transmittal.
The term "Agent's Message" means a message from the Book-Entry Transfer
Facility transmitted to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that (i) the Book-Entry Transfer Facility
has received an express acknowledgment from the participant in the Book-Entry
Transfer Facility tendering the Shares that are the subject of the Book-Entry
Confirmation, (ii) the participant has received and agrees to be bound by the
terms of the Letter of Transmittal and (iii) the Purchaser may enforce such
agreement against the participant.
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 if, as and when the Purchaser gives oral or written notice to the
Depositary of the Purchaser's acceptance of such Shares for payment pursuant to
the Offer. Upon 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 therefor with the Depositary, which will act as agent for
tendering stockholders for the purpose of receiving payments from the Purchaser
and transmitting those payments to stockholders whose Shares have been accepted
for payment. By execution of a Letter of Transmittal (or a facsimile thereof),
tendering stockholders waive any right to receive notice of the acceptance of
their Shares for payment. UNDER NO CIRCUMSTANCES WILL INTEREST ON THE PURCHASE
PRICE FOR SHARES BE PAID, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY
IN MAKING SUCH PAYMENT. If for any reason whatsoever acceptance for payment of
or payment for any Shares tendered pursuant to the Offer is delayed or the
Purchaser is unable to accept for payment or pay for Shares tendered pursuant to
the Offer, then, without prejudice to the Purchaser's rights set forth herein,
the Depositary may nevertheless, on behalf of the Purchaser, retain tendered
Shares, and those Shares may not be withdrawn except to the extent that the
tendering stockholder is entitled to exercise and duly exercises withdrawal
rights as described in Section 4, subject, however, to the Purchaser's
obligation under Rule 14e-1(c) under the Exchange Act to pay for Shares tendered
or return those Shares promptly after termination or withdrawal of the Offer.
If any tendered Shares are not accepted for payment for any reason or if
Share Certificates are submitted for more Shares than are tendered, Share
Certificates evidencing unpurchased or untendered Shares will be returned (or,
in the case of Shares tendered by book-entry transfer into the Depositary's
account at the Book-Entry Transfer Facility pursuant to the procedures set forth
in Section 3, such Shares will be credited to an account maintained at such
Book-Entry Transfer Facility), without expense to the tendering stockholder, as
promptly as practicable following the expiration, termination or withdrawal of
the Offer.
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IF, PRIOR TO THE EXPIRATION DATE, THE PURCHASER INCREASES THE CONSIDERATION
OFFERED TO STOCKHOLDERS PURSUANT TO THE OFFER, SUCH INCREASED CONSIDERATION WILL
BE PAID TO ALL STOCKHOLDERS WHOSE SHARES ARE PURCHASED PURSUANT TO THE OFFER,
REGARDLESS OF WHETHER THOSE SHARES WERE TENDERED PRIOR TO THE INCREASE IN
CONSIDERATION.
The Purchaser reserves the right to transfer or assign, in whole at any
time or in part from time to time, to another direct or indirect wholly owned
subsidiary of Parent (provided that any such subsidiary agrees in writing to be
bound by the terms, conditions and provisions of the Offer and the Merger
Agreement), the right to purchase all or any portion of the Shares tendered
pursuant to the Offer, but any such transfer or assignment will not prejudice
the rights of tendering stockholders to receive payment for Shares validly
tendered and accepted for payment pursuant to the Offer.
SECTION 3. PROCEDURE FOR TENDERING SHARES.
Valid Tender. Except as set forth below, in order for Shares to be validly
tendered pursuant to the Offer, (i) the Letter of Transmittal (or a facsimile
thereof), properly completed and duly executed with any required signature
guarantees, or an Agent's Message in connection with a book-entry delivery of
Shares, and any other documents required by the Letter of Transmittal, must be
received by the Depositary at one of its addresses set forth on the back cover
of this Offer to Purchase on or prior to the Expiration Date and (ii) either (a)
Share Certificates evidencing tendered Shares must be received by the Depositary
at such address, or the Shares must be tendered pursuant to the procedure for
book-entry transfer described below and a Book-Entry Confirmation must be
received by the Depositary, in each case on or prior to the Expiration Date, or
(b) the tendering stockholder must comply with the guaranteed delivery
procedures described below.
If Share Certificates are forwarded to the Depositary in multiple
deliveries, a properly completed and duly executed Letter of Transmittal (or a
facsimile thereof) must accompany each delivery.
No alternative, conditional or contingent tenders will be accepted and no
fractional Shares will be purchased.
Book-Entry Transfer. The Depositary will establish an account with respect
to the Shares at the Book-Entry Transfer Facility for purposes of the Offer
within two business days after the date of this Offer to Purchase. Any financial
institution that is a participant in the system of the Book-Entry Transfer
Facility may make book-entry delivery of Shares by causing the Book-Entry
Transfer Facility to transfer such Shares into the Depositary's account at the
Book-Entry Transfer Facility in accordance with the Book-Entry Transfer
Facility's transfer procedures. Although delivery of Shares may be effected
through book-entry transfer at the Book-Entry Transfer Facility, a Letter of
Transmittal (or a facsimile thereof), properly completed and duly executed with
any required signature guarantees, or an Agent's Message in connection with a
book-entry transfer, and any other documents required by the Letter of
Transmittal, must in any case be received by the Depositary at one of its
addresses set forth on the back cover of this Offer to Purchase on or prior to
the Expiration Date, or the tendering stockholder must comply with the
guaranteed delivery procedures described below. The confirmation of a book-entry
transfer of Shares into the Depositary's account at the Book-Entry Transfer
Facility as described above is referred to herein as a "Book-Entry
Confirmation." DELIVERY OF DOCUMENTS TO A BOOK-ENTRY TRANSFER FACILITY IN
ACCORDANCE WITH THE BOOK-ENTRY TRANSFER FACILITY'S PROCEDURES DOES NOT
CONSTITUTE DELIVERY TO THE DEPOSITARY.
Signature Guarantees. No signature guarantee is required on the Letter of
Transmittal (i) if the Letter of Transmittal is signed by the registered
holder(s) of the Shares (which term, for purposes of this Section 3, includes
any participant in the Book-Entry Transfer Facility system whose name appears on
a security position listing as the owner of the Shares) of such Shares tendered
therewith and such registered holder has not completed either the box entitled
"Special Delivery Instructions" or the box entitled "Special Payment
Instructions" on the Letter of Transmittal or (ii) if such Shares are tendered
for the account of a bank, broker, dealer, credit union, savings association or
other entity that is a member in good standing of the Securities Transfer Agents
Medallion Program, the New York Stock Exchange Medallion Signature Guarantee
Program or the Stock Exchange Medallion Program (each an "Eligible
Institution"). In all other cases, all signatures
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<PAGE> 10
on the Letter of Transmittal must be guaranteed by an Eligible Institution. See
Instructions 1 and 5 to the Letter of Transmittal. If the certificates for
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 Shares
not tendered or not accepted for payment are to be returned to a person other
than the registered holder of the certificates surrendered, the tendered
certificates must be endorsed in blank 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 in the manner described above. See
Instructions 1 and 5 to the Letter of Transmittal.
Guaranteed Delivery. If a stockholder desires to tender Shares pursuant to
the Offer and the stockholder's Share Certificates are not immediately
available, or the stockholder cannot arrange for the Share Certificates and all
other required documents to reach the Depositary on or prior to the Expiration
Date, or the stockholder cannot complete the procedure for delivery by
book-entry transfer on a timely basis, then the stockholder's Shares may
nevertheless be tendered, provided that all of the following guaranteed delivery
procedures are duly complied with:
(i) the 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 the Purchaser herewith,
must be received by the Depositary as provided below on or prior to the
Expiration Date; and
(iii) the Share Certificates evidencing all physically delivered
Shares, in proper form for transfer by delivery, or a Book-Entry
Confirmation, together with the Letter of Transmittal (or a facsimile
thereof) properly completed and duly executed with any required signature
guarantees (or, in the case of a book-entry transfer, an Agent's Message)
and any other documents required by the Letter of Transmittal, must be
received by the Depositary within three Nasdaq trading days after the date
of execution of the Notice of Guaranteed Delivery. A "Nasdaq trading day"
is a day on which securities are traded on the Nasdaq National Market.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted
by telegram, facsimile transmission or mail to the Depositary.
Notwithstanding any other provision hereof, payment for Shares accepted for
payment pursuant to the Offer will in all cases be made only after timely
receipt by the Depositary of (i) Share Certificates evidencing such Shares or a
Book-Entry Confirmation of the delivery of such Shares (if available), (ii) a
properly completed and duly executed Letter of Transmittal (or a facsimile
thereof) or, in the case of a book-entry transfer, an Agent's Message and (iii)
any other documents required by the Letter of Transmittal. Accordingly,
tendering stockholders may be paid at different times depending on when Share
Certificates are received by the Depositary or Book-Entry Confirmations of
tendered Shares are received into the Depositary's account at the Book-Entry
Transfer Facility. Under no circumstance will interest be paid by the Purchaser
on the purchase price of Shares to any tendering stockholder, regardless of any
delay in making such payment.
THE METHOD OF DELIVERY OF SHARE CERTIFICATES AND ALL OTHER REQUIRED
DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY TRANSFER FACILITY, IS AT
THE OPTION AND RISK OF THE TENDERING STOCKHOLDER AND THE DELIVERY WILL BE DEEMED
MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF 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.
Determination of Validity. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance for payment of any tender
of Shares pursuant to any of the procedures described above will be determined
by the Purchaser, in its sole discretion, which determination shall be final and
binding on all parties. The Purchaser 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 which may be unlawful. The Purchaser also reserves the absolute right
to waive any of the conditions of the Offer or any defect or irregularity in any
tender of Shares of any particular stockholder, whether or not similar defects
or irregularities are waived in the case of other
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stockholders. No tender of Shares will be deemed to have been validly made until
all defects and irregularities have been cured or waived.
None of the Purchaser, Parent, any of their affiliates or assigns, the
Depositary, the Information Agent 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 Purchaser's
interpretation of the terms and conditions of the Offer (including the Letter of
Transmittal and the instructions thereto) will be final and binding.
Appointment as Proxy. By executing a Letter of Transmittal as set forth
above, a tendering stockholder irrevocably appoints designees of the Purchaser
as the stockholder's attorneys-in-fact and proxies, each with full power of
substitution, in the manner set forth in the Letter of Transmittal, to the full
extent of such stockholder's rights with respect to the Shares tendered by such
stockholder and accepted for payment by the Purchaser (and with respect to any
and all other Shares or other securities issued or issuable in respect of the
Shares on or after the Expiration Date). All such powers of attorney and proxies
shall be considered irrevocable and coupled with an interest in the tendered
Shares. Such appointment will be effective if, when and only to the extent that
the Purchaser accepts such Shares for payment. Upon such acceptance for payment,
all prior powers of attorney and proxies given by the stockholder with respect
to the Shares (and other securities) will, without further action, be revoked,
and no subsequent powers of attorney, proxies or written consents may be given
or executed by such stockholders (and if given or executed, will not be deemed
effective). The designees of the Purchaser will, with respect to the Shares and
other securities for which such appointment is effective, be empowered to
exercise all voting and other rights of the stockholder as they in their sole
discretion may deem proper at any annual or special meeting of the Company's
stockholders or any adjournment or postponement thereof, by written consent in
lieu of any such meeting (if such written consent is permitted under the
Company's Bylaws) or otherwise. The Purchaser reserves the right to require
that, in order for Shares to be deemed validly tendered, immediately upon the
Purchaser's payment for such Shares, the Purchaser must be able to exercise full
voting rights with respect to such Shares.
Backup Federal Income Tax Withholding and Substitute Form W-9. Under the
"backup withholding" provisions of federal income tax law, the Depositary may be
required to withhold 31% of the amount of any payments of cash pursuant to the
Offer. In order to avoid backup withholding, each stockholder surrendering
Shares in the Offer must provide the Depositary with the stockholder's correct
taxpayer identification number ("TIN") on a Substitute Form W-9 and certify
under penalties of perjury that such TIN is correct and that the stockholder is
not subject to backup withholding. Certain stockholders (including, among
others, all corporations and certain foreign individuals and entities) are not
subject to backup withholding. If a stockholder does not provide its correct TIN
or fails to provide the certifications described above, the Internal Revenue
Service ("IRS") may impose a penalty on the stockholder and payment of cash to
the stockholder pursuant to the Offer may be subject to backup withholding. All
stockholders surrendering Shares pursuant to the Offer should complete and sign
the Substitute Form W-9 included in 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
Depositary). Noncorporate foreign stockholders should complete and sign 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 9 to the
Letter of Transmittal.
Other Requirements. The Purchaser's acceptance for payment of Shares
tendered pursuant to any of the procedures described above will constitute a
binding agreement between the tendering stockholder and the Purchaser upon the
terms and subject to the conditions of the Offer.
SECTION 4. WITHDRAWAL RIGHTS.
Tenders of Shares made pursuant to the Offer are irrevocable, except that
Shares tendered pursuant to the Offer may be withdrawn at any time on or prior
to the Expiration Date and, unless already accepted for payment by the Purchaser
pursuant to the Offer, may also be withdrawn at any time after May 11, 1998. If
the Purchaser extends the Offer, is delayed in its acceptance for payment of
Shares or is unable to purchase Shares validly tendered pursuant to the Offer
for any reason, then, without prejudice to the Purchaser's rights under the
Offer, tendered Shares may be retained by the Depositary on behalf of the
Purchaser, and may not
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be withdrawn except to the extent that tendering stockholders are entitled to
withdrawal rights as set forth in this Section 4; subject, however, to the
Purchaser's obligation, pursuant to Rule 14e-1(c) under the Exchange Act, to pay
for the tendered Shares or return those Shares promptly after termination or
withdrawal of the Offer. Any such delay will be accompanied by an extension of
the Offer to the extent required by law.
For a withdrawal 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 this 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 of the
registered holder, if different from that of the person who tendered such
Shares. If Share Certificates evidencing Shares to be withdrawn have been
delivered or otherwise identified to the Depositary, then, prior to the physical
release of such Share Certificates, the serial numbers shown on such Share
Certificates must be submitted to the Depositary and 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 procedure for book-entry transfer 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 and otherwise comply with the Book-Entry Transfer Facility's
procedures for withdrawal, in which case a notice of withdrawal will be
effective if delivered to the Depositary by any method of delivery described in
the first sentence of this paragraph.
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, whose determination will be final and binding. None of the
Purchaser, Parent, any of their affiliates or assigns, the Dealer Manager, the
Depositary, the Information Agent or any other person will be under any
obligation to give notification of any defects or irregularities in any notice
of withdrawal or incur any liability for failure to give any such notification,
nor shall any of them incur liability for failure to give such notice.
Withdrawals of Shares may not be rescinded. Any Shares properly withdrawn
will thereafter be deemed not to have been validly tendered for purposes of the
Offer. However, withdrawn Shares may be re-tendered at any time on or prior to
the Expiration Date by following one of the procedures described in Section 3.
SECTION 5. CERTAIN U.S. FEDERAL INCOME TAX MATTERS.
The summary of tax consequences set forth below is for general information
only and is based on the law as currently in effect. The tax treatment of each
stockholder will depend in part upon such stockholder's particular situation.
Special tax consequences not described herein may be applicable to particular
classes of taxpayers, such as financial institutions, broker-dealers, persons
who are not citizens or residents of the United States, stockholders who
acquired their Shares through the exercise of an employee stock option or
otherwise as compensation and persons who received payments in respect of
options to acquire Shares. ALL STOCKHOLDERS SHOULD CONSULT WITH THEIR OWN TAX
ADVISORS AS TO THE PARTICULAR TAX CONSEQUENCES OF THE OFFER AND THE MERGER TO
THEM, INCLUDING THE APPLICABILITY AND EFFECT OF THE ALTERNATIVE MINIMUM TAX AND
ANY STATE, LOCAL OR FOREIGN INCOME AND OTHER TAX LAWS AND CHANGES IN SUCH TAX
LAWS.
The receipt of cash pursuant to the Offer or the Merger will be a taxable
transaction for federal income tax purposes under the Internal Revenue Code of
1986, as amended, and may also be a taxable transaction under applicable state,
local, foreign income or other tax laws. Generally, a tendering stockholder will
recognize gain or loss in an amount equal to the difference between the cash
received by the stockholder in exchange for Shares pursuant to the Offer (or
Merger) and the stockholder's adjusted tax basis in those Shares. Gain or loss
is computed separately for each block of Shares (Shares which were purchased at
the same time and price) sold. For federal income tax purposes, such gain or
loss will be a capital gain or loss if the Shares are a capital asset in the
hands of the stockholder, and a long-term capital gain or loss if the
stockholder's holding period is more than one year as of the date the Purchaser
accepts such Shares for payment pursuant to the Offer or the effective date of
the Merger, as the case may be. There are limitations on the deductibility of
capital losses.
10
<PAGE> 13
The Taxpayer Relief Act of 1997 (the "1997 Act") created several new
categories of capital gains applicable to noncorporate taxpayers. Under prior
law, noncorporate taxpayers were generally taxed at a maximum rate of 28% on net
capital gain (generally, the excess of net long-term capital gain over net
short-term capital loss). Noncorporate taxpayers are now generally taxed at a
maximum rate of 20% on net capital gain attributable to the sale of property
held for more than eighteen months, and a maximum rate of 28% on net capital
gain attributable to the sale of property held for more than one year but not
more than eighteen months. The 1997 Act did not affect the treatment of
short-term capital gain or loss (generally, gain or loss attributable to capital
assets held for one year or less) and did not affect the taxation of capital
gains in the hands of corporate taxpayers.
As noted in Section 3 above, under the "backup withholding" provisions of
federal income tax law, the Depositary may be required to withhold 31% of the
amount of any payments of cash pursuant to the Offer. In order to avoid backup
withholding, each stockholder surrendering Shares in the Offer must provide the
payor of such cash with the stockholder's correct TIN on a Substitute Form W-9
and certify under penalties of perjury that such TIN is correct and that the
stockholder is not subject to backup withholding. See Instruction 9 to the
Letter of Transmittal.
SECTION 6. PRICE RANGE OF SHARES; DIVIDENDS.
The Shares are traded on the Nasdaq National Market under the symbol
"PRXM." The following table sets forth, for each of the periods indicated, the
high and low sale prices per Share. The information set forth below is based on
published financial sources.
<TABLE>
<CAPTION>
HIGH LOW
---- ---
<S> <C> <C>
YEAR ENDED DECEMBER 31, 1996:
First Quarter............................................. $28 7/8 $17 7/8
Second Quarter............................................ 20 1/4 10 3/4
Third Quarter............................................. 14 1/2 9 1/8
Fourth Quarter............................................ 16 10 7/16
YEAR ENDED DECEMBER 31, 1997:
First Quarter............................................. $16 7/8 $ 5 5/8
Second Quarter............................................ 6 3/4 4 3/8
Third Quarter............................................. 8 1/8 4 3/8
Fourth Quarter............................................ 9 1/16 6
YEAR ENDED DECEMBER 30, 1998:
First Quarter (through March 12, 1998).................... $10 23/32 $ 6 1/2
</TABLE>
On March 6, 1998, the last full day of trading prior to the public
announcement of the terms of the Merger Agreement, the last reported sale price
per Share on the Nasdaq National Market was $8 5/16. On March 12, 1998, the last
full day of trading prior to commencement of the Offer, the last reported sale
price per Share on the Nasdaq National Market was $10 11/16. STOCKHOLDERS ARE
URGED TO OBTAIN A CURRENT MARKET QUOTATION FOR THE SHARES.
The Company did not pay any cash dividends on the Shares in 1996 or 1997
and has not paid or declared any cash dividends in 1998 through the date of this
Offer to Purchase. In addition, under the terms of the Merger Agreement, the
Company is not permitted to declare or pay dividends with respect to the Shares
without the prior written consent of Parent.
SECTION 7. CERTAIN INFORMATION CONCERNING THE COMPANY.
Unless otherwise indicated, the information concerning the Company
contained in this Offer to Purchase, including financial information (except the
information described below under "Other Financial Information"), has been taken
from or based upon publicly available documents and records on file with the
Commission and other public sources. Neither the Purchaser nor Parent assumes
any responsibility for the
11
<PAGE> 14
accuracy or completeness of the information concerning the Company contained in
such documents and records or for any failure by the Company to disclose events
that may have occurred and may affect the significance or accuracy of any such
information but which are unknown to the Purchaser or Parent.
General. The Company markets and distributes multimedia projection
products for use in connection with personal computers or video sources. The
Company is a Delaware corporation with its principal executive offices located
9440 Carroll Park Drive, San Diego, California 92121-2298. The telephone number
of the Company is 619-457-5500.
Approximately 3.1% of the outstanding Shares are held by the Stockholders,
who constitute all the directors of the Company and who have agreed, among other
things, to tender or cause to be tendered, all Shares owned by them pursuant to
the Offer. See Section 11.
Financial Information. The table set forth below includes summary
historical financial information of the Company. The summary financial
information has been derived from the audited consolidated financial statements
as reported in the Company's Annual Report on Form 10-K for the fiscal year
ended March 31, 1997 (the "Company 10-K") and the unaudited consolidated
financial statements of the Company as reported in the Company's Quarterly
Report on Form 10-Q (the "Company 10-Q") for the fiscal quarter ended December
31, 1997. In the opinion of the Company's management, the unaudited financial
statements for the quarters ended December 31, 1997 and 1996 reflect all
adjustments necessary for a fair statement of the results of operations for the
interim periods presented therein. However, the results of operations for any
interim period are not necessarily indicative of results for the full year. The
summary historical financial information should be read in conjunction with, and
is qualified in its entirety by reference to, the consolidated financial
statements and related notes included in the reports referred to above. The
Company 10-K and the Company 10-Q and other documents may be examined and copies
thereof may be obtained from the offices of the Commission and Nasdaq in the
manner set forth under "Available Information" below.
PROXIMA CORPORATION
SUMMARY SELECTED CONSOLIDATED FINANCIAL
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
FISCAL YEAR ENDED MARCH 31, DECEMBER 31,
------------------------------ ------------------
1997 1996 1995 1997 1996
-------- -------- -------- ------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA
Sales........................................ $154,665 $159,797 $135,750 $97,297 $118,625
Operating Income (Loss)...................... (13,334) 16,519 20,701 (2,311) 114
Net Income (Loss)............................ (9,540) 9,690 13,109 (784) (1,693)
Earnings (Loss) Per Share.................... (1.36) 1.37 1.91 (0.11) (0.24)
</TABLE>
<TABLE>
<CAPTION>
AT MARCH 31, AT DECEMBER 31,
------------------------------ ------------------
1997 1996 1995 1997 1996
-------- -------- -------- ------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA
Total Assets................................. 87,278 90,258 77,827 88,295 100,297
Total Current Liabilities.................... 21,988 17,088 18,538 23,699 27,294
Total Stockholders' Equity (1)............... $ 65,290 $ 73,170 $ 59,289 $64,596 $ 73,003
</TABLE>
- ---------------
(1) No dividends were declared or paid during fiscal 1995, 1996, 1997 or 1998
(through December 31, 1997).
Other Financial Information. During the course of the discussions between
Parent and the Company that led to the execution of the Merger Agreement, the
Company provided Parent with certain information about the Company and its
projected future financial performance which is not publicly available. The
information provided included financial projections for the Company for the
fourth quarter of the Company's 1998 fiscal year and for each of the quarters in
the Company's 1999 fiscal year for net revenues of $39 million, $38 million, $40
million, $44 million and $46 million, respectively; for profit before taxes of
$1.9 million, $2.1
12
<PAGE> 15
million, $3.1 million, $3.9 million and $3.8 million, respectively; and for net
income of $1.0 million, $1.3 million, $1.9 million, $2.4 million and $2.3
million, respectively. On February 9, 1998, the Company provided Parent a
revised forecast for the fourth quarter of the Company's 1998 fiscal year for
net revenues of $38 million and for net income of approximately $800,000. On
February 21, 1998, the Company indicated to Parent that, based on estimates of
results of operations for January and February 1998, it would be very difficult
to achieve such results for the fourth quarter of the Company's 1998 fiscal
year. On March 6, 1998 the Company provided Parent revised forecasts for the
Company's 1999 fiscal year for net revenues of $168 million and net income of
$4.8 million.
THE FOREGOING INFORMATION WAS PREPARED BY THE COMPANY SOLELY FOR INTERNAL
USE AND NOT FOR PUBLICATION OR WITH A VIEW TO COMPLYING WITH THE PUBLISHED
GUIDELINES OF THE COMMISSION REGARDING PROJECTIONS OR WITH THE GUIDELINES
ESTABLISHED BY THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS AND IS
INCLUDED IN THIS OFFER TO PURCHASE ONLY BECAUSE IT WAS FURNISHED TO PARENT. THE
FOREGOING INFORMATION IS "FORWARD-LOOKING" AND INHERENTLY SUBJECT TO SIGNIFICANT
UNCERTAINTIES AND CONTINGENCIES, MANY OF WHICH ARE BEYOND THE CONTROL OF THE
COMPANY, INCLUDING INDUSTRY PERFORMANCE, GENERAL BUSINESS AND ECONOMIC
CONDITIONS, CHANGING COMPETITION, ADVERSE CHANGES IN APPLICABLE LAWS,
REGULATIONS OR RULES GOVERNING ENVIRONMENTAL, TAX OR ACCOUNTING MATTERS AND
OTHER MATTERS. THE COMPANY HAS ADVISED PARENT AND THE PURCHASER THAT THE
INTERNAL FINANCIAL FORECASTS (UPON WHICH THE PROJECTIONS PROVIDED TO PARENT WERE
BASED, IN PART) 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 INTERPRETATIONS AND PERIODIC REVISIONS BASED ON ACTUAL
EXPERIENCE AND BUSINESS DEVELOPMENTS. THE PROJECTIONS NECESSARILY WERE PREPARED
ON THE BASIS OF A SERIES OF ASSUMPTIONS, SOME OF WHICH INEVITABLY WILL PROVE TO
BE INCORRECT. ACCORDINGLY, THERE CAN BE NO ASSURANCE THAT THE PROJECTED RESULTS
WOULD BE REALIZED OR THAT THE ACTUAL RESULTS WOULD NOT BE SIGNIFICANTLY HIGHER
OR LOWER THAN THOSE PROJECTED. THE INCLUSION OF THIS INFORMATION SHOULD NOT BE
REGARDED AS AN INDICATION THAT PARENT, THE PURCHASER, THE COMPANY OR ANYONE WHO
RECEIVED THIS INFORMATION CONSIDERED IT A RELIABLE PREDICTOR OF FUTURE EVENTS,
AND THIS INFORMATION SHOULD NOT BE RELIED ON AS SUCH. NONE OF PARENT, THE
PURCHASER OR THE COMPANY ASSUMES ANY RESPONSIBILITY FOR THE VALIDITY,
REASONABLENESS, ACCURACY OR COMPLETENESS OF THE PROJECTIONS AND THE COMPANY HAS
MADE NO REPRESENTATION TO THE PURCHASER OR PARENT REGARDING THIS INFORMATION.
NONE OF PARENT, THE PURCHASER, THE COMPANY OR ANY OTHER PARTY INTENDS PUBLICLY
TO UPDATE OR OTHERWISE PUBLICLY REVISE THE PROJECTIONS SET FORTH ABOVE EVEN IF
EXPERIENCE OR FUTURE CHANGES MAKE IT CLEAR THAT THE PROJECTIONS WILL NOT BE
REALIZED (EVEN IN THE SHORT TERM).
Available Information. The Shares are registered under the Exchange Act.
Accordingly, the Company is subject to the information and reporting
requirements of the Exchange Act and in accordance therewith is obligated to
file periodic reports, proxy statements and other information with the
Commission 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 and any material interest of such persons in
transactions with the Company is required to be disclosed in such proxy
statements and distributed to the Company's stockholders and filed with the
Commission. These reports, proxy statements and other information should be
available for inspection at the public reference facilities of the Commission
located in Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and
should be available for inspection and copying at prescribed rates at the
regional offices of the Commission located at Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661, and Seven World Trade Center, Suite
1300, New York, New York 10048. Copies of this material also may be obtained by
mail, upon payment of the Commission's customary fees, from the Commission's
principal office at 450 Fifth Street, N.W., Washington, D.C. 20549. Such
material also should be available for inspection at the offices of the Nasdaq
National Market, located at 1755 K Street, N.W., Washington, D.C. 20006. The
Commission maintains an Internet site, at http://www.sec.gov, that contains
reports, proxy and information statements and other information regarding
registrants that file electronically with the Commission.
13
<PAGE> 16
SECTION 8. CERTAIN INFORMATION CONCERNING THE PURCHASER AND PARENT.
The Purchaser, a newly incorporated Delaware corporation and a wholly owned
subsidiary of Parent, was organized in connection with the Offer and has not
carried on any business activities to date other than in connection with the
Offer and the Merger Agreement. The principal executive offices of the Purchaser
and Parent are located at K.G. Meldahlsvei 9, N-1602 Fredrikstad, Norway, and
the telephone number at such offices is (47 69) 34 01 55. Parent designs,
develops, manufactures and markets multimedia projection products for use in
connection with personal computers or video sources.
Parent is not subject to the information and reporting requirements of the
Exchange Act and in accordance therewith is not obligated to file reports, proxy
statements and other information with the Commission relating to its business,
financial condition and other matters. Information as of particular dates
concerning Parent's directors and officers, their remuneration, stock options
granted to them, the principal holders of Parent's securities and any material
interests of such persons in transactions with Parent is required to be
disclosed in the proxy statement filed with the Commission in connection with
the Offer.
The name, citizenship, business address, principal occupation or employment
and five-year employment history of each of the directors and executive officers
of the Purchaser and Parent are set forth in Schedule I to this Offer to
Purchase.
Pursuant to the Option Agreement and the Stockholders Agreement, Parent may
be deemed to beneficially own 1,647,710 shares of Common Stock constituting
approximately 19.2% of the total currently outstanding Shares (after giving pro
forma effect to the issuance of shares of Common Stock under the Option
Agreement). See Section 11. Each of the Purchaser and Parent disclaims
beneficial ownership of such Shares. Except as set forth in this Offer to
Purchase, none of the Purchaser, Parent, or, to the best knowledge of the
Purchaser and Parent, any of the persons listed on Schedule I or any associate
or majority-owned subsidiary of the Purchaser, Parent or any of the persons so
listed, beneficially owns or has a right to acquire directly or indirectly any
Shares, and none of the Purchaser, Parent, or, to the best knowledge of the
Purchaser and Parent, any of the persons or entities referred to above, or any
of the respective executive officers, directors or subsidiaries of any of the
foregoing, has effected any transactions in the Shares during the past 60 days.
Except as described in this Offer to Purchase, none of the Purchaser,
Parent, or, to the best knowledge of the Purchaser and Parent, any of the
persons listed on Schedule I to this Offer to Purchase, has any contract,
arrangement, understanding or relationship with any other person with respect to
any securities of the Company, including but not limited to contracts,
arrangements, understandings or relationships concerning the transfer or voting
of such securities, joint ventures, loan or option arrangements, puts or calls,
guarantees of loans, guarantees against loss or the giving or withholding of
proxies. Except as set forth in this Offer to Purchase, since January 1993, none
of the Purchaser, Parent, or, to the best knowledge of the Purchaser and Parent,
any of the persons listed on Schedule I, has had any business relationships or
transactions with the Company or any of its executive officers, directors or
affiliates that are required to be reported under the rules and regulations of
the Commission applicable to the Offer. Except as set forth in this Offer to
Purchase, since January 1993 there have been no contacts, negotiations or
transactions between Parent, the Purchaser, or, to the best knowledge of the
Purchaser and Parent, any of the persons listed on Schedule I, 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 that would require reporting under the rules of the Commission.
Set forth below is certain selected consolidated financial information
relating to Parent and its subsidiaries for the fiscal years ended December 31,
1997, 1996 and 1995 (the "Financial Statements"). The selected consolidated
financial information is denominated in Norwegian Kroner and prepared in
accordance with generally accepted accounting principles in Norway ("Norwegian
GAAP"). Norwegian GAAP differs in certain significant respects from generally
accepted accounting principles in the United States
("US GAAP"). Immediately following Parent's summary consolidated financial
information set forth below is a brief summary of certain differences between
Norwegian GAAP and US GAAP. Parent's audited financial statements for the fiscal
years ended December 31, 1996 and 1995 and unaudited financial statements for
the fiscal year ended December 31, 1997 are incorporated herein by reference.
Those financial
14
<PAGE> 17
statements have been filed with the Commission as Exhibit (a)(10) to the
Schedule 14D-1 and may be inspected at the Commission's public reference
facilities in Washington, D.C., and copies thereof may be obtained from such
facilities upon payment of the Commission's customary charges, in the manner set
forth in Section 7 above under "Available Information" (although they will not
be available at the regional offices of the Commission). Parent expects to
complete its audit of its financial statements for the twelve months ending
December 31, 1997 at the end of March, 1998. Set forth below is certain summary
financial information excerpted or derived from Parent's financial statements.
Such summary information is qualified in its entirety by reference to the
Purchaser's financial statements and all the financial information and related
notes contained therein.
ASK ASA
SELECTED CONSOLIDATED FINANCIAL DATA
(IN MILLIONS OF NOK(1), EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------
1997 1996 1995
----------- ----- ------------
(unaudited) (pro forma(2))
<S> <C> <C> <C>
STATEMENT OF OPERATIONS DATA
Net revenue................................................ 604.3 324.6 219.2
Income from operations..................................... 130.5 73.9 32.0
Net income................................................. 95.0 50.0(3) 21.5
Earnings per share......................................... 2.60 1.40 0.60
</TABLE>
<TABLE>
<CAPTION>
AT DECEMBER 31,
-----------------------------------
1997 1996 1995
----------- ----- -----------
(unaudited) (pro forma(2))
<S> <C> <C> <C>
BALANCE SHEET DATA
Total assets................................................ 410.3 167.1 92.6
Total liabilities........................................... 116.6 53.9 37.4
Total stockholders' equity.................................. 293.7 113.2(4) 55.2
</TABLE>
- ------------------
(1) Parent publishes its financial statements in Norwegian Kroner. Based on
published financial sources, the exchange rates reflected in the Federal
Reserve Bank of New York's noon buying rates in New York City for Norwegian
Kroner to dollars, expressed in NOK per dollar, for the periods and dates
indicated, are as follows:
<TABLE>
<CAPTION>
END RATE HIGH LOW AVERAGE
-------- ------ ------ -------
<S> <C> <C> <C> <C>
Fiscal Year ended 12/29/95........................... 6.3210 6.8110 6.1155 6.3355
Fiscal Year ended 12/31/96........................... 6.3750 6.6160 6.3000 6.4590
Fiscal Year ended 12/31/97........................... 7.3740 7.7564 6.3420 7.0857
</TABLE>
(2) Parent was created in a corporate reorganization of Tandberg Data ASA
that became effective as of January 1, 1996. The pro forma figures
reflect Parent's estimates of what its stand-alone operating results and
balance sheet would have been had the reorganization instead been
completed on or prior to January 1, 1995.
(3) Net income is before minority interests of NOK 2.8 million.
(4) Total equity includes minority interests of NOK 9.0 million.
CERTAIN DIFFERENCES BETWEEN NORWEGIAN AND US GAAP
The significant differences between Norwegian and US GAAP that affect the
consolidated financial statements of Parent are described below. Under Norwegian
GAAP, deferred income tax benefits may only be
15
<PAGE> 18
used to reduce deferred income tax liabilities, whereas under US GAAP, Financial
Accounting Standard No. 109, Accounting for Income Taxes, requires the
recognition of deferred income tax assets. In 1997, Parent issued compensatory
stock options to employees that created compensation expense. Under Norwegian
tax law, this stock grant also created a separate tax on the employer. While
this tax is not recognized as an expense under Norwegian GAAP, Accounting
Principles Bulletin Opinion No. 25, Accounting for Stock Issued to Employees,
requires Parent to recognize this tax as a component of the compensatory
expense.
The following table reflects the impact of the accounting differences
described above on Parent's results of operations for the periods indicated:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------
1997 1996 1995
---- ---- ----
(in millions of NOK)
<S> <C> <C> <C>
Net income pursuant to Norwegian GAAP:...................... 95.0 50.0 21.5
Recognition of deferred income tax asset:.............. 5.3 3.3 (0.1)
Tax on compensatory stock option award:................ (3.5) -- --
Minority interest...................................... -- (2.8) --
---- ---- ----
Net income pursuant to US GAAP:............................. 96.8 50.5 21.4
==== ==== ====
</TABLE>
The following table reflects the impact of the accounting differences
described above between Norwegian and US GAAP on Parent's stockholders' equity
at the dates indicated:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------
1997 1996 1995
----- ----- ----
(in millions of NOK)
<S> <C> <C> <C>
Norwegian stockholders' equity pursuant to Norwegian
GAAP:..................................................... 293.7 113.2 55.2
Adjustments to conform to US GAAP:
Recognition of deferred income tax asset:.............. 9.7 4.0 0.9
Tax on compensatory stock option award:................ (3.5) -- --
Minority interest...................................... -- (9.0) --
----- ----- ----
Stockholders' equity pursuant to US GAAP:................... 299.9 108.2 56.1
===== ===== ====
</TABLE>
SECTION 9. SOURCE AND AMOUNT OF FUNDS.
The total amount of funds required by the Purchaser to purchase Shares
pursuant to the Offer, to complete the Merger and to pay fees and expenses of
Parent and Purchaser related to the Offer and the Merger is estimated to be
approximately $87 million. The Offer is not conditioned upon any financing
arrangements.
On March 11, 1998, Parent received irrevocable commitments from
international and Norwegian institutional investors to purchase an aggregate of
3.7 million shares of capital stock of Parent for an aggregate purchase price of
approximately 336.7 million NOK (or approximately $45.3 million based on the
Federal Reserve Bank's noon buying rate in New York City of 7.43 Norwegian
Kroners per U.S. dollar on March 11, 1998). Parent expects to consummate this
private equity placement shortly after the date of this Offer to Purchase and to
use all or a significant portion of the net proceeds, which are expected to be
approximately 327 million NOK (or approximately $44.0 million based on buying
rate described above), to fund the cost of the Offer and the Merger and related
fees and transaction expenses.
The Purchaser plans to obtain funds needed for the Offer and Merger through
a new credit facility (the "Credit Facility") to be arranged by Bankers Trust
International PLC ("BTI") and from capital contributions to be provided by
Parent from its existing and future resources. At February 28, 1998, Parent had
cash and bank deposits totaling approximately $20.0 million.
16
<PAGE> 19
BTI has delivered to Parent a commitment to provide the Credit Facility,
under which Parent or a wholly owned subsidiary of Parent will be able to borrow
up to $70 million to finance the acquisition of the Company. Although BTI has
committed to provide the entire amount of the Credit Facility, it has advised
Parent that it intends to endeavor to arrange a syndicate of financial
institutions, for which BTI or an affiliate of BTI would act as agent, to commit
a portion of the Credit Facility.
Parent has agreed to pay underwriting, agency and other fees to BTI or its
affiliates and to pay certain of its and their expenses. Parent also has agreed
to indemnify BTI, its affiliates and certain other persons against certain types
of losses and liabilities arising out of the commitment or the Credit Facility.
Set forth below is a summary description of the commitment and the proposed
Credit Facility. The summary description does not purport to be complete. There
is no assurance that the terms described below will be contained as described in
the definitive documentation for the Credit Facility, and additional terms may
be included.
The Credit Facility will be available in two drawings, one at the time the
Purchaser accepts the tendered Shares for payment pursuant to the Offer and the
second upon the Effective Time. The first drawing will be available only after
Parent first has advanced $14 million from its existing cash balance toward the
cost of purchasing tendered Shares. Drawings under the Credit Facility are to be
applied toward the cash consideration payable in the Offer and the Merger to
holders of Shares and toward the fees and other expenses incurred in connection
with the Offer and the Merger.
The outstanding indebtedness under the Credit Facility will bear interest,
at Parent's option, at rates based on the London interbank offered rate
("LIBOR") for one-, three- or six-month periods plus an interest margin based on
the total outstanding indebtedness of Parent and its direct and indirect
subsidiaries under the Credit Facility. The margin will range from 1.75% per
year if such total indebtedness exceeds $60 million to 0.75% if the total
indebtedness is less than $30 million.
The indebtedness under the Credit Facility will be guaranteed by Parent,
the Purchaser and the Company after it becomes an indirect wholly owned
subsidiary of Parent. The outstanding indebtedness under the Credit Facility
will be subject to mandatory prepayment in certain events and to semi-annual
amortization payments commencing September 30, 1998 and ending on March 31,
2001.
The covenants will include a limitation on the incurrence of additional
debt by Parent and its consolidated subsidiaries until the total indebtedness of
Parent and its consolidated subsidiaries is reduced to $45 million and a series
of financial covenants including covenants to comply with an interest coverage
ratio requirement, a leverage ratio requirement, a cash flow test and a limit on
capital expenditures.
Conditions to borrowing under the Credit Facility will be customary for
this type of transaction and will include, among other things, (i) completion of
definitive loan documentation satisfactory to BTI; (ii) upon the expiration of
the Offer, a majority of the Shares having been validly tendered and not
subsequently withdrawn and all other conditions to the Offer having been
satisfied (or waived with the consent of BTI); (iii) all necessary regulatory,
governmental and corporate consents having been obtained; (iv) there having
occurred no material adverse change in the business, assets, condition
(financial or otherwise) or prospects of the Company or the Parent and its
subsidiaries taken as a whole between the date of the commitment and the
consummation of the Offer or the Merger, as the case may be; and
(v) confirmation from the Company that, as of the date of the Merger Agreement,
the Company had cash and cash equivalents of at least $20 million.
If for any reason the Credit Facility were not finalized or to become
unavailable, Parent would require alternative funding which it would seek from
other sources. Those sources might include bank borrowings or sales of debt or
equity securities in the capital markets.
Parent expects that, depending on market conditions, it will seek to repay
a portion of the indebtedness under the Credit Facility with the proceeds of a
new issue of its equity securities. Parent also may elect to use some of the
cash and cash equivalents held by the Company to repay a portion of the
indebtedness. The Company represented in the Merger Agreement that at the date
of the Merger Agreement it held cash and cash equivalents of not less than $20
million.
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Except as described above, neither Parent nor the Purchaser has any plan or
arrangement for repayment of borrowings under the Credit Facility. Parent
expects that, except as described above, those borrowings will be repaid with
internally generated funds and from other sources which may include the proceeds
of other bank borrowings or public or private sales of debt or equity
securities, in Europe or elsewhere. Parent's decisions in this regard will be
based on Parent's review from time to time of the advisability of particular
actions, as well as prevailing interest rates, financial and other economic
conditions and other factors Parent deems relevant.
SECTION 10. BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY.
The Company is engaged in lines of business similar or complementary to
those of Parent and its affiliates. Accordingly, Parent and its affiliates have
followed the business activities of the Company for some time. As early as June
1996, Ole J. Fredriksen, President and Chief Executive Office of Parent, was
introduced to Kenneth E. Olson, Chairman of the Board of Directors of the
Company, and John Rehfeld, former President and Chief Executive Officer of the
Company. In the fall of 1996, Jan H. Andersen and Einar J. Greve, members of the
Board of Directors of Parent, met with Mr. Rehfeld in Los Angeles, California to
discuss the liquid crystal display business. At various times after this meeting
until June 1997, representatives of Parent and the Company met at trade
conferences and conventions. The parties did not discuss a possible acquisition
of the Company by Parent during this time.
In April 1997, Broadview contacted Parent, and inquired as to Parent's
possible interest in a strategic opportunity, without identifying the Company.
In May 1997, following an affirmative response from Parent, Broadview identified
the Company as the other party to a potential transaction.
On June 5 and 6, 1997, Mr. Fredriksen and Mr. Olson met in Los Angeles,
California, while attending an industry trade show, to discuss Parent's and the
Company's markets and products and the possibility of a business combination.
On June 9, 1997, Mr. Fredriksen met in San Francisco, California with
Richard T. Dalton and Maryfrances Galligan of Broadview, Mr. John Rehfeld, a
former Chief Executive Officer of the Company who told Mr. Fredriksen he was
working for the Company as a consultant, and Mr. Robert Meshel, legal advisor to
Parent at the time. At the meeting, Mr. Fredriksen indicated that Parent might
be interested in acquiring the Company for a price equal to the Company's book
value, as estimated by Parent. Broadview suggested that this valuation would
likely be inadequate; however, representatives of Parent were encouraged to
visit with the Company's management at its headquarters in San Diego, California
to further review the Company's prospects.
On July 24, 1997, Parent and the Company executed a confidentiality
agreement with customary terms.
On August 7, 8 and 9, 1997, Mr. Fredriksen, Svein S. Jacobsen, Chairman of
the Board of Directors of Parent, and Jorn Eriksen, Vice-President-Technology
and Development of Parent, met at the Company's offices in San Diego, California
with various members of the Board of Directors, management of the Company and
representatives of Broadview. The purpose of the meetings was to discuss a
possible merger between the Company and Parent and for Parent to conduct limited
financial and business due diligence with respect to the Company in connection
with a possible merger between the Company and Parent.
On August 27, 1997, all of the members of Parent's Board of Directors and
several members of Parent's management met with Mr. Dalton, in Fredrikstad,
Norway to discuss, among other things, valuation of the Company, a possible
merger and the conditions to the transaction. Mr. Dalton discussed in general
terms the current status of the Company's business affairs, future prospects and
opportunities for growth. These discussions also covered, among other things,
the Company's ongoing shift in strategy under which the Company was reducing its
own product development efforts and manufacturing capacity and focusing on the
distribution of products designed and manufactured by third parties. Mr.
Fredriksen indicated that he believed the Company might be willing to proceed
with a transaction in the $7.00 per Share range. On September 8, 1997, the
Company received a letter from Alfred Berg Norge A/S, an investment bank
retained by Parent at the time, which provided an indication of interest to
offer to purchase the stock of the Company for $7.00 cash
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per share. On September 11, 1997, Mr. Fredriksen was advised that the Company's
Board of Directors had rejected his $7.00 per share proposal.
On September 28, 1997, Mr. Jacobsen advised Mr. Dalton that Parent would
not pursue any further discussion regarding a possible merger with the Company
until after the public announcement of the Company's financial results for the
fiscal quarter ending September 30, 1997. Parent's desire to wait for those
financial results was driven in part by its uncertainty over the effect on the
Company of its strategic shift to being principally a reseller of products.
The Company's financial results for the fiscal quarter ending September 30,
1997 were released on October 20, 1997. On November 6, 1997, Mr. Fredriksen
informed Mr. Olson that Parent continued to be interested in pursuing a business
combination with the Company. On December 3, 1997, Mr. Fredriksen and Mr. Olson
met in Fredrikstad, Norway, to resume discussions regarding a possible merger, a
business plan for the combined entities and product development and markets. On
December 16, 1997, Mr. Fredriksen contacted Mr. Dalton and told him that Parent
had serious interest in pursuing a business combination with the Company. Mr.
Dalton told Mr. Fredriksen that, since the Company's financial performance and
the trading price of its Common Stock recently had improved, any purchase of the
Company would need to be at a higher price than may have been possible in the
fall of 1997.
On December 16, 1997, Mr. Fredriksen contacted BT Alex. Brown Incorporated
("BT Alex. Brown") to discuss the possibility of a business combination between
the Company and Parent.
On January 14, 1998, representatives of BT Alex. Brown and Parent met in
New York City to further discuss a possible transaction between the Company and
Parent and BT Alex. Brown's involvement as financial advisor. At this time,
Parent agreed to retain BT Alex. Brown as financial advisor. After the January
14 meeting, BT Alex. Brown and Broadview discussed the Company's business
prospects and the terms of a possible merger between the Company and Parent.
On January 20, 1998, Parent formally retained BT Alex. Brown to provide
financial advisory services with respect to a possible acquisition of the
Company by the Parent and to advise on the potential availability and terms of
financing to be obtained in connection with such an acquisition. Also, on
January 20, Broadview informed representatives of BT Alex. Brown that the
Company was discussing a possible acquisition by means of a stock-for-stock
merger with a privately held corporation. On January 21, 1998, representatives
of BT Alex. Brown and the Company met in San Diego, California to conduct
preliminary financial due diligence.
On February 2, 1998, Parent sent a letter signed by Messrs. Jacobsen and
Fredriksen (the "February 2 Letter") to Mr. Olson. The February 2 Letter set
forth a proposal for a merger between the Company and a subsidiary of Parent in
which the stockholders of the Company would receive $10.50 per share in cash.
The merger agreement for the proposed transaction would contain customary
provisions, including break-up fee protection. Parent's obligations under the
merger agreement would not be subject to any financing contingency. Based on
extensive discussions with several possible funding sources, Parent was highly
confident it could obtain definitive commitments for financing by the time a
merger agreement was finalized. Parent offered in the letter to enter
immediately into negotiation of a transaction.
After receiving the February 2 Letter, Mr. Dalton requested, on behalf of
the Board of Directors of the Company, a meeting in San Diego with Mr.
Fredriksen and Parent's financial advisors to discuss further the proposal
contained in the February 2 Letter.
On February 6, 1998, representatives of Broadview and BT Alex. Brown
discussed due diligence matters and valuation issues relating to the February 2
Letter.
On February 9, 1998, Messrs. Fredriksen, Jacobsen and Olson, a
representative of the Parent's largest stockholder, and Dennis A. Whittler,
Chief Financial Officer of the Company, met (the "February 9 Meeting") with
representatives of Broadview and BT Alex. Brown at its offices in New York City
to discuss the proposal contained in the February 2 Letter. Parent's
representatives received a presentation from Messrs. Olson and Whittler at this
meeting with respect to, among other things, the financial condition and
prospects of the Company and the synergies that would result from a merger of
Parent and the Company. After extensive discussions, the representatives of
Parent indicated they would be prepared to proceed with a transaction at $11.00
per Share, subject to a number of conditions including completion by Parent and
its
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financial and legal advisors of additional due diligence investigations and the
execution and delivery of a mutually satisfactory merger agreement containing,
among other things, provisions for the payment by the Company to Parent in
certain circumstances of an aggregate of $3 million in termination fees and up
to $500,000 in expenses, the grant by the Company to Parent of an option to
acquire newly-issued shares of Common Stock in an amount equal to 19.9% of the
Shares outstanding prior to exercise and an agreement by the members of the
Company's Board of Directors to tender their Shares. The representatives of the
Company who were present at the meeting indicated that they believed this
proposal could form the basis for a mutually acceptable transaction, except that
they did not believe an option of the type requested by Parent was acceptable.
Subsequent to the February 9 Meeting, representatives of Parent and the
Company exchanged drafts of the definitive Merger Agreement, conducted
additional legal and financial due diligence regarding the Company and discussed
plans for integrating the Company and Parent. Negotiations with respect to the
Merger Agreement addressed, among other things, the circumstances under which
the termination fee would be payable, whether an option would be granted and if
so on what terms, the terms of the Stockholders Agreement, provisions imposing
restrictions on the Company's ability to enter into a competing transaction and
the conditions to the Offer. These negotiations continued through the evening of
Saturday, March 7, 1998.
At a meeting of the Board of Directors of the Company held on March 8,
1998, by unanimous vote of those present (one member being absent), the Board
approved the Offer, the Merger and the Merger Agreement, and determined that the
Merger Agreement and the transactions contemplated thereby, including the Offer
and the Merger, taken together, are fair to, and in the best interests of, the
stockholders of the Company. In addition, the Board determined to recommend that
stockholders of the Company accept the proposed Offer and tender their Shares
pursuant to the Offer. On March 8, 1998, Broadview delivered to the Board of
Directors of the Company its oral opinion to the effect that, as of the date
thereof, the consideration to be received by the stockholders of the Company
(other than Parent, the Purchaser and any affiliate of either of them) pursuant
to the Offer and under the terms of the proposed Merger, is fair, from a
financial point of view, to such stockholders. Such oral opinion was
subsequently confirmed by the written opinion of Broadview, dated March 8, 1998.
The full text of that opinion is an exhibit to the Schedule 14D-9.
A press release announcing the execution of the Merger Agreement was issued
by the Company on March 8, 1998 before the opening of the U.S. Stock Markets on
March 9, 1998. A press release announcing the execution of the Merger Agreement
was issued by Parent before the opening of the Norwegian stock market on the
morning of March 9, 1998.
On March 13, 1998, the Purchaser commenced the Offer.
SECTION 11. PURPOSE OF THE OFFER; MERGER AGREEMENT; PLANS FOR THE COMPANY.
PURPOSE OF THE OFFER. The purpose of the Offer, the Merger and the Merger
Agreement is to enable Parent to acquire control of, and the entire equity
interest in, the Company. Upon consummation of the Merger, the Company will
become an indirect wholly owned subsidiary of Parent. The Offer is being made
pursuant to the Merger Agreement and to increase the likelihood that the Merger
will be completed.
MERGER AGREEMENT. The following is a summary of certain provisions of the
Merger Agreement. The summary is qualified in its entirety by reference to the
Merger Agreement, which is incorporated herein by reference and a copy of which
has been filed with the Commission as an exhibit to the Schedule 14D-1 Tender
Offer Statement on Schedule 14D-1 (the "Schedule 14D-1"). The Merger Agreement
may be examined and copies may be obtained at the places and in the manner set
forth in Section 7 of this Offer to Purchase.
The Offer. The Merger Agreement provides that the Purchaser will commence
the Offer and that, upon the terms and subject to the prior satisfaction or
waiver of the conditions of the Offer (which are set forth in Section 14), the
Purchaser will purchase all Shares validly tendered pursuant to the Offer. The
Merger Agreement provides that the Purchaser may modify the terms of the Offer,
including without limitation, except as provided below, extending the Offer
beyond any scheduled Expiration Date, except that, without the
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prior written consent of the Company, the Purchaser will not decrease the
purchase price paid in the Offer, decrease the number of Shares sought in the
Offer, change the form of consideration payable in the Offer, make any other
change which is materially adverse to the holders of Shares or modify or add to
the conditions of the Offer specified in Section 14. Pursuant to the terms of
the Merger Agreement, (i) the Purchaser may, in its sole discretion and without
the consent of the Company, (A) extend the Offer, at any time up to the Outside
Termination Date, for one or more periods of not more than ten business days
each, if any condition of the Offer has not been satisfied; (B) extend the Offer
at any time (but on not more than one occasion), for a period not to exceed ten
business days if at that time the number of Shares duly tendered pursuant to the
Offer and not subsequently withdrawn represents less than 90% of the shares of
Common Stock then outstanding; or (C) extend the Offer for any period required
by any rule, regulation, interpretation or position of the Commission or the
staff thereof applicable to the Offer; and (ii) if at any scheduled Expiration
Date of the Offer any Offer Condition has not been satisfied or waived by the
Purchaser, at the written request of the Company delivered no later than the
scheduled Expiration Date of the Offer, the Purchaser shall, and shall continue
to, extend the Offer from time to time for one or more periods of not more than
five business days each until a date not later than the Outside Termination
Date. In addition, the Per Share amount may be increased and the Offer may be
extended to the extent required by law in connection with such increase, in each
case without the consent of Company. Subject to the terms and conditions of the
Offer, the Purchaser shall pay, as soon as reasonably practicable after it is
permitted to do so under applicable law, for all Shares validly tendered and not
withdrawn. See Section 4.
The Merger. The Merger Agreement provides that, subject to the terms and
conditions thereof, and in accordance with Delaware law, the Purchaser shall be
merged with and into the Company as soon as practicable after satisfaction or
waiver of the conditions set forth in the Merger Agreement (the "Effective
Time"). The Merger will become effective upon the filing of a Certificate of
Merger with the Secretary of State of the State of Delaware (or such later date
as is specified in the Certificate of Merger). As a result of the Merger, the
separate corporate existence of the Purchaser will cease and the Company will
continue as the surviving corporation (the "Surviving Corporation"). In the
Merger, each issued and outstanding Share (other than Shares owned directly or
indirectly by Parent or any of its subsidiaries or by the Company as treasury
stock and Shares the holder of which has perfected appraisal rights under
Delaware law will be converted into the right to receive $11.00 per Share,
without interest, and each issued and outstanding share of common stock of the
Purchaser will be converted into one fully paid and non-assessable share of
common stock of the Surviving Corporation (which will constitute the only issued
and outstanding capital stock of the Surviving Corporation).
The Merger Agreement provides that the certificate of incorporation and
bylaws of the Purchaser at the Effective Time will be the certificate of
incorporation and bylaws of the Surviving Corporation, except that the name of
the Surviving Corporation will be "Proxima Corporation." The Merger Agreement
also provides that the directors of the Purchaser at the Effective Time will be
the directors of the Surviving Corporation, and the officers of the Purchaser at
the Effective Time will be the officers of the Surviving Corporation.
The Company's Board of Directors. The Merger Agreement provides that,
commencing upon the purchase of Shares pursuant to the Offer or pursuant to the
Option Agreement, and from time to time thereafter, Parent will be entitled to
designate such number of directors, rounded up to the next whole number, on the
Board of Directors of the Company as is equal to the product of (i) the total
number of directors on the Board (giving effect to any directors elected as
described in this sentence) and (ii) the percentage that (A) the aggregate
number of shares of Common Stock beneficially owned by Purchaser or any of its
affiliates (including Shares accepted for payment in the Offer, provided funds
therefor have been deposited with the Depositary, and shares of Common Stock
issued to the Purchaser under the Option Agreement) represents of (B) the total
number of Shares then outstanding. The Company has agreed to take all actions
necessary to cause the Purchaser's designees to be elected or appointed to the
Company's Board of Directors (including by increasing the size of such Board or
securing the resignations of incumbent directors or both). The Company also has
agreed to use its best efforts to cause persons designated by the Purchaser to
constitute the same percentage of each committee of the Board of Directors of
the Company, each board of directors of each subsidiary of the Company and each
committee of each such board as such persons represent on the Board of
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Directors of the Company. However, the Merger Agreement further provides that
until the Effective Time, the Company will retain as members of its Board of
Directors at least two directors who are directors of the Company at the date of
the Merger Agreement ("Company Designees") and that in the event of the death,
resignation or removal of any of the Company Designees (or, if no other Company
Designee will remain on the Board, the last remaining Company Designee and, if
no Company Designee will remain on the Board, a majority of the other members of
the Board) will have the right to appoint a successor or successors to fill the
vacancies so created, which successor or successors will not be an affiliate or
associate of Parent or the Purchaser and who will be deemed to be a Company
Designee for purposes of the Merger Agreement. In the Merger Agreement, the
Company has agreed to take all actions necessary to cause the Purchaser's
designees to be so elected, including mailing to the Company's stockholders an
Information Statement containing the information required by Section 14(f) of
the Exchange Act and Rule 14f-1 promulgated thereunder, and, if necessary,
seeking the resignation of one or more existing directors. The Merger Agreement
also provides that following the election or appointment of the Purchaser's
designees to the Company's Board of Directors, any amendment of the Merger
Agreement, any termination of the Merger Agreement by the Company, any extension
of time for performance of any of the obligations of the Purchaser or Parent
under the Merger Agreement, any waiver of any condition to the obligations of
the Company or of any of the Company's rights under the Merger Agreement or
other action by the Company under the Merger Agreement may be effected only by
the action of a majority of the Company Designees.
Stockholders Meeting. Pursuant to the Merger Agreement, the Company will,
if required by applicable law in order to consummate the Merger, duly call and
hold a special meeting of its stockholders (the "Special Meeting") as soon as
practicable following the acceptance for payment and purchase of Shares by the
Purchaser pursuant to the Offer, for the purpose of voting upon the Merger and
the adoption of the Merger Agreement. The Merger Agreement provides that in
connection with the Special Meeting, the Company will (i) as soon as reasonably
practicable after the consummation of the Offer, prepare and file with the
Commission a proxy statement and other proxy materials relating to the Merger
and the Merger Agreement and (ii) use its best efforts to have such proxy
statement cleared by the SEC. If the Purchaser acquires at least a majority of
the outstanding Shares (or if the number of Shares acquired by the Purchaser
together with the number of shares of Common Stock purchased under the Option
Agreement total at least a majority of the outstanding Shares), the Purchaser
will have sufficient voting power to approve the Merger, even if no other
stockholder votes in favor of the Merger. The Company has agreed, subject to the
limitations described below under the heading "No Solicitations," to include in
the proxy statement the recommendation of the Board of Directors that
stockholders of the Company vote in favor of the approval of the Merger and the
adoption of the Merger Agreement.
Interim Operations. In the Merger Agreement, the Company has agreed that,
except as expressly permitted by the Merger Agreement or the Option Agreement or
agreed to in writing by Parent, prior to the Effective Time the business of the
Company and its subsidiaries shall be conducted only in the ordinary course, in
substantially the same manner as previously conducted and in substantial
compliance with all applicable laws and regulations, and, to the extent
consistent therewith, the Company and each of its subsidiaries will use
reasonable efforts to preserve intact their present business organizations and
reputation, keep available the services of their present officers and employees,
maintain their assets and properties in good working order and condition,
ordinary wear and tear excepted, maintain insurance on their tangible assets and
businesses in such amounts and against such risks and losses as are currently in
effect, and preserve their relationships with customers, suppliers, licensors,
licensees, distributors, and others having business relationships with them. In
addition, except as expressly contemplated by the Merger Agreement or agreed to
in writing by Parent, each of the Company and its subsidiaries will not:
(i) adopt or amend in any material respect any bonus, profit sharing,
compensation, severance, termination, stock option, stock appreciation
right, pension, retirement, employment or other employee benefit agreement,
trust plan or other arrangement for the benefit or welfare of any director,
officer or employee of the Company or any of its subsidiaries or increase
in any manner the compensation or fringe benefits of any director, officer
or employee of the Company or any of its subsidiaries or pay any benefit
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not required by any existing agreement or place any assets in any trust for
the benefit of any director, officer or employee of the Company or any of
its subsidiaries;
(ii) incur any indebtedness for borrowed money or guarantee any such
indebtedness of another person, issue or sell any debt securities or
warrants or other rights to acquire any debt securities of the Company or
any of its subsidiaries, guarantee any debt securities of another person,
enter into any "keep well" or other agreement to maintain any financial
statement condition of another person or enter into any arrangement having
the economic effect of any of the foregoing, or make any loans, advances or
capital contributions to, or investments in, any other person, other than
to the Company or any direct or indirect wholly owned subsidiary of the
Company;
(iii) expend funds for capital expenditures or research and
development, which in the aggregate exceed $1,100,000;
(iv) sell, lease, license, mortgage or otherwise encumber or subject
to any lien or otherwise dispose of any of its properties or assets except
for disposition of inventory or immaterial assets, in either case, in the
ordinary course of business consistent with past practice;
(v) (x) declare, set aside or pay any dividends on, or make any other
distributions in respect of, any of its capital stock (except for dividends
paid by subsidiaries to the Company with respect to capital stock), (y)
split, combine or reclassify any of its capital stock or issue or authorize
the issuance of any other securities in respect of, in lieu of or in
substitution for shares of its capital stock, or (z) purchase, redeem or
otherwise acquire any shares of capital stock of the Company or any of its
subsidiaries or any other securities thereof or any rights, warrants or
options to acquire any such shares or other securities;
(vi) authorize for issuance, issue, deliver, sell or agree to commit
to issue, sell or deliver (whether through the issuance or granting of
options, warrants, commitments, subscriptions, rights to purchase or
otherwise), pledge or otherwise encumber any shares of its capital stock or
the capital stock of any of its subsidiaries, any other voting securities
or any securities convertible into, or any rights, warrants or options to
acquire, any such shares, voting securities or convertible securities or
any other securities or equity equivalents (including without limitation
stock appreciation rights) (other than issuances upon exercise of Company
Stock Options (as hereinafter defined) outstanding on the date hereof);
(vii) amend its Certificate of Incorporation, Bylaws or equivalent
organizational documents or alter through merger, liquidation,
reorganization, restructuring or in any other fashion the corporate
structure or ownership of any material subsidiary of the Company;
(viii) acquire or agree to acquire, including, without limitation, by
merging or consolidating with, or by purchasing a substantial equity
interest in or substantial portion of the assets of, or by any other
manner, any business or any corporation, partnership, association or other
business organization or division thereof;
(ix) settle or compromise any stockholder derivative suits arising out
of the transactions contemplated by the Merger Agreement or any other
litigation (whether or not commenced prior to the date of the Merger
Agreement) or settle, pay or compromise any claims not required to be paid,
other than in consultation and cooperation with Parent, and, with respect
to any such settlement, with the prior written consent of Parent (except
such consent shall not be required for payments to be made under any such
agreements existing on the date of the Merger Agreement and described in
connection with the Merger Agreement), which consent shall not be
unreasonably withheld;
(x) make any material tax election or settle or compromise any
material tax liability (whether with respect to amount or timing);
(xi) except in the ordinary course of business, materially modify,
amend or terminate any material contract or waive or release or assign any
material rights or claims; or
(xii) (A) fail to pay in the ordinary course of business consistent
with past practice any amount ("Payable") due, owing or payable to any
trade creditor or supplier or (B) other than in the ordinary
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course of business consistent with past practice, alter the terms or
scheduled payment dates of any Payable; or
(xiii) take or agree to take any action that would make any
representation and warranty of the Company contained in the Merger
Agreement inaccurate at, or as of any time prior to, the Effective Time, or
omit or agree to omit to take any action necessary and prudent to prevent
any such representation or warranty from being inaccurate at any such time.
Employee Benefits. Parent has agreed to cause the Surviving Corporation to
honor the Company's employee benefit plans or policies (other than those based
on shares of Common Stock) in effect at the date of the Merger Agreement until
the second anniversary of the Effective Time or, to the extent such plans or
policies (other than those based on shares of Common Stock) are not continued,
Parent will maintain or cause the Surviving Corporation to maintain until such
date benefit plans or policies for the benefit of the employees of the Company
which are no less favorable, in the aggregate, than the plans and policies
existing at the date of the Merger Agreement. All benefit plans under which the
employees' interests are based on shares of Common Stock will be terminated
immediately prior to the Effective Time. The Company's employees shall be given
credit, for purposes of any service requirements for participation in the Parent
employee benefit plans for which they become eligible, if any, for their period
of service with the Company prior to the Effective Time, and the Company
employees shall also, with respect to participation in any such Parent plans or
programs for which they may become eligible, which have co-payment, deductible
or other co-insurance features, receive credit for any amounts such employees
have paid to date in 1998 in co-payments, deductibles or co-insurance under
comparable programs maintained by the Company prior to the Effective Time. In
addition, no employee of the Company who participates in any medical/health plan
of the Company at the Effective Time shall be denied coverage under any Parent
medical/health plan for which they may become eligible, by reason of any
preexisting condition exclusions, to the extent applicable subsequent to the
Effective Time. Parent has agreed (and has agreed to cause the Surviving
Corporation) to honor without modification all employee severance plans (or
policies) and employment and severance agreements of the Company or any of its
subsidiaries in existence on the date of the Merger Agreement as such agreements
shall be in effect in accordance with the terms of the Merger Agreement at the
Effective Time.
No Solicitations. In the Merger Agreement, the Company has agreed that,
except as provided below, until the earlier of the termination of the Merger
Agreement or the Effective Date, neither the Company nor any of its subsidiaries
shall, nor shall they authorize or permit or any of their respective officers,
directors, employees, financial advisors, investment bankers, attorneys,
accountants or other advisors or representatives to directly or indirectly, (i)
take any action to knowingly solicit, initiate, continue, facilitate or
encourage (including by way of furnishing or disclosing non-public information)
any offer or proposal for a merger, consolidation or other business combination
involving the Company or any of its subsidiaries or any proposal or offer to
acquire in any manner, directly or indirectly, 15% or more of the shares of any
class of voting securities of the Company or any of its subsidiaries or a
substantial portion of the assets of the Company or any of its subsidiaries,
other than the transactions contemplated by the Merger Agreement or the Option
Agreement (any of the foregoing being referred to as an "Acquisition Proposal"),
or (ii) knowingly engage in negotiations, discussions or communications
regarding or disclose any information relating to the Company or any of its
subsidiaries or afford access to the properties, books or records of the Company
or any of its subsidiaries to any person, corporation, partnership or other
entity or group (a "Potential Acquiror") that may be considering making, or has
made, an Acquisition Proposal. In addition, the Merger Agreement prohibits the
Board of Directors of the Company (including any committee thereof) from
withdrawing or modifying in a manner adverse to Parent the approval and
recommendation of the Offer, the Merger Agreement, the Option Agreement or the
Merger or approving or recommending any Acquisition Proposal. Notwithstanding
the foregoing, the Merger Agreement provides that (i) the Company may
participate in discussions or negotiations with or furnish information to any
third party which makes a written Acquisition Proposal which either (x) is not
subject to a financing contingency and involves the purchase for cash of 100% of
the Common Stock at a price per share greater than the purchase price of the
Offer or (y) provides for the acquisition of 100% of the Common Stock for
consideration, not consisting entirely of cash, which the Company's Board of
Directors determines, based on the advice of its financial advisor, is
financially superior to the purchase price
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<PAGE> 27
of the Offer (in the case of either (x) or (y), a "Superior Proposal"), and (ii)
the Board of Directors or any committee thereof may withdraw or modify in a
manner adverse to Parent the approval or recommendation of the Merger Agreement,
the Offer or the Merger and may approve or recommend any such Superior Proposal,
if, in the case of either (i) or (ii), the Board of Directors of the Company
determines (and is advised by its outside legal counsel) that the failure to
take such action would constitute a breach of its fiduciary duties and the
Company enters into a confidentiality agreement with the Potential Acquiror with
respect to any non-public information relating to the Company or its
subsidiaries upon terms substantially the same as (and in no event more
beneficial to the Potential Acquiror than) those contained in the
Confidentiality Agreement dated July 21, 1997 between Parent and the Company.
The Company has agreed to (i) notify Parent promptly (and in any event within
one business day) after receipt of any Acquisition Proposal (or any indication
that any person is considering making an Acquisition Proposal) or any request
for non-public information relating to the Company or any of its subsidiaries or
for access to the properties, books or records of the Company or any of its
subsidiaries by any person that may be considering making, or has made, an
Acquisition Proposal, (ii) notify Parent promptly of any material change to any
such Acquisition Proposal, indication or request and (iii) upon reasonable
request by Parent, provide Parent with all material information about any such
Acquisition Proposal, indication or request. The Merger Agreement further
provides that the Company will not, and will cause its affiliates not to, enter
into an agreement with respect to a Superior Proposal unless Parent has been
advised in writing of the identity of the parties making the Superior Proposal
and the material terms thereof at least two business days prior to the entering
into of such agreement.
Directors' and Officers' Insurance; Indemnification. The Merger Agreement
provides that until the sixth anniversary of the Effective Time, Parent and the
Surviving Corporation (each an "Indemnifying Party") shall indemnify, defend and
hold harmless each person who was an officer or director of the Company or any
of its subsidiaries on the date of the Merger Agreement or any time prior to the
date thereof ("Indemnified Parties") against all losses, claims, damages, costs,
expenses (including attorneys' fees and expenses), liabilities or judgments or
amounts that are paid in settlement with the approval of the indemnifying party
(which approval shall not be unreasonably withheld) of or in connection with any
threatened or actual claim, action, suit, proceeding or investigation (whether
civil, criminal, administrative or investigative and whether asserted or claimed
prior to, at or after the Effective Time) based in whole or in part on, or
arising in whole or in part out of, the fact that such Indemnified Party is or
was a director or officer, of the Company or any of its subsidiaries (including
service as a fiduciary of any employee benefit plan), whether pertaining to any
matter existing or occurring at or prior to the Effective Time, to the fullest
extent permitted by Delaware law, or based in whole or in part on the Merger
Agreement or the transactions contemplated by the Merger Agreement ("Indemnified
Liabilities"). However, in the event any claims are asserted or made within such
six-year period, all rights to indemnification in respect of any such claims
shall continue until disposition of any and all such claims. Without limiting
the foregoing, in the event that any such claim, action, suit, proceeding or
investigation is brought against any Indemnified Party (whether arising prior to
or after the Effective Time), (w) the Indemnifying Parties will pay expenses in
advance of the final disposition of any such claim, action, suit, proceeding or
investigation to each Indemnified Party to the full extent permitted by
applicable law provided that the person to whom expenses are advanced provides
an undertaking to repay such advance if it is ultimately determined that such
person is not entitled to indemnification; (x) the Indemnified Parties shall
retain counsel reasonably satisfactory to the Indemnifying Parties; (y) the
Indemnifying Parties shall pay all reasonable fees and expenses of such counsel
for the Indemnified Parties (subject to the final sentence of this paragraph)
promptly as statements therefor are received; and (z) the Indemnifying Parties
shall use all commercially reasonable efforts to assist in the vigorous defense
of any such matter. Any Indemnified Party wishing to claim indemnification under
the Merger Agreement as described above, upon learning of any such claim,
action, suit, proceeding or investigation, shall notify the Indemnifying
Parties, but the failure so to notify an Indemnifying Party shall not relieve it
from any liability which it may have as described above except to the extent
such failure materially and irreparably prejudices such party.
The Merger Agreement also provides that the Surviving Corporation shall (i)
until the sixth anniversary of the Effective Time, cause to be maintained in
effect, to the extent available, the policies of directors' and officers'
liability insurance maintained by the Company and its subsidiaries as of the
date of the Merger Agreement (or policies of at least the same coverage and
amounts containing terms that are no less
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advantageous in any material respect to the insured parties) or (ii) purchase a
policy of directors' and officers' liability insurance of at least the same
coverage and amounts and containing terms that are no less advantageous in any
material respect to the insured parties and for a term of six years after the
Effective Time, in each case with respect to claims arising from facts or events
that occurred prior to the Effective Time. The Merger Agreement further
provides, however, that in no event will the Surviving Corporation be obligated
to expend in order to maintain or procure insurance coverage pursuant to clause
(i) of this paragraph any amount per annum in excess of 125% of the last premium
paid by the Company prior to the date of the Merger Agreement, and if the annual
premium of such insurance coverage exceeds that amount, the Surviving
Corporation shall purchase as much coverage as possible for such amount.
Company Stock Options. Pursuant to the Merger Agreement, immediately prior
to the Effective Time, each of the then outstanding employee stock options to
purchase Common Stock (the "Company Stock Options") granted under any employee
stock option or compensation plan or arrangement of the Company (the "Company
Stock Plans"), whether or not then vested or exercisable, automatically shall be
cancelled, and each holder of any such Company Stock Option shall be paid by the
Company at the Effective Time for each such Company Stock Option an amount in
cash (subject to any applicable withholding taxes) determined by multiplying (i)
the excess, if any, of the price per Share paid in the Offer over the applicable
exercise price of such Company Stock Option by (ii) the number of shares of
Common Stock such holder could have purchased (assuming full vesting of all
Company Stock Options) had such holder exercised such Company Stock Option in
full immediately prior to the Effective Time. Prior to the Effective Time, the
Company will use its best efforts to obtain any necessary consents and make any
amendments to the terms of the Company Stock Plans to the extent such consents
or amendments are necessary to give effect to the foregoing. Payment by the
Company may be withheld in respect of any Company Stock Option until necessary
consents are obtained.
Conditions to the Merger. The Merger Agreement provides that the respective
obligations of the Company, Parent and the Purchaser to consummate the Merger
are subject to the satisfaction of the following conditions: (i) the Merger
Agreement shall have been adopted by the requisite vote of the stockholders of
the Company, if required by applicable law, in order to consummate the Merger;
(ii) any applicable waiting period (and any extension thereof) under the HSR Act
relating to the Merger shall have expired or been terminated; (iii) no court of
competent jurisdiction or other governmental or regulatory authority shall have
enacted, issued, promulgated, enforced or entered any law or order (whether
temporary, preliminary or permanent) which is then in effect and has the effect
of making illegal or otherwise restricting, preventing or prohibiting
consummation of the Offer or the Merger or the transactions contemplated by the
Merger Agreement, the Option Agreement or the Stockholders Agreement; and (iv)
the Purchaser or its permitted assignee shall have purchased all Shares validly
tendered and not withdrawn pursuant to the Offer.
Representations and Warranties. In the Merger Agreement, the Company has
made customary representations and warranties to Parent and the Purchaser with
respect to, among other things, its organization, capitalization, financial
statements, public filings, labor relations, conduct of business, employee
benefit plans, insurance, compliance with laws, litigation, environmental
matters, tax matters, property, contracts and agreements, non-contravention,
consents and approvals, opinions of financial advisors, undisclosed liabilities
and the absence of certain changes with respect to the Company since December
31, 1997.
Termination; Fees. The Merger Agreement may be terminated at any time prior
to the Effective Time, whether before or after approval by the stockholders of
the Company: (i) by the mutual written consent of the Company and Parent; (ii)
by the Company (A) if there has been a material breach of any representation,
warranty, covenant or agreement on the part of Parent set forth in the Merger
Agreement which breach has not been cured, in the case of a representation or
warranty, prior to the Effective Time or, in the case of a covenant or
agreement, within 30 days following receipt by Parent of notice of such breach
(provided that such right to terminate shall expire on the date on which Parent
or the Purchaser beneficially owns a majority of the outstanding Shares), or (B)
if there shall be any law or regulation that makes consummation of the Merger
illegal or if any judgment, injunction or other order of a court or other
authority having jurisdiction preventing the consummation of the Merger shall
have become final and non-appealable; (iii) by Parent (A) (i) if any
representation or warranty of the Company shall not be true and correct (x) in
all material
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respects as of the date of the Merger Agreement or (y) as of the time of
termination of the Merger Agreement, and, in a case described in this subclause
(y), the failure of such representation or warranty to be true and correct (1)
has a Material Adverse Effect on the Company, (2) if capable of being made true
and correct within 30 days following receipt by the Company of notice of such
representation or warranty not being true and correct is not in fact made true
and correct within such 30-day period and (3) did not result from the
announcement of the Merger Agreement or the transactions contemplated thereby or
(ii) if there has been a material breach of any covenant or agreement on the
part of the Company set forth in the Merger Agreement or the Option Agreement
which breach of a covenant or agreement has not been cured within 30 days
following receipt by the Company of notice of such breach (provided that such
right to terminate shall expire on the date on which Parent or the Purchaser
beneficially owns a majority of the outstanding shares of Common Stock and
Parent's designees constitute or shall have been afforded the opportunity,
without the imposition by the Company of adverse conditions, to constitute the
requisite percentage (but not less than a majority) of the members of the Board
of Directors of the Company specified in the Merger Agreement), (B) if there
shall be any law or regulation that makes consummation of the Merger illegal or
if any judgment, injunction or other order of a court or other competent
authority preventing the consummation of the Merger shall have become final and
non-appealable or (C) if the Offer shall have expired or been terminated without
any Shares being purchased as a result of the occurrence of any of the events
described in Section 14 of this Offer to Purchase; (iv) by either the Company or
Parent if the Offer has not been consummated by the Outside Termination Date,
provided that the terminating party is not then in material breach of any
provision of the Merger Agreement; (v) by Parent upon the occurrence of a
"Trigger Event" (as defined below), provided that such right to terminate shall
expire on the date on which Parent or the Purchaser beneficially owns a majority
of the outstanding shares of Common Stock and Parent's designees constitute the
requisite percentage (but not less than a majority) of the members of the Board
of Directors of the Company specified in the Merger Agreement; and (vi) by
Parent, if the FTC or the Antitrust Division has initiated litigation or an
administrative proceeding challenging the transactions contemplated by the
Merger Agreement under U.S. antitrust laws, which litigation or administrative
proceeding will include a motion seeking an order or injunction prohibiting the
consummation of any of the transactions contemplated by the Merger Agreement.
In the event that Parent terminates the Merger Agreement pursuant to clause
(iii)(A)(i), (iii)(A)(ii) or (v) of the previous paragraph, then the Company
shall pay to Parent (x) a termination fee in the amounts and at the times
specified in the next paragraph and (y) an amount (not to exceed $500,000 in the
aggregate) equal to all out-of-pocket expenses and fees certified by Parent to
have been incurred by Parent and its subsidiaries in connection with the Merger
Agreement and the transactions contemplated thereby. In the event that Parent
terminates the Merger Agreement pursuant to clause (iii)(C) of the previous
paragraph, then the Company shall pay to Parent a termination fee in the amount
and at the time specified in the next paragraph.
The termination fee payable pursuant to the preceding paragraph shall be as
follows: (i) if the termination of the Merger Agreement occurred pursuant to
clause (v) of the second preceding paragraph based on a Trigger Event described
in clause (i) or (v) of the following paragraph, a termination fee of $3,000,000
shall be payable immediately upon such termination; (ii) if the termination of
the Merger Agreement occurred pursuant to clause (iii)(A) of the second
preceding paragraph or pursuant to clause (v) of the second preceding paragraph
based on a Trigger Event described in clause (ii), (iii) or (iv) of the
following paragraph, a termination fee of $1,500,000 (the "Initial Termination
Fee") shall be payable immediately upon such termination, and an additional
termination fee of $1,500,000 shall be payable immediately upon the occurrence
during the 12 months following the receipt of the Initial Termination Fee of a
Trigger Event described in clause (i) or (v) of the following paragraph; and
(iii) if (A) the termination of this Agreement occurred pursuant to clause
(iii)(C) of the second preceding paragraph, (B) at any time prior to termination
of the Merger Agreement pursuant to clause (iii)(c) of the second preceding
paragraph, the Company shall have received an Acquisition Proposal and (C)
within 12 months of termination of the Merger Agreement pursuant to clause
(iii)(c) of the second preceding paragraph, the Company shall have entered into,
or shall have publicly announced its intention to enter into, an agreement or
agreement in principle with respect to, or consummated any business combination
or transaction with any person or entity that made the Acquisition Proposal
referred to in the immediately preceding subclause (B) or with any affiliate of
such
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<PAGE> 30
person or entity, a termination fee of $3,000,000 shall be payable immediately
upon such termination. Notwithstanding anything to the contrary in the Merger
Agreement, any termination fees otherwise payable as described herein shall be
reduced to the extent such payment otherwise would cause the Total Profit (as
defined below under "--Option Agreement") to exceed $4,500,000.
A "Trigger Event" means any of the following events: (i) the Company shall
have entered into, or shall have publicly announced its intention to enter into,
an agreement or agreement in principle with respect to, or, at any time within
12 months after the termination of the Merger Agreement, consummated any
Acquisition Proposal or similar business combination or transaction other than
the transactions contemplated by the Merger Agreement; (ii) the Board of
Directors of the Company or any committee thereof shall have withdrawn its
approval or recommendation of the Offer, the Merger Agreement or the Merger, or
modified its approval or recommendation in a manner adverse to Parent or the
Purchaser; (iii) the Board of Directors of the Company or any committee thereof
shall have made any recommendation with respect to an Acquisition Proposal by
any person (other than Parent or the Purchaser) other than a recommendation
rejecting or against such Acquisition Proposal; (iv) the Company receives any
Acquisition Proposal by any person (other than Parent or the Purchaser), and the
Company's Board of Directors takes a neutral position or makes no recommendation
with respect to such Acquisition Proposal after a reasonable amount of time (and
in no event more than five business days) has elapsed for the Company's Board of
Directors to review and make a recommendation with respect to such Acquisition
Proposal consistent with the Board's fiduciary duties; or (v) (x) any
corporation, partnership or other entity or "person" (as defined in Section
13(d)(3) of the Exchange Act) other than Parent, the Company or any of their
respective affiliates shall have, at any time prior to the termination of the
Merger Agreement, commenced, or announced an intention to commence, (A) a
"solicitation" of "proxies" or become a "participant" in such a solicitation (as
such terms are defined in Regulation 14A under the Exchange Act) or (B) a tender
offer, exchange offer or other extraordinary transaction (in each case with
respect to Shares) and as a result thereof, if the Merger Agreement were not
terminated promptly thereafter, Parent or the Purchaser would be required to
incur substantial expenditures in addition to those otherwise required for the
transactions contemplated by the Merger Agreement and (y) such corporation,
partnership or other entity or "person" or its affiliates and associates (as
defined in the Exchange Act) collectively shall be or become the beneficial
owners (determined pursuant to Rule 13d-3 under the Exchange Act) of at least
15% of any class of shares of capital stock of the Company (including the shares
of Common Stock) or shall have acquired, directly or indirectly, at least 15% of
the assets or earning power of the Company.
STOCKHOLDERS AGREEMENT. The following is a summary of the material terms of
the Stockholders Agreement. This summary is qualified in its entirety by
reference to the Stockholders Agreement, which is incorporated herein by
reference and a copy of which has been filed with the Commission as an exhibit
to the Schedule 14D-1. The Stockholders Agreement may be examined and copies may
be obtained at the places and in the manner set forth in Section 7 of this Offer
to Purchase.
As a condition and inducement to Parent and the Purchaser's entering into
the Merger Agreement, the Stockholders, who have voting power and dispositive
power with respect to an aggregate of 219,796 Shares, representing approximately
3.1% of the Shares outstanding on March 8, 1998, concurrently with the execution
and delivery of the Merger Agreement, entered into the Stockholders Agreement.
The Stockholders are Patrick Arrington, Richard E. Belluzzo, Robert W. Johnson,
Jeffrey M. Nash, Kenneth E. Olson, and John M. Seiber and comprise the Board of
Directors of the Company. Pursuant to the Stockholders Agreement, each of the
Stockholders has agreed to tender all of his Shares into the Offer promptly, and
in no event later than 10 business days after the date of this Offer to
Purchase. Each Stockholder agreed not to withdraw his Shares so tendered unless
the Offer is terminated or expired. The Purchaser has agreed to purchase all the
Shares so tendered at a price per Share equal to $11.00 per Share or any higher
price that may be paid in the Offer; however, Purchaser's obligation to accept
for payment and pay for such Shares in the Offer is subject to all the terms and
conditions of the Offer set forth in the Stockholders Agreement and in the
Merger Agreement.
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Each of the Stockholders has granted Parent an irrevocable proxy with
respect to the voting of such Shares in favor of the Merger and against any
action or agreement which would impede, interfere with or prevent the Merger,
including any Acquisition Proposal.
Each of the Stockholders has agreed that, prior to the termination of the
Stockholders Agreement pursuant to its terms, he will not (i) transfer, or
consent to the transfer, of any or all of his Shares or any interest therein;
(ii) enter into any contract, option or other agreement or understanding with
respect to any transfer of any or all of his Shares or any interest therein;
(iii) grant any proxy, power-of-attorney or other authorization in or with
respect to his Shares; (iv) deposit his Shares into a voting trust or enter into
a voting agreement or arrangement with respect to his Shares; or (v) take any
other action that would in any way restrict, limit or interfere with the
performance of such Stockholder's obligations under the Stockholders Agreement.
Each of the Stockholders has granted to Parent and Purchaser an
irrevocable, exclusive option (the "Stockholder Option") to purchase all Shares
of such Stockholder at a price of $11.00 per Share, net to such Stockholder in
cash, subject to any amounts required to be withheld under applicable income tax
laws and regulations. The Stockholder Option shall be exercisable by Parent or
Purchaser at any time after consummation of the Offer and prior to the
termination of this Stockholders Agreement.
The Stockholders Agreement, and all rights and obligations of the parties
thereto, shall terminate immediately upon the earlier of (i) the acquisition by
Parent, through the Purchaser or otherwise of the Shares that are the subject of
the Stockholders Agreement, (ii) the termination of the Merger Agreement in
accordance with its terms or (iii) the Effective Time.
OPTION AGREEMENT. The following is a summary of the material terms of the
Option Agreement. This summary is qualified in its entirety by reference to the
Option Agreement, which is incorporated herein by reference and a copy of which
has been filed with the Commission as an exhibit to the Schedule 14D-1. The
Option Agreement may be examined and copies may be obtained at the places and in
the manner set forth in Section 7 of this Offer to Purchase.
As a condition and inducement to Parent and the Purchaser entering into the
Merger Agreement, concurrently with the execution of the Merger Agreement
Parent, the Purchaser and the Company entered into the Option Agreement.
Pursuant to the Option Agreement, the Company granted to the Purchaser an
irrevocable option (the "Option") to purchase 1,427,914 newly issued shares of
Common Stock (representing 19.9% of the Company's issued and outstanding Shares
at the date of the Option Agreement). The number of shares of Common Stock
issuable on exercise of the Option is subject to adjustment under certain
circumstances. Among other things, if the number of issued and outstanding
shares of Common Stock increases prior to the exercise of the Option, the number
of shares of Common Stock issuable on exercise of the Option will be increased
to a number equal to 19.9% of the number of shares of Common Stock issued and
outstanding following the increase. The Option is exercisable, in whole or in
part, if (i) any corporation, partnership, individual, trust, unincorporated
association, or other entity or "person" (as defined in Section 13(d)(3) of the
Exchange Act) other than Parent, the Company or any of their respective
"affiliates" (as defined in the Exchange Act) shall have solicited "proxies" in
a "solicitation" subject to the proxy rules under the Exchange Act, executed any
written consent or become a "participant" in any "solicitation" (as such terms
are defined in Regulation 14A under the Exchange Act), in each case with respect
to the Shares; (ii) the Company shall have received an Acquisition Proposal; or
(iii) any of the events described in clause (c) under the first paragraph of
"--Merger Agreement--Termination; Fees" above or any Trigger Event shall have
occurred, unless a termination fee would not be paid or payable if the Merger
Agreement were terminated as a result of such event (but without the necessity
of Parent having terminated the Merger Agreement). If prior to the expiration of
the Option any of the events described in the preceding sentence shall have
occurred, then the Purchasers (or its designee) shall have the right, in lieu of
exercising the Option, at any time thereafter (for so long as the Option is
exercisable) to request in writing that the Company pay, and promptly (but in
any event not more than five business days) after the giving by the Purchasers
(or its designee) of such request, the Company shall pay to the Purchaser (or
its designee), in cancellation of the Option, an amount in cash equal to (i) the
excess over the $11.00 of the greater of (A) the last sale price of
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<PAGE> 32
a Share as reported on the Nasdaq National Market (or any national or other
exchange on which the Common Stock may be traded) on the last trading day prior
to the date of the notice, or (B) (1) the highest price per Share offered to be
paid or paid pursuant to or in connection with an Acquisition Proposal that
involves Shares and that has not been terminated or withdrawn prior to the date
of the notice or (2) the aggregate consideration offered to be paid or paid in
an Acquisition Proposal that involves the assets of the Company and that has not
been terminated or withdrawn prior to the notice, divided by the number of
shares then outstanding, multiplied by (ii) the number of shares of Common Stock
then covered by Option. If all or a portion of the price per Share offered, paid
or payable or the aggregate consideration offered, paid or payable for the
assets of the Company, each as contemplated by the preceding sentence, consists
of non-cash consideration, such price or aggregate consideration shall be the
cash consideration, if any, plus the fair market value of the non-cash
consideration as determined by the investment bankers of the Purchaser (or its
designee) and the investment bankers of the Company. The Option Agreement
terminates, and the Option expires on , the earliest of (1) the Effective Time,
(ii) the termination of the Merger Agreement as described in clause (i), (ii),
(iii)(B) or (iii)(C) (other than a termination as described in clause (iii)(C)
after an Acquisition Proposal is made or an intent to make an Acquisition
Proposal is publicly announced), (iv) or (v) of the first paragraph of "--Merger
Agreement--Termination; Fees" above and (iii) to the extent that no notice of
exercise of the Option) has therefore been given by the Purchaser three months
after any other termination of the Merger Agreement as described in clause (i),
(ii), (iii)(B) or (iii) (C) of the first paragraph of "--Merger
Agreement--Termination; Fees."
The Option Agreement provides that in no event shall the Purchaser's (or
its designee's) Total Profit (as defined below) exceed $4,500,000 and, if it
otherwise would exceed such amount, the Purchaser (or its designee) at its sole
election, must either (a) reduce the number of Shares subject to the Option, (b)
deliver to the Company for cancellation Shares previously purchased by the
Purchaser (or its designee), (c) pay cash to the Company or (d) take any actions
described in any one or more of the preceding clauses (a), (b) and (c), so that
the Purchaser's (or its designee's) Total Profit will not exceed $4,500,000
after taking into account the foregoing actions.
"Total Profit" means (i) except in the case of the cancellation of the
Option as described in the preceding paragraph, the sum of (A) (x) the aggregate
net cash amounts (before taxes) received by the Purchaser (or its designee)
pursuant to the sale of Shares (or any other securities into which such Shares
are converted or exchanged) to any unaffiliated party, less (y) the Purchaser's
(or its designee's) purchase price of such Shares and (B) the aggregate amount
of termination fees paid under the Merger Agreement or (ii) in the case of the
cancellation of the Option as described in the preceding paragraph, the sum (A)
net cash amount (before taxes) received by the Purchaser (or its designee) as
described in the preceding paragraph and (B) the aggregate amount of termination
fees paid under the Merger Agreement.
PLANS FOR THE COMPANY. Parent intends to conduct a detailed review of the
Company and its assets, corporate structure, dividend policy, capitalization,
operations, properties, policies, management and personnel and will consider,
subject to the terms of the Merger Agreement, what, if any, changes would be
desirable in light of the circumstances which exist upon completion of the
Offer. Such changes could include changes in the Company's business, corporate
structure, certificate of incorporation, by laws, capitalization, Board of
Directors, management or dividend policy, although, except as disclosed in this
Offer to Purchase, Parent has no current plans with respect to any of such
matters. The Merger Agreement provides that, commencing upon the purchase of
Shares pursuant to the Offer of pursuant to the Option, and from time to time
thereafter, Purchaser shall be entitled to designate on the Board of Directors
of the Company the number of directors, rounded up to the next whole number,
that equals the product of (i) the total number of directors on the Board
(giving effect to any directors elected as described in this sentence) and (ii)
percentage that (A) the aggregate number of Shares beneficially owned by the
Purchaser or any affiliate of the Purchaser (including Shares accepted for
payment in the Offer, provided funds therefor have been deposited with the
Depositary, and shares of Common Stock purchased pursuant to the Option
Agreement) represents of (B) the total number of shares of Common Stock then
outstanding. See Section 11. The Merger Agreement provides that the directors
and officers of the Purchaser at the Effective Time of the Merger will, from and
after the Effective Time, be the initial directors and officers, respectively of
the Surviving Corporation.
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<PAGE> 33
Except as disclosed in this Offer to Purchase, neither Parent nor the
Purchaser has any present plans or proposals that would result in an
extraordinary corporate transaction, such as a merger, reorganization,
liquidation, relocation of operations, or sale or transfer of assets, involving
the Company or any of its subsidiaries, or any material changes in the Company's
corporate structure, business or composition of its management or personnel.
SECTION 12. DIVIDENDS AND DISTRIBUTIONS.
As described above, the Merger Agreement provides that, prior to the
Effective Time, the Company and each of its subsidiaries will not declare, pay,
set aside or make any dividend or other distribution or payment with respect to,
or split, combine, reclassify, purchase, redeem or otherwise acquire any shares
of its capital stock.
If, notwithstanding the provisions of the Merger Agreement, the Company
should (a) split, combine, redeem or reclassify any shares of its capital stock,
(b) purchase or acquire, or offer to purchase or acquire, any shares of its
capital stock or (c) (i) issue or sell any shares of its capital stock (other
than in connection with the exercise of the Company Stock Options outstanding on
the date of the Merger Agreement) or any of its other securities, (ii) issue any
securities convertible into, or rights, warrants or options to purchase or
subscribe to, any shares of its capital stock, (iii) enter into any arrangement
or contract with respect to the issuance or sale of any shares of its capital
stock or any of its other securities or (iv) make any other changes in its
capital structure, then, without prejudice to the Purchaser's rights under
Section 14 below, the Purchaser, in its sole discretion, may make such
adjustments to the purchase price and other terms of the Offer as it deems
appropriate, including, without limitation, the number or type of securities
offered to be purchased.
If, notwithstanding the provisions of the Merger Agreement, the Company
should declare, pay, set aside or make any cash dividend or make other
distributions or payments with respect to any shares of its capital stock or
issue with respect to any shares of its capital stock any additional shares,
shares of any other class of capital stock, other securities or any securities
convertible into, or rights, warrants or options, conditional or otherwise, to
acquire, any of the foregoing, payable or distributable to stockholders of
record on a date prior to the transfer of the Shares purchased pursuant to the
Offer to the Purchaser on the Company's stock transfer records, then, without
prejudice to the Purchaser's rights under Section 14 below, (a) the purchase
price payable per Share by the Purchaser pursuant to the Offer will be reduced
by the amount of any such cash dividend or cash distribution and (b) the whole
of any such noncash dividend, distribution or issuance to be received by the
tendering stockholders will (i) be received and held by the tendering
stockholders for the account of the Purchaser and will be required to be
promptly remitted and transferred by each tendering stockholder to the
Depositary for the account of the Purchaser, accompanied by appropriate
documentation of transfer, or (ii) at the direction of the Purchaser, be
exercised for the benefit of the Purchaser, in which case the proceeds of each
exercise will promptly be remitted to the Purchaser. Pending such remittance and
subject to applicable law, the Purchaser will be entitled to all rights and
privileges as owner of any such noncash dividend, distribution, issuance or
proceeds and may withhold the entire purchase price or deduct from the purchase
price the amount or value thereof, as determined by the Purchaser in its sole
discretion.
Under the Merger Agreement, the Company is prohibited from taking any of
the actions described in the two preceding paragraphs, and nothing herein shall
constitute a waiver by either the Purchaser or Parent of any of its rights under
the Merger Agreement or a limitation of remedies available to the Purchaser or
Parent for any breach of the Merger Agreement, including termination thereof.
SECTION 13. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES; INCLUSION IN THE
NASDAQ NATIONAL MARKET AND EXCHANGE ACT REGISTRATION.
The purchase of Shares pursuant to the Offer will reduce the number of
Shares that might otherwise trade publicly and probably will reduce the number
of holders of Shares. This could adversely affect the liquidity and market value
of the remaining Shares held by the public. The Purchaser cannot predict whether
the reduction in the number of Shares that might otherwise trade publicly would
have an adverse or beneficial
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effect on the market price for or marketability of the Shares or whether such
reduction would cause future market prices to be greater or less than the Offer
price.
Nasdaq National Market. Depending upon the number of Shares purchased
pursuant to the Offer, the Shares may no longer meet the requirements of the
NASD for continued inclusion in the Nasdaq National Market, which among other
things require that an issuer have at least 750,000 publicly held shares, held
by at least 400 stockholders or 300 holders of round lots, with a market value
of at least $5,000,000.
Based on information provided by the Company, as of March 9, 1998, there
were approximately 177 holders of record of Shares and approximately 6,150
beneficial owners of Shares and there were 7,175,445 Shares outstanding. If, as
a result of the purchase of Shares pursuant to the Offer or otherwise, the
Shares no longer meet the requirements of the NASD for continued inclusion in
the Nasdaq National Market or in any other tier of the Nasdaq Stock Market and
the Shares are no longer included in the Nasdaq National Market or in any other
tier of the Nasdaq Stock Market, as the case may be, the market for the Shares
could be adversely affected.
In the event that the Shares no longer meet the requirements of the NASD
for continued inclusion in any tier of the Nasdaq Stock Market, it is possible
that the Shares would continue to trade in the over-the-counter market and that
price quotations would be reported by other sources. However, the extent of the
public market for the Shares and the availability of such quotations would,
depend upon the number of holders of Shares remaining at such time, the
interests 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,
as described below, and other factors.
Margin Regulations. The Shares currently are "margin securities," as such
term is defined under the rules of the Board of Governors of the Federal Reserve
System (the "Federal Reserve Board"), which has the effect, among other things,
of allowing brokers to extend credit on the collateral of the Shares for the
purpose of buying, carrying, or trading in securities ("purpose loans").
Depending upon factors similar to those described above with respect to stock
exchange listing and market quotations, following the Offer it is possible that
the Shares might no longer constitute "margin securities" for the purposes of
the margin regulations of the Federal Reserve Board and, therefore, could no
longer be used as collateral for purpose loans made by brokers.
Exchange Act Registration. The Shares are currently registered under the
Exchange Act. The purchase of Shares pursuant to the Offer may result in the
Shares becoming eligible for deregistration under the Exchange Act. Registration
of the Shares may be terminated upon application of the Company to the
Commission if the Shares are not listed on a national securities exchange and
there are fewer than 300 record holders of the Shares. The termination of the
registration of the Shares under the Exchange Act would substantially reduce the
information required to be furnished by the Company to holders of the Shares and
to the Commission and would make certain provisions of the Exchange Act, such as
the short-swing profit recovery provisions of Section 16(b), the requirement of
furnishing a proxy statement in connection with stockholders' meetings pursuant
to Section 14(a) and the requirements of Rule 13e-3 under the Exchange Act with
respect to "going private" transactions, no longer applicable to the Shares.
Furthermore, "affiliates" of the Company and persons holding "restricted
securities" of the Company could be deprived of the ability to dispose of such
securities pursuant to Rule 144 under the Securities Act of 1933. If
registration of the Shares under the Exchange Act were terminated, the Shares
would no longer be "margin securities" or eligible for Nasdaq reporting. The
Purchaser presently intends to cause the Company to apply to terminate the
registration of the Shares as soon after the consummation of the Offer or Merger
as the requirements for termination of registration are met.
Going Private Transactions. Rule 13e-3 under the Exchange Act is applicable
to certain "going private" transactions. 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 or such
other business combination and the consideration offered to minority
stockholders be filed with the Commission and disclosed to minority stockholders
prior to the consummation of the Merger or such other business
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combination. The Purchaser believes that Rule 13e-3 will not be applicable to
the Merger; it is anticipated the Merger will be consummated within one year
after the purchase of the Shares pursuant to the Offer.
SECTION 14. CERTAIN CONDITIONS OF THE OFFER.
Notwithstanding any other provisions of the Offer, and in addition to (and
not in limitation of) the Purchaser's rights to extend and amend the Offer at
any time in its sole discretion (subject to the provisions of the Merger
Agreement), the Purchaser shall not be required to accept for payment or,
subject to any applicable rules and regulations of the SEC, including Rule
14e-1(c) under the Exchange Act (relating to the Purchaser's obligation to pay
for or return tendered Shares promptly after termination or withdrawal of the
Offer), pay for, and may delay the acceptance for payment of or, subject to the
restriction referred to above, the payment for, any tendered Shares, and may
(subject to the provisions of the Merger Agreement) terminate the Offer if (i)
any applicable waiting period under the HSR Act shall not have expired or
terminated, (ii) the Minimum Condition has not been satisfied or (iii) at any
time on or after March 8, 1998, and at or before the time of payment for any
such Shares (whether or not any Shares have theretofore been accepted for
payment or paid for pursuant to the Offer) pursuant to the Offer, any of the
following events shall have occurred and remain in effect:
(a) (i) there shall be instituted or pending any action or proceeding
by any governmental or regulatory authority (A) challenging or seeking to
make illegal, impede, materially delay or otherwise directly or indirectly
restrain, prohibit or make materially more costly the Offer or the Merger
or seeking to obtain material damages relating to the transactions
contemplated under the Offer, the Merger Agreement and the Option
Agreement, (B) seeking to prohibit or materially limit the ownership or
operation by the Purchaser or Parent of all or any material portion of the
business or assets of the Company or any of its subsidiaries taken as a
whole or to compel the Purchaser or Parent to dispose of or hold separately
all or any material portion of the business or assets of the Purchaser or
Parent or the Company or any of its subsidiaries taken as a whole, or
seeking to impose any material limitation on the ability of the Purchaser
or Parent to conduct its business or own such assets, (C) seeking to impose
material limitations on the ability of the Purchaser or Parent effectively
to exercise full rights of ownership of the Shares, including, without
limitation, the right to vote any Shares acquired pursuant to the Offer or
the Option Agreement or owned by Parent or the Purchaser on all matters
properly presented to the Company's stockholders, (D) seeking to require
divestiture by the Purchaser or Parent of any Shares or (E) otherwise
materially adversely affecting the condition of the Company and its
subsidiaries taken as a whole; or (ii) any court shall have entered an
order which is in effect and which (A) makes illegal, impedes, materially
delays or otherwise directly or indirectly restrains, prohibits or makes
materially more costly the Offer or the Merger, (B) prohibits or materially
limits the ownership or operation by the Purchaser or Parent of all or any
material portion of the business or assets of the Company or any of its
subsidiaries taken as a whole or compels the Purchaser or Parent to dispose
of or hold separately all or any material portion of the business or assets
of the Purchaser or Parent or the Company or any of its subsidiaries taken
as a whole, or imposes any material limitation on the ability of the
Purchaser or Parent to conduct its business or own such assets, (C) imposes
material limitations on the ability of the Purchaser or Parent effectively
to exercise full rights of ownership of the Shares, including, without
limitation, the right to vote any Shares acquired pursuant to the Offer or
the Option Agreement or owned by Parent or the Purchaser on all matters
properly presented to the Company's stockholders, (D) requires divestiture
by the Purchaser or Parent of any shares of Common Stock or (E) otherwise
materially adversely affects the condition of the Company and its
subsidiaries taken as a whole;
(b) there shall be any action taken, or any statute, rule, regulation,
legislation, interpretation, judgment, order or injunction enacted,
enforced, promulgated, amended, issued or deemed applicable to (i) the
Purchaser, Parent, the Company or any subsidiary of the Company or (ii) the
Offer or the Merger, by any governmental or regulatory authority other than
the routine application of the waiting period provisions of the HSR Act to
the Offer or to the Merger, which could reasonably be expected to, directly
or indirectly, result in any of the consequences referred to in clauses (A)
through (E) of paragraph (a)(i) above;
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(c) any change shall have occurred since the date of the Merger
Agreement (or any condition, event or development shall have occurred,
involving a prospective change) that would have a Material Adverse Effect
on the Company, other than any change that results from the announcement of
the Merger Agreement or the transactions contemplated thereby;
(d) there shall have occurred any of the following which would
reasonably be expected to have a Material Adverse Effect on the Company:
(i) any general suspension of trading in, or limitation on prices for,
securities on any national securities exchange or in the over-the-counter
market, (ii) any decline in any of the Dow Jones Industrial Average, the
Nasdaq Composite Index or the New York Stock Exchange Composite Index in
excess of 20% measured from the close of business on the trading day next
preceding the date of the Merger Agreement, (iii) any material change in
United States or any other currency exchange rates or a suspension of, or
limitation on, the markets therefor, (iv) a declaration of a banking
moratorium or any suspension of payments in respect of banks in the United
States or Norway, or (v) a commencement or escalation of a war or armed
hostilities or other national or international calamity directly or
indirectly involving the United States or Norway;
(e) (i) the Company shall have breached or failed to perform in any
material respect any of its obligations, covenants or agreements contained
in the Merger Agreement or the Option Agreement, (ii) any representation or
warranty of the Company set forth in the Merger Agreement or the Option
Agreement shall not be true and correct (A) in all material respects as of
the date of the Merger Agreement or (B) as of such time, and, in a case
described in this subclause (B), the failure of such representation or
warranty to be true and correct has a Material Adverse Effect on the
Company and did not result from the announcement of the Merger Agreement or
the transactions contemplated thereby or (iii) any of the stockholders who
are party to the Stockholders Agreement shall have breached or failed to
perform in any material respect any of such stockholder's obligations,
covenants or agreements under the Stockholders Agreement or any
representation or warranty of any of such stockholder contained in the
Stockholders Agreement shall not be true and correct in any material
respect, except in the case of this clause (iii) for such breaches or
failures that would not have a Material Adverse Effect on the Company or
materially hinder or delay consummation of any of the transactions
contemplated by the Merger Agreement;
(f) all consents, registrations, approvals, permits, authorizations,
notices, reports or other filings required to be obtained or made by the
Company, the Purchaser or Parent with or from any governmental or
regulatory authority in conjunction with the execution, delivery and
performance of the Merger Agreement, the Option Agreement, the Stockholders
Agreement, the Offer and the consummation of the transactions contemplated
by the Merger Agreement, the Option Agreement or the Stockholders Agreement
shall not have been made or obtained and such failure would reasonably be
expected to have a material adverse effect on the Company and its
subsidiaries, taken as a whole, or would prevent or materially hinder or
delay consummation of the transactions contemplated by the Merger
Agreement, the Option Agreement or the Stockholders Agreement;
(g) the Merger Agreement shall have been terminated in accordance with
its terms;
(h) (x) any corporation, partnership or other entity or "person" or
"group" (within the meaning of Section 13(d)(3) of the Exchange Act), other
than Parent, the Company or any of their respective affiliates, shall have
commenced, or announced an intention to commence, (A) a "solicitation" of
"proxies" or become a "participant" in any "solicitation" (as such terms
are defined in Regulation 14A under the Exchange Act) or (B) a tender
offer, exchange offer or other extraordinary transaction (in each case with
respect to shares of Common Stock) and as a result thereof, if the Offer
were not terminated, Parent or the Purchaser would be required to incur
substantial expenditures in addition to those otherwise required for the
transactions contemplated by the Merger Agreement, and (y) such
corporation, partnership, other entity or "person" or its affiliates and
associates (as defined in the Exchange Act) collectively shall be or become
the beneficial owners (determined pursuant to Rule 13d-3 under the Exchange
Act) of at least 15% of any shares of capital stock of the Company
(including the
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shares of Common Stock) or shall have acquired, directly or indirectly, at
least 15% of the assets or earning power of the Company; or
(i) (A) the Company's Board of Directors or any committee thereof
shall have withdrawn, or modified or changed in a manner adverse to the
Purchaser or Parent (including by amendment of the Schedule 14D-9) its
recommendation of the Offer, the Merger Agreement or the Merger; (B) the
Company's Board of Directors or any committee thereof shall have made any
recommendation with respect to any Acquisition Proposal by any Person
(other than the Purchaser or Parent) other than a recommendation rejecting
or against such Acquisition Proposal; or (C) the Company shall have
received any Acquisition Proposal by any person or entity (other than the
Purchaser or Parent) and the Company's Board of Directors is neutral or
makes no recommendation with respect to such Acquisition Proposal after a
reasonable amount of time (and in no event more than five business days)
has elapsed for the Company's Board of Directors to review and make a
recommendation with respect to such Acquisition Proposal consistent with
its fiduciary duties;
which in the reasonable judgment of the Purchaser or Parent, in any such case
and regardless of the circumstances giving rise to such condition, makes it
inadvisable to proceed with such acceptance for payment or payment.
As used in this Section 14, any reference to any event, change or effect
having a "Material Adverse Effect" on or with respect to, or "Materially
Adversely Affecting," an entity (or group of entities taken as a whole) means
such event, change or effect materially adversely affects the business,
condition (financial or otherwise) or results of operations of such entity (or,
if with respect thereto, of such group of entities taken as a whole).
The foregoing conditions are for the sole benefit of Parent and the
Purchaser and may be waived by Parent in whole or in part at any time and from
time to time in the sole discretion of the Purchaser. The failure by the
Purchaser at any time to exercise any of the foregoing rights shall not be
deemed a waiver of any such right; the waiver of any such right with respect to
particular facts and other circumstances shall not be deemed a waiver with
respect to any other facts and circumstances; and each such right shall be
deemed an ongoing right that may be asserted at any time and from time to time.
Any determination by the Purchaser concerning the events described above will be
final and binding on all parties.
A public announcement will be made of a material change in, or waiver of,
such conditions to the extent required by Rules 14d-4(c) and 14d-6(d) under the
Exchange Act, and the Offer will be extended in connection with any such change
or waiver to the extent required by such rules.
SECTION 15. CERTAIN LEGAL MATTERS AND REGULATORY APPROVALS.
General. Except as otherwise described in this Offer to Purchase, based
upon an examination of publicly available information filed by the Company with
the Commission, neither the Purchaser nor Parent is aware of (i) any license or
other regulatory permit that appears to be material to the business of the
Company and its subsidiaries, taken as a whole, that might be adversely affected
by the Purchaser's acquisition of Shares (and the indirect acquisition of the
stock of the Company's subsidiaries) pursuant to the Offer or the Merger or (ii)
any filings, approvals or other actions by or with any domestic (federal or
state), foreign or supranational governmental authority or administrative or
regulatory agency that would be required prior to the acquisition of Shares (or
the indirect acquisition of the stock of the Company's subsidiaries) by the
Purchaser as contemplated herein. Should any such approval or other action be
required, it is the Purchaser's present intention to seek such approval or
action. However, the Purchaser does not presently intend to delay the purchase
of Shares tendered pursuant to the Offer pending the receipt of any such
approval or the taking of any such action (subject to the Purchaser's right to
delay or decline to purchase Shares if any of the conditions in Section 14 shall
have occurred). There can be no assurance that any such approval or other
action, if needed, would be obtained without substantial conditions or that
adverse consequences might not result to the business of the Company, Parent or
the Purchaser or that certain parts of the businesses of the Company, Parent or
the Purchaser might not have to be disposed of or held separate or other
substantial conditions complied with in order to obtain such approval or other
action or, in the event that such approval was not
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obtained or such other action was not taken, any of which could cause the
Purchaser to elect to terminate the Offer without the purchase of the Shares
thereunder. The Purchaser's obligation under the Offer to accept for payment and
pay for Shares is subject to certain conditions, including conditions relating
to the legal matters discussed in this Section 15. See Section 14.
State Takeover Laws. The Company is incorporated under the laws of the
State of Delaware. In general, Section 203 of the Delaware General Corporation
Law (the "Delaware Takeover Statute") prevents an "interested stockholder"
(generally a person who owns or has the right to acquire 15% or more of a
corporation's outstanding voting stock, or an affiliate or associate thereof)
from engaging in a "business combination" (defined to include mergers and
certain other transactions) with a Delaware corporation for a period of three
years following the date such person became an interested stockholder unless,
among other things, prior to such date the board of directors of the corporation
approved either the business combination or the transaction in which the
interested stockholder became an interested stockholder. On March 8, 1998, prior
to the execution of the Merger Agreement and the Option Agreement, the Board of
Directors of the Company, by vote of all directors present at a meeting held on
such date, (i) approved and adopted the Merger Agreement and the transactions
contemplated thereby, (ii) determined that the Merger Agreement and the
transactions contemplated thereby, including each of the Offer and the Merger,
is fair to and in the best interests of, the stockholders of the Company (iii)
recommended that the stockholders of the Company accept the Offer and approve
and adopt the Merger Agreement and the transactions contemplated thereby and
(iv) approved the Option Agreement and the transactions contemplated thereby.
Accordingly, the Purchaser and Parent believe that the Delaware Takeover Statute
is inapplicable to the acquisition of shares pursuant to the Offer, the Merger
and the Option Agreement.
A number of other states have also adopted takeover laws and regulations
which purport to varying degrees to be applicable to attempts to acquire
securities of corporations which are incorporated in those states or which have
or whose business operations have substantial economic effects in those states,
or which have substantial assets, security holders, principal executive offices
or principal places of business in those states. In 1982, the Supreme Court of
the United States, in Edgar v. MITE Corp., invalidated on constitutional grounds
the Illinois Business Takeovers Act, which, as a matter of state securities law,
made takeovers of corporations meeting certain requirements more difficult.
However, in 1987, in CTS Corp. v. Dynamics Corp. of America, the Supreme Court
of the United States held that a state may, as a matter of corporate law and, in
particular, with respect to those aspects of corporate law relating to corporate
governance, constitutionally disqualify a potential acquiror from voting on the
affairs of a target corporation without the prior approval of the remaining
stockholders, provided that such laws were applicable only under certain
conditions.
Section 2115 of the California General Corporation Law (the "CGCL")provides
that a corporation with specified minimum contacts in California will be subject
to certain provisions of the CGCL even if that corporation is organized under
the laws of a different state. If those provisions were applicable to the
Company, unless the Purchaser acquired at least 90% of the outstanding Shares it
could not complete the Merger without the unanimous consent of the remaining
stockholders. The Purchaser and Parent believe these provisions are inapplicable
to the Company because Section 2115, by its terms, does not apply to a
corporation with outstanding securities designated for trading on the Nasdaq
National Market if the corporation had at least 800 holders of its equity
securities (determined in the manner provided in Section 2115 of the CGCL) as of
the record date of its most recent annual meeting of stockholders. Based on
information furnished by the Company and on representations made by the Company
in the Merger Agreement, the Purchaser and Parent believe the Company satisfies
those requirements.
The Company, directly or through subsidiaries, conducts business in a
number of states throughout the United States, some of which have enacted
takeover laws. The Purchaser does not know whether any of these laws will, by
their terms, apply to the Offer or the Merger and has not taken any action to
comply with any such laws. Should any person seek to apply any state takeover
law, the Purchaser will take such action as then appears desirable, which may
include challenging the validity or applicability of any such statute in
appropriate court proceedings. If it is asserted that one or more state takeover
laws apply to the Offer or the Merger, and an appropriate court does not
determine that the law or laws are inapplicable or invalid as applied to the
Offer or the Merger, the Purchaser might be required to file certain information
with, or receive
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approvals from, the relevant state authorities, and the Purchaser might be
unable to accept for payment or pay for any Shares tendered pursuant to the
Offer or be delayed in continuing or consummating the Offer and the Merger. In
such case, the Purchaser may not be obligated to accept for payment, or pay for,
any Shares tendered. See Section 14.
Short-Form Merger. Section 253 of the Delaware General Corporation Law
would permit the Merger to occur without a vote of the Company's stockholders (a
"short-form merger") if the Purchaser were to acquire at least 90% of the
outstanding Shares. The Purchaser and Parent intend that, if following
consummation of the Offer the Purchaser owns at least 90% of the issued and
outstanding Shares, it will proceed promptly to complete the Merger pursuant to
the short-form merger procedure. If, however, the Purchaser does not acquire at
least 90% of the then outstanding Shares pursuant to the Offer or otherwise, and
a vote of the Company's stockholders is required under Delaware law for
consummation of the Merger, a longer period of time will be required to effect
the Merger.
Appraisal Rights. Holders of the Shares do not have appraisal rights as a
result of the Offer. However, if the Merger is consummated, holders of the
Shares at the effective time of the Merger will have certain rights pursuant to
the provisions of Section 262 of the DGCL. Dissenting stockholders of the
Company who comply with the applicable statutory procedures will be entitled to
receive a judicial determination of the fair value of their Shares (exclusive of
any element of value arising from the accomplishment or expectation of the
Merger) and to receive payment of such fair value in cash, together with a fair
rate of interest thereon, if any. Any such judicial determination of the fair
value of the Shares could be based upon factors other than, or in addition to,
the price per share of Common Stock, as the case may be, to be paid in the
Merger or the market value of the Shares. The value so determined could be more
or less than the price per Share to be paid in the Merger.
THE FOREGOING SUMMARY OF THE RIGHTS OF DISSENTING STOCKHOLDERS DOES NOT
PURPORT TO BE A COMPLETE STATEMENT OF THE PROCEDURES TO BE FOLLOWED BY
STOCKHOLDERS DESIRING TO EXERCISE ANY AVAILABLE DISSENTERS' RIGHTS. THE
PRESERVATION AND EXERCISE OF DISSENTERS' RIGHTS REQUIRE STRICT ADHERENCE TO THE
APPLICABLE PROVISIONS OF THE DGCL.
The foregoing description of the DGCL, including the descriptions of
Sections 203 and 262, is not necessarily complete and is qualified in its
entirety by reference to the DGCL.
Rule 13e-3. The Merger would have to comply with any applicable Federal law
operative at the time. Rule 13e-3 under the Exchange Act is applicable to
certain "going private" transactions; however, the Purchaser believes that Rule
13e-3 will not be applicable to the Merger. If Rule 13e-e were applicable to the
Merger, it would require, among other things, that certain financial information
concerning the Company, and certain information relating to the fairness of the
proposed transaction and the consideration offered to minority stockholders in
such a transaction, be filed with the Commission and disclosed to minority
stockholders prior to consummation of the transaction.
Antitrust. Under the HSR Act and the rules that have been promulgated
thereunder by the FTC, certain acquisition transactions may not be consummated
unless certain information has been furnished to the Antitrust Division and the
FTC and certain waiting period requirements have been satisfied. The acquisition
of Shares by the Purchaser pursuant to the Offer is subject to the HSR Act
requirements. See Section 2.
Under the provisions of the HSR Act applicable to the purchase of Shares
pursuant to the Offer, such purchase may not be made until the expiration of a
15-calendar day waiting period following the required filing of a Premerger
Notification and Report Form under the HSR Act by Parent, which Parent intends
to submit on the date hereof. Accordingly, the waiting period under the HSR Act
would expire at 11:59 P.M., New York City time, on March 28, 1998, unless early
termination of the waiting period were granted or Parent received a request from
the Antitrust Division or the FTC for additional information or documentary
material prior thereto. If such a request were made, the waiting period
applicable to the Offer will expire on the tenth calendar day after the date of
substantial compliance by Parent with such request. Thereafter, the waiting
period may be extended by court order or by consent of Parent. Although the
Company is required to file
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certain information and documentary material with the Antitrust Division and the
FTC in connection with the Offer, neither the Company's failure to make such
filings nor a request to the Company from the Antitrust Division or the FTC for
additional information or documentary material will extend the waiting period.
The waiting period under the HSR Act may be terminated by the FTC and the
Antitrust Division prior to its expiration. Accordingly, pursuant to the HSR Act
each of Parent and the Company intend to request early termination of the
waiting period applicable to the Offer. There can be no assurance, however, that
the 15-day HSR Act waiting period will be terminated early. Shares will not be
accepted for payment or paid for pursuant to the Offer until the expiration or
earlier termination of the applicable waiting period under the HSR Act. See
Section 2. Subject to Section 4, any extension of the waiting period will not
give rise to any withdrawal rights not otherwise provided for by applicable law.
If the Purchaser's acquisition of Shares is delayed due to a request by the
Antitrust Division or the FTC for additional information or documentary material
pursuant to the HSR Act, the Offer may, but need not, be extended.
The FTC and the Antitrust Division frequently scrutinize the legality under
the antitrust laws of transactions such as the proposed acquisition of Shares by
the Purchaser pursuant to the Offer. At any time before or after the purchase by
the Purchaser of Shares pursuant to the Offer, either the FTC or the Antitrust
Division 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 Shares pursuant to the Offer or seeking the divestiture of Shares purchased
by the Purchaser or the divestiture of substantial assets of Parent, the Company
or any of their respective subsidiaries. Private parties and state attorneys
general may also bring legal action under federal or state antitrust laws under
certain circumstances. Based upon an examination of publicly available
information relating to the businesses in which Parent and its subsidiaries and
the Company and its subsidiaries are engaged, the Purchaser has determined that
the Company and Parent both produce and distribute similar product lines in
certain geographic areas. In particular, both the Company and Parent distribute
and market multimedia projection products. Although the Purchaser believes that
the acquisition of Shares pursuant to the Offer will not violate the antitrust
laws, 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 outcome will be.
Foreign Approvals. Parent owns property and conducts business in foreign
countries and jurisdictions. In connection with the acquisition of the Shares
pursuant to the Offer, the laws of certain of those foreign countries and
jurisdictions may require the filing of information with, or the obtaining of
the approval of, governmental authorities in such countries and jurisdictions.
The governments in such countries and jurisdictions might attempt to impose
additional conditions on the Parent's operations conducted in such countries and
jurisdictions as a result of the acquisition of the Shares pursuant to the
Offer. There can be no assurance that the Purchaser will be able to cause the
Parent or its subsidiaries to satisfy or comply with such laws or that
compliance or non-compliance will not have adverse consequences for the Parent
or any subsidiary after purchase of the Shares pursuant to the Offer.
Stockholder Litigation. On March 9, 1998, a purported class action lawsuit
was initiated in the Court of Chancery of Delaware by Marc Tisch, who purports
to bring the action individually and on behalf of other stockholders of the
Company similarly situated against the Company, its directors and Parent. The
lawsuit is styled Marc Tisch v. Kenneth E. Olson et. al. (C.A.No.16234-NC) and
seeks, among other things, a preliminary and permanent injunction against the
Offer and the Merger, rescission of the Offer and the Merger if they are
consummated, and compensatory damages. The complaint asserts, among other
things, that (i) the directors of the Company breached fiduciary duties owed to
the public stockholders of the Company; (ii) the intrinsic value of the Company
is far greater than that reflected in the market price of the Company's stock;
(iii) the terms of the proposed Merger and Offer were not the result of an
auction process or active market check and were arrived at without a full and
thorough investigation by the individual defendants and are intrinsically unfair
and inadequate from the stand point of the Company's stockholders; and (iv) the
individual defendants failed to make an informed decision, as no market check of
the Company's value was obtained, and in agreeing to the Merger, the individual
defendants failed to properly inform themselves of the Company's highest
transactional value. The complaint also alleges that the individual defendants'
fiduciary obligations under these circumstances require them to (i) undertake an
appropriate evaluation of the
38
<PAGE> 41
Company's net worth as a merger/acquisition candidate; and (ii) engage in a
meaningful auction with third parties in an attempt to obtain the best value for
the Company's public stockholders.
SECTION 16. FEES AND EXPENSES.
Except as set forth below, neither Parent nor the Purchaser will pay any
fees or commissions to any broker, dealer or other person in connection with the
solicitation of tenders of Shares pursuant to the Offer.
BT Alex. Brown is acting as the Dealer Manager in connection with the Offer
and is acting as financial advisor to Parent in connection with the Offer and
the Merger. Parent has agreed to pay BT Alex. Brown for its services (i) a
retainer of $100,000, (ii) a fee of $350,000 when the Parent commences a tender
offer for the Company or executes a definitive agreement with the Company to
consummate a transaction and (iii) a fee upon completion of the Merger in the
amount of $1,150,000, less the amounts of the fees previously paid under clauses
(i) and (ii). If the Offer is not consummated and Parent receives a termination
fee, Parent has agreed to pay BT Alex. Brown the lesser of (i) 20% of such
termination fee or (ii) $600,000 at the time such termination fee is received by
Parent, less any amounts of the fees referred to above previously paid. Parent
also has agreed that, whether or not the Offer is consummated, it will pay BT
Alex. Brown (in its capacity as Dealer Manager and financial advisor) for its
reasonable out-of-pocket expenses, including the reasonable expenses of legal
counsel, incurred in connection with its engagement, and to indemnify BT Alex.
Brown against certain liabilities and expenses in connection with its
engagement. BT Alex. Brown renders various investment banking and other advisory
services to Parent and its affiliates and is expected to continue to render such
services, for which it has received and will continue to receive customary
compensation from Parent and its affiliates.
The Purchaser has retained Beacon Hill Partners, Inc. to act as the
Information Agent and ChaseMellon Shareholder Services, L.L.C. to act as the
Depositary in connection with the Offer. The Dealer Manager and the Information
Agent may contact holders of Shares by mail, telephone, telegraph and personal
interview and may request brokers, dealers and other nominee stockholders to
forward the Offer materials to beneficial owners. The Information Agent and the
Depositary will receive reasonable and customary compensation for their services
relating to the Offer and will be reimbursed for certain out-of-pocket expenses.
The Purchaser and Parent also have agreed to indemnify the Information Agent and
the Depositary against certain liabilities and expenses in connection with the
Offer, including certain liabilities under the federal securities laws.
Brokers, dealers, commercial banks and trust companies will, upon request,
be reimbursed by the Purchaser for customary mailing and handling expenses
incurred by them in forwarding the Offer materials to their customers.
SECTION 17. MISCELLANEOUS.
The Offer is being made solely by this Offer to Purchase and the related
Letter of Transmittal and is being made to all holders of Shares. The 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 the
Purchaser becomes aware of any valid state statute prohibiting the making of the
Offer or the acceptance of Shares pursuant thereto, the Purchaser will make a
good faith effort to comply with any such state statute or seek to have such
statute declared inapplicable to the Offer. If after such good faith effort, the
Purchaser cannot comply with such state statute, the Offer will not be made to
(nor will tenders be accepted from or on behalf of) the holders of Shares in
such state. In any jurisdiction where the 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 one or more registered brokers
or dealers that are licensed under the laws of such jurisdiction.
The Purchaser and Parent have filed with the Commission a Schedule 14D-1
(including exhibits) pursuant to Rule 14d-3 under the Exchange Act, furnishing
certain additional information with respect to the Offer. Such statement and any
amendments thereto, including exhibits, may be inspected and copies may be
obtained from the offices of the Commission (except that they will not be
available at the regional offices of the Commission) in the manner set forth in
Section 7 of this Offer to Purchase.
39
<PAGE> 42
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION ON BEHALF OF THE PURCHASER OR PARENT 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.
BD ACQUISITION CORP.
March 13, 1998
40
<PAGE> 43
SCHEDULE I
INFORMATION REGARDING THE DIRECTORS AND EXECUTIVE OFFICERS OF
PARENT AND THE PURCHASER
1. DIRECTORS AND EXECUTIVE OFFICERS OF PARENT. Set forth in the table below
are the name and the present principal occupations or employment and the name,
principal business and address of any corporation or other organization in which
such occupation or employment is conducted, and the five-year employment history
of each of the directors and executive officers of Parent. Parent indirectly
owns 100% of the equity interest in the Purchaser. Unless otherwise indicated,
each person identified below who is not a Director is employed by Parent. None
of the Directors is an employee of Parent. The principal business address of
Parent and, except as otherwise indicated, of each director and officer of
Parent, is ASK asa, K.G. Meldahlsvei 9, N-1602, Fredrikstad, Norway. Directors
are identified by an asterisk. All persons identified below are citizens of
Norway except Thomas Nedder, who is a citizen of Germany.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION
NAME AND CURRENT OR EMPLOYMENT AND
BUSINESS ADDRESS FIVE-YEAR EMPLOYMENT HISTORY
---------------- ----------------------------
<S> <C>
Ole J. Fredriksen*........................... President and Chief Executive Officer of ASK asa since
1984; Director and President of BD Acquisition Corp.
since formation.
Svein S. Jacobsen*........................... Chairman of the Board of Directors of ASK asa since
Veritasveien 9 October 1996; Managing Director of Sveinja Invest
N-1322 Havik, since May 1996; Managing Director of Tomra Systems asa
Norway from September 1984 to May 1996; Director of Tomra
Systems since April 1996; Director of IPLAST asa since
June 1996; Director of GOODTECH asa since June 1996;
Director of STENTO asa since May 1997.
Jan Haudemann Andersen*...................... Private investor; Director of Tandberg Data asa since
P.O. Box 1624 November 1995.
Vika
(Munkedamsvn, 45 F), 0119
Oslo, Norway
Einar J. Greve*.............................. Partner of Wikborg, Rein & Co. since January 1993;
Wikborg, Rein & Co. Vice Chairman of Tandberg Data asa since 1995;
P.O. Box 1513 Chairman of the Board of Mikkelservice asa since 1994.
Vika 0117
Olso, Norway
Per Otto Dyb*................................ President of ABB since September 1994; President of
Vardeheia Tandberg Data, Inc. from June 1990 to August 1994;
4341 Bryne Director of HJELLEGJERDE ASA since April 1997;
Norway Director of KVERNELAND asa since July 1997.
Jorn Eriksen................................. Vice President, Technology and Development of ASK asa
since 1986.
Vidar Kinn................................... Chief Financial Manager of ASK asa since 1991;
Director, Vice President and Secretary of BD
Acquisition Corp. since formation.
</TABLE>
S-1
<PAGE> 44
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION
NAME AND CURRENT OR EMPLOYMENT AND
BUSINESS ADDRESS FIVE-YEAR EMPLOYMENT HISTORY
---------------- ----------------------------
<S> <C>
Thomas Nedder................................ Vice President, Sales and Marketing of ASK asa since
January 1998; Manager, Distribution Sales for Sharp
Electronics from January 1994 to December 1997; Area
Sales Manager for Berthold Schovisch gmbh.
Thorleif Kristoffersein...................... Production Manager for ASK asa since December 1995;
Production Manager for Norild AS from June 1993 to
December 1995; Heriot-Watt University, Scotland, from
August 1989 to May 1993.
</TABLE>
2. DIRECTORS AND EXECUTIVE OFFICERS OF THE PURCHASER. Set forth in the
table below are the name and the present principal occupations or employment and
the name, principal business and address of any corporation or other
organization in which such occupation or employment is conducted, and the
five-year employment history of each of the directors and executive officers of
the Purchaser. Each person identified below is employed by Parent and is a
director of the Purchaser. The principal business address of the Purchaser and
each person identified below, is ASK asa, K.G. Meldahlsvei 9, N-1602
Fredrikstad, Norway. All persons identified below are citizens of the Kingdom of
Norway.
<TABLE>
<CAPTION>
PRESENT PRINCIPAL OCCUPATION
OR EMPLOYMENT AND
NAME FIVE-YEAR EMPLOYMENT HISTORY
---- ----------------------------
<S> <C>
Ole J. Fredriksen............................ See Part 1 of this Schedule I.
Vidar Kinn................................... See Part 1 of this Schedule I.
Sture J. Berg................................ Administrative Manager of ASK asa since December 1994;
Director, Treasurer and Assistant Secretary of BD
Acquisition Corp. since formation; Consultant of
Christiana Bank from June 1990 to Decmber 1994
</TABLE>
S-2
<PAGE> 45
Manually signed facsimile copies of the Letter of Transmittal will be
accepted. The Letter of Transmittal and any other required documents should be
sent or delivered by each stockholder or such stockholder's broker, dealer,
bank, trust company or other nominee to the Depositary at one of the addresses
or the facsimile number set forth below:
The Depositary for the Offer is:
CHASEMELLON SHAREHOLDERS SERVICES, L.L.C.
<TABLE>
<S> <C> <C>
By Mail: By Hand: By Overnight Delivery:
ChaseMellon Shareholder Services, ChaseMellon Shareholder Services, ChaseMellon Shareholder Services,
L.L.C. L.L.C. L.L.C.
Post Office Box 3301 120 Broadway, 13th Floor 85 Challenger Rd-Mail Drop-Reorg.
South Hackensack, NJ 07606 New York, NY 10271 Ridgefield Park, NJ 07660
Attn: Reorganization Department Attn: Reorganization Department Attn: Reorganization Department
By Facsimile Transmission: Confirm Receipt of Facsimile
(For Eligible Institutions Only) by Telephone:
(201) 329-8936 (201) 296-4860
</TABLE>
Questions and requests for assistance or for additional copies of this
Offer to Purchase, the Letter of Transmittal and the Notice of Guaranteed
Delivery may be directed to the Information Agent or the Dealer Manager at their
respective telephone numbers and address listed below. You may also contact your
broker, dealer, bank, trust company or other nominee for assistance concerning
the Offer.
The Information Agent for the Offer is:
BEACON HILL PARTNERS, INC.
90 Broad Street
New York, New York 10004
Banks and Brokers Please Call Collect: (212) 843-8500
All Others Call Toll Free: (800) 301-8755
The Dealer Manager for the Offer is:
BT ALEX. BROWN INCORPORATED
101 California Street, 48th Floor
San Francisco, California 94111
(415) 544-2800 (Call Collect)
or
Call Toll Free (800) 334-2640
<PAGE> 1
LETTER OF TRANSMITTAL
TO TENDER SHARES OF COMMON STOCK
OF
PROXIMA CORPORATION
PURSUANT TO THE OFFER TO PURCHASE
DATED MARCH 13, 1998
BY
BD ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY OF
ASK ASA
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME ON THURSDAY, APRIL 9, 1998, UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
The Depositary for the Offer is:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
<TABLE>
<S> <C> <C>
By Mail: By Hand: By Overnight Delivery:
ChaseMellon Shareholder ChaseMellon Shareholder ChaseMellon Shareholder
Services, L.L.C. Services, L.L.C. Services, L.L.C.
Post Office Box 3301 120 Broadway, 13th Floor 85 Challenger Road -- Mail
Drop -- Reorg.
South Hackensack, NJ 07606 New York, NY 10271 Ridgefield Park, NJ 07660
Attn: Reorganization Department Attn: Reorganization Department Attn: Reorganization Department
For Facsimile Transmission: Confirm Receipt of Facsimile
(For Eligible Institutions Only) by Telephone:
(201) 329-8936 (201) 296-4860
</TABLE>
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. YOU MUST SIGN THIS LETTER OF
TRANSMITTAL IN THE APPROPRIATE SPACE PROVIDED THEREFOR AND COMPLETE THE
SUBSTITUTE FORM W-9 PROVIDED BELOW.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
<PAGE> 2
<TABLE>
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------
DESCRIPTION OF SHARES TENDERED
- ---------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S) SHARE CERTIFICATE(S) AND SHARES
(PLEASE FILL IN, IF BLANK, EXACTLY AS NAME(S) APPEAR(S) ON TENDERED
SHARE CERTIFICATES) (ATTACH ADDITIONAL LIST, IF NECESSARY)
- ---------------------------------------------------------------------------------------------------
TOTAL NUMBER
OF SHARES
SHARE EVIDENCED BY NUMBER OF
CERTIFICATE SHARE SHARES
NUMBER(S)* CERTIFICATE(S)* TENDERED**
--------------------------------------
--------------------------------------
--------------------------------------
--------------------------------------
--------------------------------------
TOTAL
SHARES:
- ---------------------------------------------------------------------------------------------------
* Need not be completed by stockholders delivering Shares by Book-Entry Transfer.
** Unless otherwise indicated, it will be assumed that all Shares evidenced by each Share
Certificate delivered to the Depositary are being tendered hereby. See Instruction 4.
- ---------------------------------------------------------------------------------------------------
</TABLE>
This Letter of Transmittal is to be used either if certificates are to be
forwarded herewith or if delivery of Shares (as defined below) is to be made by
book-entry transfer to an account maintained by the Depositary at The Depository
Trust Company (the "Book-Entry Transfer Facility") pursuant to the procedures
set forth in Section 3 of the Offer to Purchase (as defined below). Delivery of
documents to the Book-Entry Transfer Facility does not constitute delivery to
the Depositary. Stockholders who deliver Shares by book-entry transfer are
referred to herein as "Book-Entry Stockholders" and other stockholders are
referred to herein as "Certificate Stockholders."
Stockholders whose certificates evidencing Shares ("Share Certificates")
are not immediately available or who cannot deliver their Share Certificates and
all other documents required hereby to the Depositary or complete the procedures
for book-entry transfer prior to the Expiration Date (as defined in Section 1 of
the Offer to Purchase) must tender their Shares according to the guaranteed
delivery procedure set forth in Section 3 of the Offer to Purchase. See
Instruction 2.
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
MADE TO AN ACCOUNT MAINTAINED BY THE DEPOSITARY 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 Holder(s):
-----------------------------------------------------------------------------
Window Ticket No. (if any):
-----------------------------------------------------------------------------
Date of Execution of Notice of Guaranteed Delivery:
-----------------------------------------------------------------------------
Name of Institution which Guaranteed Delivery:
-----------------------------------------------------------------------------
If Delivered by Book-Entry Transfer, Check Here:
-----------------------------------------------------------------------------
Account Number (if delivered by Book-Entry Transfer):
-----------------------------------------------------------------------------
Transaction Code Number:
-----------------------------------------------------------------------------
2
<PAGE> 3
[ ]CHECK HERE IF YOU CANNOT LOCATE YOUR CERTIFICATE(S) AND REQUIRE ASSISTANCE IN
REPLACING THEM. UPON RECEIPT OF NOTIFICATION BY THIS LETTER OF TRANSMITTAL,
THE COMPANY'S STOCK TRANSFER AGENT WILL CONTACT YOU DIRECTLY WITH REPLACEMENT
INSTRUCTIONS.
BOXES ABOVE FOR USE BY ELIGIBLE INSTITUTIONS ONLY
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
3
<PAGE> 4
Ladies and Gentlemen:
The undersigned hereby tenders to BD Acquisition Corp., a Delaware
corporation (the "Offeror") and a wholly owned subsidiary of ASK asa, a
corporation organized under the laws of the Kingdom of Norway ("Parent"), the
above-described shares of Common Stock, par value $.001 per share (the
"Shares"), pursuant to the Offeror's offer to purchase all outstanding Shares at
a price of $11.00 per Share, net to the seller in cash, upon the terms and
subject to the conditions set forth in the Offer to Purchase dated March 13,
1998 (the "Offer to Purchase"), receipt of which is hereby acknowledged, and in
this Letter of Transmittal (which, together with the Offer to Purchase and any
amendments or supplements hereto or thereto, constitute the "Offer"). The
undersigned understands that the Offeror reserves the right to transfer or
assign, in whole or in part from time to time, to any direct or indirect wholly
owned subsidiary of Parent, the right to purchase Shares tendered pursuant to
the Offer.
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), effective upon acceptance for payment of and payment for the
Shares tendered herewith, the undersigned hereby sells, assigns and transfers
to, or upon the order of the Offeror, all right, title and interest in and to
all the Shares that are being tendered hereby (and any and all other Shares or
other securities issued or issuable in respect thereof (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 (a) deliver certificates for such Shares and all Distributions, or transfer
ownership of such Shares 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 the
Offeror, upon receipt by the Depositary, as the undersigned's agent, of the
purchase price (adjusted, if appropriate, as provided in the Offer to Purchase),
(b) present such Shares and all Distributions for cancellation and transfer on
the Company's books and (c) receive all benefits and otherwise exercise all
rights of beneficial ownership of such Shares and all Distributions, all in
accordance with the terms of the Offer.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the tendered
Shares and all Distributions and that, when the same are accepted for payment by
the Offeror, the Offeror will acquire good, marketable and unencumbered title
thereto, free and clear of all liens, restrictions, claims, charges and
encumbrances, and the same will not be subject to any adverse claims. The
undersigned will, upon request, execute any signature guarantees or additional
documents deemed by the Depositary or the Offeror to be necessary or desirable
to complete the sale, assignment and transfer of the tendered Shares and all
Distributions. In addition, the undersigned shall promptly remit and transfer to
the Depositary for the account of the Offeror any such Distributions issued to
the undersigned, in respect of the tendered Shares, accompanied by documentation
of transfer, and pending such remittance or appropriate assurance thereof, the
Offeror shall be entitled to all rights and privileges as owner of any such
Distributions and, subject to the terms of the Merger Agreement (as defined in
the Offer to Purchase), may withhold the entire purchase price or deduct from
the purchase price the amount or value thereof, as determined by the Offeror, in
its sole discretion.
All authority conferred or agreed to be conferred in this Letter of
Transmittal shall be binding upon the successors, assigns, heirs, executors,
administrators and legal representatives of the undersigned and shall not be
affected by, and shall survive, the death or incapacity of the undersigned.
Except as stated in the Offer to Purchase, this tender is irrevocable.
The undersigned hereby irrevocably appoints Ole J. Fredriksen or Vidar Kinn
and each of them, and any other designees of the Offeror, the attorneys and
proxies of the undersigned, each with full power of substitution, to vote at any
annual, special or adjourned meeting of the Company's stockholders or otherwise
act in such manner as each such attorney and proxy or his or her substitute
shall in his or her sole discretion deem proper and to otherwise act with
respect to all the Shares tendered hereby which have been accepted for payment
by the Offeror prior to the time any such vote or action is taken (and any and
all Distributions issued or issuable in respect thereof) and with respect to
which the undersigned is entitled to vote. This appointment
4
<PAGE> 5
is effective when, and only to the extent that, the Offeror accepts for payment
such Shares as provided in the Offer to Purchase.
This power of attorney and proxy is coupled with an interest in the
tendered Shares, is irrevocable and is granted in consideration of the
acceptance for payment of such Shares in accordance with the terms of the Offer.
Such acceptance for payment shall revoke all prior powers of attorney and
proxies given by the undersigned at any time with respect to such Shares and no
subsequent powers of attorney or proxies may be given by the undersigned (and,
if given, will not be deemed effective). The Offeror reserves the right to
require that, in order for Shares to be deemed validly tendered, immediately
upon the Offeror's acceptance for payment of such Shares, the Offeror must be
able to exercise full voting and other rights with respect to such Shares,
including voting at any stockholders meeting then scheduled.
The undersigned understands that the valid tender of Shares to the Offeror
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 the Offeror upon the terms and subject to the
conditions of the Offer. The undersigned recognizes that under certain
circumstances set forth in the Offer to Purchase, the Offeror may not be
required to accept for payment any of the tendered Shares. The Offeror's
acceptance for payment of Shares pursuant to the Offer will constitute a binding
agreement between the undersigned and the Offeror upon the terms and subject to
the conditions of the Offer.
Unless otherwise indicated herein under "Special Payment Instructions,"
please issue the check for the purchase price of any Shares purchased, and/or
return any certificates for Shares not tendered or accepted for payment, in the
name(s) of the registered holder(s) appearing under "Description of Shares
Tendered." Similarly, unless otherwise indicated under "Special Delivery
Instructions," please mail the check for the purchase price of any Shares
purchased, and/or any certificates for Shares not tendered or accepted for
payment (and accompanying documents, as appropriate), to the address(es) of the
registered holder(s) appearing under "Description of Shares Tendered." In the
event that both the Special Delivery Instructions and the Special Payment
Instructions are completed, please issue the check for the purchase price of any
Shares purchased, and/or return any certificates for Shares not tendered or
accepted for payment in the name(s) of, and mail said check and/or any
certificates to, the person or persons so indicated. In the case of a book-entry
delivery of Shares, please credit the account maintained at the Book-Entry
Transfer Facility indicated above with any Shares not accepted for payment. The
undersigned recognizes that the Offeror has no obligation pursuant to the
Special Payment Instructions to transfer any Shares from the name of the
registered holder(s) thereof if the Offeror does not accept for payment any of
the Shares so tendered.
5
<PAGE> 6
------------------------------------------------------
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
------------------------------------------------------
To be completed ONLY if the check for the purchase price of Shares or
Share Certificates evidencing Shares not tendered or not purchased are to be
issued in the name of someone other than the undersigned.
Issue check and/or certificate(s) to:
Name
-----------------------------------------------------------------
(PLEASE PRINT)
Address
-----------------------------------------------------------------
-----------------------------------------------------
(INCLUDE ZIP CODE)
Taxpayer Identification or Social Security Number
(See Substitute Form W-9 on reverse side)
======================================================
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
------------------------------------------------------
To be completed ONLY if the check for the purchase price of Shares
purchased or Share Certificates evidencing Shares not tendered or not
purchased are to be mailed to someone other than the undersigned, or to the
undersigned at an address other than that shown under "Description of Shares
Tendered."
Mail check and/or certificate(s) to:
Name
------------------------------------------------------------------
(PLEASE PRINT)
Address
------------------------------------------------------------------
------------------------------------------------------
(INCLUDE ZIP CODE)
------------------------------------------------------
------------------------------------------------------
6
<PAGE> 7
IMPORTANT
STOCKHOLDER(S): SIGN HERE
(PLEASE COMPLETE SUBSTITUTE FORM W-9 ON REVERSE)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SIGNATURE(S) OF HOLDER(S)
Dated:, 199_
(Must be signed by registered holder(s) exactly as name(s) appear(s) on Share
Certificates or on a security position listing or by a 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, officer of a corporation or other person acting in a fiduciary
or representative capacity, please provide the following information. See
Instruction 5.)
Name(s):
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PLEASE PRINT
Capacity:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PLEASE PROVIDE FULL TITLE
Address:
- --------------------------------------------------------------------------------
(INCLUDE ZIP CODE)
Telephone No.:
- --------------------------------------------------------------------------------
INCLUDE AREA CODE
Taxpayer Identification or
Social Security Number:
- --------------------------------------------------------------------------------
SEE SUBSTITUTE FORM W-9 ON REVERSE SIDE
GUARANTEE OF SIGNATURE(S)
(IF REQUIRED -- SEE INSTRUCTIONS 1 AND 5)
SPACE BELOW IS FOR USE BY FINANCIAL INSTITUTIONS ONLY. FINANCIAL INSTITUTIONS:
PLACE MEDALLION GUARANTEE IN SPACE PROVIDED BELOW.
7
<PAGE> 8
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. Guarantee of Signatures. Except as otherwise provided below, all
signatures on this Letter of Transmittal must be guaranteed by a 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,"
and collectively, "Eligible Institutions"). No signature guarantee is required
on this Letter of Transmittal (i) if this Letter of Transmittal is signed by the
registered holder(s) (which term, for purposes of this document, shall include
any participant in the Book-Entry Transfer Facility whose name appears on a
security position listing as the owner of Shares) of Shares tendered herewith,
unless such holder(s) has completed either the box entitled "Special Delivery
Instructions" or the box entitled "Special Payment Instructions" in this Letter
of Transmittal or (ii) if such Shares are tendered for the account of an
Eligible Institution. See Instruction 5.
2. Delivery of Letter of Transmittal and Certificates; Guaranteed Delivery
Procedures. This Letter of Transmittal is to be completed by stockholders
either if Share Certificates are to be forwarded herewith or if a tender of
Shares is to be made pursuant to the procedures for delivery by book-entry
transfer set forth in Section 3 of the Offer to Purchase. For Shares to be
validly tendered pursuant to the Offer, either (i) a properly completed and duly
executed Letter of Transmittal (or facsimile thereof), together with any
required signature guarantees, or in the case of a book-entry transfer, an
Agent's Message (as defined in the Offer to Purchase), and any other required
documents, must be received by the Depositary at one of the Depositary's
addresses set forth herein prior to the Expiration Date (as defined in the Offer
to Purchase) and either certificates for tendered Shares must be received by the
Depositary at one of such addresses or such Shares must be delivered pursuant to
the procedures for book-entry transfer (and a Book Entry Confirmation received
by the Depositary), in each case, prior to the Expiration Date, or (ii) the
tendering stockholder must comply with the guaranteed delivery procedure set
forth below.
Stockholders whose Share Certificates are not immediately available or who
cannot complete the procedures for book-entry transfer on a timely basis or time
will not permit all required documents to reach the Depositary prior to the
Expiration Date, may tender their Shares pursuant to the guaranteed delivery
procedure set forth in Section 3 of the Offer to Purchase. Pursuant to such
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 the Offeror (or facsimile thereof), must
be received by the Depositary prior to the Expiration Date and (iii) the
certificates for (or a Book-Entry Confirmation with respect to) such Shares,
together with this properly completed and duly executed Letter of Transmittal
(or 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
are received by the Depositary within three trading days after the date of
execution of such Notice of Guaranteed Delivery, all as provided in Section 3 of
the Offer to Purchase. A "trading day" is any day on which the National
Association of Securities Dealers Automated Quotation System, Inc. 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.
THE METHOD OF DELIVERY OF SHARE CERTIFICATES, 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.
SHARE CERTIFICATES 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 execution of
this Letter of Transmittal (or facsimile thereof), waive any right to receive
any notice of the acceptance of their Shares for payment.
8
<PAGE> 9
3. Inadequate Space. If the space provided herein under "Description of
Shares Tendered" is inadequate, the Share Certificate numbers and/or the number
of Shares evidenced by such Share Certificates and the number of Shares tendered
should be listed on a separate schedule attached hereto.
4. Partial Tenders. If fewer than all the Shares evidenced by any Share
Certificate delivered to the Depositary herewith are to be tendered, fill in the
number of Shares which are to be tendered in the box entitled "Number of Shares
Tendered." In such case, new Share Certificate(s) for the remainder of the
Shares that were evidenced by the Share Certificate(s) delivered to the
Depositary herewith will be sent to the person(s) signing this Letter of
Transmittal, unless otherwise provided in the box entitled "Special Delivery
Instructions" on the reverse hereof, as soon as practicable after the expiration
or termination of the Offer. All Shares represented by Share 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 Share Certificate(s) evidencing such shares without any change
whatsoever.
If any of the Shares tendered hereby are owned of record by two or more
joint owners, all such owners must sign this Letter of Transmittal.
If any of the Shares tendered hereby 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 such
Shares.
If this Letter of Transmittal or any certificates or stock powers are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing, and proper evidence
satisfactory to the Offeror of their authority so to act must be submitted.
When this Letter of Transmittal is signed by the registered owner(s) of the
Shares listed and tendered hereby, no endorsements of Share Certificates or
separate stock powers are required unless payment or Share Certificates
evidencing Shares not tendered or not accepted for payment are to be issued in
the name of a person other than the registered holder(s), in which case the
Share Certificate(s) evidencing the Shares tendered hereby 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) or such Share Certificate(s).
Signatures on such Share Certificate(s) or stock powers must be guaranteed by an
Eligible Institution. See Instruction 1.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Shares tendered hereby, the certificates evidencing
the Shares tendered hereby 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 such Share Certificates. Signatures on such Share
Certificate(s) or stock powers must be guaranteed by an Eligible Institution.
See Instruction 1.
6. Stock Transfer Taxes. Except as set forth in this Instruction 6, the
Offeror will pay, or cause to be paid, any stock transfer taxes with respect to
the transfer and sale of Shares to it or its assignee pursuant to the Offer. If,
however, payment of the purchase price of any Shares is to be made to, or if
Share Certificates evidencing Shares not tendered or accepted for payment are to
be issued in the name of, a person other than the registered holder(s), or if
tendered Shares Certificates are registered in the name of a 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 person or
otherwise payable on the account of the transfer to such other person will be
deducted from the purchase price of such Shares purchased, unless evidence
satisfactory to the Offeror 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 Share Certificates
evidencing the Shares tendered hereby.
7. Special Payment and Delivery Instructions. If a check is to be issued
in the name of and/or Shares Certificates not accepted for payment are to be
returned to a person other than the signer of this Letter of Transmittal or if a
check is to be sent and/or such Share Certificates are to be returned to a
person other than
9
<PAGE> 10
the signer of this Letter of Transmittal or to an address other than that shown
in the box entitled "Description of Shares Tendered" on the reverse hereof, the
appropriate boxes on the reverse side of this Letter of Transmittal should be
completed. Any stockholder tendering Shares by book-entry transfer will have any
Shares not accepted for payment returned by crediting the account maintained by
such stockholder at the Book-Entry Transfer Facility from which such transfer
was made.
8. Waiver of Conditions. Except as otherwise provided in the Offer to
Purchase, the Offeror reserves the absolute right, in its sole discretion, to
waive any of the conditions of the Offer or 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.
9. Substitute Form W-9. The tendering stockholder (or other payee) is
required, unless an exemption applies, to provide the Depositary with a correct
Taxpayer Identification Number ("TIN"), generally the stockholder's social
security or federal employer identification number, and with certain other
information, on Substitute Form W-9, which is provided under "Important Tax
Information" below, and to certify under penalties of perjury, that such number
is correct and that the stockholder (or other payee) is not subject to backup
withholding. If a tendering stockholder is subject to backup withholding, he or
she must cross out item (2) of the Certification Box on Substitute Form W-9
before signing such Form. Failure to furnish the correct TIN on the Substitute
Form W-9 may subject the tendering stockholder (or other payee) to a $50 penalty
imposed by the Internal Revenue Service and payments of cash to the tendering
stockholder (or other payee) pursuant to the Offer may be subject to backup
withholding of 31%. If the tendering stockholder has not been issued a TIN and
has applied for a number or intends to apply for a number in the near future, he
or she should write "Applied For" in the space provided for the TIN in Part I,
sign and date the Substitute Form W-9 and sign and date the Certificate of
Awaiting Taxpayer Identification Number. If "Applied For" is written in Part I
and the Depositary is not provided with a TIN by the time of payment, the
Depositary will withhold 31% of all such payments for surrendered Shares
thereafter until a TIN is provided to the Depositary.
10. Lost or Destroyed Certificates. If any Share Certificate has been lost
or destroyed, the stockholder should check the appropriate box on the reverse
side of the Letter of Transmittal. The Company's stock transfer agent will then
instruct such stockholder as to the procedure to be followed in order to replace
the Share Certificate. The stockholder will have to post a surety bond of
approximately 2% of the current market value of the stock. This Letter of
Transmittal and related documents cannot be processed until procedures for
replacing lost or destroyed Share Certificates have been followed.
11. Requests for Assistance or Additional Copies. Questions and requests
for assistance or additional copies of the Offer to Purchase, the 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 at the locations and telephone numbers set
forth below.
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A FACSIMILE COPY THEREOF),
TOGETHER WITH ANY REQUIRED SIGNATURE GUARANTEES, OR IN THE CASE OF A BOOK-ENTRY
TRANSFER, AN AGENT'S MESSAGE, AND SHARE CERTIFICATES, OR A BOOK-ENTRY
CONFIRMATION, FOR SHARES AND ALL OTHER REQUIRED DOCUMENTS MUST BE RECEIVED BY
THE DEPOSITARY, OR THE NOTICE OF GUARANTEED DELIVERY (OR A FACSIMILE COPY
THEREOF) MUST BE RECEIVED BY THE DEPOSITARY, ON OR PRIOR TO THE EXPIRATION DATE.
10
<PAGE> 11
IMPORTANT TAX INFORMATION
Under federal income tax law, a stockholder surrendering Shares must,
unless an exemption applies, provide the Depositary (as payor) with his correct
TIN on Substitute Form W-9 included in this Letter of Transmittal. If the
stockholder is an individual, his TIN is such stockholder's social security
number. If the correct TIN is not provided, the stockholder may be subject to a
$50 penalty imposed by the Internal Revenue Service and payments of cash to the
tendering stockholder (or other payee) pursuant to the Offer may be subject to
backup withholding of 31% of all payments of the purchase price.
Certain stockholders (including, among others, all corporations and certain
foreign individuals and entities) are not subject to backup withholding. In
order for an exempt foreign stockholder to avoid backup withholding, such person
should complete, sign and submit a Form W-8, Certificate of Foreign Status,
signed under penalties of perjury, attesting to his exempt status. A Form W-8
can be obtained from the Depositary. Exempt stockholders, other than foreign
stockholders, should furnish their TIN, write "Exempt" on the face of the
Substitute Form W-9 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 payment made to payee. Backup withholding is not an additional tax.
Rather, the federal income tax liability of persons subject to backup
withholding will be reduced by the amount of tax withheld. If backup 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 his correct TIN (or the TIN of any other
payee) by completing the Substitute Form W-9 included in this Letter of
Transmittal certifying (1) that the TIN provided on the Substitute Form W-9 is
correct (or that such stockholder is awaiting a TIN), and (2) that the
stockholder is not subject to backup withholding because (i) the stockholder has
not been notified by the Internal Revenue Service that the stockholder is
subject to backup withholding as a result of a failure to report all interest
and dividends or (ii) the Internal Revenue Service has notified the stockholder
that the stockholder is no longer subject to backup withholding.
WHAT NUMBER TO GIVE THE DEPOSITARY
The stockholder is required to give the Depositary the TIN, generally the
social security number or employer identification number, of the record holder
of the Shares tendered hereby. 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 number or intends to apply for a
number in the near future, he or she should write "Applied For" in the space
provided for the TIN in Part I, sign and date the Substitute Form W-9 and sign
and date the Certificate of Awaiting Taxpayer Identification Number, which
appears in a separate box below the Substitute Form W-9. If "Applied For" is
written in Part I and the Depositary is not provided with a TIN by the time of
payment, the Depositary will withhold 31% of all payments of the purchase price
for the Shares purchased pursuant to the Offer until a TIN is provided to the
Depositary.
11
<PAGE> 12
PAYER'S NAME: CHASEMELLON SHAREHOLDER SERVICES, AS DEPOSITARY
<TABLE>
<S> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------
PART I -- TAXPAYER IDENTIFICATION NUMBER -- FOR ALL PART II -- FOR PAYEES EXEMPT
SUBSTITUTE ACCOUNTS FROM BACKUP WITHHOLDING, SEE
FORMW-9 THE ENCLOSED GUIDELINES AND
COMPLETE AS INSTRUCTED
THEREIN.
---------------------------------------------------------------------------------------
DEPARTMENT OF THE TREASURY ENTER YOUR TIN IN THE BOX AT RIGHT. (FOR MOST
INTERNAL REVENUE SERVICE INDIVIDUALS, THIS IS YOUR SOCIAL SECURITY NUMBER. SOCIAL SECURITY NUMBER
IF YOU DO NOT HAVE A TIN, SEE OBTAINING A NUMBER IN
THE ENCLOSED GUIDELINES.) CERTIFY BY SIGNING AND OR
DATING BELOW.
NOTE: IF THE ACCOUNT IS IN MORE THAN ONE NAME, SEE EMPLOYEE IDENTIFICATION NUMBER
THE CHART IN THE ENCLOSED GUIDELINES TO DETERMINE (IF AWAITING TIN WRITE "APPLIED FOR")
WHICH NUMBER TO GIVE THE PAYOR.
---------------------------------------------------------------------------------------
PAYER'S REQUEST FOR CERTIFICATION -- UNDER PENALTIES OF PERJURY, I CERTIFY
TAXPAYER IDENTIFICATION THAT:
NUMBER (TIN) (1) THE NUMBER SHOWN ON THIS FORM IS MY CORRECT TAXPAYER
IDENTIFICATION NUMBER (OR I AM WAITING FOR A NUMBER TO
BE ISSUED TO ME), AND
(2) I AM NOT SUBJECT TO BACKUP WITHHOLDING EITHER BECAUSE
(A) I AM EXEMPT FROM BACKUP WITHHOLDING, (B) I HAVE NOT
BEEN NOTIFIED BY THE INTERNAL REVENUE SERVICE (THE
"IRS") THAT I AM SUBJECT TO BACKUP WITHHOLDING AS A
RESULT OF FAILURE TO REPORT ALL INTEREST OR DIVIDENDS,
OR (C) THE IRS HAS NOTIFIED ME THAT I AM NO LONGER
SUBJECT TO BACKUP WITHHOLDING.
CERTIFICATION INSTRUCTIONS -- YOU MUST CROSS OUT ITEM (2)
ABOVE IF YOU HAVE BEEN NOTIFIED BY THE IRS THAT YOU ARE
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 ITEM (2). (ALSO SEE
INSTRUCTIONS IN THE ENCLOSED GUIDELINES.)
SIGNATURE __________ DATE ,199__________
- -----------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN A $50 PENALTY
IMPOSED BY THE INTERNAL REVENUE SERVICE AND 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.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU
WROTE "APPLIED FOR" IN PART I OF SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I CERTIFY UNDER THE PENALTIES OF PERJURY THAT A TAXPAYER IDENTIFICATION
NUMBER HAS NOT BEEN ISSUED TO ME, AND EITHER (A) I HAVE MAILED OR DELIVERED AN
APPLICATION TO RECEIVE A TAXPAYER IDENTIFICATION NUMBER TO THE APPROPRIATE
INTERNAL REVENUE SERVICE CENTER OR SOCIAL SECURITY ADMINISTRATION OFFICE, OR (B)
I INTEND TO MAIL OR DELIVER AN APPLICATION IN THE NEAR FUTURE. I UNDERSTAND THAT
IF I DO NOT PROVIDE A TAXPAYER IDENTIFICATION NUMBER BY THE TIME OF PAYMENT, 31%
OF ALL REPORTABLE PAYMENTS MADE TO ME THEREAFTER WILL BE WITHHELD UNTIL I
PROVIDE A NUMBER.
Signature __________ Date __________
12
<PAGE> 13
[THIS PAGE INTENTIONALLY LEFT BLANK]
13
<PAGE> 14
Questions and requests for assistance or additional copies of the Offer to
Purchase, Letter of Transmittal and other tender offer materials may be directed
to the Dealer Manager and the Information Agent at the locations and telephone
numbers set forth below:
The Information Agent for the Offer is:
BEACON HILL PARTNERS, INC.
90 Broad Street
New York, New York 10004
Banks and Brokers Call Collect (212) 843-8500
All others Call Toll-Free: (800) 301-8755
The Dealer Manager for the Offer is:
BT ALEX. BROWN INCORPORATED
101 California Street, 48th Floor
San Francisco, California 94111
(415) 544-2800 (Call Collect)
or
Call Toll-Free (800) 334-2640
14
<PAGE> 1
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
PROXIMA CORPORATION
AT
$11.00 NET PER SHARE
BY
BD ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY OF
ASK ASA
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON THURSDAY, APRIL 9, 1998, UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
March 13, 1998
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
We have been appointed by BD Acquisition Corp., a Delaware corporation (the
"Offeror") and a wholly owned subsidiary of ASK asa, a company organized under
the laws of the Kingdom of Norway ("Parent"), and by Parent to act as Dealer
Manager in connection with the Offeror's offer to purchase all outstanding
shares (the "Shares") of common stock, par value .001 per share (the "Common
Stock"), of Proxima Corporation, a Delaware corporation (the "Company"), at a
price of $11.00 per Share, net to the seller in cash, without interest, upon the
terms and subject to the conditions set forth in the Offeror's Offer to
Purchase, dated March 13, 1998 (the "Offer to Purchase"), and the related Letter
of Transmittal (which, as amended or supplemented from time to time, together
constitute the "Offer") enclosed herewith. The Offer is being made in connection
with the Agreement and Plan of Merger, dated as of March 8, 1998, by and among
Parent, the Offeror and the Company. 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.
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
copies of the following documents:
1. Offer to Purchase;
2. Letter of Transmittal to tender Shares for your use and for the
information of your clients;
3. Notice of Guaranteed Delivery to be used to accept the Offer if
certificates for Shares are not immediately available or time will not
permit all required documents to reach the Depositary by the Expiration
Date (as defined in the Offer to Purchase) or if the procedure for
book-entry transfer cannot be completed on a timely basis;
4. A letter to stockholders of the Company from Kenneth Olsen,
Chairman, President and Chief Executive Officer of the Company, together
with a Solicitation/Recommendation Statement on Schedule 14D-9 filed with
the Securities and Exchange Commission by the Company;
5. A 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;
<PAGE> 2
6. Guidelines of the Internal Revenue Service for Certification of
Taxpayer Identification Number on Substitute Form W-9; and
7. Return envelope addressed to ChaseMellon Shareholder Services,
L.L.C. (the "Depositary").
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 THURSDAY, APRIL 9, 1998, UNLESS THE OFFER IS EXTENDED.
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) the
certificates evidencing 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), (ii) a letter of Transmittal (or
facsimile thereof), properly completed and duly executed, with any required
signature guarantees, or an Agent's Message (as defined in the Offer to
Purchase) in connection with a book-entry delivery, and (iii) and any other
documents required by the Letter of Transmittal.
If a holder of Shares wishes to tender Shares, but cannot deliver such
holder's certificates or other required documents, or cannot comply with the
procedure for book-entry transfer, prior to the expiration of the Offer, a
tender may be effected by following the guaranteed delivery procedure described
in Section 3 of the Offer to Purchase.
Neither the Offeror nor the Parent will pay any fees or commissions to any
broker, dealer or other person (other than BT Alex. Brown Incorporated (the
"Dealer Manager") and Beacon Hill Partners, Inc. (the "Information Agent") for
soliciting tenders of Shares pursuant to the Offer. However, upon request, the
Offeror will reimburse you for customary mailing and handling expenses incurred
by you in forwarding any of the enclosed materials to your clients. The Offeror
will pay or cause to be paid any stock transfer taxes payable with respect to
the transfer of Shares to it, except as otherwise provided in the Letter of
Transmittal.
Any inquiries you may have with respect to the Offer should be addressed to
the Information Agent or to the Dealer Manager, at the respective addresses and
telephone numbers set forth on the back cover page of the Offer to Purchase.
Additional copies of the enclosed material may be obtained from the
Information Agent at the address and telephone number set forth on the back
cover page of the Offer to Purchase.
Very truly yours,
BT ALEX. BROWN INCORPORATED
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL AUTHORIZE YOU
OR ANY OTHER PERSON TO ACT ON BEHALF OF OR AS THE AGENT OF THE PARENT, THE
OFFEROR, THE COMPANY, THE DEALER MANAGER, THE INFORMATION AGENT OR THE
DEPOSITARY, OR OF ANY AFFILIATE OF ANY OF THEM, OR AUTHORIZE YOU OR ANY OTHER
PERSON TO USE ANY DOCUMENT OR TO MAKE ANY STATEMENT ON BEHALF OF ANY OF THEM IN
CONNECTION WITH THE OFFER OTHER THAN THE ENCLOSED DOCUMENTS AND THE STATEMENTS
CONTAINED THEREIN.
2
<PAGE> 1
OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
PROXIMA CORPORATION
AT
$11.00 NET PER SHARE
BY
BD ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY OF
ASK ASA
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON THURSDAY, APRIL 9, 1998, UNLESS THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
March 13, 1998
To Our Clients:
Enclosed for your consideration are an Offer to Purchase, dated March 13,
1998 (the "Offer to Purchase"), and a related Letter of Transmittal (which, as
amended or supplemented from time to time, together constitute the "Offer")
relating to the offer by BD Acquisition Corp., a Delaware corporation (the
"Offeror") and a wholly owned subsidiary of ASK asa, a company organized under
the laws of the Kingdom of Norway ("Parent"), to purchase all outstanding shares
(the "Shares") of common stock, par value $.001 per share (the "Common Stock"),
of Proxima Corporation, a Delaware corporation (the "Company"), at a price of
$11.00 per Share, net to the seller in cash, without interest, upon the terms
and subject to the conditions set forth in the Offer. The Offer is being made in
connection with the Agreement and Plan of Merger, dated as of March 8, 1998 (the
"Merger Agreement"), by and among Parent, the Offeror and the Company. Also
enclosed is the Letter to Stockholders of the Company from Kenneth Olson,
Chairman, President and Chief Executive Officer of the Company, together with a
Solicitation/Recommendation Statement on Schedule 14D-9 filed with the
Securities and Exchange Commission by the Company.
WE ARE (OR OUR NOMINEE IS) THE HOLDER OF RECORD OF SHARES HELD BY US FOR
YOUR ACCOUNT. A TENDER OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF
RECORD AND PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED
TO YOU FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER SHARES HELD
BY US FOR YOUR ACCOUNT.
Accordingly, we request instructions as to whether you wish to have us
tender on your behalf any or all of the Shares held by us (or our nominee) for
your account, upon the terms and subject to the conditions set forth in the
Offer.
Your attention is invited to the following:
1. The tender price is $11.00 per Share, net to the seller in cash,
without interest.
2. The Offer is being made for all outstanding Shares.
3. The Board of Directors of the Company by a unanimous vote of those
present (one member being absent from the meeting) has determined that the
Merger Agreement and the transactions contemplated thereby, including the
Merger and the Offer, taken together, are fair to and in the best interests
of the stockholders of the Company and recommends that the stockholders of
the Company accept the Offer and tender their Shares to the Purchaser
pursuant to the Offer.
<PAGE> 2
4. The Offer and withdrawal rights will expire at 12:00 midnight, New
York City time, on Thursday, April 9, 1998, unless the Offer is extended.
5. Tendering stockholders will not be obligated to pay brokerage fees
or commissions or, except as otherwise provided in the Letter of
Transmittal, stock transfer taxes with respect to the purchase of Shares by
the Offeror pursuant to the Offer. However, U.S. federal income tax backup
withholding at a rate of 31% may be required, unless an exemption is
provided or unless the required taxpayer identification information is
provided. See Instruction 9 of the Letter of Transmittal.
If you wish to have us tender any or all of your Shares, please so instruct
us by completing, executing, detaching and returning to us the instruction form
contained in this letter. An envelope in which 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 in your instructions. 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.
The Offer is made solely by the Offer to Purchase and the related Letter of
Transmittal and any supplements or amendments 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 laws
of such jurisdiction. In any jurisdiction where the 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 Offeror by BT Alex. Brown
Incorporated or one or more registered brokers or dealers licensed under the
laws of such jurisdiction.
2
<PAGE> 3
INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
PROXIMA CORPORATION
BY
BD ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY OF
ASK ASA
The undersigned acknowledge(s) receipt of your letter and the enclosed
Offer to Purchase, dated March 13, 1998, and the related Letter of Transmittal
(which, as amended or supplemented from time to time, together constitute the
"Offer") in connection with the offer by BD Acquisition Corp., a Delaware
corporation and a wholly owned subsidiary of ASK asa, a company organized under
the laws of the Kingdom of Norway, to purchase all outstanding shares (the
"Shares") of common stock, par value $.001 per share (the "Common Stock"), of
the Company.
This will instruct you to tender the number of Shares indicated below (or,
if no number is indicated below, all Shares) that are held by you for the
account of the undersigned, upon the terms and subject to the conditions set
forth in the Offer.
Dated:
- ------------------------------, 1998
Number of Shares to be Tendered:
- ------------------shares of Common Stock*
SIGN HERE
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
Signature(s) of Holder(s)
Name(s) of Holder(s)
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
Please Type or Print
- --------------------------------------------------------------------------
Address
- --------------------------------------------------------------------------
Zip Code
- --------------------------------------------------------------------------
Area Code and Telephone Number
- --------------------------------------------------------------------------
Taxpayer Identification or Social Security Number
- ---------------
* Unless otherwise indicated, it will be assumed that all Shares held by us for
your account are to be tendered.
3
<PAGE> 1
THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you
are in any doubt as to the action to be taken, you should seek your own
financial advice immediately from your own appropriately authorized independent
financial advisor.
If you have sold or transferred all of your registered holdings of Common
Stock of Proxima Corporation, please forward this document and all accompanying
documents to the stockbroker, bank or other agent through whom the sale or
transfer was effected, for submission to the purchaser or transferee.
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK
OF
PROXIMA CORPORATION
PURSUANT TO THE OFFER TO PURCHASE
DATED MARCH 13, 1998
TO
BD ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY OF
ASK ASA
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
This Notice of Guaranteed Delivery, or one substantially in the form
hereof, must be used to accept the Offer (as defined below) if certificates
evidencing shares (the "Shares") of common stock, par value $.001 per share (the
"Common Stock"), of Proxima Corporation, a Delaware corporation (the "Company"),
are not immediately available or time will not permit all required documents to
reach ChaseMellon Shareholder Services, L.L.C., as Depositary (the
"Depositary"), prior to the Expiration Date (as defined in Section 1 of the
Offer to Purchase (as defined below)) or the procedure for delivery by
book-entry transfer cannot be completed on a timely basis. This Notice of
Guaranteed Delivery may be delivered by hand or transmitted by telegram,
facsimile transmission or mail to the Depositary. See Section 3 of the Offer to
Purchase.
THE DEPOSITARY FOR THE OFFER IS:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
<TABLE>
<S> <C> <C>
By Mail: By Hand: By Overnight Delivery:
ChaseMellon Shareholder ChaseMellon Shareholder ChaseMellon Shareholder
Services, L.L.C. Services, L.L.C. Services, L.L.C.
Post Office Box 3301 120 Broadway, 13th Floor 85 Challenger Road -- Mail
Drop -- Reorg.
South Hackensack, NJ 07606 New York, NY 10271 Ridgefield Park, NJ 07660
Attn: Reorganization Attn: Reorganization Attn: Reorganization
Department Department Department
By Facsimile Transmission: Confirm Receipt of Facsimile
(For Eligible Institutions Only) by Telephone:
(201) 329-8936 (201) 296-4860
</TABLE>
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE, AND TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION
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.
Shares may not be tendered pursuant to the Guaranteed Delivery Procedures.
<PAGE> 2
Ladies and Gentlemen:
The undersigned hereby tenders to BD Acquisition Corp., a Delaware
corporation and a wholly owned subsidiary of ASK asa, a company organized under
the laws of the Kingdom of Norway, upon the terms and subject to the conditions
set forth in the Offer to Purchase, dated March 13, 1998 (the "Offer to
Purchase"), and the related Letter of Transmittal (which, as amended or
supplemented from time to time, together constitute the "Offer"), receipt of
each of which is hereby acknowledged, the number of Shares specified below
pursuant to the guaranteed delivery procedure described in Section 3 of the
Offer to Purchase.
PLEASE CHECK RELEVANT BOX BELOW
Certificate Nos. of Shares (if available):
Common Stock, par value $.001
Certificate Nos.
Number of Shares Tendered [ ]
Name(s) of Record Holder(s)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Please Type or Print
- -------------------------------------------------------------------------------
Address(es):
- -------------------------------------------------------------------------------
Zip Code
Area Code and Tel. No.:--------------------------------------------------------
Signature(s):------------------------------------------------------------------
Dated:-------------------------------------------------------------------------
[ ] Check here if Shares will be delivered by book-entry transfer.
Account No.:__________________
2
<PAGE> 3
GUARANTEE
(NOT TO BE USED FOR THE SIGNATURE GUARANTEE)
The undersigned, an Eligible Institution (as defined in the Offer to
Purchase), hereby guarantees delivery to the Depositary, at one of its addresses
set forth above, certificates ("Share Certificates") evidencing the Shares
tendered hereby, in proper form for transfer, or confirmation of book-entry
transfer of such Shares into the Depositary's account at the Depositary Trust
Company with delivery of a Letter of Transmittal (or facsimile thereof) properly
completed and duly executed, or an Agent's Message (as defined in the Offer to
Purchase) in the case of a book-entry delivery, and any other required
documents, all within three days on which the National Association of Securities
Dealers Automated Quotation System, Inc. is open for business after the date
hereof.
The Eligible Institution that completes this form must communicate the
guarantee to the Depositary and must deliver the Letter of Transmittal and Share
Certificates to the Depositary within the time period shown herein. Failure to
do so could result in a financial loss to such Eligible Institution.
- -------------------------------------------------------------------------------
NAME OF FIRM
- -------------------------------------------------------------------------------
ADDRESS
- -------------------------------------------------------------------------------
ZIP CODE
- -------------------------------------------------------------------------------
AREA CODE AND TELEPHONE NUMBER
- -------------------------------------------------------------------------------
AUTHORIZED SIGNATURE
TITLE: ------------------------------------------------------------------------
NAME: -------------------------------------------------------------------------
PLEASE TYPE OR PRINT
DATED: -------------, 199 _
DO NOT SEND SHARE CERTIFICATES WITH THIS NOTICE.
SHARE CERTIFICATES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.
3
<PAGE> 1
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, e.g.,
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen, e.g., 00-0000000. The table below will help determine the number to
give the payer.
------------------------------------------------------------------
<TABLE>
<S> <C> <C>
FOR THIS TYPE OF ACCOUNT: GIVE THE SOCIAL SECURITY
NUMBER OF --
- --------------------------------------------------------------
1. An individual's account The individual
2. Two or more individuals The actual owner of the
(joint account) account or, if combined
funds, the first individual
on the account(1)
3. Custodian account of a The minor(2)
minor (Uniform Gift to
Minors Act)
4. Custodian account of a The minor (2)
minor (Uniform Gift to
Minors Act)
5. Adult and minor (joint The adult or, if the minor
account) is the only contributor, the
minor (1)
6. Account in the name of The ward, minor, or in-
guardian or committee for competent person (3)
a designated ward, minor,
or incompetent person
7. a. A revocable savings The actual owner(1)
trust account (in which
grantor is also
trustee) The actual owner(1)
b. Any "trust" account
that is not a legal or
valid trust under
State law
- --------------------------------------------------------------
GIVE THE EMPLOYER
FOR THIS TYPE OF ACCOUNT: IDENTIFICATION NUMBER OF --
- --------------------------------------------------------------
8. Sole proprietorship The owner(4)
account
9. A valid trust, estate or The legal entity (do not
pension furnish the identifying
number of the personal
representative or trustee
unless the legal entity
itself is not designated in
the account title) (5)
10. Corporate account The corporation
11. Religious, charitable or The organization
educational organization
account
12. Partnership account held The partnership
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 Depart- The public entity
ment 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 person whose number you furnish.
(2) Circle the minor's name and furnish the minor's Social Security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show the name of the owner. If the owner does not have an employer
identification number, furnish the owner's social security number.
(5) List first and circle the name of the legal trust, estate, or pension trust.
NOTE: IF NO NAME IS CIRCLED WHEN THERE IS MORE THAN ONE NAME, THE NUMBER WILL BE
CONSIDERED TO BE THAT OF THE FIRST NAME LISTED.
<PAGE> 2
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you do not have a taxpayer identification number or you do not know your
number, obtain form SS-5, Application for a Social Security Number Card (for
resident individuals), Form SS-4, Application for Employer Identification Number
(for businesses and all other entities), or Form W-7 for International Taxpayer
Identification Number (for alien individuals required to file U.S. tax returns),
at an office of the Social Security Administration or the Internal Revenue
Service.
To complete Substitute Form W-9, if you do not have a taxpayer identification
number, write "Applied For" in the space for the taxpayer identification number
in Part I, sign and date the Form, and give it to the requester. Generally, you
will then have 60 days to obtain a taxpayer identification number and furnish it
to the requester. If the requester does not receive your taxpayer identification
number within 60 days, backup withholding, if applicable, will begin and will
continue until you furnish your taxpayer identification number to the requester.
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, or a custodial account under section 403(b)(7).
- - The United States or any agency or instrumentality thereof.
- - A state, the District of Columbia, a possession of the United States, or any
political subdivision or instrumentality thereof.
- - A foreign government or a political subdivision, agency or instrumentality
thereof.
- - An international organization or any agency or instrumentality thereof.
- - A registered dealer in securities or commodities registered in the United
States or a possession of the United States.
- - 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 during the tax year under the Investment
Company Act of 1940.
- - A foreign central bank of issue.
- ---------------
* Unless otherwise noted herein, all references below to section numbers or to
regulations are references to the Internal Revenue Code and the regulations
promulgated thereunder.
EXEMPT PAYEES DESCRIBED ABOVE SHOULD FILE A SUBSTITUTE 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,
SIGN AND DATE THE FORM AND RETURN IT TO THE PAYER.
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 NOTICES. Section 6109 requires most recipients of dividends,
interest or other payments to give taxpayer identification numbers to payers who
must report the payments to the IRS. The IRS uses the numbers for identification
purposes and to help verify the accuracy of your tax return. Payers must be
given the numbers whether or not recipients are required to file tax returns.
Payers must generally withhold 31% of taxable interest, dividends, and certain
other payments to a payee who does not furnish a taxpayer identification number
to a payer. Certain penalties may also apply.
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 United
States 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 (i) this interest is $600 or more, and (ii)
the interest is paid in the course of the payer's trade or business and (iii)
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 non-resident aliens.
- - Payments on tax-free covenant bonds under section 1451.
- - Payments made by certain foreign organizations.
- - Payments made to a nominee.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER. -- If you
fail to furnish your taxpayer identification number to a payer, you are subject
to a penalty of $50 for each such failure unless your failure is due to
reasonable cause and not to willful neglect.
(2) CIVIL PENALTY FOR FALSE STATEMENTS WITH RESPECT TO WITHHOLDING. -- If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION. -- If you falsify
certifications or affirmations, you are subject to criminal penalties including
fines and/or imprisonment.
(4) 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 and such failure is due to negligence, a
penalty of 20% is imposed on any portion of any underpayment attributable to the
failure.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE.
<PAGE> 1
Exhibit (a)(7)
PRESS RELEASE
ASK asa announces take-over bid for Proxima Corporation
Today, ASK asa announced a cash tender offer for all issued stock in the US
company, Proxima listed on NASDAQ, USA (Symbol: PRXM). During 1997, Proxima
reported revenues of USD 133.3 billion (NOK 1,000 million). The main intention
of the acquisition is to strengthen ASK's distribution and presence in the US
marketplace.
The tender offer is USD 11 per share, and the total value of the transaction is
USD $4 million or NOK 630 million. The tender offer is conditional upon
acceptance by minimum 50% of Proxima's shareholders, as well as approval by the
American authorities. The Board of Proximal unanimously recommend its
stockholders to accept the offer.
The technical framework for the tender offer is as a merger agreement between
Proxima and a wholly owned subsidiary of ADK which has been established for
this purpose. All shareholders will be tendered at the same share prices as
long as minimum 50% accept the presented tender offer. The acquisition is
financed by a combination of ASK funds and bank loans. The merger schedule
provides for Proxima as a wholly-owned subsidiary of ASK, and the intention is
to delist Proxima from NASDAQ. On Friday 6 March, Proxima's final quotation was
USD $ 5/16, making ASK's offer a bid premium of 32% above the final quotation.
This offer will be sent to Proxima's shareholders on 13 March and the offer
will expire on 10 April.
In his statement, Managing Director Ole J. Fredriksen of ASK asa says "The
acquisition of Proxima represents a unique opportunity to create a global
market leader within multimedia projector's. The combination of the
well-established Proxima trademark in the American market, in conjunction with
ASK's product portfolio, will lead to a stronger and more profitable unit. The
two companies have complimentary strengths and the merged company will become
one of the dominating players within the fast growing presentation industry. We
have great expectations to the opportunities that Proxima's distribution
channels will represent in future, so that we can be a part of the significant
growth which is taking place in the US marketplace."
Ken E. Olson, Chairman of the Board and Managing Director at Proxima, states,
"The merger of the two companies will create the second largest player in the
global market for multimedia projectors. In time, we will have the possibility
of becoming the market leader, since this merger provides strategic advantages
in both marketing and technology. Together, the two companies feature an unique
combination of strengths. ASK's special skills lie in system and hardware
design, while Proxima's lie in software and peripheral products. Proxima enjoys
a well-established brand name in USA and a strong position in the market, while
ASK has an equivalent position in Europe. These two markets are the most
important today.
<PAGE> 2
About PROXIMA
Proxima was established in 1982, and is one of the market leaders within
multimedia projectors, offering products to the professional market. Proxima
markets and distributes a product portfolio of easy-to-use lightweight portable
projectors featuring high resolution graphics. The company also markets LCD
overhead panels. The company's financial year does not follow the calendar
year, and in the calendar year of 1997 it reported revenues of USD 133.3
million (NOK 1,000 million). At the end of the 3rd financial quarter, which
closed 31 December 1997, the company reported a net loss of USD 1.4 million.
Proxima implemented a turn-round operation at turn of year 1996/1997, and show
that they are now on the right course with sales of USD 68 million and pre-tax
profits of USD 1.3 million for the last two quarters. The sales were
distributed as follows: USA/Canada 73%, Europe 14% and Asia 13%. The company is
based in San Diego, California, USA. Proxima's website can be visited at
http://www.proxima.com.
- ----------------------
About ASK
ASK was established in 1984, and was listed on the Oslo Stock Exchange in
August 1996 after its demerger from Tandberg Data asa. ASK develops, markets
and manufactures a varied product portfolio ranging from ultra portable to
portable and permanent installation projectors. The projectors are used for
data and video based presentations. ASK has focused on the ultra portable
segment, and the higher and of the market. ASK has achieved a leading position
by focusing on continual product improvement as well as by offering the market
products based round differing technological platforms. In 1997, the company
reported revenues of NOK 604 millions (USD 80.5 million), distributed as
follows: Europe 69%, USA/Canada 16% and Asia 15%. The company is based in
Fredrikstad, Norway. ASK's website can be visited at hhttp://www.ask.no.
------------------
About the market
The multimedia projector market is in a state of rapid growth, with an annual
volume growth of 35% according to Pacific Media Associates. They expect a total
market value of USD 2.5 billion by the end of 1998. In 1997, around 330,000
units were sold world wide. In comparison, during the same period 65-70 million
PC's were sold. The growth in the projector market has been fuelled by several
factors, including the increased acceptance of the productivity improvements
which are taking place in electronic presentations.
The market is also being heavily fuelled by increased sales of notebooks, PC's
and workstations, as well as continual improvements in presentation and
multimedia applications. Software houses are also continually prompting their
products (including Microsoft's PowerPoint, Lotus Freelance Graphics,
Macromedia Director, Software Publishing's Harvard Graphics). Multiplication of
the distribution channels for projectors increases availability of the products,
and at the same time the introduction of ultra portable projectors (weighing
3-5 kg.) as a sales tool fuels the process of establishing a new market
segment.
Fredrikstad, 9 March 1998
Contacts:
Ole J. Fredriksen Ken. E. Olsen
47 69 34 01 55/ 47 23 11 36 00 1 619 457 5500
ASK ass Proxima Corporation
<PAGE> 1
Exhibit (a)(8)
PROXIMA
Contact: Dennis Whittler
Vice President, Finance
Chief Financial Officer
(619) 638-2786
FOR IMMEDIATE RELEASE
PROXIMA CORPORATION SIGNS MERGER AGREEMENT WITH ASK asa
San Diego, California, March 8, 1998 -- Proxima Corporation
(NASDAQ:PRXM) announced today that it has entered into a definitive merger
agreement with ASK asa, pursuant to which ASK will acquire all of the shares of
Proxima for $11 per share, or approximately $84 million in cash. ASK will
commence a tender offer within five business days. Completion of the tender
offer is subject to a majority of the shares on a fully-diluted basis being
tendered and other customary conditions. The tender offer will be followed as
promptly as possible by a merger in which any untendered shares of Proxima
stock will be converted into the right to receive $11 per share in cash.
Based in Fredrikstad, Norway, ASK is a leading manufacturer of
multimedia projection equipment. ASK is publicly traded and listed on the Oslo
Stock Exchange. Under the terms of the agreement, Proxima will become a
wholly-owned subsidiary of ASK.
Commenting on the merger agreement, Kenneth E. Olson, chairman,
president and CEO of Proxima, and Ole J. Fredriksen, president of ASK, stated
that "this merger will create a strong competitor in the worldwide market for
data-capable multimedia projectors. Proxima's powerful brand name and strong
market position in the Americas are complementary to ASK's leadership position
in Europe. This merger offers strategic opportunities for both technologies and
marketing. We believe that this is a very synergistic combination of strengths
which will give us the capability to challenge for the leadership position in
our market."
Mr. Olson will become an advisory member of ASK's board of directors
and will continue as the chairman, CEO and president of Proxima. Mr. Fredriksen
will join the Proxima board.
For the twelve months ended December 31, 1997, Proxima reported
revenues of $133.3 million, while ASK reported revenues of $82.0 million.
<PAGE> 2
PROXIMA CORPORATION SIGNS MERGER AGREEMENT
Page 2 of 2
Proxima was advised by Broadview Associates LLC. ASK was advised by BT
Alex. Brown Inc., which will serve as dealer manager for the tender offer.
The statements contained in this release regarding the expected
completion of the merger, the synergistic integration of the combined
companies, and the leadership position and market strength of the combined
companies constitute "forward-looking" statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Such forward-looking
statements involve risks and uncertainties that could cause actual results to
differ materially from those in the forward-looking statements. Potential risks
and uncertainties include, but are not limited to, such factors as the possible
objection of regulatory authorities, adverse economic and business conditions
in the electronics industry, reduced demand for the products of the combined
companies, the inability of the companies to consummate the merger for whatever
reason, difficulties in managing the integration for the two companies,
supplier and/or customer disruption caused by the merger, and other risks and
uncertainties described in reports and other documents filed by Proxima from
time to time with the SEC. Any of the companies' assumptions could prove
inaccurate, and therefore, there can be no representation that the
forward-looking information will prove to be accurate.
<PAGE> 1
Exhibit (a)(9)
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 solely
by the Offer to Purchase, dated March 13, 1998 (the "Offer to Purchase"), and
the related Letter of Transmittal 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 laws of such
jurisdiction or any administrative or judicial action pursuant thereto. In any
jurisdiction 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 (as defined below) by BT Alex. Brown Incorporated (the
"Dealer Manager") or one or more registered brokers or dealers licensed under
the laws of such jurisdiction.
NOTICE OF OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
OF
PROXIMA CORPORATION
AT
$11.00 NET PER SHARE
BY
BD ACQUISITION CORP.
A WHOLLY OWNED SUBSIDIARY OF
ASK ASA
BD Acquisition Corp., a Delaware corporation (the "Purchaser") and a
wholly owned subsidiary of ASK asa, a corporation organized under the laws of
the Kingdom of Norway ("Parent"), is offering to purchase all of the issued and
outstanding shares (the "Shares") of common stock, par value $.001 per share
(the "Common Stock"), of Proxima Corporation, a Delaware corporation (the
"Company"), for $11.00 per Share, net to the seller in cash (the "Offer Price"),
upon the terms and subject to the conditions set forth in 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 will not be obligated to pay brokerage fees or commissions or,
except as set forth in Instruction 6 of the Letter of Transmittal, transfer
taxes on the purchase of Shares pursuant to the Offer. The Purchaser is offering
to acquire all Shares as a first step in acquiring the entire equity interest in
the Company. Following 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 THURSDAY, APRIL 9, 1998, UNLESS THE OFFER IS EXTENDED.
The Offer is being made pursuant to an Agreement and Plan of Merger, dated
March 8, 1998 (the "Merger Agreement"), by and among Parent, the Purchaser and
the Company, pursuant to which, as soon as practicable after the completion of
the Offer and satisfaction or waiver, if permissible, of all conditions to the
Merger (as defined below), the Purchaser will be merged with and into the
Company and the separate corporate existence of the Purchaser will thereupon
cease. The merger, as effected pursuant to the immediately preceding sentence,
is referred to herein as the "Merger," and the Company as the surviving
corporation of the Merger is sometimes herein referred to as the "Surviving
Corporation." At the effective time of the Merger (the "Effective Time"), each
share of Common Stock then outstanding (other than Shares held by Parent or any
of its subsidiaries or by the Company as treasury stock and Shares held by
stockholders who properly perfect their appraisal rights under Delaware law)
will be canceled and retired and converted into the right to receive the Offer
Price, in cash payable to the holder thereof without interest.
THE BOARD OF DIRECTORS OF THE COMPANY HAS BY A UNANIMOUS VOTE OF THOSE
PRESENT DETERMINED THAT THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED
THEREBY, INCLUDING THE OFFER AND THE MERGER, TAKEN TOGETHER, ARE FAIR TO AND IN
THE BEST INTERESTS OF THE STOCKHOLDERS OF THE COMPANY AND RECOMMENDS THAT THE
STOCKHOLDERS OF THE COMPANY ACCEPT THE OFFER AND TENDER THEIR SHARES TO THE
PURCHASER PURSUANT TO THE OFFER.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE BEING VALIDLY
TENDERED AND NOT WITHDRAWN, IN ACCORDANCE WITH THE TERMS OF THE OFFER AND PRIOR
TO THE EXPIRATION OF THE OFFER, A NUMBER OF SHARES OF COMMON STOCK WHICH
REPRESENTS (TOGETHER WITH ANY SHARES OF COMMON STOCK PURCHASED BY THE PURCHASER
UNDER THE OPTION AGREEMENT) AT LEAST A MAJORITY OF THE SHARES OF COMMON STOCK
OUTSTANDING ON A FULLY DILUTED BASIS (THE "MINIMUM CONDITION"). THE PURCHASER
WILL NOT BE REQUIRED TO ACCEPT FOR PAYMENT OR PAY FOR ANY TENDERED SHARES UNTIL
THE EXPIRATION OF ALL APPLICABLE WAITING PERIODS UNDER THE HART-SCOTT-RODINO
ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED. THE OFFER IS ALSO SUBJECT TO
OTHER TERMS AND CONDITIONS DESCRIBED IN SECTION 14 OF THE OFFER TO PURCHASE. As
used herein "fully diluted basis" takes into account the conversion or exercise
of all outstanding options (other than the Option (as defined below)) and other
rights and securities exercisable or convertible into shares of Common Stock. If
at any scheduled expiration date of the Offer, the Minimum Condition or any
other condition of the Offer has not been satisfied or waived by the Purchaser,
at the written request of the Company delivered no later than the scheduled
expiration date of the Offer, the Purchaser is required to extend the Offer from
time to time for one or more periods of not more than five business days each,
but in no event later than May 5, 1998.
As a condition and inducement to Parent and the Purchaser to enter into
the Merger Agreement, concurrently with the execution and delivery of the Merger
Agreement, the Purchaser, Parent and the Company entered into an Option
Agreement, dated March 8, 1998 (the "Option Agreement"), pursuant to which, upon
the terms set forth therein, the Company granted to the Purchaser an irrevocable
option (the "Option") to purchase up to an aggregate number of shares of Common
Stock that equals 19.9% of the aggregate Shares then outstanding at a purchase
price per Option Share equal to the Offer Price, subject to the terms and
conditions set forth in the Option Agreement. The Option will expire on the
earliest of (i) the Effective Time, (ii) the termination of the Merger Agreement
pursuant to certain sections thereof and (iii) to the extent no written notice
to exercise the Option has been given by the Purchaser, three months after any
other termination of the Merger Agreement.
As a condition and inducement to Parent and the Purchaser to enter into
the Merger Agreement, all of the Company's current directors (the
"Stockholders"), who have voting power and dispositive power with respect to an
aggregate of 219,796 Shares, concurrently with the execution and delivery of the
Merger Agreement entered into a Stockholders Agreement, dated March 8, 1998 (the
"Stockholders Agreement"), with Parent and the Purchaser. Pursuant to the
Stockholders Agreement, the Stockholders have agreed, among other things, to (i)
tender the Shares held by them in the Offer, (ii) grant the Purchaser an option
to buy the Shares held by them at any time after the Offer is consummated and
prior to the termination of the Stockholders Agreement and (iii) grant Parent an
irrevocable proxy with respect to the voting of such Shares in favor of the
Merger and against any action or agreement that would impede, interfere with or
prevent the Merger. With certain exceptions, all of the rights and obligations
of the parties under the Stockholders Agreement will terminate upon the earlier
of (i) the acquisition by Parent, through Purchaser or otherwise, of all of the
Shares, (ii) the termination of the Merger Agreement in accordance with its
terms and (iii) the Effective Time.
For the purposes of the Offer, the Purchaser will be deemed to have
accepted for payment, and thereby purchased, Shares properly tendered to the
Purchaser and not withdrawn as of and when the Purchaser gives oral or written
notice to ChaseMellon Shareholder Services, L.L.C. (the "Depositary") of the
Purchaser's acceptance for payment of such Shares. Upon 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 therefor with the
Depositary, which will act as agent for tendering stockholders for the purposes
of receiving payment from the Purchaser and transmitting payment to tendering
stockholders. In all cases, payment for Shares accepted for payment pursuant to
the Offer will be made only after timely receipt by the Depositary of (i)
certificates for such Shares (or a timely Book-Entry Confirmation (as defined in
the Offer to Purchase) with respect thereto), (ii) a Letter of Transmittal (or
facsimile thereof), properly completed and duly executed, with any 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. The per share consideration paid to any
holder of a Share pursuant to the Offer will be the highest per share
consideration paid to any other holder of Shares pursuant to the Offer. UNDER NO
CIRCUMSTANCES WILL INTEREST BE PAID ON THE PURCHASE PRICE TO BE PAID BY THE
PURCHASER FOR THE TENDERED SHARES, REGARDLESS OF ANY EXTENSION OF THE OFFER OR
ANY DELAY IN MAKING SUCH PAYMENT. Except as otherwise provided in the Offer to
Purchase, tenders of Shares are irrevocable. Shares tendered pursuant to the
Offer may be withdrawn pursuant to the procedures set forth below at any time
prior to the Expiration Date (as defined in the Offer to Purchase) and, unless
theretofore accepted for payment and paid for by the Purchaser pursuant to the
Offer, may also be withdrawn at any time after May 11, 1998, as described in
Section 4 of the Offer to Purchase.
For a withdrawal 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 and
must specify the name of the person having tendered the Shares to be withdrawn,
the number of Shares to be withdrawn and the name of the registered holder of
the Shares to be withdrawn, if different from the name of the person who
tendered the Shares. If certificates for Shares have been delivered or otherwise
identified to the Depositary, then, prior to the physical release of such
certificates, the serial numbers shown on such certificates must be submitted to
the Depositary and, unless such Shares have been tendered by an Eligible
Institution (as defined in Section 3 of the Offer to Purchase), the signatures
on the notice of withdrawal must be guaranteed by an Eligible Institution. If
Shares have been delivered pursuant to the procedures for book-entry transfer as
set forth in Section 3 of the Offer to Purchase, any notice of withdrawal must
also specify the name and number of the account at the appropriate Book-Entry
Transfer Facility (as defined in the Offer to Purchase) to be credited with the
withdrawn Shares and otherwise comply with such Book-Entry Transfer Facility's
procedures. Withdrawals of tenders of Shares may not be rescinded, and any
Shares properly withdrawn will thereafter be deemed not validly tendered for
purposes of the Offer. However, withdrawn Shares may be tendered again by
following one of the procedures described in Section 3 of the Offer to Purchase
any time prior to the Expiration Date.
The term "Expiration Date" shall mean 12:00 Midnight, New York City time,
on Thursday, April 9, 1998, unless and until the Purchaser, in accordance with
the terms of the Offer, shall have extended the period of time during 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.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by the Purchaser, in its sole
discretion, which determination will be final and binding. None of the
Purchaser, Parent, the Depositary, Beacon Hill Partners, Inc. (the "Information
Agent"), the Dealer Manager 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 any such notification.
Subject to the terms of the Merger Agreement, the Purchaser expressly
reserves the right, in its sole discretion, at any time or from time to time, to
extend the period of time during which the Offer is open and thereby delay
acceptance for payment of, and the payment for, any Shares, by giving oral or
written notice of such extension to the Depositary and by making a public
announcement of such extension by no later than 9:00 a.m. New York City time on
the next business day after the previously scheduled expiration date. During any
such extension, 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.
The information required to be disclosed by paragraph (e)(1)(vii) of Rule
14d-6 under the Securities Exchange Act of 1934, as amended, is contained in the
Offer to Purchase and is incorporated herein by reference.
The Company has provided the Purchaser with the Company's stockholder
lists and security position listings for the purpose of disseminating the Offer
to holders of Shares. The Offer to Purchase, the related Letter of Transmittal
and other relevant documents will be mailed by the Purchaser to record holders
of Shares, and will be furnished by the Purchaser to brokers, dealers,
commercial 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 Shares.
THE OFFER TO PURCHASE AND THE LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION AND SHOULD BE READ IN THEIR ENTIRETY BEFORE ANY DECISION IS MADE
WITH RESPECT TO THE OFFER.
Questions and requests for assistance or additional copies of the Offer to
Purchase, Letter of Transmittal and other tender offer documents may be directed
to the Information Agent or the Dealer Manager at the respective addresses and
telephone numbers set forth below, and copies will be furnished at the
Purchaser's expense. The Purchaser will not pay any fees or commissions to any
broker or dealer or other person (other than the Information Agent, Depositary
and Dealer Manager) for soliciting tenders of Shares pursuant to the Offer.
The Information Agent for the Offer is:
BEACON HILL PARTNERS, INC.
90 Broad Street
New York, New York 10004
(212) 843-8500 (Call Collect)
or
Call Toll-Free (800) 755-5001
The Dealer Manager for the Offer is:
BT ALEX. BROWN INCORPORATED
101 California Street, 48th Floor
San Francisco, California 94111
(415) 544-2800 (Call Collect)
or
Call Toll-Free (800) 334-2640
March 13, 1998
<PAGE> 1
Exhibit (a)(10)
FINANCIAL STATEMENTS OF PARENT
AUDIT REPORT FOR 1996
We have audited the financial statements for ASK asa for 1996, showing a
loss for the year of NOK 1,018,000 for the parent company and an annual profit
of NOK 50,031,000 for the group. The financial statements, consisting of the
Board of Directors' report, profit and loss account, balance sheet, cash flow
statement, notes and consolidated financial statements, have been presented by
the company's Board of Directors and its managing director.
Our responsibility is to examine the company's financial statements, the
accounts and accounting records and other related matters.
We have performed the audit in accordance with the relevant laws,
regulations and generally accepted auditing standards. We have performed the
audit procedures which we have considered necessary in order to confirm that the
annual report and accounts do not contain material errors or misstatements. We
have examined on a sample basis the evidence supporting the accounting items and
assessed the accounting principles applied, the estimates made by management and
the overall financial statements' content and presentation. To the extent it is
required by generally accepted auditing standards we have reviewed the company;s
management routines and internal control.
The Board's proposed disposition of the net loss and equity transfers is
in the accordance with the requirements of the Joint Stock Companies' Act.
In our opinion the financial statements are prepared in accordance with
the Joint Stock Companies' Act and present fairly the financial position of the
company and the group pr. December 31, 1996 and the result of the operations in
the accounting year in compliance with generally accepted accounting principles.
Fredrikstad, 3 March 1997
Coopers & Lybrand ANS
/s/ Jens-Erik Huneide
- ----------------------------------
Jens-Erik Huneide
State Authorized Public Accountant
<PAGE> 2
[Letterhead of Coopers & Lybrand ANS]
To the Annual General Meeting
ASK AS
AUDIT REPORT FOR 1995 (TRANSLATION FROM NORWEGIAN)
We have audited the financial statements for ASK AS for 1995, showing a profit
for the year of NOK 23,660,960. The financial statements, consisting of the
Board of Directors' report, profit and loss account, balance sheet, cash flow
statement and notes, have been presented by the company's Board of Directors and
its managing director.
Our responsibility is to examine the company's financial statements, the
accounts and accounting records and other related matters.
We have performed the audit in accordance with the relevant laws, regulations
and generally accepted auditing standards. We have performed the audit
procedures which we have considered necessary in order to confirm that the
annual report and accounts do not contain material errors or misstatements. We
have examined on a sample basis the evidence supporting the accounting items and
assessed the accounting principles applied, the estimates made by management and
the overall financial statements' content and presentation. To the extent it is
required by generally accepted auditing standards we have reviewed the company's
management routines and internal control.
The Board's proposed disposition of the net profit and equity transfers is in
accordance with the requirements of the Joint Stock Companies' Act.
In our opinion the financial statements are prepared in accordance with the
Joint Stock Companies' Act and present fairly the financial position of the
company for December 31, 1995 and the result of the operations in the accounting
year in compliance with generally accepted accounting principles.
Fredrikstad, April 23, 1996
Coopers & Lybrand ANS
/s/ Tom Svendsen
- -----------------------------------
Tom Svendsen
Statsautorisert revisor
(State Authorized Public Accountant)
2
<PAGE> 3
We consent to the inclusion in this filing with the Securities and Exchange
Commission on Schedule 14D of our reports under the dates, March 3, 1997 and
April 23, 1996, on our audits for the consolidated financial statements of ASK
asa for each of two years in the period ended December 31, 1996.
/s/ Coopers & Lybrand ANS
------------------------------------
COOPERS & LYBRAND ANS
Fredrikstad, Norway
March 13, 1998
3
<PAGE> 4
ASK GROUP, PROFIT AND LOSS ACCOUNT
<TABLE>
<CAPTION>
Pro forma
NOTE Amounts in NOK 1,000 1996 1995
- --------------------------------------------------------------------------------------------
Operating income 324,616 219,169
- --------------------------------------------------------------------------------------------
<C> <S> <C> <C>
Cost of goods sold 161,660 132,933
12 Salaries, wages and other social security costs 37,516 29,936
7,11 Other operating expenses 46,790 26,987
5 Ordinary depreciation 2,440 1,168
2 Bad debts 1,081 530
Movement in work in process and finished goods 1,210 -4,375
- --------------------------------------------------------------------------------------------
Total operating expenses 250,697 187,179
- --------------------------------------------------------------------------------------------
Operating profit 73,919 31,990
- --------------------------------------------------------------------------------------------
Interest income 3,944 326
Interest expenses -2,603 -1,611
- --------------------------------------------------------------------------------------------
Net financial items 1,341 -1,285
- --------------------------------------------------------------------------------------------
Profit before taxes 75,260 30,705
- --------------------------------------------------------------------------------------------
8 Taxes 25,229 9,183
- --------------------------------------------------------------------------------------------
Net income 50,031 21,522
- --------------------------------------------------------------------------------------------
Minority interest 2,780
Majority shareholders' equity 47,251 21,522
</TABLE>
4
<PAGE> 5
ASK GROUP, BALANCE SHEET
<TABLE>
<CAPTION>
ASSETS Pro forma
NOTE Amounts in NOK 1,000 1996 1995
- ---------------------------------------------------------------
<C> <S> <C> <C>
1 Cash and bank deposits 59,205 12,126
2 Accounts receivable 51,833 30,712
Other short term receivables 2,354 6,000
3 Total inventories 42,010 37,867
- ---------------------------------------------------------------
Total current assets 155,402 86,705
- ---------------------------------------------------------------
4 Long term receivables 469 164
5 Fixed assets 11,186 5,696
- ---------------------------------------------------------------
Total fixed assets 11,655 5,860
- ---------------------------------------------------------------
Total assets 167,057 92,565
- ---------------------------------------------------------------
Total Liabilities and Equity
</TABLE>
<TABLE>
<CAPTION>
Pro forma
Note Amounts in NOK 1,000 1996 1995
- -------------------------------------------------------------------
<C> <S> <C> <C>
Accounts payable 10,386 14,295
VAT, employees tax deduction, social 10,172 9,524
security costs, holiday pay and
assessed taxes
8 Tax payable 25,119 9,182
Guarantee and service liabilities 2,500 2,160
Other short term liabilities 5,690 2,073
- -------------------------------------------------------------------
Total short term liabilities 53,867 37,234
- -------------------------------------------------------------------
Long term interest bearing debt 0 147
- -------------------------------------------------------------------
Total long term debt 0 147
- -------------------------------------------------------------------
9 Minority interests 8,980 0
- -------------------------------------------------------------------
Share capital (10.980.000 shares) 10,980 10,980
- -------------------------------------------------------------------
Other equity 93,230 44,204
- -------------------------------------------------------------------
10 Majority shareholders' equity 104,210 55,184
- -------------------------------------------------------------------
Total equity 113,190 55,184
- -------------------------------------------------------------------
Total liabilities and equity 167,057 92,565
- -------------------------------------------------------------------
6 Mortgages 0 1477
Guarantees given 0 00
</TABLE>
5
<PAGE> 6
Cash Flow Statement
<TABLE>
<CAPTION>
Pro forma Pro forma
1996 1995 1996 1995
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Cash flow from operating activities Cash flow from financing activities
Profit before taxes 75,260 30,705 Decrease in bank overdraft -14,071
Income taxes paid -9,292 -1,989 Payment of short term debt -147 -294
Profit from sale of fixed assets -190 -36 Group contribution paid -6,995
Ordinary depreciation 2,440 1,168 Proceeds from issuance of share 8,000
capital of minority interests
------------------------------------------------------------
Changes in inventories -4,143 817 Net cash flow from
financing activities 7,853 -21,360
------------------------------------------------------------
Changes in accounts receivable -21,396 902 Net increase in cash and cash 47,079 909
equivalents
Changes in accounts payable -3,909 3,113 Opening balance of cash and
cash equivalents 12,126 11,217
------------------------------------------------------------
Changes in other working capital 8,251 -7,486 Closing balance of cash and
bank cash equivalents 59,205 12,126
------------------------------------------------------------
Exchange differences 251 403 Cash and bank deposits 59,205 12,126
Change in pension assets -294 -50 Undrawn bank overdraft 16,600 16,575
- ------------------------------------------------------------
Net cash flow from
operating activities 46,978 27,547
- ------------------------------------------------------------
Cash flow from investing activities
Proceeds from sales of fixed assets 190 74
Purchase of fixed assets -7,931 -5,196
Net increase in long term debtors -11 -156
- ------------------------------------------------------------
Net cash flow from
investing activities -7,752 -5,278
- ------------------------------------------------------------
</TABLE>
6
<PAGE> 7
THE ESTABLISHMENT OF ASK ASA AND A DESCRIPTION OF THE GROUP
ASK asa was established in 1996 through a demerger of Tandberg Data AS. The
demerger was made in August, but with accounting effect from 1 January 1996. ASK
asa took over 100% of the shares in ASK AS (which changed name to ASK Norge AS)
at a book value of NOK 28,147, and NOK 1,853 in cash. As the company did not
take over any liabilities, the company's equity totalled NOK 30,000.
Shareholders' equity in ASK asa's Group balance sheet per 1 January 1996
totalled NOK 55,184.
In June there was an issue in ASK Norge AS to the company's employees. For
a payment of NOK 8,000 the employees received 8% of the shares in the company.
ASK asa's ownership was thus reduced to 92%.
The following companies are included in the Group 31.12.1996:
<TABLE>
<CAPTION>
ASK asa Parent Company
<S> <C>
ASK Norge AS 92%
ASK LCD Inc.
(subsidiary of ASK Norge AS) 92%
</TABLE>
ACCOUNTING PRINCIPLES
Consolidation principles
When the parent company and the subsidiary are presented as one financial
entity, the Group accounts present the total financial result and the overall
financial position. The accounts have been prepared in compliance with Norwegian
accounting legislation and generally accepted accounting principles.
The Group accounts have been prepared according to the purchase method.
Unrealized gains in stocks which relate to internal deliveries have been
eliminated in the Group's stocks. Intercompany assets and liabilities and
intercompany assets and liabilities and intercompany transfers of income and
expenses have been eliminated. Changes in the shareholders equity due to
exchange differences have been booked directly to shareholders' equity.
Valuation principles
Trade debtors
Trade debtors are shown in the balance sheet after deduction of provisions for
bad debts. Provisions for bad debts are allocated on basis of individual
evaluations of the debtors. Additionally, a general provision is made to cover
potential losses which are not known when the evaluation is made.
7
<PAGE> 8
Receivables and debts in foreign currency
Trade debtors and suppliers in foreign currencies have been translated at the
exchange rate at the balance sheet date.
Stocks
Stocks are valued at the lower of cost price according to the FIFO principle and
net sales value. Net sales value for raw materials and work in progress is
calculated as sales value for finished goods reduced with the remaining
production costs and sales costs. For some raw materials replacement value is
used as estimated actual value. Cost price for produced goods includes direct
material costs, direct payroll costs and a portion of indirect production costs.
Development costs
Development costs are expenses in full as and when they occur.
Fixed assets
Fixed assets have been valued at historical cost after deduction of total
ordinary depreciation.
Ordinary depreciation is calculated on a straight line basis, taking into
account the assets' expected financial and technical useful lives.
Warranty provision
Provisions have been made based on estimated guarantee expenses related to
warranty sales. The provision is included in short term liabilities in the
balance sheet.
Pension costs
The company's employees are covered by a collective defined benefit plan. The
pension costs are booked in compliance with the accounting standard for pension
costs. The main principle is that pension commitments are expenses when they
occur, i.e. when the employees have earned them through their employment.
Estimated value is used for calculating pension funds and pension commitment at
the year-end closing. The estimated values are adjusted every year in line with
actuarial calculations.
8
<PAGE> 9
Taxes
Taxes are expenses when they incur, i.e. the tax burden is related to the
accounting result before taxes. In principle the tax charge consists of payable
taxes (taxes on taxable income for the year) and changes in (net) deferred
taxes. Deferred taxes in the balance sheet are calculated on basis of net
temporary differences between accounting and tax values. In the Group accounts
net temporary differences are negative. According to the accounting legislation
the related tax benefit cannot be shown in the balance sheet. The tax charges
for the year therefore consist of payable taxes for the year.
ESTIMATED COMPARABLE FIGURES
The comparable figures for 1995 are estimated, as ASK asa was not established
until 1996. Estimated comparable figures are the figures shown in ASK AS' Group
accounts for 1995, adjusted for liquid funds taken over in the demerger. As ASK
asa does not have separate activities, the estimated figures are considered
comparable.
NOTES TO THE GROUP ACCOUNTS
(1) BANK DEPOSITS
Included in this item are restricted bank deposits totalling NOK 1,985. The item
also includes a positive balance on the bank overdraft. The bank overdraft limit
is NOK 16,600.
9
<PAGE> 10
(2) TRADE DEBTORS
<TABLE>
<CAPTION>
1996 1995
- --------------------------------------------------------------
<S> <C> <C>
Trade debtors at nominal value 53,682 32,015
Bad debts provision -1,849 -1,303
- --------------------------------------------------------------
Trade debtors in the balance sheet 51,833 30,712
- --------------------------------------------------------------
<CAPTION>
1996 1995
- --------------------------------------------------------------
<S> <C> <C>
Bad debts incurred 535 32
Increase in provision for bad debts 546 498
- --------------------------------------------------------------
Bad debts in the profit and loss
account 1,081 530
- --------------------------------------------------------------
</TABLE>
(3) STOCKS
<TABLE>
<CAPTION>
1996 1995
- --------------------------------------------------------------
<S> <C> <C>
Raw materials 27,044 21,691
Work in process 3,776 3,771
Finished Goods 11,190 12,405
- --------------------------------------------------------------
Total 42,010 37,867
- --------------------------------------------------------------
</TABLE>
(4) LONG TERM RECEIVABLES
<TABLE>
<CAPTION>
1996 1995
- --------------------------------------------------------------
<S> <C> <C>
Loan to employees 167 156
Net pension funds 302 8
- --------------------------------------------------------------
Long term receivables in the balance sheet 469 164
</TABLE>
Net pension funds
The company has a collective defined benefit plan with an insurance company for
its employees. The commitment covers 32 employees. Actuarial calculations are
made every year based on information from the company. The following assumptions
are made:
<TABLE>
<CAPTION>
1996 1995
- --------------------------------------------------------------
<S> <C> <C>
Discount rate 7,0% 7,0%
Expected return on pension funds 8,0% 8,0%
Payroll adjustments 3,3% 3,3%
Pension adjustments 2,5% 2,5%
</TABLE>
Based on the above assumptions and actuarial assumptions the pension
commitments, pension fund and pension costs have been calculated as follows:
10
<PAGE> 11
<TABLE>
<CAPTION>
Pension funds 31.12 1996 1995
- --------------------------------------------------------------
<S> <C> <C>
Present value of pension
commitments incurred -1,456 -1,294
Value of pension funds 31.12 1,647 1,098
Adjustments not shown in the
profit and loss account 111 204
- --------------------------------------------------------------
Net pension funds in the balance sheet 302 8
- --------------------------------------------------------------
Present value of pensions earned 275 241
Interest expense on pension
commitments incurred 77 58
Estimated return on pension funds -102 -61
Booked adjustments 6
Social security 62 34
- --------------------------------------------------------------
Pension costs 312 278
- --------------------------------------------------------------
</TABLE>
Overfinancing of the collective pension plan has been considered, and it is
expected that the overfinancing can be utilized due to the expected changes in
pension commitments.
(5) FIXED ASSETS
<TABLE>
<CAPTION>
Plant machinery
- ---------------------------------------------------------
<S> <C>
Purchase cost 01.01.96 7,763
Additions during the year 7,931
Reductions at purchase cost -736
Total depreciation 31.12.96 3,772
- ---------------------------------------------------------
Book value 31.12.96 11,186
- ---------------------------------------------------------
Depreciation for the year 2,440
Ordinary depreciation rate 15-30%
</TABLE>
<TABLE>
<CAPTION>
Investments and sales the last 5 years 1996 1995 1993/94 1992/93 1991/92
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment 7,931 5,196 995 1,123 539
Sales (as sales price) 190 74 50 0 0
</TABLE>
(6) MORTGAGES
<TABLE>
<CAPTION>
1996 1995
- -------------------------------------------------------------
<S> <C> <C>
Remaining mortgage loans 0 147
Book value of mortgaged
trade debtors 51,833 30,712
</TABLE>
11
<PAGE> 12
<TABLE>
<S> <C> <C>
Book value of mortgaged stocks 42,010 37,867
Book value of mortgaged assets 11,186 5,696
Guarantee commitments 100 0
</TABLE>
Assets have also been pledged as security for the bank overdraft of NOK 16.600
(7) MATERIAL RENTAL AGREEMENTS
The Group rents production and office premises. The agreement is valid until 30
June 2002. In 1996 the rent amounted to NOK 2,140. The rent is to be adjusted
annually in line with the consumer price index.
(8) TAXES
<TABLE>
<CAPTION>
Temporary differences 1996 1995
- --------------------------------------------------------------
<S> <C> <C>
Current assets/short term liabilities -16,531 -3,522
Fixed assets 822 364
Carryforward losses -3,550 -2,654
- --------------------------------------------------------------
Net negative temporary
difference 19,259 5,812
- --------------------------------------------------------------
</TABLE>
Carryforward losses relates to ASK LCD Inc. The tax charge shown in the profit
and loss account is payable taxes. Estimated RISK for 1996 is NOK 5,41 per
share.
12
<PAGE> 13
(9) MINORITY INTERESTS
<TABLE>
<S> <C>
Minority interests per. 01.01.96 0
Paid in 1996 8,000
Difference between paid in amount and portion
of booked equity transferred to majority -1,800
Minority portion of result for the year 2,780
- -------------------------------------------------------------
Minority interests per. 31.12.96 8,980
- -------------------------------------------------------------
</TABLE>
(10) MAJORITY SHAREHOLDERS' EQUITY
<TABLE>
<S> <C>
Majority shareholders' equity 01.01.96 55,184
Increase by payment from minority
interests (see above) 1,800
Majority portion of result for the year 47,251
Translation differences -25
- -------------------------------------------------------------
Majority shareholders' equity 31.12.96 104,210
- -------------------------------------------------------------
</TABLE>
(11) OTHER OPERATING EXPENSES
Other operating expenses consist mainly of operating equipment, spare parts and
accessories, external services, sales and administration expenses, and demerger
expenses.
(12) PAYROLL AND SOCIAL SECURITY EXPENSES
Renumeration to board members totalling NOK 250 has been accrued. The Managing
Director got his salary from ASK Norge AS.
13
<PAGE> 14
ASK asa Profit and Loss Account
<TABLE>
<CAPTION>
NOTE NOK 1,000 1996
- ------------------------------------------------------
<C> <S> <C>
1 Payroll and other personnel expenses 285
2 Other operating expenses 746
- ------------------------------------------------------
Total operating expenses 1,031
- ------------------------------------------------------
Operating profit -1,031
- ------------------------------------------------------
Interest income 13
- ------------------------------------------------------
Net financial items 13
- ------------------------------------------------------
Profit before taxes -1,018
- ------------------------------------------------------
3 Taxes 0
- ------------------------------------------------------
Net income -1,018
- ------------------------------------------------------
The loss is covered as follows:
Group contribution received
1,018
</TABLE>
<TABLE>
<CAPTION>
ASSETS
NOTE NOK 1,000 31.12.96 01.01.96
- --------------------------------------------------------------
<C> <S> <C> <C>
Liquid funds 1,138 1,853
Total current assets 1,138 1,853
- --------------------------------------------------------------
4 Shares in ASK Norge AS 28,147 28,147
Receivables from ASK Norge AS 1,018 0
- --------------------------------------------------------------
Total fixed assets 29,165 28,147
- --------------------------------------------------------------
Total assets 30,303 30,000
- --------------------------------------------------------------
TOTAL LIABILITIES AND EQUITY
NOTE NOK 1,000 31.12.96 01.01.96
- --------------------------------------------------------------
1 Other short term liabilities 303 0
Total short term liabilities 0 0
- --------------------------------------------------------------
Share capital (10,980.000 shares) 10,980 10,980
Legal reserve 19,020 19,020
- --------------------------------------------------------------
Total equity 30,000 30,000
- --------------------------------------------------------------
Total liability and equity 30,303 30,000
Mortgages 0 0
Guarantees given 0 0
</TABLE>
COMPARABLE FIGURES
As ASK asa was established in 1996, there are no comparable figures for 1995. In
the balance sheet the figures in the (demerger)balance sheet per.01.01.96 are
shown as comparable figures.
(1) PAYROLL AND OTHER PERSONNEL EXPENSES
This item is a provision for Board fees, including social security fees.
(2) OTHER OPERATING EXPENSES
Included in this amount are the demerger expenses totalling NOK 638 and
accounting fees with 6.
(3) TAXES
<TABLE>
<S> <C>
Profit before taxes -1,018
Group contribution received 1,018
- -------------------------------------
Taxable income 0
- -------------------------------------
</TABLE>
(4) SHARES IN ASK NORGE AS
ASK asa owns 92% of the shares in ASK Norge AS. Total nominal value of the
shares is NOK 25,900. Total cost price is NOK 28,147.
14
<PAGE> 15
ASK Group
Profit and Loss Statement (MNOK)
<TABLE>
<CAPTION>
4th Quarter 4th Quarter 1997 1996
'97 '96
<S> <C> <C> <C> <C>
Sales Revenue 243,2 86,1 604,3 324,6
Cost of sales 156,0 37,4 371,0 176,9
Gross margin 87,2 48,7 233,3 147,7
Other operating costs 31,3 21,1 98,5 71,4
Ordinary depreciation 1,2 0,9 4,3 2,4
Operating profit 54,7 26,7 130,5 73,9
Net financial items 0,5 -0,2 7,3 1,3
Profit before taxes 55,2 26,5 137,8 75,2
Taxes 19,7 8,9 42,8 25,2
Profit after taxes 35,5 17,6 95,0 50,0
Earnings per share (NOK) 0,94 0,50 2,60 1,40
Earnings per share, diluted 0,93 0,50 2,59 1,40
(NOK)
</TABLE>
15
<PAGE> 16
Balance Sheet (MNOK)
<TABLE>
<CAPTION>
At December 31, 1997 At December 31, 1996
<S> <C> <C>
Cash & bank deposits 157,3 59,2
Receivables 167,0 54,2
Total inventories 73,6 42,0
Current assets 397,9 155,4
Fixed assets 12,4 11,7
Total assets 410,3 167,1
Short term liabilities 116,5 53,9
Long term liabilities 0,1 0,0
Equity 293,7 113,2
Total liabilities and equity 410,3 167,1
</TABLE>
16
<PAGE> 17
Key Figures
<TABLE>
<CAPTION>
4th Quarter 4th Quarter 1997 1996
'97 '96
<S> <C> <C> <C> <C>
Gross margin in % of sales 35,9 56,6 38,6 45,5
Operating profit in % of sales 22,5 31,0 21,6 22,8
Profit before tax in % of sales 22,7 30,8 22,8 23,2
Equity ratio % 71,6 67,7 71,6 67,7
</TABLE>
17
<PAGE> 18
COMMENTS
4th. Quarter 1997
ASK increased its turnover from NOK 86.1 mill. in the 4th quarter of 1996 to NOK
243.2 mill. in the 4th quarter of 1997, which is an increase of 182.5%.
Operating profit rose from NOK 26.7 mill. in the 4th quarter 1996 to NOK 54.7
mill. in the 4th quarter of 1997, which is an increase of 104.9%. Profit before
tax rose from NOK 26.5 mill. in the 4th quarter of 1996 to NOK 55.2 mill. in the
4th quarter of 1997, which is an increase of 108.3%.
Turnover for 1997 was NOK 604.3 mill., as opposed to NOK 324.6 for 1996, an
increase of 86.2%. Operating profit for 1997 was NOK 130.5 mill., as opposed to
NOK 73.9 mill. for 1996, which is an increase of 76.6%. Profit before tax for
1997 were NOK 137.8 mill. as opposed to NOK 75.2 mill. for 1996, which is an
increase of 83.2%.
Earnings per share for the 4th quarter of 1997 were NOK 0.94, as opposed to NOK
0.50 for the 4th quarter of 1996, which is an increase of 88.0%. Earnings per
share for 1997 were NOK 2.60, and NOK 1.40 for 1996, which is an increase of
85.7%.
ASK Group (ASK), has its primary base of operations in Fredfikstad, Norway.
The rise in the company's turnover and profits for the 4th quarter of 1997 is
due primarily to a marked demand for the ultra portable projectors IMPRESSION A4
(SVGA resolution, 800 x 600 pixels) and IMPRESSION A6 (XGA resolution, 1024 x
768 pixels). These projectors are often used together with laptop PCs.
During the current quarter, the company began deliveries of IMPRESSION 1280, its
first high resolution SXGA (1280 x 1024 pixels) projector. IMPRESSION 1280 is
primarily intended for work station users with special image quality needs. The
projector can be used in a wide variety of contexts. It can be used with both
front and back projection, and can also be mounted permanently in a ceiling
mount. IMPRESSION 1280 is based on amorphous TFI technology, and is a typical
niche product in the projector market. The potential size of the 1998 SXGA
market is estimated to approximately 5,000 units; this market should be
dominated primarily by CRT-based products. However, there is expected to be a
pronounced growth in the SXGA field starting in 1999 as a result of new
technology in projector solutions (primary PolySilicon TFT and reflective LCD).
Since ASK entered the SXGA market early on, the company will be able to
establish the necessary channels for future product launches.
ASK has computer and video projectors in its current product portfolio, covering
a broad range of the portable and ultra portable segment of the market. It also
has a product aimed at the installation market (IMPRESSION 1280).
The company's income from sales derives primarily from computer and video
projectors during the current quarter, with LCD overhead panels constituting an
insignificant share and being replaced, in large measure, by more reasonably
priced projectors.
ASK has instituted a share option plan which allows its employees to subscribe
to 700,000 shares at a subscription rate of NOK 41,67 with an addition of 1% per
month calculated from 19.06.97. There will be an overall payroll tax associated
with the share issue of approx. NOK 3.5 mill. based on the share price as of
31.12.97. The employer's cost in terms of payroll tax will at the time of the
share issue be entered directly against company equity, in line with other costs
associated with the share issue. The Oslo Stock Exchange's general view of the
matter is understood to be that employer's cost in terms of payroll tax shall be
entered as cost; in that case, Profit before tax can be reduced by a
corresponding amount. This issue will be resolved before the ordinary general
assembly.
The company sells its products via distributors in Europe and Asia and via a
chain of dealerships in the United States. In 1997, Europe accounted for 69% of
sales, Asia for 15%, and the United States for 16%.
In 1997, ASK succeeded in its strategy, which was to aggressively enter the
volume market for ultra portable projectors, while at the same time maintaining
the company's presence in the high end of the market. The competitive market
situation is marked by the steady improvement of existing products, alone, with
the frequent launching of new products by the manufacturers - usually 2-4
product launches per year from the market leaders. It has begun to become clear
which players are making the greatest effort to achieve substantial market share
and which ones are choosing the traditional course of wait-and-see.
ASK is well-situated as regards the different product areas, and the company is
keeping abreast of new developments in sales and distribution.
Fredrikstad, 11 February 1998
The ASK asa Board of Directors
18
<PAGE> 1
Exhibit (b)(1)
5 March 1998
ASK asa
K.G. Meldahlsvei 9
N-1602 Fredrikstad
Norway
Attn: Mr. Ole J. Fredriksen
President
Dear Sirs,
Re: Project Safari
You have advised us that: (a) ASK asa ("ASK") and a direct or indirect
subsidiary of ASK ("Merger Sub") intend to enter into an Agreement and Plan of
Merger (the "Merger Agreement") with Proxima Corporation, a Delaware corporation
("Proxima"); (b) pursuant to the Merger Agreement, Merger Sub will commence a
tender offer (the "Offer") to purchase up to 100% of the outstanding shares (the
"Shares") of common stock, par value $.001 per share, of Proxima at a price of
up to $11 per Share, net to the seller in cash; (c) the Offer will be subject to
a number of conditions, including the condition that, at the time the Offer
expires, not less than a majority of the Shares shall have been validly tendered
and not subsequently withdrawn; (d) if Merger Sub has consummated the Offer,
Merger Sub will vote all those Shares owned by Merger Sub so as to cause a
merger (the "Merger") of Merger Sub with and into Proxima; and (e) in the
Merger, all outstanding Shares (other than Shares held in treasury by Proxima,
Shares owned by ASK and its subsidiaries and Shares the holders of which have
perfected appraisal rights under the Delaware General Corporation Law) will
cease to be outstanding and automatically will be converted into the right to
receive cash. Based on the foregoing and subject to the terms and conditions set
forth below, Bankers Trust International PLC ("BTI") is pleased to provide its
commitment that BTI and/or its affiliates (together, "Bankers Trust") will
arrange and/or provide a senior credit facility of up to $70,000,000 (the
"Facility"), on the terms set forth in this letter and on the attached term
sheet.
BTI's commitment to provide the Facility is subject to the accuracy and
completeness of the financial and other information provided to Bankers Trust by
ASK regarding ASK, its subsidiaries and Proxima. ASK and its subsidiaries,
before and after the consummation of the Offer and the Merger, are sometimes
collectively referred to as the "Group".
<PAGE> 2
BTI's commitment to provide the Facility is subject to the following conditions:
o execution of the Merger Agreement in substantially the form
previously furnished to Bankers Trust, with such revisions as
Bankers Trust may approve;
o completion and execution of mutually satisfactory
documentation for the Facility and related documents, and the
satisfaction of the conditions contained therein and in the
Merger Agreement;
o no material adverse change in the business, assets, condition
(financial or otherwise) or prospects of the Company, the
Target or the Group as a whole; and
o satisfaction of the conditions described in the attached term
sheet.
Without limitation of the foregoing, Bankers Trust will require that the price
of the Offer not exceed $11 per Share, that the Offer and the Merger be carried
out in accordance with the Merger Agreement and that no amendment or waiver
thereof will be agreed by or on behalf of ASK without our prior written consent
in each instance. Any such amendment or waiver without our consent may be the
basis for a decision on our part not to provide the Facility.
Bankers Trust reserves the right prior to or after execution of the definitive
documentation relating to the Facility to syndicate all or part of its
commitment to one or more financial institutions pursuant to a syndication to be
managed by Bankers Trust. You agree to assist Bankers Trust in achieving a
syndication that is satisfactory to Bankers Trust and you.
This letter is for your benefit and may not be relied upon by any other person
or entity. Bankers Trust shall not be responsible or liable to you or any other
person for indirect, special or consequential damages which may be alleged as a
result of this letter.
Bankers Trust reserves the right to employ the services of its affiliates in
providing the services contemplated by this letter and the attached term sheet
and to allocate, in whole or in part, to such affiliates certain fees payable to
Bankers Trust in such manner as Bankers Trust and its affiliates may agree in
their sole discretion. You acknowledge that Bankers Trust may share with any of
its affiliates, and such affiliates may share with Bankers Trust, any
information relating to the Company, the Target and their respective
subsidiaries and affiliates (including, without limitation, any non-public
customer information regarding the creditworthiness of the Company and its
affiliates and subsidiaries).
In consideration of the offer made in this letter and the attached term sheet,
you agree (whether or not definitive agreements are entered into) to:
(i) indemnify Bankers Trust on demand against all reasonable costs and
expenses (including reasonable legal fees and other out of pocket expenses
and value added tax thereon) incurred by Bankers Trust in connection with
the negotiation, preparation,
2
<PAGE> 3
execution and completion of all documentation relating to the Transaction
(including, without limitation, the Facility) and matters incidental
thereto; and
(ii) indemnify and hold harmless Bankers Trust on demand for its own account
and as trustee for each of its affiliates and its affiliates<0- 32>
directors, officers, employees and advisors from and against any and all
losses, claims, damages, liabilities and expenses (including all
reasonable fees and disbursements of any such person and such person<0-
32>s counsel and all of such person<0- 32>s reasonable travel and other
out-of-pocket expenses incurred in connection with the investigation of
and preparation for any such pending or threatened claims and any
litigation or other proceedings arising therefrom, but excluding, however,
any such loss, claim, damage, liability or expense resulting from (i)
Bankers Trust's breach of this commitment, (ii) Bankers Trust's gross
negligence or willful misconduct, or (iii) the inaccuracy or
incompleteness of any information furnished by Bankers Trust for use by
ASK) to which any such person may become subject insofar as the same
arises out of or in any way relates to or results from the proposed
Transaction, this letter and/or the attached term sheet or the disclosure
of this letter and/or the attached term sheet by you to any third party
whether with or without Bankers Trust's agreement.
This letter and the attached term sheet are confidential and shall not, without
Bankers Trust's prior written consent, be disclosed by you to any person other
than ASK's accountants, lawyers and other advisers and Proxima's Board of
Directors and legal and financial advisers, and then only on a confidential
basis and in connection with the transactions contemplated by this letter and
the attached term sheet.
The offer in this letter and the attached term sheet will cease to be effective
on the earlier of May 7, 1998 or the date any definitive documentation for the
Facility is executed and delivered, although your obligations under this letter
shall continue to be effective after such date. This letter shall in any event
not be effective until the attached copy has been signed and returned to us by
you together with the attached fee letter and the fee specified therein as
payable on the date of your countersigning of this letter. The offer in this
letter and the attached term sheet shall cease to be effective if the Offer is
not commenced on or before March 18, 1998 or if such signed copy, payment and
fee letter are not received by us by the earlier of March 18, 1998 or the
commencement of the Offer.
This letter may be executed in counterparts and shall be governed by and
construed in accordance with the laws of England.
3
<PAGE> 4
Please confirm your agreement to the terms and conditions set out above by
signing and returning the attached copy of this letter.
Yours sincerely,
/s/ James H. Courtenay
---------------------------
for and on behalf of
Bankers Trust International PLC
ASK asa hereby agrees to the terms and conditions set out above.
/s/ Ole J. Fredriksen
- --------------------------
By: Ole J. Fredriksen
Title: President
Date: March 6, 1998
4
<PAGE> 5
PROJECT SAFARI
Summary of Terms and Conditions
for Loan Facilities to Acquire Proxima Corporation
The terms set forth in this term sheet are subject in their entirety to
the terms of the letter dated 5 March, 1998 to which this term sheet is attached
(the "Commitment Letter").
A. SENIOR TERM LOAN
Borrower: ASK asa, or a wholly-owned subsidiary
established to effectuate the Offer
and the Merger (the "Borrower").
Arranger: Bankers Trust International PLC.
Agent: Bankers Trust Company.
Senior Banks: Bankers Trust Company and any banks or
financial institutions acceptable to
the Arranger (the "Senior Banks").
Majority Senior Banks: Senior Banks whose Senior Term Loan
commitments/participations exceed
66-2/3% of the total
commitments/participations.
Amount: $70,000,000.
Type: Senior term loan.
Final Maturity: 31 March 2001.
Purpose: The proceeds of the Senior Term Loan
will be applied towards: (i) the cash
consideration for the Offer and the
Merger; and (ii)
5
<PAGE> 6
fees and other expenses incurred by
the Borrower in connection with the
Transaction, in amounts agreed in
advance between the Borrower and the
Arranger.
Availability: The Senior Term Loan will be available
by way of (i) a cash advance to
effectuate the consummation of the
Offer (provided that at least the
first $14,000,000 of the purchase
price required for the consummation of
the Offer is paid for from the cash
balances of ASK asa), and (ii) a cash
advance to effectuate the consummation
of the Merger.
Interest: LIBOR for 1, 3 or 6 month periods
selected in advance by the Borrower
(or such other periods as may be
agreed) plus the Margin. Interest is
to be paid on the last day of each
interest period provided that if an
interest period is longer than 3
months, interest is to be paid
quarterly.
Margin: If Total Debt is:
$60,000,000 or greater: 1.75%
$50,000,000 or greater, but less than
$60,000,000: 1.50%
$40,000,000 or greater, but less than
$50,000,000: 1.25%
$30,000,000 or greater, but less than
$40,000,000: 1.00%
less than $30,000,000: 0.75%
6
<PAGE> 7
Voluntary Prepayment: At any time in whole or in part (but
if in part in a minimum amount of
$1,000,000 and an integral multiple of
$1,000,000) on 5 business days' notice
without penalty but subject to payment
of broken funding costs if the
prepayment is not made on the last day
of an interest period. Amounts prepaid
may not be reborrowed.
Mandatory Prepayment: Prepayment of the Senior Term Loan
will be mandatory in the following
circumstances:
(a) in full, upon a change of
control or sale of
substantially all of the
business/assets of the Target
or ASK asa;
(b) if Total Debt is greater than
$45,000,000, in part, from the
net proceeds of disposal of
assets out of the ordinary
course of business of the
Target or ASK asa not utilized
within 6 months to reinvest in
new or like assets; provided
that the net proceeds of any
disposal or series of related
disposals equal to $5,000,000
or more must be prepaid
promptly: if Total Debt is less
than or equal to $45,000,000,
in part, from the net proceeds
of disposal of assets out of
the ordinary course of business
of the
7
<PAGE> 8
Target or ASK asa not utilized
within 12 months to reinvest in
new or like assets;
(c) if Total Debt is greater than
$45,000,000, in part, from the
net proceeds of insurance
claims not utilized to reinvest
in new or like assets within 6
months. If Total Debt is less
than or equal to $45,000,000,
in part, from the net proceeds
of insurance claims not
utilized to reinvest in new or
like assets within 12 months;
and
(d) in part, from the first
$25,000,000 of the net proceeds
of any share placement(s) by
ASK asa; provided that after
the first $25,000,000 has been
applied to prepayment pursuant
to this clause (d), no further
proceeds of any subsequent
share placement need be so
applied.
Application of Prepayments: All prepayments will be applied
against installments in order of
maturity.
Repayment: Subject to semi-annual amortisation
payments based on the following
schedule:
8
<PAGE> 9
Repayment Date Amount (US$)
30/9/98 20,000,000
31/3/99 5,000,000
30/9/99 10,000,000
31/3/00 10,000,000
30/9/00 10,000,000
31/3/01 15,000,000
----------
70,000,000
B. OTHER TERMS OF THE FACILITY
Guarantors: If the Borrower is not ASK asa, then
ASK asa shall be a guarantor. In
addition, all other members of the
Group from time to time, other than
non-material subsidiaries and other
than the Borrower (if not ASK asa),
shall be guarantors. It is understood
that there may be legal limitations on
the enforceability of certain of the
guarantees, particularly "upstream"
guarantees.
Security Agent: Bankers Trust Company.
Security: Usual security for this type of
transaction including, without
limitation: (i) negative pledge in
respect of the assets of the Group,
subject to agreed exceptions; and (ii)
pledge of shares of the Target and
other material subsidiaries of ASK
asa, subject, in the case of
9
<PAGE> 10
the shares of the Target, to the
margin regulations of the Board of
Governors of the Federal Reserve
System.
Conditions Precedent: Usual for this type of financing and
to include, but not limited to: (i)
definitive documentation in a form
satisfactory to the Agent and the
Arranger (including security
documents); (ii) upon the expiration
of the Offer, a majority of the Shares
having been validly tendered and not
subsequently withdrawn and all other
conditions to the Offer having been
satisfied (or waived with the consent
of the Arranger); (iii) all necessary
regulatory, governmental and corporate
consents having been obtained; (iv)
there having occurred no breach of
representations and warranties and no
event of default or potential event of
default; (v) there having occurred no
material adverse change in the
business of the Target or the Group as
a whole between the time of the
commencement of the Offer and the
consummation of the Transaction; (vi)
evidence that as of the consummation
of the Offer, ASK asa will be able to
effectuate the Merger as a matter of
legal right; and (vii) confirmation
from the Target that, as of the
signing of the Merger Agreement, the
Target had cash balances and
marketable securities of at least
$20,000,000.
10
<PAGE> 11
Representations and
Warranties: Usual for this type of transaction and
to include, but not limited to: (i)
due incorporation of each member of
the Group and authority to, inter
alia, perform its obligations under
the transaction documents and to
provide guarantees and security (where
applicable), subject to legal
limitations on enforceability of
"upstream" guarantees; (ii) compliance
with corporate formalities,
non-conflict with agreements, laws and
other obligations; (iii) no material
litigation; (iv) no material adverse
change; (v) no winding-up or
insolvency proceedings; (vi) no
defaults, events of defaults or
potential events of default; (vii)
assets to be acquired will be
beneficially owned by ASK asa and
consents and filings for business
operations having been obtained;
(viii) accuracy and basis of
preparation of accounts to be
delivered; (ix) accuracy and basis of
relevant reports to be delivered; (x)
rights to all material intellectual
property; and (xi) no material
environmental liabilities.
Negative Undertakings: All negative covenants of the Merger
Agreement will be incorporated by
reference, in addition to other
negative undertakings usual for this
type of transaction, including,
without limitation, limitation on
asset sales, acquisitions,
transactions with affiliates, liens
and restricted payments. In addition,
there will
11
<PAGE> 12
be a limitation of additional
financial indebtedness of the ASK
Group of $5,000,000 until Total Debt
is reduced to $45,000,000.
Affirmative
Undertakings: All affirmative covenants of the
Merger Agreement will be incorporated
by reference, in addition to other
affirmative covenants for this type of
transaction.
Financial Covenants: ASK asa will make the following
financial covenants from and after the
end of each accounting quarter set
forth below, such covenants to be
measured: (i) in accordance with US
GAAP, (ii) on a twelve month rolling
basis (or since the initial drawdown
date, if less than twelve months), and
(iii) on a consolidated basis for the
Group:
(a) Minimum Interest Coverage Ratio
(measured from and after the
end of the third quarter of
1998): 3.5 : 1
(b) Leverage Ratio (measured from
and after the end of the third
quarter of 1998): 2.4 : 1
(c) Cashflow Test: Minimum Cashflow
(measured from and after the
end of the third quarter of
1998: Greater than 0.
12
<PAGE> 13
(d) Maximum Capital Expenditure
(measured from and after the
end of the third quarter of
1998): $4,000,000 per annum,
provided that this test shall
not apply if Total Debt is less
than or equal to $45,000,000.
Certain Definitions:
The following definitions, as provided
in summary form only here, apply to
the financial covenants set forth
above: (i) Interest Coverage Ratio:
the ratio of EBIT to Net Interest;
(ii) EBIT: net income, plus interest
on Total Debt and taxes; (iii) Total
Debt: the aggregate of all moneys
borrowed and other sums in the nature
of financial indebtedness, including
contingent obligations such as
guarantees of other financial
indebtedness; (iv) Net Interest:
interest on Total Debt, less interest
earned; (v) Leverage Ratio: the ratio
of Total Debt to EBITDA; (vi) EBITDA:
net income, plus interest on Total
Debt, taxes, depreciation,
amortisation and other non-cash
charges to income; (vii) Cashflow:
EBITDA, plus/minus changes in working
capital, plus the net proceeds from
any equity offering by ASK asa, less
capital expenditure, taxes, dividends,
debt service and prepayments of
principal indebtedness; (viii) Capital
Expenditure: expenditures
13
<PAGE> 14
treated as tangible fixed assets in
accordance with US GAAP.
Reporting
Requirements: Usual for this type of transaction,
including quarterly unaudited
financial reports and annual audited
financial reports.
Events of Default: Usual for this type of transaction,
including payment default, breach of
other obligations, misrepresentation,
insolvency, invalidity/unlawfulness,
cross default, auditors qualification,
material adverse effect, etc.
C. OTHER PROVISIONS
Illegality/Increased Costs/
Capital Adequacy/
Gross-Up for Taxes: Usual for this type of senior
facilities, including withholding tax
gross-up, breakage costs, compensation
for increased costs and compliance
with capital adequacy requirements,
illegality, market disruption, etc.
Costs and Expenses: All costs and out of pocket expenses
(including reasonable legal fees)
incurred by the Agent/Arranger
relating to the Transaction to be
payable by the Borrower.
Assignments/Transfers: Senior Banks free to assign/transfer
rights and obligations under, or grant
participations in the Facility.
14
<PAGE> 15
Syndication
Memorandum: The Borrower will agree to assist the
Senior Banks in syndication generally
and in preparing an information
memorandum.
Law: English.
Jurisdiction: Courts of England.
15
<PAGE> 1
Exhibit (c)(1)
AGREEMENT AND PLAN OF MERGER
DATED AS OF MARCH 8, 1998
AMONG
ASK ASA,
BD ACQUISITION CORP.
AND
PROXIMA CORPORATION
<PAGE> 2
TABLE OF CONTENTS
This Table of Contents is not part of the
Agreement to which it is attached but is inserted
for convenience only.
ARTICLE I.
THE OFFER
1.01 The Offer................................................................ 2
1.02 Company Action........................................................... 3
1.03 Company Board Representation; Section 14(f).............................. 4
ARTICLE II.
THE MERGER
2.01 The Merger............................................................... 5
2.02 Effective Time........................................................... 5
2.03 Closing.................................................................. 6
2.04 Certificate of Incorporation and Bylaws of the Surviving Corporation..... 6
2.05 Directors and Officers of the Surviving Corporation...................... 6
2.06 Effects of the Merger.................................................... 6
2.07 Further Assurances....................................................... 6
ARTICLE III.
CONVERSION OF SHARES
3.01 Conversion of Capital Stock.............................................. 7
3.02 Exchange of Certificates................................................. 8
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
4.01 Organization and Qualification.......................................... 10
4.02 Capital Stock........................................................... 10
4.03 Authority Relative to this Agreement and the Stock Option Agreement..... 12
4.04 Non-Contravention; Approvals and Consents............................... 12
4.05 SEC Reports and Financial Statements.................................... 13
4.06 Absence of Certain Changes or Events.................................... 14
4.07 Absence of Undisclosed Liabilities; Cash and Short-term Investments..... 14
4.08 Legal Proceedings....................................................... 14
4.09 Information Supplied.................................................... 15
4.10 Compliance with Laws and Orders......................................... 15
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4.11 Compliance with Agreements; Certain Agreements; Major Customers......... 16
4.12 Taxes................................................................... 17
4.13 Employee Benefit Plans; ERISA........................................... 20
4.14 Insurance............................................................... 24
4.15 Labor Matters........................................................... 24
4.16 Environmental Matters................................................... 24
4.17 Tangible Property and Assets; Real Property............................. 25
4.18 Intellectual Property Rights............................................ 25
4.19 Vote Required........................................................... 26
4.20 Section 203 of the DGCL Not Applicable.................................. 26
4.21 Financial Advisor Advice................................................ 26
ARTICLE V.
REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB
5.01 Organization and Qualification.......................................... 27
5.02 Authority Relative to this Agreement.................................... 27
5.03 Non-Contravention; Approvals and Consents............................... 27
5.04 Legal Proceedings....................................................... 28
5.05 Information Supplied.................................................... 28
5.06 Parent Not an Interested Stockholder or an Acquiring Person............. 29
5.07 Financing............................................................... 29
ARTICLE VI.
COVENANTS OF THE COMPANY
6.01 Conduct of Business..................................................... 29
6.02 No Solicitations........................................................ 32
ARTICLE VII.
ADDITIONAL AGREEMENTS
7.01 Access to Information; Confidentiality.................................. 33
7.02 Approval of Stockholders................................................ 34
7.03 Preparation of Proxy Statement.......................................... 34
7.04 Regulatory and Other Approvals.......................................... 35
7.05 Employee Benefit Plans.................................................. 35
7.06 Directors' and Officers' Indemnification and Insurance.................. 36
7.07 Expenses................................................................ 38
7.08 Brokers or Finders...................................................... 38
7.09 Notice and Cure......................................................... 38
7.10 Fulfillment of Conditions............................................... 38
7.11 Conveyance Taxes........................................................ 39
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7.12 Stock Option Agreement.................................................. 39
ARTICLE VIII.
CONDITIONS
8.01 Conditions to Each Party's Obligation to Effect the Merger.............. 39
ARTICLE IX.
TERMINATION, AMENDMENT AND WAIVER
9.01 Termination............................................................. 39
9.02 Effect of Termination................................................... 41
9.03 Amendment............................................................... 42
9.04 Waiver.................................................................. 43
ARTICLE X.
GENERAL PROVISIONS
10.01 Non-Survival of Representations, Warranties, Covenants and Agreements.. 43
10.02 Notices................................................................ 43
10.03 Entire Agreement....................................................... 44
10.04 Public Announcements................................................... 45
10.05 No Third Party Beneficiary............................................. 45
10.06 No Assignment; Binding Effect.......................................... 45
10.07 Headings............................................................... 45
10.08 Invalid Provisions..................................................... 45
10.09 Governing Law.......................................................... 45
10.10 Schedules.............................................................. 46
10.11 Counterparts........................................................... 46
GLOSSARY OF DEFINED TERMS.................................................... 48
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AGREEMENT AND PLAN OF MERGER, dated as of March 8, 1998 (the
"Agreement"), made and entered into by and among ASK asa, a corporation
organized under the laws of the Kingdom of Norway ("Parent"), BD Acquisition
Corp., a Delaware corporation and an indirect wholly owned subsidiary of Parent
("Sub"), and Proxima Corporation, a Delaware corporation (the "Company").
WHEREAS, the Boards of Directors of Parent, Sub and the Company have
each determined that it is advisable and in the best interests of their
respective stockholders to consummate, and have approved, the business
combination transaction provided for herein in which (i) Parent will cause Sub
to make a cash tender offer to acquire all of the issued and outstanding shares
of common stock, par value $ .001 per share ("Company Common Stock"), of the
Company upon the terms and subject to the conditions of this Agreement and (ii)
subsequently, Sub will merge with and into the Company and the Company will
become an indirect wholly owned subsidiary of Parent;
WHEREAS, concurrently with the execution and delivery of this Agreement
and as a condition and inducement to Parent's and Sub's willingness to enter
into this Agreement, the Company, Parent and Sub are entering into a stock
option agreement, substantially in the form attached as Exhibit A hereto (the
"Stock Option Agreement"), pursuant to which the Company has granted to Sub an
option, exercisable upon the occurrence of certain events, to acquire a number
of shares of Company Common Stock representing in the aggregate 19.9% of the
aggregate shares of Company Common Stock outstanding at the date of this
Agreement;
WHEREAS, concurrently with the execution and delivery of this Agreement
and as a condition to Parent's and Sub's willingness to enter into this
Agreement, Parent, Sub and certain stockholders of the Company are entering into
a stockholders agreement substantially in the form of Exhibit B hereto (the
"Stockholders Agreement"), pursuant to which each of such stockholders has
agreed, among other things, to tender all shares of Company Common Stock
beneficially owned by him to Sub pursuant to the tender offer referred to above;
WHEREAS, the Board of Directors of the Company has approved and adopted
this Agreement and the transactions contemplated hereby and resolved and agreed
to recommend that holders of shares of Company Common Stock tender their shares
pursuant to such tender offer; and
WHEREAS, Parent, Sub and the Company desire to make certain
representations, warranties and agreements in connection with the transactions
contemplated by this Agreement and also to prescribe various conditions to the
consummation of such transactions;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
<PAGE> 6
ARTICLE I.
THE OFFER
1.01 The Offer.
(a) Provided that this Agreement shall not have been terminated in
accordance with Section 9.01 and nothing shall have occurred that would result
in a failure to satisfy any of the conditions set forth in Annex A hereto, not
later than five business days after the public announcement of the execution of
this Agreement, Parent shall cause Sub to, and Sub shall, commence (within the
meaning of Rule 14d-2 under the Securities Exchange Act of 1934, as amended
(such Act and the rules and regulations promulgated thereunder being referred to
herein as the "Exchange Act")) a cash tender offer (the "Offer") to acquire all
of the issued and outstanding shares of Company Common Stock for $11.00 per
share (such amount, or any greater amount per share paid pursuant to the Offer,
the "Per Share Amount"), net to the seller in cash, subject to any amounts
required to be withheld under applicable federal, state, local or foreign tax
laws and regulations. The obligation of Sub to consummate the Offer and to
accept for payment and to pay for shares of Company Common Stock tendered
pursuant to the Offer shall be subject only to (i) the condition that there
shall have been validly tendered and not withdrawn, in accordance with the terms
of the Offer and prior to the expiration date of the Offer, a number of shares
of Company Common Stock that represents (together with any shares of Common
Stock purchased by Sub under the Stock Option Agreement) at least a majority of
the shares of Company Common Stock outstanding on a fully diluted basis (the
"Minimum Condition"), and (ii) the other conditions set forth in Annex A hereto
(together with the Minimum Condition, the "Offer Conditions"). Sub expressly
reserves the right to waive the Minimum Condition or any of the other Offer
Conditions and to make any other changes in the terms and conditions of the
Offer (other than extending the Offer except as expressly provided below in this
Section 1.01(a)); provided, however, that, without the prior written consent of
the Company, no change may be made which (i) decreases the Per Share Amount or
the number of shares of Company Common Stock sought in the Offer, (ii) changes
the form of consideration to be paid in the Offer, (iii) imposes conditions to
the Offer in addition to those set forth in Annex A hereto, (iv) amends any
Offer Condition, (v) except as provided below, extends the Offer or (vi) is
materially adverse to the holders of shares of Company Common Stock.
Notwithstanding anything to the contrary in this Agreement, (i) Sub may, in its
sole discretion and without the consent of the Company, (A) extend the Offer, at
any time up to the Outside Termination Date, for one or more periods of not more
than ten business days each, if, at the then scheduled expiration date of the
Offer, any Offer Condition has not been satisfied; (B) extend the Offer at any
time (but on not more than one occasion) for a period of not more than 10
business days, if at that time the number of shares of Company Common Stock duly
tendered pursuant to the Offer and not subsequently withdrawn represents less
than 90% of the shares of Company Common Stock then outstanding; or (C) extend
the Offer for any period required by any rule, regulation, interpretation or
position of the Securities and Exchange Commission ("SEC") or the staff thereof
applicable to the Offer and (ii) if at any scheduled expiration date of the
Offer any Offer Condition has not been satisfied or waived by Sub, at the
written request of the Company delivered no later than the scheduled expiration
date of the Offer, Sub shall, and shall continue to, extend the Offer from time
to time for one or more
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periods of not more than five business days each until a date not later than the
Outside Termination Date. Subject to the terms and conditions of the Offer, Sub
shall pay, as soon as reasonably practicable after it is permitted to do so
under applicable law, for all Shares validly tendered and not withdrawn.
(b) As soon as practicable on the date of commencement of the Offer,
Sub shall file with the SEC a Tender Offer Statement on Schedule 14D-1
promulgated under the Exchange Act (together with all amendments and supplements
thereto, the "Schedule 14D-1") with respect to the Offer, and take such steps as
are necessary to cause the Offer to Purchase (as defined below) to be
disseminated to the holders of shares of Company Common Stock as and to the
extent required by applicable federal securities laws. The Schedule 14D-1 shall
contain an offer to purchase (the "Offer to Purchase") and forms of the related
letter of transmittal and any related summary advertisement and other documents
required to be filed pursuant to the Exchange Act (the Schedule 14D-1, the Offer
to Purchase and such other documents, together with all amendments and
supplements thereto, are sometimes collectively referred to in this Agreement as
the "Offer Documents"). Parent, Sub and the Company shall correct promptly any
information provided by any of them for use in the Offer Documents which shall
have become false or misleading, and Parent and Sub shall take all steps
necessary to cause the Schedule 14D-1 as so corrected to be filed with the SEC
and the other Offer Documents as so corrected to be disseminated to holders of
shares of Company Common Stock, in each case as and to the extent required by
applicable federal securities laws. The Company and its counsel shall be given
an opportunity to review and comment on the Offer Documents prior to their being
filed with the SEC, and Parent and Sub shall be promptly advised of any comments
that Parent or Sub receives from the SEC or its staff with respect to the Offer
Documents promptly after receipt of any such comments.
1.02 Company Action.
(a) The Company hereby approves and consents to the Offer and
represents that the Board of Directors of the Company, at a meeting duly called
and held at which a quorum was present throughout, has unanimously (A)
determined that this Agreement and the transactions contemplated hereby,
including the Offer and the Merger, taken together, are fair to and in the best
interests of the holders of shares of Company Common Stock, (B) approved and
adopted this Agreement and the transactions contemplated hereby, (C) recommended
that the stockholders of the Company accept the Offer, tender their shares of
Company Common Stock thereunder to Sub and, if required by applicable law in
order to consummate the Merger, approve and adopt this Agreement and the
transactions contemplated hereby and (D) taken all necessary steps to render
Section 203 of the Delaware General Corporation Law (the "DGCL") inapplicable to
the Merger; provided, however, that subject to and in accordance with the
provisions of Section 6.02, such recommendation may be withdrawn, modified or
amended in connection with a Superior Proposal (as defined in Section 6.02). The
Company hereby consents to the inclusion in the Offer Documents of the
recommendation of the Board of Directors of the Company described in the
immediately preceding sentence.
(b) As soon as practicable on the date of commencement of the Offer,
the Company shall file with the SEC a Solicitation/Recommendation Statement on
Schedule 14D-9
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<PAGE> 8
promulgated under the Exchange Act (together with all amendments and supplements
thereto, the "Schedule 14D-9") containing the recommendation of the Board of
Directors of the Company described in Section 1.02(a), and shall take such steps
as are necessary to cause the Schedule 14D-9 to be disseminated to the holders
of shares of Company Common Stock as and to the extent required by applicable
federal securities laws. The Company, Parent and Sub shall correct promptly any
information provided by any of them for use in the Schedule 14D-9 which shall
have become false or misleading, and the Company shall take all steps necessary
to cause the Schedule 14D-9 as so corrected to be filed with the SEC and
disseminated to holders of shares of Company Common Stock, in each case as and
to the extent required by applicable federal securities laws. Parent and its
counsel shall be given an opportunity to review and comment on the Schedule
14D-9 (including all amendments and supplements thereto) prior to its being
filed with the SEC, and the Company will provide Parent and its counsel in
writing with any comments that the Company receives from the SEC or its staff
with respect to the Schedule 14D-9 promptly after receipt of any such comments.
(c) The Company shall promptly cause its transfer agent to furnish Sub
with mailing labels containing the names and addresses of all record holders of
shares of Company Common Stock and with security position listings of shares of
Company Common Stock held in stock depositories, each as of a recent date,
together with all other available listings and computer files containing names,
addresses and security position listings of record holders and beneficial owners
of shares of Company Common Stock. The Company shall furnish Sub with such
additional information, including, without limitation, updated listings and
files of stockholders, mailing labels and security position listings and such
other assistance as Parent, Sub or their agents may reasonably request in
communicating the Offer to record and beneficial holders of shares of Company
Common Stock.
1.03 Company Board Representation; Section 14(f).
(a) Commencing upon the purchase by Sub of shares of Company Common
Stock pursuant to the Offer or the Stock Option Agreement and from time to time
thereafter, Sub shall be entitled to designate the number of directors, rounded
up to the next whole number, on the Board of Directors of the Company that
equals the product of (i) the total number of directors on the Board of
Directors of the Company (giving effect to any directors elected pursuant to
this sentence) and (ii) the percentage that (A) the aggregate number of shares
of Company Common Stock beneficially owned by Sub or any affiliate of Sub
(including shares accepted for payment in the Offer, provided funds therefor
have been deposited with the depositary appointed by Sub in connection with the
Offer, and shares of Company Common Stock issued to Sub under the Stock Option
Agreement) represents of (B) the total number of shares of Company Common Stock
then outstanding, and the Company shall take all actions necessary to cause
Sub's designees to be elected or appointed as directors of the Company,
including, without limitation, by increasing the size of the Board of Directors
of the Company or securing the resignations of incumbent directors or both. At
such times, the Company shall use its best efforts to cause persons designated
by Sub to constitute the same percentage of each committee of the Board of
Directors of the Company, each board of directors of each Subsidiary and each
committee of each such board as such persons represent on the Board of Directors
of the Company.
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<PAGE> 9
(b) The Company's obligations to appoint Buyer's designees to the Board
of Directors of the Company shall be subject to Section 14(f) of the Exchange
Act and Rule 14f-1 promulgated thereunder. The Company shall promptly take all
actions required pursuant to Section 14(f) and Rule 14f-1 in order to fulfill
its obligations under this Section 1.03, and shall include in the Schedule 14D-9
such information with respect to the Company and its officers and directors as
is required under Section 14(f) and Rule 14f-1 to fulfill such obligations under
this Section 1.03. Parent or Sub shall supply to the Company in writing and be
solely responsible for any information with respect to either of them and their
nominees, officers, directors and affiliates required by such Section 14(f) and
Rule 14f-1.
(c) From and after the time that any of Sub's designees are appointed
to the Company's Board of Directors pursuant to this Section 1.03 and prior to
the Effective Time, any amendment of this Agreement, any termination of this
Agreement by the Company, any extension of the time for the performance of any
of the obligations of Parent or Sub hereunder, any waiver of any condition to
the obligations of the Company or of any of Company's rights hereunder or other
action by the Company hereunder may be effected only by the action of a majority
of the Company Designees (as hereinafter defined), which action shall be deemed
to constitute the action of the full Board of Directors. Until the Effective
Time, the Company shall retain as members of its Board of Directors at least two
directors who are directors of the Company on the date of this Agreement (the
"Company Designees"); in the event of the death, resignation or removal of any
of the Company Designees, any remaining Company Designee (or, if no other
Company Designee shall remain on the Board, the last remaining Company Designee
and, if no Company Designee shall remain on the Board, a majority of the other
members of the Board) shall have the right to appoint a successor or successors
to fill the vacancies so created, which successor shall not be an affiliate or
associate (as those terms are defined in Section 203 of the DGCL) of Parent or
Sub, each of whom shall be deemed for purposes of this Agreement to be a Company
Designee.
ARTICLE II.
THE MERGER
2.01 The Merger. At the Effective Time (as defined in Section 2.02),
upon the terms and subject to the conditions of this Agreement, Sub shall be
merged with and into the Company (the "Merger") in accordance with the DGCL. The
Company shall be the surviving corporation in the Merger (the "Surviving
Corporation"). Sub and the Company are sometimes referred to herein as the
"Constituent Corporations". As a result of the Merger, the outstanding shares of
capital stock of the Constituent Corporations shall be converted or cancelled in
the manner provided in Article III.
2.02 Effective Time. At the Closing (as defined in Section 2.03), a
certificate of merger (the "Certificate of Merger") shall be duly prepared and
executed by the Surviving Corporation and thereafter delivered to the Secretary
of State of the State of Delaware (the "Secretary of State") for filing, as
provided in Section 251 or Section 253, as applicable, of the DGCL, on, or as
soon as practicable after, the Closing Date (as defined in Section 2.03). The
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<PAGE> 10
Merger shall become effective at the time of the filing of the Certificate of
Merger with the Secretary of State or such other time as Sub and the Company
shall agree to be set forth in the Certificate of Merger (such time being
referred to herein as the "Effective Time").
2.03 Closing. The closing of the Merger (the "Closing") will take place
at the offices of Rogers & Wells LLP, 200 Park Avenue, New York, New York 10166,
or at such other place as the parties hereto mutually agree, as soon as
practicable (but in no event later than 10:00 a.m., New York City time, on the
second business day) after consummation of the Offer and, if required by
applicable law in order to consummate the Merger, after the adoption of this
Agreement by the requisite vote of the stockholders of the Company, provided
that the other closing conditions set forth in Article VIII have been satisfied
or, if permissible, waived in accordance with this Agreement (the "Closing
Date").
2.04 Certificate of Incorporation and Bylaws of the Surviving
Corporation. At the Effective Time, (i) the Certificate of Incorporation of Sub
as in effect immediately prior to the Effective Time shall be the Certificate of
Incorporation of the Surviving Corporation until thereafter amended as provided
by law and such Certificate of Incorporation; provided that the Article First of
the Certificate of Incorporation of the Surviving Corporation shall be amended
to read in its entirety as follows: "FIRST: The name of the Corporation is
Proxima Corporation."; and (ii) the Bylaws of Sub as in effect immediately prior
to the Effective Time shall be the Bylaws of the Surviving Corporation until
thereafter amended as provided by law, the Certificate of Incorporation of the
Surviving Corporation and such Bylaws.
2.05 Directors and Officers of the Surviving Corporation. The directors
of Sub and the officers of Sub immediately prior to the Effective Time shall,
from and after the Effective Time, be the directors and officers, respectively,
of the Surviving Corporation until their respective successors shall have been
duly elected or appointed and qualified or until their earlier death,
resignation or removal in accordance with the Surviving Corporation's
Certificate of Incorporation and Bylaws.
2.06 Effects of the Merger. Subject to the foregoing, the effects of
the Merger shall be as provided in the applicable provisions of the DGCL.
2.07 Further Assurances. Each party hereto will execute such further
documents and instruments and take such further actions as may reasonably be
requested by one or more of the others to consummate the Merger, to vest the
Surviving Corporation with full title to all assets, properties, rights,
approvals, immunities and franchises of either of the Constituent Corporations
or to effect the other purposes of this Agreement.
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ARTICLE III.
CONVERSION OF SHARES
3.01 Conversion of Capital Stock. At the Effective Time, by virtue of
the Merger and without any further action on the part of any holder of capital
stock of the Company:
(a) Capital Stock of Sub. Each issued and outstanding share of the
common stock, par value $.001 per share, of Sub ("Sub Common Stock") shall be
converted into and become one fully paid and nonassessable share of common
stock, par value $.001 per share, of the Surviving Corporation ("Surviving
Corporation Common Stock"). Each certificate representing outstanding shares of
Sub Common Stock shall at the Effective Time represent an equal number of shares
of Surviving Corporation Common Stock.
(b) Cancellation of Treasury Stock and Company Common Stock Owned by
Parent and its Subsidiaries. All shares of Company Common Stock that are owned
by the Company as treasury stock and any shares of Company Common Stock owned by
Parent, Sub or any other wholly owned Subsidiary of Parent automatically shall
be cancelled and retired and shall cease to exist, and no stock of Parent or
other consideration shall be delivered in exchange therefor. As used in this
Agreement, "Subsidiary" means, with respect to any party, any corporation or
other organization, whether incorporated or unincorporated, of which more than
50% of either the equity interests in, or the voting control of, such
corporation or other organization is, directly or indirectly, through
Subsidiaries or otherwise, beneficially owned by such party.
(c) Conversion of Company Common Stock. Each issued and outstanding
share of Company Common Stock (other than shares to be cancelled in accordance
with Section 3.01(b) and other than Dissenting Shares (as defined in Section
3.01(d)) shall be converted into the right to receive the Per Share Amount (the
"Merger Price"). All such shares of Company Common Stock shall no longer be
outstanding and shall automatically be cancelled and retired and shall cease to
exist, and each holder of a certificate representing any such shares shall cease
to have any rights with respect thereto, except the right to receive the Merger
Price per share, upon the surrender of such certificate in accordance with
Section 3.02, without interest.
(d) Dissenting Shares. (i) Notwithstanding any provision of this
Agreement to the contrary, each outstanding share of Company Common Stock the
holder of which has not voted in favor of the Merger, has perfected such
holder's right to an appraisal of such holder's shares in accordance with the
applicable provisions of the DGCL and has not effectively withdrawn or lost such
right to appraisal (a "Dissenting Share"), shall not be converted into or
represent a right to receive the Merger Price pursuant to Section 3.01(c), but
the holder thereof shall be entitled only to such rights as are granted by the
applicable provisions of the DGCL; provided, however, that any Dissenting Share
held by a person at the Effective Time who shall, after the Effective Time,
withdraw the demand for appraisal or lose the right of appraisal, in either case
pursuant to the DGCL, shall be deemed to be converted into, as of the Effective
Time, the right to receive the Merger Price pursuant to Section 3.01(c).
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<PAGE> 12
(ii) The Company shall give Parent (x) prompt notice of any written
demands for appraisal, withdrawals of demands for appraisal and any other
instruments served pursuant to the applicable provisions of the DGCL relating to
the appraisal process received by the Company and (y) the opportunity to direct
all negotiations and proceedings with respect to demands for appraisal under the
DGCL. The Company will not, except with the prior written consent of Parent,
voluntarily make any payment with respect to any demands for appraisal or settle
or offer to settle any such demands.
(e) Stock Options. Immediately prior to the Effective Time, each of the
then outstanding employee stock options to purchase Common Stock (the "Company
Stock Options") granted under any employee stock option or compensation plan or
arrangement of the Company (the "Company Stock Plans"), whether or not then
vested or exercisable, automatically shall be cancelled, and each holder of any
such Company Stock Option shall be paid by the Company at the Effective Time for
each such Company Stock Option an amount in cash (subject to any applicable
withholding taxes) determined by multiplying (i) the excess, if any, of the
Merger Price over the applicable exercise price of such Company Stock Option by
(ii) the number of shares of Company Common Stock such holder could have
purchased (assuming full vesting of all Company Stock Options) had such holder
exercised such Company Stock Option in full immediately prior to the Effective
Time. Prior to the Effective Time, the Company will use its best efforts to
obtain any necessary consents and make any amendments to the terms of the
Company Stock Plans to the extent such consents or amendments are necessary to
give effect to the foregoing. Payment by the Company may be withheld in respect
of any Company Stock Option until necessary consents are obtained.
(f) Employee Stock Purchase Plan. Immediately prior to the Effective
Time, the Company's Employee Stock Purchase Plan shall be terminated, and
holders of shares of Company Common Stock purchased under such plan shall be
subject to the terms of this Article III.
3.02 Exchange of Certificates.
(a) Exchange Agent. As soon as reasonably practicable after the
Effective Time, Parent shall make available to the Surviving Corporation for
deposit with a bank or trust company designated by Parent (the "Exchange
Agent"), a cash amount equal to the aggregate Merger Price to which holders of
shares of Company Common Stock shall be entitled upon consummation of the
Merger, to be held for the benefit of and distributed to such holders in
accordance with this Section. The Exchange Agent shall agree to hold such funds
(such funds, together with earnings thereon, being referred to herein as the
"Exchange Fund") for delivery as contemplated by this Section and upon such
additional terms as may be agreed upon by the Exchange Agent, the Company and
Parent. The Exchange Agent shall have a combined capital and surplus of at least
$100,000,000.
(b) Exchange Procedures. As soon as reasonably practicable after the
Effective Time, the Surviving Corporation shall cause to be mailed to each
holder of record of a certificate or certificates which immediately prior to the
Effective Time represented outstanding shares of Company Common Stock (the
"Certificates") whose shares are converted pursuant to
8
<PAGE> 13
Section 3.01(c) into the right to receive the Merger Price (i) a letter of
transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon delivery of the
Certificates to the Exchange Agent and shall be in such form and have such other
provisions as the Surviving Corporation may reasonably specify) and (ii)
instructions for use in effecting the surrender of the Certificates in exchange
for the Merger Price. Upon surrender of a Certificate to the Exchange Agent,
together with such letter of transmittal, duly executed and completed in
accordance with its terms, the holder of such Certificate shall be entitled to
receive in exchange therefor a check representing the Merger Price per share of
Company Common Stock represented thereby which such holder has the right to
receive pursuant to the provisions of this Article III, and the Certificate so
surrendered shall forthwith be cancelled. In no event shall the holder of any
Certificate be entitled to receive interest on any funds to be received in the
Merger. In the event of a transfer of ownership of Company Common Stock which is
not registered in the transfer records of the Company, the Merger Price may be
issued to a transferee if the Certificate representing such Company Common Stock
is presented to the Exchange Agent accompanied by all documents required to
evidence and effect such transfer and by evidence that any applicable stock
transfer taxes have been paid. Until surrendered as contemplated by this Section
3.02(b), each Certificate shall be deemed at any time after the Effective Time
to represent only the right to receive upon such surrender the Merger Price per
share of Company Common Stock represented thereby as contemplated by this
Article III.
(c) No Further Ownership Rights in Company Common Stock. All cash paid
upon the surrender of shares of Company Common Stock in accordance with the
terms hereof shall be deemed to have been paid in full satisfaction of all
rights pertaining to such shares of Company Common Stock. From and after the
Effective Time, the stock transfer books of the Company shall be closed and
there shall be no further registration of transfers on the stock transfer books
of the Surviving Corporation of the shares of Company Common Stock which were
outstanding immediately prior to the Effective Time. If, after the Effective
Time, Certificates are presented to the Surviving Corporation for any reason,
they shall be cancelled and exchanged as provided in this Section.
(d) Escheat. Neither Parent nor the Surviving Corporation shall be
liable to any holder of shares of Company Common Stock for cash representing the
Merger Price delivered to a public official pursuant to any applicable abandoned
property, escheat or similar law. Any amounts representing the Merger Price and
remaining unclaimed by any holder of shares of Company Common Stock on the day
immediately prior to the time such amounts would otherwise escheat to or become
the property of any governmental entity shall, to the extent permitted by law,
become the property of Parent, free and clear of any claims or interest of any
natural or legal person previously entitled thereto.
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ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the relevant Section (determined in accordance
with Section 10.10 of this Agreement) of the disclosure schedule (the
"Disclosure Schedule") delivered by the Company to Parent and Sub concurrently
with the execution of this Agreement, the Company represents and warrants to
Parent and Sub as follows:
4.01 Organization and Qualification.
(a) Each of the Company and its Subsidiaries is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has full corporate power and authority to
conduct its business as and to the extent now conducted and to own, use and
lease its assets and properties, except (in the case of any Subsidiary) for such
failures to be so organized, existing and in good standing or to have such power
and authority which, individually or in the aggregate, are not having and could
not be reasonably expected to have a Material Adverse Effect on the Company and
its Subsidiaries taken as a whole. Each of the Company and its Subsidiaries is
duly qualified, licensed or admitted to do business and is in good standing in
each jurisdiction in which the ownership, use or leasing of its assets and
properties, or the conduct or nature of its business, makes such qualification,
licensing or admission necessary, except for such failures to be so qualified,
licensed or admitted and in good standing which, individually or in the
aggregate, (i) are not having and could not be reasonably expected to have a
Material Adverse Effect on the Company and its Subsidiaries taken as a whole and
(ii) could not be reasonably expected to have a Material Adverse Effect on the
validity or enforceability of this Agreement or the Stock Option Agreement or on
the ability of the Company to perform its obligations hereunder or thereunder.
As used in this Agreement, any reference to any event, change or effect having a
"Material Adverse Effect" on or with respect to, or "Materially Adversely
Affecting," an entity (or group of entities taken as a whole) means such event,
change or effect materially adversely affects the business, condition (financial
or otherwise) or results of operations of such entity (or, if with respect
thereto, of such group of entities taken as a whole). Section 4.01 of the
Disclosure Schedule sets forth the name and jurisdiction of incorporation of
each Subsidiary of the Company.
(b) Neither the Company nor any Subsidiary of the Company, directly or
indirectly, owns any shares or has any ownership interest in any other Person or
is a partner with any other Person, and neither the Company nor any Subsidiary
of the Company has an obligation to purchase any shares of stock, other
securities or any other form of investment in any other Person.
4.02 Capital Stock.
(a) The authorized capital stock of the Company consists solely of
40,000,000 shares of Company Common Stock and 5,000,000 shares of preferred
stock, par value $.001 per share ("Preferred Stock"). As of the date of this
Agreement, (i) 7,175,445 shares of Company Common Stock were issued and
outstanding, (ii) 281,221 shares of Company Common
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Stock were held in the treasury of the Company, (iii) 1,500,000 shares of
Company Common Stock have been reserved for issuance under the Company's Amended
and Restated 1996 Stock Plan (the "1996 Plan"), (iv) up to an additional 500,000
shares of Company Common Stock have been reserved for issuance under the 1996
Plan to the extent that outstanding options to purchase Company Common Stock
previously granted under the Company's Amended and Restated 1986 Stock Option
Plan expire unexercised and (v) 1,427,914 shares of Company Common Stock have
been reserved for issuance under the Stock Option Agreement. As of the date
hereof, no shares of Preferred Stock are issued and outstanding. All of the
issued and outstanding shares of Company Common Stock are, and all shares
reserved for issuance will be, upon issuance in accordance with the terms
specified in the instruments or agreements pursuant to which they are issuable,
duly authorized, validly issued, fully paid and nonassessable. Except pursuant
to this Agreement and the Stock Option Agreement, there are no (i) outstanding
subscriptions, options, warrants, rights (including "phantom" stock rights),
preemptive rights or other contracts, commitments, understandings or
arrangements, including any right of conversion or exchange under any
outstanding security, instrument or agreement (together, "Options"), obligating
the Company or any of its Subsidiaries to issue or sell any shares of capital
stock of the Company or any Subsidiary of the Company or to grant, extend or
enter into any Option with respect thereto or (ii) voting trusts, proxies or
other commitments, understandings, restrictions or arrangements in favor of any
person other than the Company or a Subsidiary wholly owned, directly or
indirectly, by the Company with respect to the voting of or the right to
participate in dividends or other earnings on any capital stock of any
Subsidiary of the Company.
(b) All of the outstanding shares of capital stock of each Subsidiary
of the Company are duly authorized, validly issued, fully paid and nonassessable
and are owned, beneficially and of record, by the Company or a Subsidiary wholly
owned, directly or indirectly, by the Company, free and clear of any liens,
claims, mortgages, encumbrances, pledges, security interests, equities and
charges of any kind (each a "Lien").
(c) There are no outstanding contractual obligations of the Company or
any Subsidiary of the Company to repurchase, redeem or otherwise acquire any
shares of Company Common Stock or any capital stock of any Subsidiary of the
Company or to provide funds to, or make any investment (in the form of a loan,
capital contribution or otherwise) in, any Subsidiary of the Company or any
other person.
(d) As of the date of this Agreement and as of the record date of the
Company's most recent annual meeting of stockholders, the Company has and had,
respectively, at least 800 holders of Company Common Stock. The Company
previously has furnished to Parent written documentation with respect to such
number of holders of Company Common Stock, including certifications obtained by
the Company in accordance with Section 2115(a) of the California General
Corporation Law from each Nominee Holder (as defined in such Section 2115(a))
with respect to all beneficial owners for whom shares of Company Common Stock
are held and the number of such shares held for those beneficial owners having
addresses (as shown on the records of the Nominee Holders) in the State of
California and outside of the State of California.
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4.03 Authority Relative to this Agreement and the Stock Option
Agreement. The Company has full corporate power and authority to enter into this
Agreement and the Stock Option Agreement and, subject (in the case of this
Agreement) to obtaining the Company Stockholders' Approval (as defined in
Section 7.02(a)), if and to the extent required by applicable law, to perform
its obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby. The execution, delivery and performance of this
Agreement and the Stock Option Agreement by the Company and the consummation by
the Company of the transactions contemplated hereby and thereby have been duly
and validly approved by the Board of Directors of the Company; the Board of
Directors of the Company has unanimously recommended adoption of this Agreement
by the stockholders of the Company and directed that this Agreement be submitted
to the stockholders of the Company for their consideration; and no other
corporate proceedings on the part of the Company or its stockholders are
necessary to authorize the execution, delivery and performance of this Agreement
and the Stock Option Agreement by the Company and the consummation by the
Company of the transactions contemplated hereby and thereby, other than, with
respect to the Merger, obtaining the Company Stockholders' Approval if and to
the extent required by applicable law. This Agreement and the Stock Option
Agreement have been duly and validly executed and delivered by the Company and,
subject (in the case of this Agreement) to the obtaining of the Company
Stockholders' Approval, if and to the extent required by applicable law,
constitute legal, valid and binding obligations of the Company enforceable
against the Company in accordance with their terms, except as enforceability may
be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights generally and by
general equitable principles (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
4.04 Non-Contravention; Approvals and Consents.
(a) The execution and delivery of this Agreement and the Stock Option
Agreement by the Company do not, and the performance by the Company of its
obligations hereunder and thereunder and the consummation of the transactions
contemplated hereby and thereby will not, conflict with, result in a violation
or breach of, constitute (with or without notice or lapse of time or both) a
default under, result in or give to any person any right of payment or
reimbursement, termination, cancellation, modification or acceleration of, or
result in the creation or imposition of any Lien upon any of the assets or
properties of the Company or any of its Subsidiaries under, any of the terms,
conditions or provisions of (i) the certificates or articles of incorporation or
bylaws (or other comparable charter documents) of the Company or any of its
Subsidiaries, or (ii) subject to the obtaining of the Company Stockholders'
Approval and the taking of the actions described in paragraph (b) of this
Section, (x) any statute, law, rule, regulation or ordinance (together, "Laws"),
or any judgment, decree, order, writ, permit or license (together, "Orders"), of
any court, tribunal, arbitrator, authority, agency, commission, official or
other instrumentality of the United States any foreign country or any domestic
or foreign state, county, city or other political subdivision (a "Governmental
or Regulatory Authority"), applicable to the Company or any of its Subsidiaries
or any of their respective assets or properties, or (y) any note, bond,
mortgage, security agreement, indenture, license, franchise, permit, concession,
contract, lease or other instrument, obligation or agreement of any kind
(together, "Contracts") to which the Company or any of its Subsidiaries is a
party or by
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which the Company or any of its Subsidiaries or any of their respective assets
or properties is bound, excluding from the foregoing clauses (x) and (y)
conflicts, violations, breaches, defaults, terminations, modifications,
accelerations and creations and impositions of Liens which, individually or in
the aggregate, could not be reasonably expected to have a Material Adverse
Effect on the Company and its Subsidiaries taken as a whole or on the ability of
the Company to consummate the transactions contemplated by this Agreement and
the Stock Option Agreement.
(b) Except (i) for the filing of a premerger notification report by the
Company under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, and the rules and regulations thereunder (the "HSR Act"), (ii) for the
filing of the Schedule 14D-9 and the Proxy Statement (as defined in Section
4.09) with the SEC pursuant to the Exchange Act, (iii) for the actions pursuant
to Section 14(f) of and Rule 14f-1 under the Exchange Act contemplated by
Section 1.03(b), (iv) for the filing of the Certificate of Merger and other
appropriate merger documents required by the DGCL with the Secretary of State
and appropriate documents with the relevant authorities of other states in which
the Constituent Corporations are qualified to do business, and (v) as disclosed
in Schedule 4.04 hereto, no consent, approval or action of, filing with or
notice to any Governmental or Regulatory Authority or other public or private
third party is necessary or required under any of the terms, conditions or
provisions of any Law or Order of any Governmental or Regulatory Authority or
any Contract to which the Company or any of its Subsidiaries is a party or by
which the Company or any of its Subsidiaries or any of their respective assets
or properties is bound for the execution and delivery of this Agreement and the
Stock Option Agreement by the Company, the performance by the Company of its
obligations hereunder and thereunder or the consummation of the transactions
contemplated hereby or thereby, other than such consents, approvals, actions,
filings and notices which the failure to make or obtain, as the case may be,
individually or in the aggregate, could not be reasonably expected to have a
Material Adverse Effect on the Company and its Subsidiaries taken as a whole or
on the ability of the Company to consummate the transactions contemplated by
this Agreement and the Stock Option Agreement.
4.05 SEC Reports and Financial Statements. The Company delivered to
Parent prior to the execution of this Agreement a true and complete copy of each
form, report, schedule, registration statement, definitive proxy statement and
other document (together with all amendments thereof and supplements thereto)
filed by the Company or any of its Subsidiaries with the SEC since March 31,
1995 (as such documents have since the time of their filing been amended or
supplemented, the "Company SEC Reports"), which are all the documents (other
than preliminary material) that the Company and its Subsidiaries were required
to file with the SEC since such date. As of their respective dates, the Company
SEC Reports (i) complied as to form in all material respects with the
requirements of the Securities Act of 1933, as amended, and the rules and
regulations thereunder (the "Securities Act"), or the Exchange Act, as the case
may be, and (ii) did not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading. The audited consolidated financial statements and
unaudited interim consolidated financial statements (including, in each case,
the notes, if any, thereto) included in the Company SEC Reports (the "Company
Financial Statements") complied as to form in all material respects with the
published
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<PAGE> 18
rules and regulations of the SEC as of the date thereof with respect thereto,
were prepared in accordance with generally accepted accounting principles
applied on a consistent basis during the periods involved (except as may be
indicated therein or in the notes thereto and except with respect to unaudited
statements as permitted by Form 10-Q of the SEC) and fairly present (subject, in
the case of the unaudited interim financial statements, to normal, recurring
year-end audit adjustments which are not expected to be, individually or in the
aggregate, materially adverse to the Company and its Subsidiaries taken as a
whole) the consolidated financial position of the Company and its consolidated
subsidiaries as at the respective dates thereof and the consolidated results of
their operations and cash flows for the respective periods then ended. Each
Subsidiary of the Company is treated as a consolidated subsidiary of the Company
in the Company Financial Statements for all periods covered thereby.
4.06 Absence of Certain Changes or Events. Except as contemplated by
this Agreement and except as disclosed in the Company SEC Reports filed prior to
the date of this Agreement, (a) since December 31, 1997 there has not been any
change, event or development having, individually or in the aggregate, a
Material Adverse Effect on the Company and its Subsidiaries taken as a whole and
(b) between such date and the date hereof (i) the Company and its Subsidiaries
have conducted their respective businesses only in the ordinary course
consistent with past practice and (ii) neither the Company nor any of its
Subsidiaries has taken any action which, if taken after the date hereof, would
constitute a breach of any provision of clause (ii) of Section 6.01(b).
4.07 Absence of Undisclosed Liabilities; Cash and Short-term
Investments.
(a) Except for matters reflected or reserved against in the balance
sheet at December 31, 1997 included in the Company Financial Statements, neither
the Company nor any of its Subsidiaries had at such date, or has incurred since
that date, any liabilities or obligations (whether absolute, accrued,
contingent, fixed or otherwise, or whether due or to become due) of any nature
that would be required by generally accepted accounting principles to be
reflected on a consolidated balance sheet of the Company and its consolidated
subsidiaries (including the notes thereto), except liabilities or obligations
(i) which were incurred in the ordinary course of business consistent with past
practice and (ii) which have not been, and could not be reasonably expected to
be, individually or in the aggregate, materially adverse to the Company and its
Subsidiaries taken as a whole.
(b) As of the date of this Agreement, the Company has cash and cash
equivalents and short-term investments (in each case calculated in accordance
with generally accepted accounting principles consistently applied in accordance
with past practice) that in the aggregate equal at least $20 million.
4.08 Legal Proceedings. Except as disclosed in the Company SEC Reports
filed prior to the date of this Agreement, (i) there are no actions, suits,
arbitrations or proceedings pending or, to the knowledge of the Company and its
Subsidiaries, threatened against, relating to or affecting, nor to the knowledge
of the Company and its Subsidiaries are there any Governmental or Regulatory
Authority investigations or audits pending or threatened against, relating to or
affecting, the Company or any of its Subsidiaries or any of their respective
assets
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and properties which, individually or in the aggregate, could be reasonably
expected to have a Material Adverse Effect on the Company and its Subsidiaries
taken as a whole or on the ability of the Company to consummate the transactions
contemplated by this Agreement or the Stock Option Agreement, and there are no
facts or circumstances known to the Company or any of its Subsidiaries that
could be reasonably expected to give rise to any such action, suit, arbitration,
proceeding, investigation or audit, and (ii) neither the Company nor any of its
Subsidiaries is subject to any Order of any Governmental or Regulatory Authority
which, individually or in the aggregate, is having or could be reasonably
expected to have a Material Adverse Effect on the Company and its Subsidiaries
taken as a whole or on the ability of the Company to consummate the transactions
contemplated by this Agreement or the Stock Option Agreement.
4.09 Information Supplied.
(a) The Schedule 14D-9, any proxy statement or information statement,
as the case may be, relating to the Company Stockholders' Meeting (as defined in
Section 7.02) to be sent to stockholders of the Company, as amended or
supplemented from time to time (as so amended and supplemented, the "Proxy
Statement"), and any other documents to be filed by the Company with the SEC or
any other Governmental or Regulatory Authority in connection with the Offer or
the Merger and the other transactions contemplated hereby or by the Stock Option
Agreement will not, on the date of its filing or, with respect to the Schedule
14D-9, at the date it is filed with the SEC and first published, sent or given
to stockholders, or, in the case of the Proxy Statement, at the date it is
mailed to stockholders, and at the time of the Company Stockholders' Meeting and
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 light of the circumstances under which they
are made, not misleading, except that no representation is made by the Company
with respect to information supplied in writing by or on behalf of Parent or Sub
expressly for inclusion therein and information incorporated by reference
therein from documents, if any, filed by Parent or any of its Subsidiaries with
the SEC. The Schedule 14D-9, the Proxy Statement and any other such documents
filed by the Company with the SEC under the Exchange Act will comply as to form
in all material respects with the requirements of the Exchange Act.
(b) Neither the information supplied or to be supplied in writing by or
on behalf of the Company for inclusion, nor the information incorporated by
reference from documents filed by the Company or any of its Subsidiaries with
the SEC, in the Offer Documents or any other documents to be filed by Parent or
Sub with the SEC or any other Governmental or Regulatory Authority in connection
with the Offer or the Merger and the other transactions contemplated hereby or
by the Stock Option Agreement will on the date of its filing or, with respect to
the Offer Documents, at the date they are filed with the SEC and first
published, sent or given to stockholders, 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.
4.10 Compliance with Laws and Orders. The Company and its Subsidiaries
hold all permits, licenses, variances, exemptions, orders and approvals of all
Governmental and Regulatory Authorities necessary for the lawful conduct of
their respective businesses (the
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"Company Permits"), except for failures to hold such permits, licenses,
variances, exemptions, orders and approvals which, individually or in the
aggregate, are not having and could not be reasonably expected to have a
Material Adverse Effect on the Company and its Subsidiaries taken as a whole.
The Company and its Subsidiaries are in compliance with the terms of the Company
Permits, except failures so to comply which, individually or in the aggregate,
are not having and could not be reasonably expected to have a Material Adverse
Effect on the Company and its Subsidiaries taken as a whole. Except as disclosed
in the Company SEC Reports filed prior to the date of this Agreement, the
Company and its Subsidiaries are not in violation of or default under any Law or
Order of any Governmental or Regulatory Authority, except for violations which,
individually or in the aggregate, are not having and could not be reasonably
expected to have a Material Adverse Effect on the Company and its Subsidiaries
taken as a whole.
4.11 Compliance with Agreements; Certain Agreements; Major Customers.
(a) Except as disclosed in the Company SEC Reports filed prior to the
date of this Agreement, neither the Company nor any of its Subsidiaries nor to
the knowledge of the Company and its Subsidiaries any other party thereto is 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 notice or lapse of
time or both, could be reasonably expected to result in a default under, (i) the
certificates of incorporation or bylaws (or other comparable charter documents)
of the Company or any of its Subsidiaries or (ii) any Contract to which the
Company or any of its Subsidiaries is a party or by which the Company or any of
its Subsidiaries or any of their respective assets or properties is bound,
except in the case of clause (ii) for breaches, violations and defaults which,
individually or in the aggregate, are not having and could not be reasonably
expected to have a Material Adverse Effect on the Company and its Subsidiaries
taken as a whole.
(b) Except as disclosed in the Company SEC Reports filed prior to the
date of this Agreement or as provided for in this Agreement, as of the date
hereof, neither the Company nor any of its Subsidiaries is a party to any oral
or written (i) consulting agreement not terminable on 30 days' or less notice
involving the payment of more than $75,000 per annum or $250,000 per annum in
the aggregate for all such agreements, (ii) union or collective bargaining
agreement, (iii) agreement with any executive officer or other key employee of
the Company or any of its Subsidiaries the benefits of which are contingent or
vest, or the terms of which are materially altered, upon the occurrence of a
transaction involving the Company or any of its Subsidiaries of the nature
contemplated by this Agreement, (iv) agreement with respect to any executive
officer or other key employee of the Company or any of its Subsidiaries
providing any term of employment or compensation guarantee or (v) agreement or
plan, including any stock option, stock appreciation right, restricted stock or
stock purchase plan, any of the benefits of which will be increased, or the
vesting of the benefits of which will be accelerated, by the occurrence of any
of the transactions contemplated by this Agreement or the value of any of the
benefits of which will be calculated on the basis of any of the transactions
contemplated by this Agreement.
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(c) Section 4.11 of the Disclosure Schedule includes a complete and
correct list of the 15 largest customers of the Company and its Subsidiaries, on
a consolidated basis, in terms of revenue recognized in respect of such
customers for the three-month period ending December 31, 1997, showing the
amount of revenue recognized for each such customer during such period. No
officer of the Company or any Subsidiary of the Company has been notified in
writing that any of the customers listed in Section 4.11 of the Disclosure
Schedule will terminate or reduce in any material respect, or otherwise
materially and adversely change, the business or relationship between such
customer and the Company or any Subsidiary of the Company.
4.12 Taxes.
(a) (i) Filing of Timely Tax Returns. The Company has timely filed all
Tax Returns required to be filed by applicable law, maintained all documents
and records relating to Taxes as are required to be made or provided by it
and has complied in all respects with all legislation relating to Taxes
applicable to it. All Tax Returns were in all respects (and, as to Tax
Returns not filed as of the date hereof, will be) true, complete and
correct. No claim has ever been made by any authority of a jurisdiction
where the Company does not file Tax Returns that the Company is or may be
subject to taxation by that jurisdiction.
(ii) Payment of Taxes. The Company has, within the time and in the
manner prescribed by law, paid (and until the Closing Date will pay within
the time and in the manner prescribed by law) all Taxes that are due and
payable.
(iii) Tax Reserves. The Company has established (and until the Closing
Date will maintain) on its books and records reserves adequate to pay all
Taxes not yet due and payable in accordance with generally accepted
accounting principles. No differences exist between the amounts of the book
basis and the tax basis of assets (net of liabilities) on the books and
records of the Company that are not accounted for by an accrual on the books
for federal income tax purposes.
(iv) Tax Liens. There are no Liens for Taxes with respect to the assets
or the income or operations of the Company except Liens for Taxes not yet
due.
(v) Extensions of Time for Filing Tax Returns. The Company has not
requested any extension of time within which to file any Tax Return, which
Tax Return has not since been filed.
(vi) Waivers of Statute of Limitations. The Company has not executed
any outstanding waivers or comparable consents regarding the application of
the statute of limitations with respect to any Taxes or Tax Returns.
(vii) Expiration of Statute of Limitations. The statute of limitations
for the assessment of all Taxes has expired for all applicable federal and
California state Tax Returns of the Company or those federal and California
state Tax Returns have been
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examined by the appropriate taxing authorities for all periods through
March 31, 1994, in the case of federal Tax Returns, and through March 31,
1993, in the case of California state Tax Returns. No deficiency for any
Taxes has been proposed, asserted or assessed against the Company that has
not been resolved and paid in full.
(viii) Audit, Administrative and Court Proceedings. No audits or other
administrative proceedings or court proceedings are presently pending with
regard to any Taxes or Tax Returns of the Company, and no Governmental or
Regulatory Authority has notified the Company that it intends to investigate
its Tax affairs.
(ix) Powers of Attorney. No power of attorney currently in force has
been granted by the Company concerning any Tax matter.
(x) Tax Rulings. The Company has not received a Tax Ruling or entered
into a Closing Agreement with any Governmental or Regulatory Authority that
would reasonably be expected to have a Material Adverse Effect upon the
Company after the Closing Date.
(xi) Availability of Tax Returns. The Company has made available to
Parent complete and accurate copies of (i) all Tax Returns, and any
amendments thereto, filed by the Company, (ii) all audit reports received
from any Governmental or Regulatory Authority relating to any Tax Return
filed by the Company and (iii) the Closing Agreements entered into by the
Company with any Governmental or Regulatory Authority.
(xii) Secondary Liability. No event, transaction, act or omission has
occurred which could result in the Company becoming liable to pay or to bear
any Tax as a transferee, successor or otherwise which is primarily or
directly chargeable or attributable to any other person, firm or company.
The Company has no actual or contingent liability (whether by reason of any
indemnity, warranty or otherwise) to any other person in respect of any
actual, contingent or deferred liability of such person for Taxes.
(xiii) Withholding Taxes. The Company has complied (and until the
Closing Date will comply) in all respects with the provisions of the
Internal Revenue Code of 1986, as amended (the "Code"), relating to the
payment and withholding of Taxes, including, without limitation, the
withholding and reporting requirements under Code Sections 1441
through 1464, 3401 through 3606, and 6041 and 6049, as well as similar
provisions under any other Laws, and has, within the time and in the manner
prescribed by Law, withheld and paid over to the proper Governmental or
Regulatory Authorities all amounts required in connection with amounts paid
or owing to any employee, independent contractor, creditor, stockholder, or
other third party.
(xiv) Code Section 341(f). The Company has not filed (and will not file
prior to the Closing) a consent pursuant to Code Section 341(f) or agreed to
have Code Section 341(f)(2)
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apply to any disposition of a subsection (f) asset (as that term is
defined in Code Section 341(f)(4)) owned by the Company.
(xv) Code Section 168. No property of the Company is property that it
or any party to this transaction is or will be required to treat as being
owned by another person pursuant to the provisions of Code Section 168(f)(8)
(as in effect prior to its amendment by the Tax Reform Act of 1986) or is
"tax-exempt use property" within the meaning of Code Section 168.
(xvi) Code Section 481 Adjustments. The Company is not required to
include in income any adjustment pursuant to Code Section 481(a) by reason
of a voluntary change in accounting method initiated by the Company, and to
the best of the knowledge of the Company, the Internal Revenue Service (the
"IRS") has not proposed any such adjustment or change in accounting method.
(xvii) Code Section 338 Elections. No election under Code Section 338
(or any predecessor provisions) has been made with respect to any assets of
the Company.
(xviii) Deductibility of Payments or Obligations. The Company is not
subject to any contract, obligation or commitment under which it will or may
any time hereafter be or become liable to make any payment (or provide any
other amount in money or money's worth) which (in either such case) is not
deductible, depreciable or amortizable in full in computing the income of
the Company for the purpose of any Taxes on income or profits to which the
Company may be subject, other than any payment relating to the acquisition
of assets which is treated as having an indefinite useful life for purposes
of the relevant Tax.
(xix) Payments for Assets or Services. The Company has not disposed of
any asset or supplied any service or business facility of any kind
(including a loan of money or the letting, hiring or licensing of any
property whether tangible or intangible) in circumstances where the
consideration to be received for such disposal or supply will be less than
the consideration deemed received for Tax purposes.
(xx) Parachute Payments. The Company is not a party to any agreement,
contract, or arrangement that would result, separately or in the aggregate,
in the payment of any "excess parachute payments" within the meaning of Code
Section 280G.
(b) Defined Terms. The following capitalized terms shall have the
following meanings:
(i) "Closing Agreement" means a written and legally binding agreement
with a Governmental or Regulatory Authority relating to Taxes.
(ii) "Tax" or "Taxes" means all taxes, charges, fees, levies or other
assessments imposed by any federal, state, local or foreign taxing
authority, whether disputed or not, including, without limitation, income,
capital, estimated, excise,
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property, sales, transfer, withholding, employment, payroll, and
franchise taxes and such terms shall include any interest, penalties or
additions attributable to or imposed on or with respect to such assessments.
(iii) "Tax Returns" means any return, report, information return, or
other document (including any related or supporting information) filed or
required to be filed with any federal, state, local, or foreign Governmental
or Regulatory Authority in connection with the determination, assessment or
collection of any Tax (whether or not such Tax is imposed on the Company) or
the administration of any laws, regulations or administrative requirements
relating to any Tax.
(iv) "Tax Ruling" means a written ruling by a Governmental or
Regulatory Authority relating to Taxes.
4.13 Employee Benefit Plans; ERISA.
(a) There are no Company Benefit Plans (as defined below) except as set
forth in Section 4.13 of the Disclosure Schedule. With respect to each Company
Benefit Plan, to the extent applicable:
(i) each of the Company Benefit Plans is, and its administration is and
has been in compliance with, and none of the Company nor any of its
Subsidiaries has received any claim or notice that any such Company Benefit
Plan is not in compliance with, its terms and all applicable laws,
regulations, rulings and other authority issued thereunder and all other
applicable governmental laws, regulations and orders, and prohibited
transaction exemptions, including, without limitation, the requirements of
ERISA and all Tax rules for which favorable Tax treatment is intended,
bonding requirements and requirements for the filing of applicable reports,
documents, and notices with the Secretary of Labor or the Secretary of the
Treasury and the furnishing of documents to the participants and
beneficiaries (and other individuals entitled to such documents) of each
such Plan (as defined below);
(ii) neither the PBGC (as defined below), the Company nor any of its
Subsidiaries has instituted proceedings to terminate any Company Benefit
Plan;
(iii) all contributions, premiums and other payments required by law or
any Plan or applicable collective bargaining agreement to have been made
under any such Plan to any fund, trust or account established thereunder or
in connection therewith have been made by the due date thereof; and any and
all contributions, premiums and other payments with respect to compensation
or service before and through the Closing, or otherwise with respect to
periods before and through the Closing, due from any of the Company or its
affiliates to, under or on account of each Company Benefit Plan shall have
been paid prior to Closing or shall have been fully reserved and provided
for on the Company Financial Statements;
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(iv) no Company Benefit Plan is now or has ever been subject to Part
III of Subtitle B of Title I of ERISA or Section 412 of the Code;
(v) the actuarial present value on a termination basis of accrued
benefits under each of the Company Benefit Plans sponsored by the Company,
any Subsidiary of the Company or any ERISA Affiliate which is subject to
Title IV of ERISA, based upon the interest rate assumptions that would be
utilized by the PBGC to value annuities for a pension plan termination and
the other actuarial assumptions and methods currently used for such Company
Benefit Plan, did not, as of its latest valuation date, exceed the then
current value of the assets of such Company Benefit Plan;
(vi) each of the Company Benefit Plans which is intended to be
Tax-qualified under Section 401(a) of the Code has been determined by the
IRS to be so qualified and such determination has not been modified, revoked
or limited, and no circumstances have occurred that would adversely affect
the tax-qualified status of any such Plan;
(vii) there is no suit, action, dispute, claim, arbitration or legal,
administrative or other proceeding or governmental investigation pending, or
threatened, alleging any breach of the terms of any such Plan or of any
fiduciary duties thereunder or violation of any applicable law with respect
to any such Plan;
(viii) none of the Company or any of its Subsidiaries is in default in
performing any of its contractual obligations under any of the Company
Benefit Plans or any related trust agreement or insurance contract;
(ix) none of the Company or any Subsidiary of the Company, or, to the
Company's best knowledge, any "party in interest" (as defined in Section
3(14) of ERISA) or any "disqualified person" (as defined in Section 4975 of
the Code) with respect to any such Plan, has engaged in a non-exempt
"prohibited transaction" within the meaning of Section 4975 of the Code or
Section 406 of ERISA;
(x) (a) no Company Benefit Plan that is a "welfare benefit plan" (as
defined in Section 3(1) of ERISA) provides for continuing benefits or
coverage for any participant or beneficiary or covered dependent of a
participant after such participant's termination of employment, except to
the extent required by Law; (b) there has been no violation of Section 4980B
of the Code or Sections 601 through 608 of ERISA with respect to any such
Plan that could result in any material liability; (c) no such Plans are
"multiple employer welfare arrangements" within the meaning of Section 3(40)
of ERISA; (d) with respect to any such Plans that are self-insured, all
claims made pursuant to any such Plan that have not yet been paid are set
forth in Section 4.13 of the Disclosure Schedule, together with an estimate
thereof; no such claim could, in the aggregate, result in an uninsured
liability in excess of $10,000 per participant or covered dependent, and all
such claims could not result in an uninsured liability of more than $100,000
in the aggregate for all participants and covered dependents combined, and
are estimated as set forth on Section 4.13 of the Disclosure Schedule; (e)
none of the
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Company or any Subsidiary of the Company maintains or has any
obligation to contribute to any "voluntary employees' beneficiary
association" within the meaning of Section 501(c)(9) of the Code or other
funding arrangement for the provision of welfare benefits (such disclosure
to include the amount of any such funding); and (f) all Company Benefit
Plans which provide medical, dental health or long-term disability benefits
are fully insured and claims with respect to any participant or covered
dependent under such Company Benefit Plan could not result in any uninsured
liability to the Company, any Subsidiary of the Company or Parent;
(xi) None of the Company, any Subsidiary of the Company or any ERISA
Affiliate has at any time: (a) had any obligation to contribute to any
"multiemployer plan" as defined in Section 3(37) of ERISA, and (b) withdrawn
in any complete or partial withdrawal from any "multiemployer plan" as
defined in Section 3(37) of ERISA. If the Company, the Subsidiaries of the
Company and each ERISA Affiliate were to, as of the date hereof, completely
withdraw from all multiemployer plans in which any of them participate, or
to which any of them otherwise have any obligation to contribute, neither
the Company, any Subsidiary of the Company nor any ERISA Affiliate would
incur any withdrawal liability;
(xii) with respect to each such Plan, true, correct, and complete
copies of the applicable following documents have been delivered to Parent:
(a) all current Plan documents and related trust documents, and any
amendment thereto; (b) Forms 5500, financial statements and actuarial
reports for the last three Plan years; (c) the most recently issued IRS
determination letter; (d) summary plan descriptions and all summaries of
material modifications; and (e) all written communications to employees
relating to such Plans.
(b) Without limiting any other provision of this Section 4.13, no event
has occurred and no condition exists, with respect to any Plan, that has
subjected or could subject the Company or any Subsidiary of the Company, or any
Company Benefit Plan or any successor thereto, to any tax, fine, penalty or
other liability (other than, in the case of the Company, a Subsidiary of the
Company and the Company Benefit Plans, a liability arising in the normal course
to make contributions or payments, as applicable, when ordinarily due under a
Company Benefit Plan with respect to employees of the Company and the
Subsidiaries of the Company). No Plan other than a Company Benefit Plan is or
will be directly or indirectly binding on Parent by virtue of the transactions
contemplated hereby. Parent, and its affiliates, including on and after the
Closing, the Company and any Subsidiary of the Company, shall have no liability
for, under, with respect to or otherwise in connection with any Plan, which
liability arises under ERISA or the Code, by virtue of the Company or any
Subsidiary of the Company being aggregated in a controlled group or affiliated
service group with any ERISA Affiliate for purposes of ERISA or the Code at any
relevant time prior to the Closing. No Plan exists which could result in the
payment by the Company of money or any other property or rights, or accelerate
or provide any other rights or benefits, to any current or former employee of
the Company or any Subsidiary of the Company (or other current or former service
provider thereto) that would not have been required but for the transactions
provided for herein, and none of the Company or any Subsidiary of the Company,
nor any of their respective affiliates, is a
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party to any Plan, program, arrangement or understanding that would result,
separately or in the aggregate, in the payment (whether in connection with any
termination of employment or otherwise) of any "excess parachute payment" within
the meaning of Section 280G of the Code with respect to a current or former
employee of, or current or former independent contractor to, any of the Company
or any Subsidiary of the Company. None of the Company or any Subsidiary of the
Company maintains any Plan which provides severance benefits to current or
former employees or other service providers. Each Company Benefit Plan may be
amended and terminated in accordance with its terms, and, each such Plan
provides for the unrestricted right of the Company or any Subsidiary of the
Company (as applicable) to amend or terminate such Plan. Neither the Company,
any Subsidiary of the Company nor Parent will have any liability under the
Workers Adjustment and Retraining Notification Act, as amended, with respect to
any events occurring or conditions existing on or prior to Closing.
(c) As used herein:
(i) "Company Benefit Plan" means a Plan which the Company or any
Subsidiary of the Company, or any ERISA Affiliate sponsors, maintains, has
any obligation to contribute to, has liability under or is otherwise a party
to, or which otherwise provides benefits for employees, former employees,
independent contractors or former independent contractors (or their
dependents and beneficiaries) of the Company or any Subsidiary of the
Company existing on the date of this Agreement or at any time subsequent
thereto and on or prior to the Closing Date and, in the case of a Plan which
is subject to Part 3 of Title I of ERISA, Section 412 of the Code or Title
IV of ERISA, at any time during the five-year period preceding the date of
this Agreement.
(ii) "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended, and any successor or statute thereto, and the rules and
regulations promulgated thereunder.
(iii) "ERISA Affiliate" means an entity required to be aggregated with
any of the Company or any Subsidiary of the Company under Sections 414(b),
(c), (m) or (o) of the Code or Section 4001 of ERISA.
(iv) "PBGC" means the Pension Benefit Guaranty Corporation.
(v) "Plan" means any employment, bonus, incentive compensation,
deferred compensation, pension, profit sharing, retirement, stock purchase,
stock option, stock ownership, stock appreciation rights, phantom stock,
equity (or equity-based) leave of absence, layoff, vacation, day or
dependent care, legal services, cafeteria, life, health, medical, accident,
disability, workmen's compensation or other insurance, severance,
separation, termination, change of control or other benefit plan, agreement
(including any collective bargaining agreement), practice, policy or
arrangement of any kind, whether written or oral, and whether or not subject
to ERISA, including, but not limited to any "employee benefit plan" within
the meaning of Section 3(3) of ERISA.
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(d) Except as set forth in Section 4.13 of the Disclosure Schedule,
neither the execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby constitutes a change in control or has or will
accelerate benefits under any Company Benefit Plan.
4.14 Insurance. The Company delivered to Parent prior to the execution
of this Agreement a true and complete list of all liability, property, workers'
compensation, directors' and officers' liability and other insurance policies
currently in effect that insure the business, operations, properties, assets or
employees of the Company or any of its Subsidiaries.
4.15 Labor Matters. There are no material controversies pending or, to
the knowledge of the Company and its Subsidiaries, threatened between the
Company or any of its Subsidiaries and any representatives of its employees,
and, to the knowledge of the Company and its Subsidiaries, there are no material
organizational efforts presently being made involving any of the now unorganized
employees of the Company or any of its Subsidiaries. Since March 31, 1993, there
has been no work stoppage, strike or other concerted action by employees of the
Company or any of its Subsidiaries.
4.16 Environmental Matters.
(a) (i) The Company and its Subsidiaries are in compliance with all
applicable Environmental Laws (as defined below); (ii) the Company and its
Subsidiaries have obtained all permits, licenses and other material
authorizations from all Governmental or Regulatory Authorities required under
applicable Environmental Laws, and are in compliance with the terms and
conditions thereof; (iii) neither the Company nor any of its Subsidiaries has
received written notice of, or is the subject of, any action cause of action,
claim, investigation, demand or notice by any person or entity alleging
liability under or noncompliance with any Environmental Law; and (iv) there is
no environmental condition which was caused by the Company or its Subsidiaries
on any of the properties currently or formerly owned or leased by the Company or
any of its Subsidiaries.
(b) As used herein:
(i) "Environmental Law" means any Law of any Governmental or Regulatory
Authority relating to human health, safety or protection of the environment
or to emissions, discharges, releases or threatened releases of pollutants,
contaminants or Hazardous Materials in the environment (including, without
limitation, ambient air, surface water, ground water, land surface or
subsurface strata), or otherwise relating to the treatment, storage,
disposal, transport or handling of any Hazardous Material; and
(ii) "Hazardous Material" means (A) any petroleum or petroleum
products, radioactive materials, asbestos in any form that is or could
become friable, urea formaldehyde foam insulation and transformers or other
equipment that contain dielectric fluid containing levels of polychlorinated
biphenyls (PCBs); (B) any chemicals, materials, substances or wastes which
are now or hereafter become defined as or included in the definition of
"hazardous substances," "hazardous wastes," "hazardous materials,"
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"extremely hazardous wastes," "restricted hazardous wastes," "toxic
substances," "toxic pollutants" or words of similar import, under any
Environmental Law; and (C) any other chemical, material, substance or waste,
exposure to which is now prohibited, limited or regulated by any
Governmental or Regulatory Authority.
4.17 Tangible Property and Assets; Real Property. The Company and its
Subsidiaries have good and marketable title to, or have valid leasehold
interests in or valid rights under contract to use, all tangible property and
assets used in and, individually or in the aggregate, material to the conduct of
the businesses of the Company and its Subsidiaries taken as a whole (including
all tangible property and assets reflected on the latest unaudited balance sheet
included in such Company SEC Reports or acquired since such date, other than
property or assets disposed of since such date or held subject to a lease or
other contract permitted to expire in accordance with its terms since such date,
in either case in the ordinary course of business), free and clear of all Liens
other than (i) any statutory Lien arising in the ordinary course of business by
operation of Law with respect to a liability that is not yet due or delinquent
and (ii) any minor imperfection of title or similar Lien which individually or
in the aggregate with other such Liens does not materially impair the value of
the property or asset subject to such Lien or the use of such property or asset
in the conduct of the business of the Company or any such Subsidiary. All such
property and assets are, in all material respects, in good working order and
condition, ordinary wear and tear excepted, and adequate and suitable for the
purposes for which they are presently being used. The Company and its
Subsidiaries do not own any real property.
4.18 Intellectual Property Rights.
(a) (i) The Company or a Subsidiary of the Company owns the entire
right, title and interest in and to, or is licensed or otherwise has the right
to use, all Intellectual Property (as defined below), including the right to sue
and recover for damages and the other remedies with respect to any past
infringement or other violations of the Intellectual Property, used in or
necessary for the conduct of the business as currently conducted by the Company
and its Subsidiaries taken as a whole; (ii) there is no suit, claim, action,
investigation or proceeding pending or, to the best knowledge of the Company,
threatened that the Company or any Subsidiary of the Company is infringing,
misappropriating or otherwise violating the rights of any person or entity with
regard to any Intellectual Property owned by, licensed to and/or otherwise used
by the Company or any Subsidiary of the Company; (iii) to the best knowledge of
the Company, no person is infringing on or otherwise violating any right of the
Company or any Subsidiary of the Company with respect to any Intellectual
Property owned by, licensed to and/or otherwise used by the Company or its
Subsidiaries; (iv) the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby does not and will not
conflict with or result in any violation, breach or default under any agreement,
license, sublicense or other right relating to the Intellectual Property owned
by, licensed to and/or otherwise used by the Company or its Subsidiaries; (v)
the Company or a Subsidiary of the Company will continue to own, be licensed or
have rights to use the Intellectual Property after the execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby;
(vi) the Company and each Subsidiary of the Company has taken reasonable steps
to protect its Intellectual Property and its rights thereunder, and to the best
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knowledge of the Company, no such rights to Intellectual Property have been lost
or are in jeopardy of being lost through failure to act by the Company or any
Subsidiary of the Company; (vii) there are no restrictions on the direct or
indirect transfer of any interest in the Intellectual Property, including any
license agreement, held by the Company or any Subsidiary of the Company in
respect of the Intellectual Property; (viii) neither the Company nor any of its
Subsidiaries is, or has received notice that it is, in default (or with the
giving of notice or lapse of time or both, would be in default) under any
agreement to use the Intellectual Property; and (ix) all documentation related
to the Intellectual Property is accurate in all material respects and reasonably
sufficient in detail and content to identify and explain the Intellectual
Property to facilitate its full and proper use without reliance on the special
knowledge or memory of any Person.
(b) "Intellectual Property" means: (i) any and all trademarks and
trademark rights, trade names and trade name rights, service marks and service
mark rights, trade dress, copyrights and copyright rights, patents and patent
rights, mask works, trade secrets, know-how, proprietary information, processes,
formulae, computer programs (including source code, object code and data),
industrial models, designs, methodologies, business names, product names, brand
names, logos and slogans; (ii) any and all pending applications for trademarks,
service marks, copyrights, patents and mask works and any and all other kinds of
intellectual property; and (iii) all documentation related to such intellectual
property, including, without limitation, technical specifications,
manufacturing, engineering and technical drawings, and comprising physical
documents and/or electronic files.
4.19 Vote Required. Assuming the accuracy of the representation and
warranty contained in Section 5.06, unless the Merger may be consummated in
accordance with Section 253 of the DGCL as contemplated by Section 7.02(b), the
affirmative vote of the holders of record of at least a majority of the
outstanding shares of Company Common Stock with respect to the adoption of this
Agreement is the only vote of the holders of any class or series of the capital
stock of the Company required to adopt this Agreement and approve the Merger and
the other transactions contemplated hereby. No action on the part of the
Company's stockholders is required with respect to the Stock Option Agreement.
4.20 Section 203 of the DGCL Not Applicable. The provisions of Section
203 of the DGCL will not, before the termination of this Agreement, assuming the
accuracy of the representation and warranty contained in Section 5.06, apply to
this Agreement, the Stock Option Agreement, the Offer, the Merger or the other
transactions contemplated hereby or by the Stock Option Agreement.
4.21 Financial Advisor Advice. The Company has received the opinion of
Broadview Associates LLC to the effect that, as of the date of this Agreement,
the cash consideration to be received by the stockholders of Company pursuant to
the Offer and the Merger is fair, from a financial point of view, to such
stockholders.
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ARTICLE V.
REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB
Parent and Sub represent and warrant to the Company as follows:
5.01 Organization and Qualification. Each of Parent and Sub is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation. Sub was formed solely for the purpose of
engaging in the transactions contemplated by this Agreement, has engaged in no
other business activities and has conducted its operations only as contemplated
hereby. Each of Parent and Sub is duly qualified, licensed or admitted to do
business and is in good standing in each jurisdiction in which the ownership,
use or leasing of its assets and properties, or the conduct or nature of its
business, makes such qualification, licensing or admission necessary, except for
such failures to be so qualified, licensed or admitted and in good standing
which, individually or in the aggregate, could not be reasonably expected to
have a Material Adverse Effect on the validity or enforceability of this
Agreement or on the ability of Parent or Sub to perform its obligations
hereunder.
5.02 Authority Relative to this Agreement. Each of Parent and Sub has
full corporate power and authority to enter into this Agreement and to perform
its obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby. The execution, delivery and performance of this
Agreement by each of Parent and Sub and the consummation by each of Parent and
Sub of the transactions contemplated hereby have been duly and validly approved
by its Board of Directors and by Parent in its capacity as the sole stockholder
of Sub and no other corporate proceedings on the part of Parent or Sub or their
stockholders are necessary to authorize the execution, delivery and performance
of this Agreement by Parent or Sub and the consummation by Parent or Sub of the
transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by Parent and Sub and constitutes the legal, valid and
binding obligation of Parent and Sub enforceable against Parent and Sub in
accordance with its terms except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally and by general equitable principles
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
5.03 Non-Contravention; Approvals and Consents.
(a) The execution and delivery of this Agreement by Parent and Sub do
not, and the performance by Parent and Sub of their obligations hereunder and
the consummation of the transactions contemplated hereby will not, conflict
with, result in a violation or breach of, constitute (with or without notice or
lapse of time or both) a default under, result in or give to any person any
right of termination, cancellation, modification or acceleration of, or result
in the creation or imposition of any Lien upon any of the assets or properties
of Parent or any of its Subsidiaries under, any of the terms, conditions or
provisions of (i) the certificates or articles of incorporation or bylaws (or
other comparable charter documents) of Parent or any of its Subsidiaries, or
(ii) subject to the taking of the actions described in paragraph (b) of this
Section, (x) any Law or Order of any Governmental or Regulatory Authority
applicable to Parent or any
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of its Subsidiaries or any of their respective assets or properties, or (y) any
Contract to which Parent or any of its Subsidiaries is a party or by which
Parent or any of its Subsidiaries or any of their respective assets or
properties is bound, excluding from the foregoing clauses (x) and (y) conflicts,
violations, breaches, defaults, terminations, modifications, accelerations and
creations and impositions of Liens which, individually or in the aggregate,
could not be reasonably expected to have a Material Adverse Effect on the
ability of Parent and Sub to consummate the transactions contemplated by this
Agreement.
(b) Except (i) for the filing of a premerger notification report by
Parent under the HSR Act, (ii) for the filing of the Certificate of Merger and
other appropriate merger documents required by the DGCL with the Secretary of
State and appropriate documents with the relevant authorities of other states in
which the Constituent Corporations are qualified to do business, (iii) for the
filing of the Schedule 14D-1 with the SEC pursuant to the Exchange Act, and the
transactions contemplated hereby and (iv) as disclosed in Schedule 5.03 hereto,
no consent, approval or action of, filing with or notice to any Governmental or
Regulatory Authority or other public or private third party is necessary or
required under any of the terms, conditions or provisions of any Law or Order of
any Governmental or Regulatory Authority or any Contract to which Parent or any
of its Subsidiaries is a party or by which Parent or any of its Subsidiaries or
any of their respective assets or properties is bound for the execution and
delivery of this Agreement by Parent and Sub, the performance by Parent and Sub
of their respective obligations hereunder or the consummation of the
transactions contemplated hereby, other than such consents, approvals, actions,
filings and notices which the failure to make or obtain, as the case may be,
individually or in the aggregate, could not be reasonably expected to have a
Material Adverse Effect on the ability of Parent and Sub to consummate the
transactions contemplated by this Agreement.
5.04 Legal Proceedings. There are no actions, suits, arbitrations or
proceedings pending or, to the knowledge of Parent and its Subsidiaries,
threatened against, relating to or affecting, nor to the knowledge of Parent and
its Subsidiaries are there any Governmental or Regulatory Authority
investigations or audits pending or threatened against, relating to or
affecting, Parent or any of its Subsidiaries or any of their respective assets
and properties which, if determined adversely to Parent or any of its
Subsidiaries, individually or in the aggregate, could be reasonably expected to
have a Material Adverse Effect on the ability of Parent and Sub to consummate
the transactions contemplated by this Agreement. Neither Parent nor any of its
Subsidiaries is subject to any Order of any Governmental or Regulatory Authority
which, individually or in the aggregate, could be reasonably expected to have a
Material Adverse Effect on the ability of Parent and Sub to consummate the
transactions contemplated by this Agreement.
5.05 Information Supplied.
(a) The Offer Documents and any other documents to be filed by Parent
or Sub with the SEC or any other Governmental or Regulatory Authority in
connection with the Offer or the Merger and the other transactions contemplated
hereby or by the Stock Option Agreement will not, on the date of its filing or,
with respect to the Offer Documents, on the date they are filed with the SEC and
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
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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, except that no representation is made by Parent or Sub with respect
to information supplied in writing by or on behalf of the Company expressly for
inclusion therein and information incorporated by reference therein from
documents filed by the Company or any of its Subsidiaries with the SEC. The
Offer Documents and any other such documents filed by Parent or Sub with the SEC
under the Exchange Act will comply as to form in all material respects with the
requirements of the Exchange Act.
(b) Neither the information supplied or to be supplied in writing by or
on behalf of Parent or Sub for inclusion, nor the information incorporated by
reference from documents filed by Parent or any of its Subsidiaries with the
SEC, in the Schedule 14D-9, the Proxy Statement or any other documents to be
filed by the Company with the SEC or any other Governmental or Regulatory
Authority in connection with the Offer or the Merger and the other transactions
contemplated hereby or by the Stock Option Agreement will on the date of its
filing or, with respect to the Schedule 14D-9, on the date it is filed with the
SEC and first published, sent or given to stockholders of the Company, or, in
the case of the Proxy Statement, at the date it is mailed to stockholders, at
the time of the Company Stockholders' Meeting and 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 light of the circumstances under which they are made, not
misleading.
5.06 Parent Not an Interested Stockholder or an Acquiring Person.
Neither Parent nor any of its affiliates or associates (as such terms are
defined in Section 203 of the DGCL) is an "interested stockholder" (as such term
is defined in Section 203 of the DGCL).
5.07 Financing. Parent has sufficient cash and/or available credit
facilities (and has provided the Company with evidence thereof) to acquire all
the outstanding shares of Company Common Stock in the Offer and the Merger in
accordance with this Agreement and to make all other necessary payments of fees
and expenses in connection with the transactions contemplated by this Agreement.
ARTICLE VI.
COVENANTS OF THE COMPANY
6.01 Conduct of Business. At all times from and after the date hereof
until the Effective Time, the Company covenants and agrees as to itself and its
Subsidiaries that (except as expressly contemplated or permitted by this
Agreement or the Stock Option Agreement, or to the extent that Parent shall
otherwise consent in writing):
(a) Ordinary Course. The Company and its Subsidiaries shall conduct
their respective businesses only in, and the Company and such Subsidiaries shall
not take any action except in, the ordinary course in substantially the same
manner as previously conducted and in substantial compliance with all applicable
Laws.
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(b) Without limiting the generality of paragraph (a) of this Section,
(i) the Company and its Subsidiaries shall use reasonable efforts to preserve
intact in their present business organizations and reputation, to keep available
the services of their present officers and employees, to maintain their assets
and properties in good working order and condition, ordinary wear and tear
excepted, to maintain insurance on their tangible assets and businesses in such
amounts and against such risks and losses as are currently in effect, to
preserve their relationships with customers, suppliers, licensors, licensees,
distributors and others having business relationships with them and to comply in
all material respects with all Laws and Orders of all Governmental or Regulatory
Authorities applicable to them, and (ii) neither the Company nor any of its
Subsidiaries shall, except (A) as expressly contemplated by this Agreement or
(B) as set forth in Section 6.01 of the Disclosure Schedule:
(1) adopt or amend in any material respect any bonus, profit sharing,
compensation, severance, termination, stock option, stock appreciation
right, pension, retirement, employment or other employee benefit agreement,
trust plan or other arrangement for the benefit or welfare of any director,
officer or employee of the Company or any of its Subsidiaries or increase in
any manner the compensation or fringe benefits of any director, officer or
employee of the Company or any of its Subsidiaries or pay any benefit not
required by any existing agreement or place any assets in any trust for the
benefit of any director, officer or employee of the Company or any of its
Subsidiaries;
(2) incur any indebtedness for borrowed money or guarantee any such
indebtedness of another person, issue or sell any debt securities or
warrants or other rights to acquire any debt securities of the Company or
any of its Subsidiaries, guarantee any debt securities of another person,
enter into any "keep well" or other agreement to maintain any financial
statement condition of another person or enter into any arrangement having
the economic effect of any of the foregoing, or make any loans, advances or
capital contributions to, or investments in, any other person, other than to
the Company or any direct or indirect wholly owned Subsidiary of the
Company;
(3) expend funds for capital expenditures or research and development,
which in the aggregate exceed $1,100,000;
(4) sell, lease, license, mortgage or otherwise encumber or subject to
any Lien or otherwise dispose of any of its properties or assets except for
disposition of inventory or immaterial assets, in either case, in the
ordinary course of business consistent with past practice;
(5) (x) declare, set aside or pay any dividends on, or declare or make
any other distribution in respect of, any of its capital stock (except for
dividends paid by Subsidiaries to the Company with respect to capital
stock), (y) split, combine or reclassify any of its capital stock or issue
or authorize the issuance of any other securities in respect of, in lieu of
or in substitution for shares of its capital stock or (z) purchase, redeem
or otherwise acquire any shares of capital stock of the Company or any of
its
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Subsidiaries or any other securities thereof or any rights, warrants or
options to acquire any such shares or other securities;
(6) authorize for issuance, issue, deliver, sell or agree to commit to
issue, sell or deliver (whether through the issuance or granting of Options
or otherwise), pledge or otherwise encumber any shares of its capital stock
or the capital stock of any of its Subsidiaries, any other voting securities
or any securities convertible into, or any Options to acquire, any such
shares, voting securities or convertible securities or any other securities
or equity equivalents (including without limitation stock appreciation
rights) (other than issuances upon exercise of Company Stock Options
outstanding on the date hereof);
(7) amend its Certificate of Incorporation, By-Laws or equivalent
organizational documents or alter through merger, liquidation,
reorganization, restructuring or in any other fashion the corporate
structure or ownership of any Subsidiary of the Company;
(8) acquire or agree to acquire, including, without limitation, by
merging or consolidating with, or by purchasing a substantial equity
interest in or substantial portion of the assets of, or by any other manner,
any business or any corporation, partnership, association or other business
organization or division thereof;
(9) settle or compromise any stockholder derivative or other suits
arising out of the transactions contemplated by this Agreement or any other
litigation (whether or not commenced prior to the date of this Agreement) or
settle, pay or compromise any claims not required to be paid, other than in
consultation and cooperation with Parent, and, with respect to any such
settlement, without the prior written consent of Parent (except such consent
shall not be required for payments to be made under any such agreements
existing on the date of this Agreement and described in Section 6.01 of the
Disclosure Schedule), which consent shall not be unreasonably withheld;
(10) make any material Tax election or settle or compromise any
material Tax liability (whether with respect to amount or timing);
(11) except in the ordinary course of business, materially modify,
amend or terminate any material Contract or waive or release or assign any
material rights or claims;
(12) (i) fail to pay in the ordinary course of business consistent with
past practice any amount ("Payable") due, owing or payable to any trade
creditor or supplier or (ii) other than in the ordinary course of business
consistent with past practice, alter the terms or scheduled payment dates of
any Payable; or
(13) take or agree to take any action that would make any
representation and warranty of the Company contained in this Agreement
inaccurate at, or as of any
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time prior to, the Effective Time, or omit or agree to omit to take any
action necessary and prudent to prevent any such representation or warranty
from being inaccurate at any such time.
(c) Advice of Changes. The Company shall confer on a regular and
frequent basis with Parent with respect to its business and operations and other
matters relevant to the Offer or the Merger, and shall promptly advise Parent,
orally and in writing, of any change or event, including, without limitation,
any complaint, investigation or hearing by any Governmental or Regulatory
Authority (or communication indicating the same may be contemplated) or the
institution or threat of litigation, having, or which, insofar as can be
reasonably foreseen, could have, a Material Adverse Effect on the Company and
its Subsidiaries taken as a whole or on the ability of the Company to consummate
the transactions contemplated hereby.
6.02 No Solicitations. Except as provided below, from the date of this
Agreement until the earlier of the termination of this Agreement or the
Effective Time, neither the Company nor any of its Subsidiaries shall, nor shall
they authorize or permit any officer, director, employee, investment banker,
financial advisor, attorney, accountant or other advisor or representative
(each, a "Representative") retained by or acting for or on behalf of the Company
or any of its Subsidiaries to, directly or indirectly, (i) take any action to
knowingly solicit, initiate, continue, facilitate or encourage (including by way
of furnishing or disclosing non-public information) any offer or proposal for a
merger, consolidation or other business combination involving the Company or any
of its Subsidiaries or any proposal or offer to acquire in any manner, directly
or indirectly, 15% or more of the shares of any class of voting securities of
the Company or any of its Subsidiaries or a substantial portion of the assets of
the Company or any of its Subsidiaries, other than the transactions contemplated
by this Agreement or by the Stock Option Agreement (any of the foregoing being
referred to as an "Acquisition Proposal"), or (ii) knowingly engage in
negotiations, discussions or communications regarding or disclose any
information relating to the Company or any of its Subsidiaries or afford access
to the properties, books or records of the Company or any of its Subsidiaries to
any person, corporation, partnership or other entity or group (a "Potential
Acquiror") that may be considering making, or has made, an Acquisition Proposal.
The Board of Directors of the Company (including any committee thereof) shall
not withdraw or modify in a manner adverse to Parent the approval and
recommendation of the Offer, this Agreement, the Stock Option Agreement or the
Merger or approve or recommend any Acquisition Proposal. Notwithstanding the
foregoing, (i) the Company may participate in discussions or negotiations with
or furnish information to any third party which makes a written Acquisition
Proposal which either (x) is not subject to a financing contingency and involves
the purchase for cash of 100% of the Company Common Stock at a price per share
greater than the purchase price of the Offer or (y) provides for the acquisition
of 100% of the Company Common Stock for consideration, not consisting entirely
of cash, which the Company's Board of Directors determines, based on the advice
of its financial advisor, is financially superior to the purchase price of the
Offer (in the case of either (x) or (y), a "Superior Proposal"), and (ii) the
Board of Directors or any committee thereof may withdraw or modify in a manner
adverse to Parent the approval or recommendation of this Agreement, the Offer or
the Merger and may approve or recommend any such Superior Proposal, if, in the
case of either (i) or (ii), the Board of Directors of the
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Company determines (and is advised by its outside legal counsel) that the
failure to take such action would constitute a breach of its fiduciary duties
and the Company enters into a confidentiality agreement with the Potential
Acquiror with respect to any non-public information relating to the Company or
its Subsidiaries upon terms substantially the same as (and in no event more
beneficial to the Potential Acquiror than) those contained in the
Confidentiality Agreement dated July 21, 1997, between Parent and the Company.
The Company shall (i) notify Parent promptly (and in any event within one
business day) after receipt of any Acquisition Proposal (or any indication that
any person is considering making an Acquisition Proposal) or any request for
non-public information relating to the Company or any of its Subsidiaries or for
access to the properties, books or records of the Company or any of its
Subsidiaries by any person that may be considering making, or has made, an
Acquisition Proposal, (ii) notify Parent promptly of any material change to any
such Acquisition Proposal, indication or request and (iii) upon reasonable
request by Parent, provide Parent with all material information about any such
Acquisition Proposal, indication or request. The Company will not, and will
cause its affiliates not to, enter into an agreement with respect to a Superior
Proposal unless Parent has been advised in writing of the identity of the
parties making the Superior Proposal and the material terms thereof at least two
business days prior to the entering into of such agreement.
ARTICLE VII.
ADDITIONAL AGREEMENTS
7.01 Access to Information; Confidentiality.
(a) The Company shall, and shall cause its Subsidiaries to, throughout
the period from the date hereof to the Effective Time, (i) provide Parent and
its Representatives with reasonable access, upon reasonable prior notice and
during normal business hours, to all officers, employees, agents and accountants
of the Company and its Subsidiaries and their respective properties, books,
contracts, commitments and records, and (ii) furnish promptly to such persons
(x) a copy of each report, statement, schedule and other document filed or
received by the Company or any of its Subsidiaries during such period pursuant
to the requirements of federal or state securities laws or filed with any other
Governmental or Regulatory Authority, and (y) all other information and data
(including, without limitation, copies of Contracts, Company Benefit Plans and
other books and records) concerning the business and operations of the Company
and its Subsidiaries as Parent or its Representatives reasonably may request. No
investigation pursuant to this paragraph or otherwise shall affect any
representation or warranty contained in this Agreement or any condition to the
obligations of the parties hereto.
(b) Parent will hold, and will use its best efforts to cause its
Representatives to hold, in strict confidence, unless (i) compelled to disclose
by judicial or administrative process or by other requirements of applicable
Laws of Governmental or Regulatory Authorities (including, without limitation,
in connection with obtaining the necessary approvals of this Agreement or the
transactions contemplated hereby of Governmental or Regulatory Authorities), or
(ii) disclosed in an action or proceeding brought by a party hereto in pursuit
of its rights or in the exercise of its remedies hereunder, all documents and
information concerning the
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Company and its Subsidiaries furnished to it by the Company or its
Representatives in connection with this Agreement or the transactions
contemplated hereby, except to the extent that such documents or information can
be shown to have been (x) previously known by Parent or its Representatives, (y)
in the public domain (either prior to or after the furnishing of such documents
or information hereunder) through no fault of Parent and its Representatives or
(z) later acquired by Parent or its Representatives from another source if
Parent or such Representative is not aware that such source is under an
obligation to the Company to keep such documents and information confidential.
In the event that this Agreement is terminated without the transactions
contemplated hereby having been consummated, upon the request of the Company,
Parent will, and will cause its Representatives to, promptly redeliver or cause
to be redelivered all copies of documents and information furnished by the
Company or its Representatives to Parent and its Representatives in connection
with this Agreement or the transactions contemplated hereby and destroy or cause
to be destroyed all notes, memoranda, summaries, analyses, compilations and
other writings related thereto or based thereon prepared by Parent or its
Representatives.
(c) Parent will not for a period of two years from the date of
termination of this Agreement directly or indirectly solicit for employment or
employ any person who is at the date of this Agreement employed by the Company
or any of its Subsidiaries; provided, however, that the foregoing restriction
shall not apply (i) following the Effective Time, (ii) to solicitations made by
way of advertisement or other general (as opposed to specific) solicitations or
(iii) to solicitations addressed to persons who at the date of the solicitation
have not been employed by the Company or its Subsidiaries for a period of at
least six months.
7.02 Approval of Stockholders.
(a) If required by applicable law in order to consummate the Merger,
the Company shall, through its Board of Directors, duly call, give notice of,
convene and hold a meeting of its stockholders (the "Company Stockholders'
Meeting") as soon as practicable following the acceptance and payment and
purchase of shares of Company Common Stock by Sub pursuant to the Offer, for the
purpose of voting on the Merger and the adoption of this Agreement (the "Company
Stockholders' Approval"). Subject to Section 6.02, the Company shall, through
its Board of Directors, include in the Proxy Statement the recommendation of the
Board of Directors of the Company that the stockholders of the Company adopt
this Agreement, and shall use its best efforts to obtain such adoption. At such
meeting, Parent shall, and shall cause its Subsidiaries to, cause all shares of
Company Common Stock then owned by Parent or any such Subsidiary to be voted in
favor of the adoption of this Agreement.
(b) Notwithstanding the foregoing, in the event that Sub shall acquire
at least 90% of the then outstanding shares of Company Common Stock, the parties
hereto shall, subject to Article VIII, at the request of Sub take all necessary
and appropriate action to cause the Merger to become effective in accordance
with Section 253 of the DGCL, as soon as reasonably practicable after such
acquisition, without a meeting of the stockholders of the Company.
7.03 Preparation of Proxy Statement. Except to the extent not required
by applicable law, the Company shall prepare and file the Proxy Statement and
all other required
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materials with the SEC as soon as reasonably practicable after consummation of
the Offer, and shall use its best efforts to have the Proxy Statement cleared by
the SEC. If at any time prior to the Effective Time any event shall occur that
should be set forth in an amendment of or a supplement to the Proxy Statement,
the Company shall prepare and file with the SEC such amendment or supplement as
soon thereafter as is reasonably practicable. Parent, Sub and the Company shall
cooperate with each other in the preparation of the Proxy Statement, and the
Company shall notify Parent of the receipt of any comments of the SEC with
respect to the Proxy Statement and of any requests by the SEC for any amendment
or supplement thereto or for additional information, and shall provide to Parent
promptly copies of all correspondence between the Company or any representative
of the Company and the SEC with respect to the Proxy Statement. The Company
shall give Parent and its counsel the opportunity to review the Proxy Statement
and all responses to requests for additional information by and replies to
comments of the SEC before their being filed with, or sent to, the SEC. Each of
the Company, Parent and Sub shall use its best efforts, after consultation with
the other parties hereto, to respond promptly to all such comments of and
requests by the SEC and to cause the Proxy Statement to be mailed to the holders
of Company Common Stock entitled to vote at the Company Stockholders' Meeting at
the earliest reasonably practicable time.
7.04 Regulatory and Other Approvals. Subject to the terms and
conditions of this Agreement and without limiting the provisions of Sections
7.02 and 7.03, each of the Company and Parent will proceed diligently and in
good faith and will use all commercially reasonable efforts to do, or cause to
be done, all things necessary, proper or advisable to, as promptly as
practicable, (a) obtain all consents, approvals or actions of, make all filings
with and give all notices to Governmental or Regulatory Authorities or any other
public or private third parties required of Parent, the Company or any of their
Subsidiaries to consummate the Offer, the Merger and the other matters
contemplated hereby and by the Stock Option Agreement, and (b) provide such
other information and communications to such Governmental or Regulatory
Authorities or other public or private third parties as the other party hereto
or such Governmental or Regulatory Authorities or other public or private third
parties may reasonably request. In addition to and not in limitation of the
foregoing, each of the parties will (x) take promptly all actions necessary to
make the filings required of Parent and the Company or their affiliates under
the HSR Act and under comparable merger notification or competition laws of
non-U.S. jurisdictions, (y) comply at the earliest practicable date with any
request for additional information received by such party or its affiliates from
the Federal Trade Commission (the "FTC") or the Antitrust Division of the
Department of Justice (the "Antitrust Division") pursuant to the HSR Act or the
authorities of such other jurisdictions, and (z) cooperate with the other party
in connection with such party's filings under the HSR Act and in connection with
resolving any investigation or other inquiry concerning the Offer or the Merger
or the other matters contemplated by this Agreement commenced by the FTC, the
Antitrust Division, state attorneys general or any other Governmental or
Regulatory Authority.
7.05 Employee Benefit Plans.
(a) Parent shall cause the Company Benefit Plans (other than those that
are based on Company Common Stock) in effect at the date of this Agreement to
remain in effect until the second anniversary of the Effective Time or, to the
extent such Company Benefit Plans
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(other than those that are based on Company Common Stock) are not continued,
Parent will maintain or cause the Company to maintain until such date benefit
plans (as defined in Section 3(3) of ERISA) for the benefit of the employees of
the Company which are no less favorable, in the aggregate, than the Company
Benefit Plans (other than those that are based on Company Common Stock) existing
on the date hereof. All Company Benefit Plans under which the employees'
interests are based on Company Common Stock shall be terminated immediately
prior to the Effective Time. The Company's employees shall be given credit, for
purposes of any service requirements for participation in the Parent plans for
which they become eligible, if any, for their period of service with the Company
prior to the Effective Time, and the Company employees shall also, with respect
to participation in any Parent plans or programs for which they may become
eligible, if any, which have co-payment, deductible or other co-insurance
features, receive credit for any amounts such employees have paid to date in
1998 in co-payments, deductibles or co-insurance under comparable programs
maintained by the Company prior to the Effective Time. In addition, no employee
of the Company who participates in any medical/health plan of the Company at the
Effective Time shall be denied coverage under any Parent medical/health plan for
which they become eligible, if any, by reason of any pre-existing condition
exclusions, to the extent applicable subsequent to the Effective Time.
(b) Parent will, and will cause the Surviving Corporation to, honor
without modification all employee severance plans (or policies) and employment
and severance agreements of the Company or any of its Subsidiaries in existence
on the date hereof as such agreements shall be in effect in accordance with the
terms of this Agreement at the Effective Time, including, without limitation,
the plans and agreements specified in Schedule 7.05 hereto.
7.06 Directors' and Officers' Indemnification and Insurance.
(a) Until the sixth anniversary of the Effective Time, the Company and
Parent, and from and after the Effective Time the Surviving Corporation (each,
an "Indemnifying Party"), shall indemnify, defend and hold harmless each person
who is now, or has been at any time prior to the date hereof, a director or
officer of the Company or any of its Subsidiaries (the "Indemnified Parties")
against all losses, claims, damages, costs and expenses (including attorneys'
fees and expenses), liabilities or judgments or amounts that are paid in
connection with any threatened or actual claim, action, suit, proceeding or
investigation (whether civil, criminal, administrative or investigative and
whether asserted or claimed prior to, at or after the Effective Time) that is
based in whole or in part on, or arises in whole or in part out of, the fact
that such Indemnified Party is or was a director or officer of the Company or
any of its Subsidiaries (including service as a fiduciary of any employee
benefit plan), whether pertaining to any matter existing or occurring at or
prior to the Effective Time to the fullest extent permitted by Delaware law or
based in whole or in part on this Agreement or the transactions contemplated
hereby ("Indemnified Liabilities"); provided that no Indemnifying Party shall be
liable for any settlement of any claim effected without its written consent,
which consent shall not be unreasonably withheld; provided further that in the
event any claims are asserted or made within such six-year period, all rights to
indemnification in respect of any such claims shall continue until disposition
of any and all such claims. Without limiting the foregoing, in the event that
any such claim, action, suit, proceeding or investigation is brought against any
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Indemnified Party (whether arising prior to or after the Effective Time), (w)
the Indemnifying Parties will pay expenses in advance of the final disposition
of any such claim, action suit, proceeding or investigation to each Indemnified
Party to the full extent permitted by applicable law provided that the person to
whom expenses are advanced provides an undertaking to repay such advance if it
is ultimately determined that such person is not entitled to indemnification;
(x) the Indemnified Parties shall retain counsel reasonably satisfactory to the
Indemnifying Parties; (y) the Indemnifying Parties shall pay all reasonable fees
and expenses of such counsel for the Indemnified Parties (subject to the final
sentence of this paragraph) promptly as statements therefor are received; and
(z) the Indemnifying Parties shall use all commercially reasonable efforts to
assist in the vigorous defense of any such matter. Any Indemnified Party wishing
to claim indemnification under this Section, upon learning of any such claim,
action, suit, proceeding or investigation, shall notify the Indemnifying
Parties, but the failure so to notify an Indemnifying Party shall not relieve it
from any liability which it may have under this paragraph except to the extent
such failure materially and irreparably prejudices such party.
(b) The Surviving Corporation shall (i) until the sixth anniversary of
the Effective Time, cause to be maintained in effect, to the extent available,
the policies of directors' and officers' liability insurance maintained by the
Company and its Subsidiaries as of the date hereof (or policies of at least the
same coverage and amounts containing terms that are no less advantageous in any
material respect to the insured parties) or (ii) purchase a policy of directors'
and officers' liability insurance of at least the same coverage and amounts and
containing terms that are no less advantageous in any material respect to the
insured parties and for a term of six years after the Effective Time, in each
case with respect to claims arising from facts or events that occurred prior to
the Effective Time; provided, however, that in no event shall the Surviving
Corporation be obligated to expend in order to maintain or procure insurance
coverage pursuant to clause (i) of this paragraph any amount per annum in excess
of 125% of the last premium paid by the Company prior to the date of this
Agreement, and if the annual premium of such insurance coverage exceeds that
amount, the Surviving Corporation shall purchase as much coverage as possible
for such amount.
(c) The provisions of this Section are intended to be for the benefit
of, and shall be enforceable by, each Indemnified Party and each party entitled
to insurance coverage under paragraph (b) above, respectively, and his or her
heirs and legal representatives, and shall be in addition to any other rights an
Indemnified Party may have under the certificate or articles of incorporation or
bylaws of the Surviving Corporation or any of its Subsidiaries, under the DGCL
or otherwise.
(d) In the event Parent, the Company or the Surviving Corporation or
any of their respective 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, (ii) transfers all or substantially
all of its properties and assets to any person or (iii) consummates a
transaction resulting in the transfer of more than a majority of its capital
stock (whether by means of reverse triangular merger, share exchange or
otherwise), then, and in each such case, proper provision shall be made so that
the successors and assigns of Parent, the Company or the Surviving Corporation,
as the case may be, shall assume the obligations set forth in paragraphs (a) and
(b) of this Section.
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7.07 Expenses. Except as set forth in Section 9.02, whether or not the
Offer or 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 cost or expense, except that expenses incurred
in connection with printing and mailing the Offer Documents, the Schedule 14D-9
and the Proxy Statement, as well as any filing fees relating thereto, shall be
shared equally by Parent and the Company.
7.08 Brokers or Finders. Each of Parent and the Company represents, as
to itself and its affiliates, that no agent, broker, investment banker,
financial advisor or other firm or person is or will be entitled to any broker's
or finder's fee or any other commission or similar fee in connection with any of
the transactions contemplated by this Agreement except Broadview Associates LLC,
whose fees and expenses will be paid by the Company in accordance with the
Company's agreement with such firm (a true and complete copy of which has been
delivered by the Company to Parent prior to the execution of this Agreement),
and BT Alex. Brown Incorporated, whose fees and expenses will be paid by Parent
in accordance with Parent's agreement with such firm (a true and complete copy
of which has been delivered by Parent to the Company prior to the execution of
this Agreement), and each of Parent and the Company shall indemnify and hold the
other harmless from and against any and all claims, liabilities or obligations
with respect to any other such fee or commission or expenses related thereto
asserted by any person on the basis of any act or statement alleged to have been
made by such party or its affiliate.
7.09 Notice and Cure. Each of Parent and the Company will notify the
other promptly in writing of, and contemporaneously will provide the other with
true and complete copies of any and all information or documents relating to,
and will use reasonable efforts to cure before the Closing, any event,
transaction or circumstance occurring after the date of this Agreement that
causes or will cause any covenant or agreement of Parent or the Company, as the
case may be, under this Agreement to be breached or that renders or will render
untrue any representation or warranty of Parent or the Company, as the case may
be, contained in this Agreement as if the same were made on or as of the date of
such event, transaction or circumstance. Each of Parent and the Company also
will notify the other promptly in writing of, and will use best efforts to cure,
before the Closing, any violation or breach of any representation, warranty,
covenant or agreement made by Parent or the Company, as the case may be, in this
Agreement, whether occurring or arising prior to, on or after the date of this
Agreement. No notice given pursuant to this Section shall have any effect on the
representations, warranties, covenants or agreements contained in this Agreement
for purposes of determining satisfaction of any condition contained herein.
7.10 Fulfillment of Conditions. Subject to the terms and conditions of
this Agreement, each of Parent and the Company will take or cause to be taken
all steps reasonably necessary or desirable and proceed diligently and in good
faith to satisfy each condition to the other's obligations contained in this
Agreement and to consummate and make effective the transactions contemplated by
this Agreement, and neither Parent nor the Company will, nor will it permit any
of its Subsidiaries to, take or fail to take any action that could be reasonably
expected to result in the nonfulfillment of any such condition.
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7.11 Conveyance Taxes. Sub and the Company shall cooperate in the
preparation, execution and filing of all returns, questionnaires, applications,
or other documents regarding any real property transfer or gains, sales, use,
transfer, value added, stock transfer and stamp taxes, any transfer, recording,
registration and other fees, and any similar taxes which become payable in
connection with the transactions contemplated hereunder that are required or
permitted to be filed on or before the Effective Time.
7.12 Stock Option Agreement. The Company, Parent and Sub shall perform
fully their respective obligations under the Stock Option Agreement.
ARTICLE VIII.
CONDITIONS
8.01 Conditions to Each Party's Obligation to Effect the Merger. The
respective obligation of each party to consummate the Merger is subject to the
fulfillment, at or prior to the Closing, of each of the following conditions:
(a) Stockholder Approval. Unless the Merger may be consummated pursuant
to Section 253 of the DGCL as contemplated by Section 7.02(b), this Agreement
shall have been adopted by the requisite vote of the stockholders of the Company
under the DGCL.
(b) HSR Act. Any waiting period (and any extension thereof) applicable
to the consummation of the Merger under the HSR Act shall have expired or been
terminated.
(c) No Injunctions or Restraints. No court of competent jurisdiction or
other competent Governmental or Regulatory Authority shall have enacted, issued,
promulgated, enforced or entered any Law or Order (whether temporary,
preliminary or permanent) which is then in effect and has the effect of making
illegal or otherwise restricting, preventing or prohibiting consummation of the
Offer or the Merger or the other transactions contemplated by this Agreement,
the Stock Option Agreement or the Stockholders Agreement.
(d) Consummation of Offer. Sub or its permitted assignee shall have
purchased all shares of Company Common Stock validly tendered and not withdrawn
pursuant to the Offer.
ARTICLE IX.
TERMINATION, AMENDMENT AND WAIVER
9.01 Termination. This Agreement may be terminated, and the
transactions contemplated hereby may be abandoned, at any time prior to the
Effective Time, whether prior to or after the Company Stockholders' Approval:
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(a) by mutual written consent of the Company and Parent;
(b) by the Company (A) if there has been a material breach of any
representation, warranty, covenant or agreement on the part of Parent set forth
in this Agreement which breach has not been cured, in the case of a
representation or warranty, prior to the Effective Time or, in the case of a
covenant or agreement, within 30 days following receipt by Parent of notice of
such breach (provided that such right to terminate shall expire on the date on
which Parent or the Sub beneficially owns a majority of the outstanding shares
of Company Common Stock, or (B) if there shall be any Law that makes
consummation of the Merger illegal or if any injunction or Order of a
Governmental or Regulatory Authority having jurisdiction preventing the
consummation of the Merger shall have become final and non-appealable;
(c) by Parent (A) (i) if any representation or warranty of the Company
shall not be true and correct (x) in all material respects as of the date of
this Agreement or (y) as of the time of termination of this Agreement, and, in a
case described in this subclause (y), the failure of such representation or
warranty to be true and correct (1) has a Material Adverse Effect on the
Company, (2) if capable of being made true and correct within 30 days following
receipt by the Company of notice of such representation or warranty not being
true and correct is not in fact made true and correct within such 30-day period
and (3) did not result from the announcement of this Agreement or the
transactions contemplated hereby, or (ii) if there has been a material breach of
any covenant or agreement on the part of the Company set forth in this Agreement
or the Stock Option Agreement which breach of a covenant or agreement has not
been cured within 30 days following receipt by the Company of notice of such
breach (provided that such right to terminate shall expire on the date on which
Parent or Sub beneficially owns a majority of the outstanding shares of Company
Common Stock and Parent's designees constitute, or shall have been afforded the
opportunity, without the imposition by the Company of adverse conditions, to
constitute, the requisite percentage (but not less than a majority) of the
members of the Board of Directors of the Company specified in this Agreement),
(B) if there shall be any Law that makes consummation of the Merger illegal or
if any injunction or Order of a Governmental or Regulatory Authority having
jurisdiction preventing the consummation of the Merger shall have become final
and non-appealable or (C) if the Offer shall have expired or been terminated
without any shares of Company Common Stock being purchased thereunder by Sub as
a result of the occurrence of any of the events described on Annex A hereto;
(d) by either the Company or Parent if the Offer has not been
consummated by May 5, 1998 (the "Outside Termination Date"), provided that the
terminating party is not then in material breach of any provision of this
Agreement;
(e) by Parent upon the occurrence of a "Trigger Event" (as defined
below), provided that such right to terminate shall expire on the date on which
Parent or Sub beneficially owns a majority of the outstanding shares of Company
Common Stock and Parent's designees constitute the requisite percentage (but not
less than a majority) of the members of the Board of Directors of the Company
specified in this Agreement; and
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(f) by Parent, if the FTC or the Antitrust Division has initiated
litigation or an administrative proceeding challenging the transactions
contemplated by this Agreement under U.S. antitrust laws, which litigation or
administrative proceeding will include a motion seeking an Order or injunction
prohibiting the consummation of any of the transactions contemplated by this
Agreement.
9.02 Effect of Termination.
(a) If this Agreement is validly terminated by either the Company or
Parent pursuant to Section 9.01, this Agreement shall forthwith become null and
void and there shall be no liability or obligation on the part of either the
Company or Parent (or any of their respective Representatives or affiliates),
except (i) that the provisions of Sections 7.01(b), 7.01(c), 7.07, 7.08 and 9.02
will continue to apply following any such termination, (ii) that nothing
contained herein shall relieve any party hereto from liability for breach of its
representations, warranties, covenants or agreements contained in this Agreement
and (iii) as provided in paragraph (b) below.
(b) In the event that Parent terminates this Agreement pursuant to
Section 9.01(c)(A)(i), 9.01(c)(A)(ii) or 9.01(e), then the Company shall pay to
Parent (x) a termination fee in the amounts and at the times specified in
Section 9.02(c) and (y) an amount (not to exceed $500,000 in the aggregate)
equal to all out-of-pocket expenses and fees certified by Parent to have been
incurred by Parent and its Subsidiaries in connection with this Agreement and
the transactions contemplated hereby (including, without limitation, fees and
expenses payable to all banks, investment banking firms and other financial
institutions and persons and their respective agents and counsel for acting as
Parent's financial advisor with respect to, or arranging or committing to
provide or providing any financing for, the acquisition of all the outstanding
shares of Company Common Stock in the Offer and the Merger). In the event that
Parent terminates this Agreement pursuant to Section 9.01(c)(C), then the
Company shall pay to Parent a termination fee in the amount and at the time
specified in Section 9.02(c). A "Trigger Event" means any of the following
events: (i) the Company shall have entered into, or shall have publicly
announced its intention to enter into, an agreement or agreement in principle
with respect to, or, at any time within 12 months after the termination of this
Agreement, consummated any Acquisition Proposal or similar business combination
or transaction other than the transactions contemplated by the Merger Agreement;
(ii) the Board of Directors of the Company or any committee thereof shall have
withdrawn its approval or recommendation of the Offer, this Agreement or the
Merger, or modified its approval or recommendation in a manner adverse to Parent
or Sub; (iii) the Board of Directors of the Company or any committee thereof
shall have made any recommendation with respect to an Acquisition Proposal by
any person (other than Parent or Sub) other than a recommendation rejecting or
against such Acquisition Proposal; (iv) the Company receives any Acquisition
Proposal by any person (other than Parent or Sub), and the Company's Board of
Directors takes a neutral position or makes no recommendation with respect to
such Acquisition Proposal after a reasonable amount of time (and in no event
more than five business days) has elapsed for the Company's Board of Directors
to review and make a recommendation with respect to such Acquisition Proposal
consistent with the Board's fiduciary duties; or (v) (x) any corporation,
partnership or other entity or "person" (as defined in Section 13(d)(3) of the
Exchange Act) other than Parent, the
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Company or any of their respective affiliates shall have, at any time prior to
the termination of this Agreement, commenced, or announced an intention to
commence, (A) a "solicitation" of "proxies" or become a "participant" in such a
solicitation (as such terms are defined in Regulation 14A under the Exchange
Act) or (B) a tender offer, exchange offer or other extraordinary transaction
(in each case with respect to Company Common Stock) and as a result thereof, if
this Agreement were not terminated promptly thereafter, Parent or Sub would be
required to incur substantial expenditures in addition to those otherwise
required for the transactions contemplated by this Agreement, and (y) such
corporation, partnership or other entity or "person" or its affiliates and
associates (as defined in the Exchange Act) collectively shall be or become the
beneficial owners (determined pursuant to Rule 13d-3 under the Exchange Act) of
at least 15% of any class of shares of capital stock of the Company (including
the shares of Company Common Stock) or shall have acquired, directly or
indirectly, at least 15% of the assets or earning power of the Company.
(c) The termination fee payable pursuant to Section 9.02(b) shall be as
follows: (i) if the termination of this Agreement occurred pursuant to Section
9.01(e) based on a Trigger Event described in clause (i) or (v) of Section
9.02(b), a termination fee of $3,000,000 shall be payable immediately upon such
termination; (ii) if the termination of this Agreement occurred pursuant to
Section 9.01(c)(A) or pursuant to Section 9.01(e) based on a Trigger Event
described in clause (ii), (iii) or (iv) of Section 9.02(b), a termination fee of
$1,500,000 (the "Initial Termination Fee") shall be payable immediately upon
such termination, and an additional termination fee of $1,500,000 shall be
payable immediately upon the occurrence during the 12 months following the
receipt of the Initial Termination Fee of a Trigger Event described in clause
(i) or (v) of Section 9.02(b); and (iii) if (A) the termination of this
Agreement occurred pursuant to Section 9.01(c)(C), (B) at any time prior to
termination of this Agreement pursuant to Section 9.01(c)(C), the Company shall
have received an Acquisition Proposal and (C) within 12 months of termination of
this Agreement pursuant to Section 9.01(c)(C), the Company shall have entered
into, or shall have publicly announced its intention to enter into, an agreement
or agreement in principle with respect to, or consummated any business
combination or transaction with any person or entity that made the Acquisition
Proposal referred to in the immediately preceding subclause (B) or with any
affiliate of such person or entity, a termination fee of $3,000,000 shall be
payable immediately upon such termination. All termination fees and other
amounts payable under Section 9.02(b) and this Section 9.02(c) shall be payable
by wire transfer of immediately available funds to an account designated in
writing by Parent. Except as otherwise provided in this Section 9.02, all such
amounts shall be due immediately upon termination of this Agreement and without
prior notice or demand.
(d) Notwithstanding anything to the contrary in this Agreement, any
termination fees otherwise payable under Section 9.02(b) shall be reduced to the
extent such payment otherwise would cause the Total Profit (as defined in the
Stock Option Agreement) to exceed $4,500,000.
9.03 Amendment. Subject to Section 1.03(c), this Agreement may be
amended, supplemented or modified by action taken by or on behalf of the
respective Boards of Directors of the parties hereto at any time prior to the
Effective Time, whether prior to or after adoption of this Agreement by the
stockholders of the Company but after such adoption only to the extent
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permitted by applicable law. No such amendment, supplement or modification shall
be effective unless set forth in a written instrument duly executed by or on
behalf of each party hereto.
9.04 Waiver. Subject to Section 1.03(c), at any time prior to the
Effective Time any party hereto, by action taken by or on behalf of its Board of
Directors, may to the extent permitted by applicable law (i) extend the time for
the performance of any of the obligations or other acts of the other parties
hereto, (ii) waive any inaccuracies in the representations and warranties of the
other parties hereto contained herein or in any document delivered pursuant
hereto or (iii) waive compliance with any of the covenants, agreements or
conditions of the other parties hereto contained herein. No such extension or
waiver shall be effective unless set forth in a written instrument duly executed
by or on behalf of the party extending the time of performance or waiving any
such inaccuracy or non-compliance. No waiver by any party of any term or
condition of this Agreement, in any one or more instances, shall be deemed to be
or construed as a waiver of the same or any other term or condition of this
Agreement on any future occasion.
ARTICLE X.
GENERAL PROVISIONS
10.01 Non-Survival of Representations, Warranties, Covenants and
Agreements. The representations, warranties, covenants and agreements contained
in this Agreement or in any instrument delivered pursuant to this Agreement
shall not survive the Merger but shall terminate at the Effective Time, except
for the agreements contained in Article III and in Sections 7.01(b), 7.01(c),
7.05, 7.06, 7.07 and 7.08, which shall survive the Effective Time.
10.02 Notices. All notices, requests and other communications hereunder
must be in writing and will be deemed to have been duly given only if delivered
personally or by facsimile transmission or mailed (first class postage prepaid)
to the parties at the following addresses or facsimile numbers:
If to Parent or Sub, to:
ASK asa
K.G. Meldahlsvei 9
N-1602 Fredrikstad
NORWAY
Facsimile No.: 47 69 34 0632
Attn: Ole J. Fredriksen
with a copy to:
Rogers & Wells LLP
200 Park Avenue
New York, NY 10166
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<PAGE> 48
Facsimile No.: 212-878-8375
Attn: John A. Healy, Esq.
If to the Company, to:
Proxima Corporation
9440 Carroll Park Drive
San Diego, CA 92121-2298
Facsimile No.: (619) 677-5755
Attn: General Counsel
with copies to:
Brobeck, Phleger & Harrison LLP
4875 MacArthur Court, Suite 1000
Newport Beach, CA 92660
Facsimile No.: 714-752-7522
Attn: Patrick Arrington, Esq.
and
Brobeck, Phleger & Harrison LLP
One Market Square
Spear Street Tower
San Francisco, CA 94105
Facsimile No.: 415-442-1010
Attn: Steve L. Camahort, Esq.
All such notices, requests and other communications will (i) if delivered
personally to the address as provided in this Section, be deemed given upon
delivery, (ii) if delivered by facsimile transmission to the facsimile number as
provided in this Section, be deemed given upon receipt, and (iii) if delivered
by mail in the manner described above to the address as provided in this
Section, be deemed given upon receipt (in each case regardless of whether such
notice, request or other communication is received by any other person to whom a
copy of such notice is to be delivered pursuant to this Section). Any party from
time to time may change its address, facsimile number or other information for
the purpose of notices to that party by giving notice in writing specifying such
change to the other parties hereto.
10.03 Entire Agreement. This Agreement, including all Exhibits and
Schedules referred to herein or delivered pursuant hereto, and the Stock Option
Agreement supersede all prior discussions and agreements among the parties
hereto with respect to the subject matter hereof and thereof, including, without
limitation, that certain confidentiality agreement between the Company and
Parent dated July 21, 1997, and contain the sole and entire agreement among the
parties hereto with respect to the subject matter hereof and thereof.
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10.04 Public Announcements. Except as otherwise required by law or the
rules of any applicable securities exchange or national market system, so long
as this Agreement is in effect, Parent and the Company will not, and will not
permit any of their respective Representatives to, issue or cause the
publication of any press release or make any other public announcement with
respect to the transactions contemplated by this Agreement without the consent
of the other party, which consent shall not be unreasonably withheld. Parent and
the Company will cooperate with each other in the development and distribution
of all press releases and other public announcements with respect to this
Agreement and the transactions contemplated hereby, and will furnish the other
with drafts of any such releases and announcements as far in advance as
practicable.
10.05 No Third Party Beneficiary. The terms and provisions of this
Agreement are intended solely for the benefit of each party hereto and their
respective successors or permitted assigns, and except as provided in Sections
7.05 and 7.06 (which are intended to be for the benefit of the persons entitled
to therein, and may be enforced by any of such persons), it is not the intention
of the parties to confer third-party beneficiary rights upon any other person.
10.06 No Assignment; Binding Effect. Neither this Agreement nor any
right, interest or obligation hereunder may be assigned by any party hereto
without the prior written consent of the other parties hereto and any attempt to
do so will be void, except that Sub may assign any or all of its rights,
interests and obligations hereunder, including the right to purchase all or any
portion of the shares of Company Common Stock tendered pursuant to the Offer, to
another direct or indirect wholly owned Subsidiary of Parent, provided that any
such Subsidiary agrees in writing to be bound by all of the terms, conditions
and provisions contained herein. Subject to the preceding sentence, this
Agreement is binding upon, inures to the benefit of and is enforceable by the
parties hereto and their respective successors and assigns.
10.07 Headings. The headings used in this Agreement have been inserted
for convenience of reference only and do not define or limit the provisions
hereof.
10.08 Invalid Provisions. If any provision of this Agreement is held to
be illegal, invalid or unenforceable under any present or future law, and if the
rights or obligations of any party hereto under this Agreement will not be
materially and adversely affected thereby, (i) such provision will be fully
severable, (ii) this Agreement will be construed and enforced as if such
illegal, invalid or unenforceable provision had never comprised a part hereof,
(iii) the remaining provisions of this Agreement will remain in full force and
effect and will not be affected by the legal, invalid or unenforceable provision
or by its severance herefrom and (iv) in lieu of such illegal, invalid or
unenforceable provision, there will be added automatically as a part of this
Agreement a legal, valid and enforceable provision as similar in terms to such
illegal, invalid or unenforceable provision as may be possible.
10.09 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware applicable to a contract
executed and performed in such State without giving effect to the conflicts of
laws principles thereof.
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10.10 Schedules. Each exception set forth in the Disclosure Schedule is
identified by reference to, or has been grouped under a heading referring to, a
specific individual Section of this Agreement and, except as otherwise
specifically stated with respect to such exception, relates only to such
Section.
10.11 Counterparts. This Agreement may be executed in any number of
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, each party hereto has caused this Agreement to be
signed by its officer thereunto duly authorized as of the date first above
written.
ASK ASA
By: /s/ Einar J. Greve
-------------------------------
Name: Einar J. Greve
Title: Director
BD ACQUISITION CORP.
By: /s/ Einar J. Greve
-------------------------------
Name: Einar J. Greve
Title: Director
PROXIMA CORPORATION
By: /s/ K.E. Olson
-------------------------------
Name: K.E. Olson
Title: CEO
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GLOSSARY OF DEFINED TERMS
The following terms, when used in this Agreement, have the meanings
ascribed to them in the corresponding Sections of this Agreement listed below:
"Acquisition Transaction" -- Section 6.02
"Acquisition Proposal" -- Section 6.02
"Antitrust Division" -- Section 7.04
"CERCLA" -- Section 4.16(c)
"Certificate of Merger" -- Section 2.02
"Certificates" -- Section 3.02(b)
"Closing" -- Section 2.03
"Closing Date" -- Section 2.03
"Code" -- Section 4.12(a)
"Company" -- Preamble
"Company Benefit Plan" -- Section 4.13(c)(i)
"Company Common Stock" -- Preamble
"Company Designees" -- Section 1.03(c)
"Company Financial Statements" -- Section 4.05
"Company Permits" -- Section 4.10
"Company SEC Reports" -- Section 4.05
"Company Stock Option" -- Section 3.01(e)
"Company Stock Plan" -- Section 3.01(e)
"Company Stockholders' Approval" -- Section 7.02(a)
"Company Stockholders' Meeting" -- Section 7.02(a)
"Constituent Corporations" -- Section 2.01
"Contracts" -- Section 4.04(a)
"DGCL" -- Section 1.02(a)
"Dissenting Share" -- Section 3.01(d)
"Effective Time" -- Section 2.02
"Environmental Law" -- Section 4.16(g)(i)
"ERISA" -- Section 4.13(c)
"ERISA Affiliate" -- Section 4.13(b)
"Exchange Act" -- Section 1.01
"Exchange Agent" -- Section 3.02(a)
"Exchange Fund" -- Section 3.02(a)
"Exon-Florio Amendment" -- Section 7.04
"FTC" -- Section 7.04
"Governmental or Regulatory Authority" -- Section 4.04(a)
"Hazardous Material" -- Section 4.16(g)(ii)
"HSR Act" -- Section 4.04(b)
"Indemnified Liabilities" -- Section 7.06(a)
"Indemnified Parties" -- Section 7.06(a)
"Indemnifying Party" -- Section 7.06(a)
"Intellectual Property" -- Section 4.18
"IRS" -- Section 4.12(a)
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"Laws" -- Section 4.04(a)
"Lien" -- Section 4.02(b)
"Materially Adversely Affecting" -- Section 4.01
"Material Adverse Effect" -- Section 4.01
"Merger" -- Section 2.01
"Merger Price" -- Section 3.01(c)
"Minimum Condition" -- Section 1.01(a)
"Offer" -- Section 1.01(a)
"Offer Documents" -- Section 1.01(b)
"Offer to Purchase" -- Section 1.01(b)
"Options" -- Section 4.02(a)
"Orders" -- Section 4.04(a)
"Outside Termination Date" -- Section 9.01(d)
"Parent" -- Preamble
"PBGC" -- Section 4.13(a)(iii)
"Per Share Amount" -- Section 1.01(a)
"Plan" -- Section 4.13(c)(ii)
"Potential Acquiror" -- Section 6.02
"Preferred Stock" -- Section 4.02(a)
"Proxy Statement" -- Section 4.09
"Release" -- Section 4.16(a)
"Representative" -- Section 6.02
"SEC" -- Section 1.01(a)
"Schedule 14D-1" -- Section 1.01(b)
"Schedule 14D-9" -- Section 1.02(b)
"Secretary of State" -- Section 2.02
"Securities Act" -- Section 4.05
"Stockholders Agreement" -- Preamble
"Stock Option Agreement" -- Preamble
"Sub" -- Preamble
"Sub Common Stock" -- Section 3.01(a)
"Subsidiary" -- Section 3.01(b)
"Superior Proposal" -- Section 6.02
"Surviving Corporation" -- Section 2.01
"Surviving Corporation Common Stock" -- Section 2.01(a)
"Trigger Event" -- Section 9.02(b)
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ANNEX A
CONDITIONS TO THE OFFER
The capitalized terms used in this Annex A shall have the meanings
ascribed to them in the Agreement and Plan of Merger to which this Annex A is
attached, except that the term "Merger Agreement" shall be deemed to refer to
such Agreement and Plan of Merger.
Notwithstanding any other provisions of the Offer, and in addition to
(and not in limitation of) Sub's rights to extend and amend the Offer at any
time in its sole discretion (subject to the provisions of the Merger Agreement),
Sub shall not be required to accept for payment or, subject to any applicable
rules and regulations of the SEC, including Rule 14e-1(c) under the Exchange Act
(relating to Sub's obligation to pay for or return tendered shares of Company
Common Stock promptly after termination or withdrawal of the Offer), pay for,
and may delay the acceptance for payment of or, subject to the restriction
referred to above, the payment for, any tendered shares of Company Common Stock,
and may (subject to Sections 1.01(a) and 7.04 of the Merger Agreement) terminate
the Offer if (i) any applicable waiting period under the HSR Act shall not have
expired or terminated, (ii) the Minimum Condition has not been satisfied or
(iii) at any time on or after March 8, 1998, and at or before the time of
payment for any such shares of Company Common Stock (whether or not any shares
of Company Common Stock have theretofore been accepted for payment or paid for
pursuant to the Offer) pursuant to the Offer, any of the following events shall
have occurred and remain in effect:
(a) (i) there shall be instituted or pending any action or proceeding
by any Governmental or Regulatory Authority (A) challenging or seeking to make
illegal, impede, materially delay or otherwise directly or indirectly restrain,
prohibit or make materially more costly the Offer or the Merger or seeking to
obtain material damages relating to the transactions contemplated under the
Offer, the Merger Agreement and the Stock Option Agreement, (B) seeking to
prohibit or materially limit the ownership or operation by Sub or Parent of all
or any material portion of the business or assets of the Company or any of its
subsidiaries taken as a whole or to compel Sub or Parent to dispose of or hold
separately all or any material portion of the business or assets of Sub or
Parent or the Company or any of its Subsidiaries taken as a whole, or seeking to
impose any material limitation on the ability of Sub or Parent to conduct its
business or own such assets, (C) seeking to impose material limitations on the
ability of Sub or Parent effectively to exercise full rights of ownership of the
shares of Company Common Stock, including, without limitation, the right to vote
any shares of Company Common Stock acquired pursuant to the Offer or the Stock
Option Agreement or owned by Parent or Sub on all matters properly presented to
the Company's stockholders, (D) seeking to require divestiture by Sub or Parent
of any shares or (E) otherwise materially adversely affecting the condition of
the Company and its Subsidiaries taken as a whole; or (ii) any court shall have
entered an Order which is in effect and which (A) makes illegal, impedes,
materially delays or otherwise directly or indirectly restrains, prohibits or
makes materially more costly the Offer or the Merger, (B) prohibits or
materially limits the ownership or operation by Sub or Parent of all or any
material portion of the business or assets of the Company or any of its
Subsidiaries taken as a whole or compels Sub or Parent to dispose of or hold
separately all or any material portion of the business
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<PAGE> 55
or assets of Sub or Parent or the Company or any of its Subsidiaries taken as a
whole, or imposes any material limitation on the ability of Sub or Parent to
conduct its business or own such assets, (C) imposes material limitations on the
ability of Sub or Parent effectively to exercise full rights of ownership of the
shares of Company Common Stock, including, without limitation, the right to vote
any shares of Company Common Stock acquired pursuant to the Offer or the Stock
Option Agreement or owned by Parent or Sub on all matters properly presented to
the Company's stockholders, (D) requires divestiture by Sub or Parent of any
shares of Company Common Stock or (E) otherwise Materially Adversely Affects the
condition of the Company and its Subsidiaries taken as a whole;
(b) there shall be any action taken, or any statute, rule, regulation,
legislation, interpretation, judgment, Order or injunction enacted, enforced,
promulgated, amended, issued or deemed applicable to (i) Sub, Parent, the
Company or any Subsidiary of the Company or (ii) the Offer or the Merger, by any
Governmental or Regulatory Authority other than the routine application of the
waiting period provisions of the HSR Act to the Offer or to the Merger, which
could reasonably be expected to, directly or indirectly, result in any of the
consequences referred to in clauses (A) through (E) of paragraph (a)(i) above;
(c) any change shall have occurred since the date of the Merger
Agreement (or any condition, event or development shall have occurred, involving
a prospective change) that would have a Material Adverse Effect on the Company,
other than any change that results from the announcement of the Merger Agreement
or the transactions contemplated thereby;
(d) there shall have occurred any of the following which would
reasonably be expected to have a Material Adverse Effect on the Company or
Parent: (i) any general suspension of trading in, or limitation on prices for,
securities on any national securities exchange or in the over-the-counter
market, (ii) any decline in any of the Dow Jones Industrial Average, the Nasdaq
Composite Index or the New York Stock Exchange Composite Index in excess of 20%
measured from the close of business on the trading day next preceding the date
of the Merger Agreement, (iii) any material change in United States or any other
currency exchange rates or a suspension of, or limitation on, the markets
therefor, (iv) a declaration of a banking moratorium or any suspension of
payments in respect of banks in the United States or Norway, or (v) a
commencement or escalation of a war or armed hostilities or other national or
international calamity directly or indirectly involving the United States or
Norway;
(e) (i) the Company shall have breached or failed to perform in any
material respect any of its obligations, covenants or agreements contained in
the Merger Agreement or the Stock Option Agreement, (ii) any representation or
warranty of the Company set forth in the Merger Agreement or the Stock Option
Agreement shall not be true and correct (A) in all material respects as of the
date of the Merger Agreement or (B) as of such time, and, in a case described in
this subclause (B), the failure of such representation or warranty to be true
and correct has a Material Adverse Effect on the Company and did not result from
the announcement of the Merger Agreement or the transactions contemplated
thereby or (iii) any of the stockholders who are party to the Stockholders
Agreement shall have breached or failed to perform in any material respect any
of such stockholder's obligations, covenants or agreements under the
Stockholders Agreement or any representation or warranty of any of such
stockholder contained
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in the Stockholders Agreement shall not be true and correct in any respect,
except in the case of this clause (iii) for such breaches or failures that would
not have a Material Adverse Effect on the Company or materially hinder or delay
consummation of any of the transactions contemplated by the Merger Agreement;
(f) all consents, registrations, approvals, permits, authorizations,
notices, reports or other filings required to be obtained or made by the
Company, Sub or Parent with or from any Governmental or Regulatory Authority in
conjunction with the execution, delivery and performance of the Merger
Agreement, the Stock Option Agreement, the Stockholders Agreement, the Offer and
the consummation of the transactions contemplated by the Merger Agreement, the
Stock Option Agreement or the Stockholders Agreement shall not have been made or
obtained and such failure would reasonably be expected to have a Material
Adverse Effect on the Company and its Subsidiaries, taken as a whole, or would
prevent or materially hinder or delay consummation of the transactions
contemplated by the Merger Agreement, the Stock Option Agreement or the
Stockholders Agreement;
(g) the Merger Agreement shall have been terminated in accordance with
its terms;
(h) (x) any corporation, partnership or other entity or "person" or
"group" (within the meaning of Section 13(d)(3) of the Exchange Act), other than
Parent, the Company or any of their respective affiliates, shall have commenced,
or announced an intention to commence, (A) a "solicitation" of "proxies" or
become a "participant" in any "solicitation" (as such terms are defined in
Regulation 14A under the Exchange Act) or (B) a tender offer, exchange offer or
other extraordinary transaction (in each case with respect to Company Common
Stock) and as a result thereof, if the Offer were not terminated, Parent or Sub
would be required to incur substantial expenditures in addition to those
otherwise required for the transactions contemplated by the Merger Agreement,
and (y) such corporation, partnership, other entity or "person" or its
affiliates and associates (as defined in the Exchange Act) collectively shall be
or become the beneficial owners (determined pursuant to Rule 13d-3 under the
Exchange Act) of at least 15% of any shares of capital stock of the Company
(including the shares of Company Common Stock) or shall have acquired, directly
or indirectly, at least 15% of the assets or earning power of the Company; or
(i) (i) the Company's Board of Directors or any committee thereof shall
have withdrawn, or modified or changed in a manner adverse to Sub or Parent
(including by amendment of the Schedule 14D-9) its recommendation of the Offer,
the Merger Agreement or the Merger; (ii) the Company's Board of Directors or any
committee thereof shall have made any recommendation with respect to any
Acquisition Proposal by any Person (other than Sub or Parent) other than a
recommendation rejecting or against such Acquisition Proposal; or (iii) the
Company shall have received any Acquisition Proposal by any person or entity
(other than Sub or Parent) and the Company's Board of Directors is neutral or
makes no recommendation with respect to such Acquisition Proposal after a
reasonable amount of time (and in no event more than five business days) has
elapsed for the Company's Board of Directors to review and make a recommendation
with respect to such Acquisition Proposal consistent with its fiduciary duties;
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which in the reasonable judgment of Sub or Parent, in any such case and
regardless of the circumstances giving rise to such condition, makes it
inadvisable to proceed with such acceptance for payment or payment.
The foregoing conditions are for the sole benefit of Parent and Sub and
may be waived by Parent in whole or in part at any time and from time to time in
the sole discretion of Sub. The failure by Sub at any time to exercise any of
the foregoing rights shall not be deemed a waiver of any such right; the waiver
of any such right with respect to particular facts and other circumstances shall
not be deemed a waiver with respect to any other facts and circumstances; and
each such right shall be deemed an ongoing right that may be asserted at any
time and from time to time. Any determination by Sub concerning the events
described above will be final and binding on all parties.
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Exhibit (c)(2)
STOCKHOLDERS AGREEMENT
STOCKHOLDERS AGREEMENT (this "Agreement"), dated March 8, 1998, by and
among ASK asa, a corporation organized under the laws of the Kingdom of Norway
("Parent"), BD Acquisition Corp., a Delaware corporation ("Purchaser") and an
indirect wholly owned subsidiary of Parent, and each of the Individuals Listed
on the Signature Pages hereto (each in his individual capacity, a "Stockholder",
and collectively, the "Stockholders").
WHEREAS, each of the Stockholders is, as of the date hereof, the record
and beneficial owner of the shares of common stock, par value $.001 per share
(the "Common Stock"), of Proxima Corporation, a Delaware corporation (the
"Company"), set forth on Annex I hereto;
WHEREAS, Parent, Purchaser and the Company concurrently herewith are
entering into an Agreement and Plan of Merger, dated as of the date hereof (the
"Merger Agreement"; capitalized terms used but not defined herein have the
meanings ascribed to such terms in the Merger Agreement), which provides, among
other things, for the acquisition of the Company by Parent by means of a cash
tender offer (the "Offer") by Purchaser for all of the outstanding shares of
Common Stock and for the subsequent merger (the "Merger") of Purchaser with and
into the Company upon the terms and subject to the conditions set forth in the
Merger Agreement; and
WHEREAS, as a condition to the willingness of Parent and Purchaser to
enter into the Merger Agreement, and in order to induce Parent and Purchaser to
enter into the Merger Agreement, the Stockholders have agreed to enter into this
Agreement.
NOW, THEREFORE, in consideration of the execution and delivery by
Parent and Purchaser of the Merger Agreement and the foregoing and the mutual
representations, warranties, covenants and agreements set forth herein and
therein, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:
SECTION 1. Representations and Warranties of the Stockholder. Each of
the Stockholders hereby represents and warrants to Parent and Purchaser,
severally and not jointly, as follows:
(a) Such Stockholder is the record and beneficial owner of the shares
of Common Stock (as may be adjusted from time to time pursuant to Section 7
hereof, the "Shares") set forth opposite his name on Annex I to this Agreement.
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(b) Such Stockholder has the legal capacity to execute and deliver this
Agreement and to consummate the transactions contemplated hereby.
(c) This Agreement has been validly executed and delivered by such
Stockholder and constitutes the legal, valid and binding obligation of such
Stockholder, enforceable against such Stockholder in accordance with its terms,
except as limited by bankruptcy, insolvency, reorganization, moratorium or other
laws affecting enforcement of creditors' rights generally and by general
equitable principles (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
(d) The execution and delivery of this Agreement by such Stockholder do
not, and the performance by such Stockholder of his obligations hereunder will
not, (i) conflict with, result in a violation or breach of, constitute (with or
without notice or lapse of time or both) a default under, result in or give to
any person any right of termination, cancellation, modification or acceleration
of, or result in the creation or imposition of any Lien upon any of the assets
or properties of such Stockholder under, any of the terms, conditions or
provisions of (A) (x) any Law or Order of any Governmental or Regulatory
Authority applicable to such Stockholder or any of his assets or properties, or
(y) any Contract to which such Stockholder is a party or by which such
Stockholder or any of his assets or properties is bound, or (ii) require any
filing by such Stockholder with, or any permit, authorization, consent or
approval of, any Governmental or Regulatory Authority or any third party.
(e) The Shares and the certificates representing the Shares owned by
such Stockholder are now and at all times during the term hereof will be held by
such Stockholder, or by a nominee or custodian for the benefit of such
Stockholder, free and clear of all liens, claims, security interests, proxies,
voting trusts or agreements, understandings or arrangements or any other
encumbrances whatsoever, except for any such encumbrances or proxies arising
hereunder, and not subject to any preemptive rights.
SECTION 2. Representations and Warranties of Parent and Purchaser. Each
of Parent and Purchaser hereby represents and warrants to the Stockholders as
follows:
(a) Parent is a corporation duly organized, validly existing and in
good standing under the laws of the Kingdom of Norway, Purchaser is a
corporation duly organized, validity existing and in good standing under the
laws of the State of Delaware, and each of Parent and Purchaser has full
corporate power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby and has taken all necessary corporate action to
authorize the execution, delivery and performance of this Agreement.
(b) This Agreement has been duly authorized, executed and delivered by
each of Parent and Purchaser and constitutes the legal, valid and binding
obligation of each of Parent and Purchaser, enforceable against each of them in
accordance with its terms, except as limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting enforcement of
creditors' rights generally and by general equitable principles (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
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(c) The execution and delivery of this Agreement by Parent and
Purchaser do not, and the performance by Parent and Purchaser of their
obligations hereunder and the consummation of the transactions contemplated
hereby will not, (i) conflict with, result in a violation or breach of,
constitute (with or without notice or lapse of time or both) a default under,
result in or give to any person any right of termination, cancellation,
modification or acceleration of, or result in the creation or imposition of any
Lien upon any of the assets or properties of Parent or Purchaser under, any of
the terms, conditions or provisions of (A) the certificates or articles of
incorporation or bylaws (or other comparable charter documents) of Parent or
Purchaser or (B) (x) any Law or Order of any Governmental or Regulatory
Authority applicable to Parent or Purchaser or any of their respective assets or
properties, or (y) any Contract to which Parent or Purchaser is a party or by
which Parent or Purchaser or any of their respective assets or properties is
bound, excluding from the foregoing clauses (x) and (y) conflicts, violations,
breaches, defaults, terminations, modifications, accelerations and creations and
impositions of Liens which, individually or in the aggregate, could not be
reasonably expected to have a material adverse effect on the ability of Parent
and Purchaser to consummate the transactions contemplated by this Agreement, or
(ii) require any filing by Parent or Purchaser with, or any permit,
authorization, consent or approval of, any Governmental or Regulatory Authority.
SECTION 3. Grant of Option.
(a) Each Stockholder hereby irrevocably grants to Parent and Purchaser
an exclusive option ("Option") to purchase all Shares of such Stockholder at a
price of $11.00 per Share, net to such Stockholder in cash, subject to any
amounts required to be withheld under applicable federal, state, local or
foreign income tax laws and regulations, and subject to adjustment under Section
3(d), which Option shall be exercisable by Parent or Purchaser at any time after
consummation of the Offer and prior to the termination of this Agreement.
(b) To exercise the Option, either Parent or Purchaser shall send a
written notice ("Exercise Notice") to each Stockholder specifying the place and
the time (which shall be not less than two business days and not more than four
business days after the date of the Exercise Notice) for the closing of the
purchase and sale of the Shares in accordance with the exercise of the Option.
The closing of the purchase of the Shares ("Closing") pursuant to the exercise
of the Option shall take place at the places and at the times designated by
Parent or Purchaser in the Exercise Note.
(c) At Closing, each Stockholder shall sell, assign, convey and
transfer to Parent or Purchaser, and its successors or permitted assigns, each
such Stockholder's Shares, free and clear of any and all liens, claims, security
interests, encumbrances, options or adverse claims whatsoever, and each
Stockholder shall deliver or cause to be delivered to either Parent or Purchaser
a certificate or certificates representing the number of Shares to be delivered
by such Stockholder at the Closing, duly endorsed, or accompanied by stock
powers duly executed in blank, with all required transfer tax stamps affixed
thereto; and either Parent or Purchaser shall deliver to each Stockholder (or
the Stockholder's designee) by wire transfer or certified or bank cashier's
check or checks, an amount equal to (i) the product of (x) the number of such
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Stockholder's Shares purchased at Closing multiplied by (y) the Per Share
Amount, less (ii) any amounts required to be withheld under applicable federal,
state, local or foreign income tax laws and regulations.
(d) In the event of any change in the Company's capital stock by reason
of any stock dividend, stock split, merger, consolidation, recapitalization,
combination, conversion, exchange of shares or dividend or other change in the
corporate or capital structure of the Company, which would have the effect of
diluting or changing Parent's or Purchaser's rights hereunder, the number and
kind of shares or securities subject to the Option and the Offer Price shall be
appropriately and equitably adjusted so that (i) Parent or Purchaser shall
receive, at the Closing, the number and class of shares or other securities or
property that Parent or Purchaser would have received and (ii) the Stockholders
shall receive, at the Closing, the consideration they would have received in
respect of the Shares purchasable upon exercise of the Option if the Option had
been exercised immediately prior to such event.
SECTION 4. Purchase and Sale of the Shares. Each of the Stockholders
hereby agrees that he shall tender his Shares into the Offer promptly, and in
any event no later than the tenth business day following the commencement of the
Offer pursuant to Section 1.01 of the Merger Agreement, and that such
Stockholder shall not withdraw any Shares so tendered unless the Offer is
terminated or has expired. Purchaser hereby agrees to purchase all the Shares so
tendered at a price per Share equal to $11.00 per Share or any higher price that
may be paid in the Offer; provided, however, that Purchaser's obligation to
accept for payment and pay for the Shares in the Offer is subject to all the
terms and conditions of the Offer set forth in the Merger Agreement and Annex A
thereto.
SECTION 5. Transfer of the Shares. Prior to the termination of this
Agreement, except as otherwise provided, herein, none of the Stockholders shall:
(i) transfer (which term shall include, without limitation, for the purposes of
this Agreement, any sale, gift, pledge or other disposition), or consent to any
transfer of, any or all of the Shares; (ii) enter into any contract, option or
other agreement or understanding with respect to any transfer of any or all of
the Shares or any interest therein; (iii) grant any proxy, power-of-attorney or
other authorization or consent in or with respect to the Shares; (iv) deposit
the Shares into a voting trust or enter into a voting agreement or arrangement
with respect to the Shares; or (v) take any other action that would in any way
restrict, limit or interfere with the performance of such Stockholder's
obligations hereunder or the transactions contemplated hereby.
SECTION 6. Grant of Irrevocable Proxy; Appointment of Proxy.
(a) Each of the Stockholders hereby irrevocably grants to, and
appoints, Parent and any nominee thereof, its proxy and attorney-in-fact (with
full power of substitution), for and in the name, place, and stead of such
Stockholder, to vote his Shares, or grant a consent or approval in respect of
his Shares, in connection with any meeting of the Stockholders of the Company
(i) in favor of the Merger, and (ii) against any action or agreement which would
impede, interfere with or prevent the Merger, including any Acquisition Proposal
(as defined below).
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(b) Each of the Stockholders represents that any proxies heretofore
given in respect of the Shares are not irrevocable, and that such proxies are
hereby revoked.
(c) Each of the Stockholders hereby affirms that the proxy set forth in
this Section 6 is irrevocable and is given in connection with the execution of
the Merger Agreement, and that such irrevocable proxy is given to secure the
performances of the duties of such Stockholder under this Agreement. Each
Stockholder hereby further affirms that the irrevocable proxy granted hereby is
coupled with an interest in the Shares and, except as set forth in Section 9
hereof, is intended to be irrevocable in accordance with the provisions of
Section 212(e) of the Delaware General Corporation Law.
SECTION 7. Certain Events. In the event of any stock split, stock
dividend, merger, reorganization, recapitalization or other change in the
capital structure of the Company affecting the Common Stock or the acquisition
of additional shares of Common Stock or other securities or rights of the
Company by any Stockholder, the number of Shares shall be adjusted
appropriately, and this Agreement and the rights and obligations hereunder shall
attach to any additional shares of Common Stock or other securities or rights of
the Company issued to or acquired by any such Stockholder.
SECTION 8. Certain Other Agreements. From the date of this Agreement
until the earlier of the termination of this Agreement or the Effective Time,
none of the Stockholders shall, and none of the Stockholders shall authorize or
permit any advisor or representative retained by or acting for or on behalf of
any such Stockholder to, directly or indirectly, (i) take any action to
knowingly solicit, initiate, continue, facilitate or encourage (including by way
of furnishing or disclosing non-public information) any offer or proposal for a
merger, consolidation or other business combination involving the Company or any
of its Subsidiaries or any proposal or offer to acquire in any manner, directly
or indirectly, 15% or more of the shares of any class of voting securities of
the Company or any of its Subsidiaries or a substantial portion of the assets of
the Company or any of its Subsidiaries, other than the transactions contemplated
by the Merger Agreement or by this Agreement (any of the foregoing being
referred to as an "Acquisition Proposal"), or (ii) knowingly engage in
negotiations, discussions or communications regarding or disclose any
information relating to the Company or any of its Subsidiaries or afford access
to the properties, books or records of the Company or any of its Subsidiaries to
any person, corporation, partnership or other entity or group (a "Potential
Acquiror") that may be considering making, or has made, an Acquisition Proposal.
Each of the Stockholders shall (i) notify Parent promptly (and in any event
within one business day) after receipt of any Acquisition Proposal (or any
indication that any person is considering making an Acquisition Proposal) or any
request for non-public information relating to the Company or any of its
Subsidiaries or for access to the properties, books or records of the Company or
any of its Subsidiaries by any person that may be considering making, or has
made, an Acquisition Proposal, (ii) notify Parent promptly of any material
change to any such Acquisition Proposal, indication or request and (iii) upon
reasonable request by Parent, provide Parent with all material information about
any such Acquisition Proposal, indication or request.
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SECTION 9. Further Assurances. Each of the Stockholders shall, upon
request of Parent or Purchaser, execute and deliver any additional documents and
take such further actions as may reasonably be deemed by Parent or Purchaser to
be necessary or desirable to carry out the provisions hereof and to vest in
Parent the power to vote the Shares as contemplated by Section 6 hereof.
SECTION 10. Termination. Except as otherwise provided in this
Agreement, this Agreement, and all rights and obligations of the parties
hereunder, shall terminate immediately upon the earlier of (i) the acquisition
by Parent, through Purchaser or otherwise, of all the Shares, (ii) the
termination of the Merger Agreement in accordance with its terms or (iii) the
Effective Time; provided, however, that Sections 9 and 11 shall survive any
termination of this Agreement.
SECTION 11. Expenses. All fees and expenses incurred by any one party
hereto shall be borne by the party incurring such fees and expenses.
SECTION 12. Public Announcements. Each of the Stockholders, Parent and
Purchaser agrees that it will not issue any press release or otherwise make any
public statement with respect to this Agreement or the transactions contemplated
hereby without the prior consent of the other party, which consent shall not be
unreasonably withheld or delayed; provided, however, that such disclosure can be
made without obtaining such prior consent if (i) the disclosure is required by
law, and (ii) the party making such disclosure has first used its best efforts
to consult with the other party about the form and substance of such disclosure.
Section 13. Miscellaneous.
(a) All notices, requests and other communications hereunder must be in
writing and will be deemed to have been duly given only if delivered personally
or by facsimile transmission or mailed (first class postage prepaid) to the
parties at the following addresses or facsimile numbers:
(A) if to any or all the Stockholders, to:
Proxima Corporation
9440 Carroll Park Drive
San Diego, CA 92121
Telephone: (619) 457-5500
Facsimile: (619) 677-5755
Attention: General Counsel
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with copies to:
Brobeck, Phleger & Harrison LLP
4875 MacArthur Court, Suite 1000
Newport Beach, CA 92660
Facsimile No.: 714-752-7522
Attn: Patrick Arrington, Esq.
and
Brobeck, Phleger & Harrison LLP
One Market Square
Spear Street Tower
San Francisco, CA 94105
Facsimile No.: 415-442-1010
Attn: Steve L. Camahort, Esq.
and
(B) if to Parent or Purchaser, to:
ASK asa
K.G. Meldahlsvei 9
N-1602 Fredrikstad
NORWAY
Telephone: 47 69 34 01 55
Facsimile: 47 69 34 06 32
Attention: Ole J. Fredriksen
with a copy to:
Rogers & Wells LLP
200 Park Avenue
New York, New York 10166
Telephone: (212) 878-8000
Facsimile: (212) 878-8375
Attention: John A. Healy, Esq.
All such notices, requests and other communications will (i) if delivered
personally to the address as provided in this Section, be deemed given upon
delivery, (ii) if delivered by facsimile transmission to the facsimile number as
provided in this Section, be deemed given upon receipt, and (iii) if delivered
by mail in the manner described above to the address as provided in this
Section, be deemed given upon receipt (in each case regardless of whether such
notice, request or other communication is received by any other person to whom a
copy of such notice is to be delivered pursuant to this Section). Any party from
time to time may change its address,
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facsimile number or other information for the purpose of notices to that party
by giving notice specifying such change to the other parties hereto.
(b) The headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement.
(c) This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original but all of which shall be considered one and
the same agreement.
(d) This Agreement constitutes the entire agreement, and supersedes all
prior agreements and understandings, whether written and oral, among the parties
hereto with respect to the subject matter hereof.
(e) This Agreement shall be governed by, and construed in accordance
with, the laws of the State of Delaware without giving effect to the principles
of conflicts of laws thereof.
(f) Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the parties hereto (whether by
operation of law or otherwise) without the prior written consent of the other
parties, and any such purported assignment shall be null and void; provided,
however, Purchaser or Parent may, without the prior written consent of any
Stockholder assign its rights and obligations to any of its direct or indirect
wholly owned Subsidiaries. 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, and the provisions of this
Agreement are not intended to confer upon any person other than the parties
hereto any rights or remedies hereunder.
(g) If any term, provision, covenant or restriction herein is held by a
court of competent jurisdiction or other authority to be invalid, void or
unenforceable or against its regulatory policy, the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated.
(h) Each of the parties hereto acknowledge and agrees that in the event
of any breach of this Agreement, each non-breaching party would be irreparably
and immediately harmed and could not be made whole by monetary damages. It is
accordingly agreed that the parties hereto (i) will waive, in any action for
specific performance, the defense of adequacy of a remedy at law and (ii) shall
be entitled, in addition to any other remedy to which they may be entitled at
law or in equity, to compel specific performance of this Agreement.
(i) No amendment, modification or waiver in respect to this Agreement
shall be effective unless it shall be in writing and signed by each party
hereto.
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(j) No person who is or becomes (during the term hereof) a director or
officer of the Company makes any agreement or understanding herein in his or her
capacity as such director or officer, and nothing herein shall limit or affect
any action taken by any Stockholder in his or her capacity as an officer or
director of the Company in connection with the Company's rights under the Merger
Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, each of Parent, the Purchaser and the Stockholders
have caused this Agreement to be duly executed and delivered as of the date
first written above.
ASK ASA
By: /s/ Einar J. Greve
-------------------------------
Name: Einar J. Greve
Title: Director
BD ACQUISITION CORP.
By: /s/ Einar J. Greve
-------------------------------
Name: Einar J. Greve
Title: Director
/s/ Patrick Arrington
-----------------------------------
Patrick Arrington
/s/ Richard E. Belluzzo
-----------------------------------
Richard E. Belluzzo
/s/ Robert W. Johnson
-----------------------------------
Robert W. Johnson
/s/ Jeffrey M. Nash
-----------------------------------
Jeffrey M. Nash
/s/ Kenneth E. Olson
-----------------------------------
Kenneth E. Olson
/s/ John M. Seiber
-----------------------------------
John M. Seiber
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ANNEX I
Ownership of Company Common Stock
1. Patrick Arrington............................................. 0 Shares
2. Richard E. Belluzzo........................................... 0 Shares
3. Robert W. Johnson............................................. 9,260 Shares
4. Jeffrey M. Nash............................................... 0 Shares
5. Kenneth E. Olson.............................................. 202,430 Shares
6. John M. Seiber................................................ 8,106 Shares
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Exhibit (c)(3)
OPTION AGREEMENT
OPTION AGREEMENT, dated as of March 8, 1998 (this "Agreement"), among
ASK asa, a corporation organized under the laws of the Kingdom of Norway
("Parent"), BD Acquisition Corp., a Delaware corporation ("Sub") and an indirect
wholly owned subsidiary of Parent, and Proxima Corporation, a Delaware
corporation (the "Company").
WHEREAS, Parent, Sub and the Company, concurrently with the execution
and delivery of this Agreement, have entered into an Agreement and Plan of
Merger dated as of the date hereof (the "Merger Agreement"), providing for,
among other things, the merger of Sub with and into the Company (the "Merger");
and
WHEREAS, as a condition to the willingness of Parent and Sub to enter
into the Merger Agreement, Parent and Sub have required that the Company agree,
and in order to induce Parent and Sub to enter into the Merger Agreement the
Company has agreed, to grant Sub the Option (as hereinafter defined) upon the
terms and subject to the conditions of this Agreement.
NOW THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained herein, and intending to be legally bound
hereby, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
Capitalized terms that are not defined in this Agreement shall have the
respective meanings set forth in the Merger Agreement.
ARTICLE II
THE OPTION
SECTION 2.1 GRANT OF OPTION. The Company hereby grants to Sub an
irrevocable option (the "Option") to purchase 1,427,914 newly-issued shares
(representing 19.9% of the aggregate outstanding shares) (the "Shares") of
common stock, par value $.001 per share ("Company Common Stock"), of the Company
at a purchase price per share of $11.00 (the "Exercise Price"), in the manner
set forth in Sections 2.2 and 2.3 of this Agreement. The number of Shares that
may be received upon the exercise of the Option and the Exercise Price are
subject to adjustment as herein set forth. This Agreement shall terminate, and
the Option hereby granted expire, on the earliest of (i) the Effective Time,
(ii) the termination of the
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Merger Agreement pursuant to Section 9.01(a), 9.01(b), 9.01(c)(B) or 9.01(c)(C)
(other than a termination pursuant to Section 9.01(c)(C) made after an
Acquisition Proposal is made or an intent to make an Acquisition Proposal is
publicly announced), 9.01(d) or 9.01(f) thereof and (iii) to the extent that no
Option Notice (as defined below) has theretofore been given by Sub, three months
after any other termination of the Merger Agreement.
SECTION 2.2 EXERCISE OF OPTION. (a) At any time or from time to time
prior to the expiration of the Option granted hereunder in accordance with the
terms of this Agreement, Sub (or its designee) may exercise the Option, in whole
or in part, if on or after the date hereof:
(i) any corporation, partnership, individual, trust, unincorporated
association, or other entity or "person" (as defined in Section
13(d)(3) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) other than Parent, the Company or any of their
respective "affiliates" (as defined in the Exchange Act) shall have
solicited "proxies" in a "solicitation" subject to the proxy rules
under the Exchange Act, executed any written consent or become a
"participant" in any "solicitation" (as such terms are defined in
Regulation 14A under the Exchange Act), in each case with respect to
the Company Common Stock;
(ii) the Company shall have received an Acquisition Proposal; or
(iii) any of the events described in Section 9.01(c) or (e) of the
Merger Agreement shall have occurred, unless a termination fee would
not be paid or payable if the Merger Agreement were terminated as a
result of such event (but without the necessity of Parent having
terminated the Merger Agreement).
(b) In the event that Sub wishes to exercise all or any part of the
Option, Sub shall give written notice (the "Option Notice," with the date of the
Option Notice being hereinafter called the "Notice Date") to the Company
specifying the number of Shares it will purchase and a place and date (not later
than 30 business days from the Notice Date) for closing such purchase (a
"Closing"). Sub's obligation to purchase Shares upon any exercise of the Option
is subject (at its election) to the conditions that (i) no preliminary or
permanent injunction or other order against the purchase, issuance or delivery
of the Shares shall have been issued by any federal, state or foreign court of
competent jurisdiction (and no action or proceeding shall have been commenced or
threatened for purposes of obtaining such an injunction or order); (ii) any
applicable waiting period under the HSR Act shall have expired or been
terminated; and (iii) there shall have been no material breach of the
representations, warranties, covenants or agreements of the Company contained in
this Agreement or the Merger Agreement; provided, however, that any failure by
Sub to purchase Shares upon exercise of the Option at any Closing as a result of
the nonsatisfaction of any of such conditions shall not affect or prejudice
Parent's right to purchase such Shares upon the subsequent satisfaction of such
conditions. Upon request by Sub, the Company will promptly take all action
required to effect all necessary filings by the Company under the HSR Act.
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(c) Notwithstanding anything to the contrary in this Agreement, if
prior to the expiration of the Option granted hereby any of the events described
in Section 2.2(a) of this Agreement shall have occurred, then Sub (or its
designee) shall have the right, in lieu of exercising the Option, at any time
thereafter (for so long as the Option is exercisable under this Agreement) to
request in writing that the Company pay, and promptly (but in any event not more
than five business days) after the giving by Sub (or its designee) of such
request, the Company shall pay to Sub (or its designee), in cancellation of the
Option, an amount in cash equal to (i) the excess over the Exercise Price of the
greater of (A) the last sale price of a share of Company Common Stock as
reported on the Nasdaq National Market (or any national or other exchange on
which the Company Common Stock may be traded) on the last trading day prior to
the Notice Date, or (B) (1) the highest price per share of Company Common Stock
offered to be paid or paid pursuant to or in connection with an Acquisition
Proposal that involves the Company Common Stock and that has not been terminated
or withdrawn prior to the Notice Date or (2) the aggregate consideration offered
to be paid or paid in an Acquisition Proposal that involves the assets of the
Company and that has not been terminated or withdrawn prior to the Notice Date,
divided by the number of shares of Company Common Stock then outstanding,
multiplied by (ii) the number of Shares then covered by the Option. If all or a
portion of the price per share of Company Common Stock offered, paid or payable
or the aggregate consideration offered, paid or payable for the assets of the
Company, each as contemplated by the preceding sentence, consists of non-cash
consideration, such price or aggregate consideration shall be the cash
consideration, if any, plus the fair market value of the non-cash consideration
as determined by the investment bankers of Sub (or its designee) and the
investment bankers of the Company.
SECTION 2.3 PURCHASE OF SHARES. At any Closing, which shall be held at
the offices of Rogers & Wells LLP, New York, New York, (i) the Company will
deliver to Sub the certificate or certificates representing the number of Shares
being purchased in proper form for transfer upon exercise of the Option in the
denominations designated by Sub in the Option Notice, and, if the Option has
been exercised in part, a new Option evidencing the rights of Sub to purchase
the balance of the Shares subject thereto, and (ii) Sub shall pay the aggregate
purchase price for the Shares to be purchased by wire transfer of immediately
available funds to an account designated by the Company two business days prior
to the Closing in the amount of the Exercise Price times the number of Shares to
be purchased.
SECTION 2.4 ADJUSTMENTS UPON SHARE ISSUANCES, CHANGES IN
CAPITALIZATION, ETC. (a) Without in any way affecting the Company's obligations
under the Merger Agreement, in the event of any change in Company Common Stock
or in the number of outstanding shares of Company Common Stock by reason of a
stock dividend, split-up, recapitalization, combination, exchange of shares or
similar transaction or any other change in the corporate or capital structure of
the Company (including, without limitation, the declaration or payment of an
extraordinary dividend of cash, securities or other property), the type and
number of the Shares to be issued by the Company upon exercise of the Option
shall be adjusted appropriately, and proper provision shall be made in the
agreements governing such transaction, so that Sub shall receive upon exercise
of the Option the number and class of shares or other securities or property
that Sub would have received in respect to the Shares if the Option had been
exercised immediately prior to such event, or the record date therefor, as
applicable, and
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<PAGE> 4
Sub had elected to the fullest extent it would have been permitted to elect, to
receive such securities, cash or other property in respect of such Shares.
(b) Without in any way affecting the Company's obligations under the
Merger Agreement, in the event that the Company shall enter into an agreement
(i) to consolidate with or merge into any person, other than Parent or one of
its subsidiaries, and shall not be the continuing or surviving corporation of
such consolidation or merger, (ii) to permit any person, other than Parent or
one of its subsidiaries, to merge into the Company and the Company shall be the
continuing or surviving corporation, but, in connection with such merger, the
then outstanding shares of Company Common Stock shall be changed into or
exchanged for stock or other securities of the Company or any other person or
cash or any other property, or then outstanding shares of Company Common Stock
shall after such merger represent less than 50% of the outstanding shares and
share equivalents of the surviving corporation or (iii) to sell or otherwise
transfer all or substantially all of its assets to any person, other than Parent
or one of its subsidiaries, then, and in each such case, proper provision shall
be made in the agreements governing such transaction so that Sub shall receive
upon exercise of the Option the number and class of shares or other securities
or property that Sub would have received in respect of the Shares if the Option
had been exercised immediately prior to such transaction, or the record date
therefor, as applicable, and Sub had elected to the fullest extent it would have
been permitted to elect, to receive such securities, cash or other property in
respect of such Shares.
(c) Notwithstanding anything to the contrary in this Agreement and
without in any way affecting the Company's obligations under the Merger
Agreement, in the event that any additional shares of Company Common Stock are
issued after the date of this Agreement (other than pursuant to clause (a) of
this Section 2.4), the number of Shares issuable upon exercise of the Option
shall be automatically adjusted so that, after such issuance, such number equals
19.9% of the aggregate number of shares of Company Common Stock then issued and
outstanding (without considering any shares of Company Common Stock subject to
or issued pursuant to the Option).
(d) The rights of Sub under this Section 2.4 shall be in addition to,
and shall in no way limit, Parent's or Sub's rights against the Company for any
breach of the Merger Agreement.
(e) The provisions of this Agreement shall apply with appropriate
adjustments to any securities for which the Option becomes exercisable pursuant
to this Section 2.4.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Parent as follows:
SECTION 3.1 AUTHORITY RELATIVE TO THIS AGREEMENT. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware. The Company has full corporate power and authority to
execute and
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<PAGE> 5
deliver this Agreement, to perform its obligations hereunder and to consummate
the transactions contemplated hereby. The execution, delivery and the
consummation by the Company of the transactions contemplated by this Agreement
have been duly and validly authorized 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, delivery and performance of this Agreement by the
Company and the consummation by the Company of the transactions contemplated by
this Agreement. This Agreement has been duly and validly executed and delivered
by the Company and constitutes a legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights generally and by
general equitable principles (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
SECTION 3.2 NO CONFLICT; REQUIRED FILINGS AND CONSENTS. The execution
and delivery of this Agreement by the Company do not, and the performance of
this Agreement by the Company will not, (i) conflict with, result in a violation
or breach of, constitute (with or without notice or lapse of time or both) a
default under, result in or give to any person any right of payment or
reimbursement, termination, cancellation, modification or acceleration of, or
result in the creation or imposition of any Lien upon any of the assets or
properties of the Company under, any of the terms, conditions or provisions of
(A) the certificate or articles of incorporation of bylaws (or other comparable
charter documents) of the Company, (B) subject to the taking of the actions
described in clause (ii) of this Section, (x) any Law or Order of any
Governmental or Regulatory Authority, applicable to the Company or any of its
assets or properties, or (y) any note, bond, mortgage, security agreement,
indenture, license, franchise, permit, concession, contract, lease or other
instrument, obligation or agreement of any kind to which the Company is a party
or by which the Company or any of its assets or properties is bound, and (ii)
except for applicable requirements of the HSR Act, the Exchange Act and the
Securities Act of 1933, as amended (the "Securities Act"), require any filing by
the Company with, or any permit, authorization, consent or approval of, any
Governmental or Regulatory Authority or any third party.
SECTION 3.3 OPTION SHARES. The Company has taken all necessary
corporate action to authorize and reserve for issuance upon exercise of the
Option a total of 1,427,914 shares of Company Common Stock (together with any
additional shares of Company Common Stock that would be issuable as a result of
any adjustments required under Section 2.4 of this Agreement), and such shares
of Company Common Stock, when issued and delivered by the Company to Parent upon
exercise of the Option, will be duly authorized, validly issued, fully paid and
nonassessable, and will be free and clear of any security interests, liens,
claims, pledges, charges or encumbrances of any kind whatsoever and not subject
to any preemptive rights.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB
Parent and Sub hereby represent and warrant to the Company as follows:
5
<PAGE> 6
SECTION 4.1 AUTHORITY RELATIVE TO THIS AGREEMENT. Each of Parent and
Sub is a corporation duly organized, validly existing and in good standing under
the laws of its jurisdiction of incorporation. Each of Parent and Sub has full
corporate power and authority to enter into this Agreement and to perform its
obligations hereunder and to consummate the transactions contemplated hereby.
The execution, delivery and performance of this Agreement by each of Parent and
Sub and the consummation by each of Parent and Sub of the transactions
contemplated hereby have been duly and validly authorized by its Board of
Directors, and no other corporate proceeding on the part of Parent or Sub is
necessary to authorize the execution, delivery and performance of this Agreement
by Parent or Sub or for Parent or Sub to consummate such transactions. This
Agreement has been duly and validly executed and delivered by each of Parent and
Sub and constitutes a legal, valid and binding obligation of Parent and Sub,
enforceable against Parent and Sub in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights generally and by
general equitable principles (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
SECTION 4.2 NO CONFLICT, REQUIRED FILING AND CONSENTS. The execution
and delivery of this Agreement by Parent and Sub do not, and the performance of
this Agreement by Parent and Sub will not, (i) conflict with, result in a
violation or breach of, constitute (with or without notice or lapse of time or
both) a default under, result in or give to any person any right of payment or
reimbursement, termination, cancellation, modification or acceleration of, or
result in the creation or imposition of any Lien upon any of the assets or
properties of Parent or Sub under, any of the terms, conditions or provisions of
(A) the certificate or articles of incorporation of bylaws (or other comparable
charter documents) of Parent or Sub, (B) subject to the taking of the actions
described in clause (ii) of this Section, (x) any Law or Order of any
Governmental or Regulatory Authority applicable to Parent or Sub or any of their
respective assets or properties, or (y) any Contract to which Parent or Sub is a
party or by which Parent or Sub or any of their respective assets or properties
is bound, or (ii) except for applicable requirements of the HSR Act, the
Exchange Act, and the Securities Act, require any filing by Parent with, or any
permit, authorization, consent or approval of, any Governmental or Regulatory
Authority or any third party.
SECTION 4.3 INVESTMENT INTENT. The purchase of the Shares pursuant to
this Agreement is for the account of Sub for the purpose of investment and not
with a view to or for sale in connection with any distribution thereof within
the meaning of the Securities Act and the rules and regulations promulgated
thereunder.
ARTICLE V
ADDITIONAL AGREEMENTS
SECTION 5.1 REGISTRATION RIGHTS; LISTING OF SHARES. (a) The Company
agrees to use its reasonable best efforts to (i) effect as promptly as possible
upon the request of Sub and (ii) cause to become and remain effective for a
period of not less than six months (or such shorter period as may be necessary
to effect the distribution of such Shares), the registration under the
Securities Act and any applicable state securities laws, of all or any part
6
<PAGE> 7
of the Shares as may be specified in such request; provided, however, that Sub
(i) shall have the right to select the managing underwriter for any such
offering after consultation with the Company, which managing underwriter shall
be reasonably acceptable to the Company and (ii) shall not be entitled to more
than two effective registration statements hereunder. Sub agrees to use all
reasonable efforts to cause, and to cause any underwriters of any sale or other
disposition to cause, any sale or other disposition pursuant to such
registration statement to be effected on a widely distributed basis so that upon
consummation thereof no purchaser or transferee will own beneficially more than
5% of the then outstanding voting power of the Company. Sub agrees not to sell,
or cause to be sold, any Shares registered pursuant to this Section 5.1 for one
period not exceeding ninety days in the aggregate if the Board of Directors of
the Company shall have determined in good faith (and shall have notified Sub in
writing of such determination) that such sale would result in the disclosure of
nonpublic information that would materially and adversely affect the Company.
(b) In addition to such demand registrations, if the Company proposes
to effect a registration of Company Common Stock for its own account or for the
account of any other stockholder of the Company, the Company will give prompt
written notice to all holders of Options or Shares of its intention to do so and
shall use its reasonable best efforts to include therein all Shares requested by
Sub to be so included; provided, however, that if the managing underwriter of
such offering advises the Company in writing that in its opinion the number of
shares of Company Common Stock requested to be included in such registration
exceeds the number which can be sold in such offering, the Company will, after
fully including therein all shares of Company Common Stock to be sold by the
Company, include the shares of Company Common Stock requested to be included
therein by Sub pro rata (based on the number of shares of Company Common Stock
intended to be included therein) with the shares of Company Common Stock
intended to be included therein by persons other than the Company. No
registration effected under this Section 5.1(b) shall relieve the Company of its
obligations to effect demand registrations under Section 5.1(a) hereof.
(c) Registrations effected under this Section 5 shall be at the
Company's expense, but excluding underwriting discounts and commissions to
brokers or dealers and the fees and expenses of counsel to the holder of Options
or Shares; provided, however, that the Company will not be required to pay for
any registration expenses with respect to any registration which is withdrawn at
the request of a Holder unless the Holder agrees to forfeit its right to request
one registration. In connection with each registration under this Section 5, the
Company shall indemnify and hold each holder of Options or Shares participating
in such offering (a "Holder"), its underwriters and each of their respective
affiliates harmless against any and all losses, claims, damages, liabilities and
expenses (including, without limitation, investigation expenses and fees and
disbursements of counsel and accountants), joint or several, to which such
Holder, its underwriters and each of their respective affiliates may become
subject, under the Securities Act or otherwise, insofar as such losses, claims,
damages, liabilities or expenses (or actions in respect thereof) arise out of or
are based upon an untrue statement or alleged untrue statement of a material
fact contained in any registration statement (including any prospectus therein),
or any amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, other
than such losses, claims,
7
<PAGE> 8
damages, liabilities or expenses (or actions in respect thereof) which arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in written information furnished by a Holder to the
Company expressly for use in such registration statement.
(d) In connection with any registration statement pursuant to this
Section 5, each Holder agrees to furnish the Company with such information
concerning itself and the proposed sale or distribution as shall reasonably be
required in order to ensure compliance with the requirements of the Securities
Act. In addition, Sub shall indemnify and hold the Company, its underwriters and
each of their respective affiliates harmless against any and all losses, claims,
damages, liabilities and expenses (including without limitation investigation
expenses and fees and disbursements of counsel and accountants), joint or
several, to which the Company, its underwriters and each of their respective
affiliates may become subject under the Securities Act or otherwise, insofar as
such losses, claims, damages, liabilities or expenses (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in written information furnished by any
Holder to the Company expressly for use in such registration statement.
(e) Upon the issuance of Shares hereunder, the Company will use its
reasonable best efforts promptly to cause the Shares to be approved for
quotation on Nasdaq or on such national or other exchange on which the shares of
Company Common Stock are at the time listed.
SECTION 5.2 LIMITATION ON PROFIT. (a) Notwithstanding any other
provision of this Agreement to the contrary, in no event shall Sub's (or its
designee's) Total Profit (as hereinafter defined) exceed $4,500,000 and, if it
otherwise would exceed such amount, Sub (or its designee), at its sole election,
shall either (a) reduce the number of shares of Company Common Stock subject to
the Option, (b) deliver to the Company for cancellation Shares previously
purchased by Sub (or its designee), (c) pay cash to the Company or (d) take any
actions described in any one or more of the preceding clauses (a), (b) and (c),
so that Sub's (or its designee's) Total Profit shall not exceed $4,500,000 after
taking into account the foregoing actions.
(b) As used herein, the term "Total Profit" shall mean (i) except in
the case of the cancellation of the Option pursuant to Section 2.2(c), the sum
of (A) (x) the aggregate net cash amounts (before taxes) received by Sub (or its
designee) pursuant to the sale of Shares (or any other securities into which
such Shares are converted or exchanged) to any unaffiliated party, less (y)
Sub's (or its designee's) purchase price of such Shares and (B) the aggregate
amount of termination fees paid under Section 9.02(b) of the Merger Agreement or
(ii) in the case of the cancellation of the Option pursuant to Section 2.2(c),
the sum of (A) the net cash amount (before taxes) received by Sub (or its
designee) pursuant to Section 2.2(c) and (B) the aggregate amount of termination
fees paid under Section 9.02(b) of the Merger Agreement.
SECTION 5.3 TRANSFER OF SHARES; RESTRICTIVE LEGEND. Sub agrees not to
transfer or otherwise dispose of the Shares issuable upon exercise of the
Option, or any interest therein, without first providing to the Company an
opinion of counsel for Sub,
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<PAGE> 9
reasonably satisfactory in form and substance to counsel for the Company, to the
effect that such transfer or disposition will not violate the Securities Act or
any applicable state law governing the offer and sale of securities, and the
rules and regulations thereunder. Sub further agrees to the placement on the
certificate(s) representing the Shares issuable upon exercise of the Option of
the following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER EITHER (i) THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR
(ii) ANY APPLICABLE STATE LAW GOVERNING THE OFFER AND SALE OF
SECURITIES. NO TRANSFER OR OTHER DISPOSITION OF THESE SHARES, OR OF ANY
INTEREST THEREIN, MAY BE MADE EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT AND SUCH OTHER STATE LAWS OR
PURSUANT TO EXEMPTIONS FROM REGISTRATION UNDER THE ACT, SUCH OTHER
STATE LAWS, AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER.";
provided, however, that upon provision to the Company of any opinion of counsel
for Sub, reasonably satisfactory in form and substance to counsel for the
Company, to the effect that such legend is no longer required under the
provisions of the Securities Act or applicable state securities laws, the
Company shall promptly cause new unlegended certificates representing such
Shares to be issued to Sub against surrender of such legended certificates.
SECTION 5.4 BEST EFFORTS. Subject to the terms and conditions of this
Agreement, Parent, Sub and the Company shall each use its best efforts to take,
or cause to be taken, all actions, and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by this Agreement.
Each party shall promptly consult with the other and provide any necessary
information and material with respect to all filings made by such party with any
Governmental or Regulatory Authority in connection with this Agreement or the
transactions contemplated hereby.
SECTION 5.5 FURTHER ASSURANCES. The Company shall perform such further
acts and execute such further documents and instruments as may reasonably be
required to vest in Sub the power to carry out the provisions of this Agreement.
If Sub shall exercise the Option, or any portion thereof, in accordance with the
terms of this Agreement, the Company shall, without additional consideration,
execute and deliver all such further documents and instruments and take all such
further action as Sub may reasonably request for the purpose of effectively
carrying out the transactions contemplated by this Agreement.
SECTION 5.6 SURVIVAL. All of the representations, warranties and
covenants contained herein shall survive a Closing and shall be deemed to have
been made as of the date hereof and as of the date of each Closing.
9
<PAGE> 10
ARTICLE VI
MISCELLANEOUS
SECTION 6.1 SPECIFIC PERFORMANCE; JURISDICTION. The parties hereto
agree that if any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached, irreparable
damage would occur, no adequate remedy at law would exist and damages would be
difficult to determine, and that the parties shall be entitled to specific
performance of the terms hereof, without any requirement for securing or posting
any bond, in addition to any other remedy at law or equity.
SECTION 6.2 ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement of the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements and understandings, both written and oral,
between the parties, or any of them, with respect to the subject matter hereof.
SECTION 6.3 AMENDMENT; ASSIGNMENT. This Agreement may not be amended
except by an instrument in writing signed by the parties hereto and specifically
referencing this Agreement. No party to this Agreement may assign any of its
rights or obligations under this Agreement without the prior written consent of
the other party hereto, and any such purported assignment shall be null and
void. Notwithstanding the foregoing, the rights and obligations of Parent or Sub
hereunder may, without the prior written consent of the Company, be assigned by
Parent or Sub to any of its direct or indirect wholly owned Subsidiaries.
SECTION 6.4 SEVERABILITY. The provisions of this Agreement shall be
deemed severable and the invalidity or unenforceability of any provisions hereof
shall not affect the validity and enforceability of the other provisions hereof.
If any provision of this Agreement, or the application thereof to any person or
entity or any circumstances, is invalid or unenforceable, (i) a suitable and
equitable provision shall be substituted therefor in order to carry out, so far
as may be valid and enforceable, the intent and purpose of such invalid and
unenforceable provision and (ii) the remainder of this Agreement and the
application of such provision to other persons, entities or circumstances shall
not be affected by such invalidity or unenforceability, nor shall such
invalidity or unenforceability affect the validity or enforceability of such
provision, or the application thereof, in any other jurisdiction.
SECTION 6.5 GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware without giving
effect to the provisions thereof relating to conflicts of law.
SECTION 6.6 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but each of which
together shall constitute one and the same document.
SECTION 6.7 NOTICES. All notices, requests, claims, demands and other
communications under this Agreement shall be in writing and shall be given in
the manner and to the parties at the addresses specified in Section 10.02 of the
Merger Agreement.
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<PAGE> 11
SECTION 6.8 BINDING EFFECT. This Agreement shall be binding upon, inure
to the benefit of, and be enforceable by the permitted successors and assigns of
the parties hereto. Nothing expressed or referred to in this Agreement is
intended or shall be construed to give any person other than the parties to this
Agreement, or their respective permitted successors or assigns, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision contained herein.
SECTION 6.9 SURVIVAL. All of the representations, warranties and
covenants contained herein shall survive a Closing and shall be deemed to have
been made as of the date hereof and as of the date of each Closing.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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<PAGE> 12
IN WITNESS WHEREOF, each of the Company and Parent have caused this
Agreement to be executed on its behalf by its officers thereunto duly
authorized, all as of the date first above written.
PROXIMA CORPORATION
By: /s/ K.E. Olson
-------------------------------
Name: K.E. Olson
Title: CEO
ASK ASA
By: /s/ Einar J. Greve
-------------------------------
Name: Einar J. Greve
Title: Director
BD ACQUISITION CORP.
By: /s/ Einar J. Greve
-------------------------------
Name: Einar J. Greve
Title: Director
12
<PAGE> 1
Exhibit (g)
IN THE COURT OF CHANCERY IN THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
________________________________________x
.
MARC TISCH, .
.
Plaintiff, .
. C.A. No. 16234NC
KENNETH E. OLSON, PATRICK ARRINGTON, .
RICHARD E. BELLUZO, ROBERT W. JOHNSON, .
JEFFREY M. NASH, JOHN M. SIEBER, .
PROXIMA CORPORATION and ASK asa, .
.
Defendants. .
.
________________________________________x
CLASS ACTION COMPLAINT
----------------------
Plaintiff alleges upon information and belief, except for paragraph 1
hereof, which is alleged upon knowledge, as follows:
1. Plaintiff has been the owner of the common stock of Proxima Corp.
("Proxima" or the "Company") since prior to the transaction herein complained
of and continuously to date.
2. Proxima is a corporation duly organized and existing under the laws
of the State of Delaware. The Company is a leading developer, manufacturer and
marketer of multimedia projection products which bring the power of the
computer to the workgroup.
3. ASK asa ("ASK") is a Norwegian company based in Fredrikstad, Norway
and is a leading manufacturer of multimedia projection equipment.
4. Defendant Kenneth E. Olsen is Chairman of the Board, interim
President and Chief Executive Officer of the Company.
<PAGE> 2
5. Defendants Patrick Arrington, Richard E. Belluzo, Robert W.
Johnson, Jeffrey M. Nash, and John M. Slober are Directors of Proxima.
6. The Individual Defendants are in a fiduciary relationship with
Plaintiff and the other public stockholders of Proxima and owe them the highest
obligations of good faith and fair dealing.
CLASS ACTION ALLEGATIONS
7. Plaintiff brings this action on its own behalf and as a class
action, pursuant to Rule 23 of the Rules of the Court of Chancery, on behalf of
all common stockholders of the Company (except the defendants herein and any
person, firm, trust, corporation, or other entity related to or affiliated with
any of the defendants) and their successors in interest, who are or will be
threatened with injury arising from defendants' actions as more fully described
herein.
8. This action is properly maintainable as a class action because:
(a) The class is so numerous that joinder of all members is
impracticable. As of June 6, 1997, there were approximately 7,152,368 shares of
Proxima common stock outstanding owned by hundreds, if not thousands, of record
and beneficial holders;
(b) There are questions of law and fact which are common to the
class including, inter alia, the following: (i) whether defendants have
----------
breached their fiduciary and other common law duties owned by them to plaintiff
and the members
<PAGE> 3
of the class; and (ii) whether the class is entitled to injunctive relief or
damages as a result of the wrongful conduct committed by defendants.
(c) Plaintiff is committed to prosecuting this action and has retained
competent counsel experienced in litigation of this nature. The claims of the
plaintiff are typical of the claims of other members of the class and plaintiff
has the same interests as the other members of the class. Plaintiff will fairly
and adequately represent the class.
(d) Defendants have acted in a manner which affects plaintiff and all
members of the class alike, thereby making appropriate injunctive relief and/or
corresponding declaratory relief with respect to the class as a whole.
(e) The prosecution of separate actions by individual members of the
Class would create a risk of inconsistent or varying adjudications with respect
to individual members of the Class, which would establish incompatible
standards of conduct for defendants, or adjudications with respect to
individual members of the Class which would, as a practical matter, be
dispositive of the interests of other members or substantially impair or impede
their ability to protect their interests.
SUBSTANTIVE ALLEGATIONS
9. After experiencing some operating difficulties in the past few
years, Proxima has recently begun to show significant improvements in its
financial results and future prospects. The Company has also received excellent
market response for its new products. Indeed, Proxima's new DP9200XGA projector
recently
<PAGE> 4
received the prestigious PC Magazine Editor's Choice Award and was awarded
Computer Resoller News' highest recommendation in the category. Additionally,
- ----------------------
for the third quarter ended December 31, 1997, Proxima reported net income of
$789,000, or 11 cents a share, on revenues of $35,076,000. A Company press
release noted that third quarter revenues increased by 25 percent over the
previous quarter "primarily on good market acceptance of the Company's three
new multimedia projector models," and that gross margins increased to nearly 21
percent while operating expenses declined to about 18 percent revenues.
10. Despite these strong results and promising prospects, Proxima's
stock price has languished. Given Proxima's strong portfolio of products and
financial performance, its prospects for future growth and expansion are
substantial, and the intrinsic value of Proxima is for greater than that
reflected in the market price of Proxima's stock.
11. On March 9, 1998, Proxima and ASK announced that they had entered
into a definitive merger agreement whereby ASK will acquire Proxima in a
transaction valued at $84 million. Under the terms of the transaction as
presently proposed, ASK will commence a cash tender offer for all of Proxima's
outstanding common shares at a price of $11 per share. The tender offer will be
followed by a merger in which any untendered shares of Proxima will be
converted into the right to receive $11 per share in cash.
12. By entering into the agreement with ASK, the Proxima Board has
initiated a process to sell the Company which imposes heightened fiduciary
<PAGE> 5
responsibilities and requires enhanced scrutiny by the Court. However, the
terms of the porposed transaction were not the result of an auction process or
active market check; they were arrived at without a full and thorough
investigation by the Individual Defendants; and they are intrinsically unfair
and inadequate from the standpoint of the Proxima shareholders.
13. The Individual Defendants failed to make an informed decision, as
no market check of the Company's value was obtained. In agreeing to the
merger, the Individual Defendants failed to properly inform themselves of
Proxima's highest transactional value.
14. The Individual Defendants have violated the fiduciary duties owned
to the public shareholders of Proxima. The Individual Defendants' agreement to
the terms of the transaction, its timing, and the failure to auction the
Company and invite other bidders, and defendants' failure to provide a market
check demonstrate a clear absence of the exercise of due care and of loyalty to
Proxima's public shareholders.
15. The Individual Defendants' fiduciary evaluation of Proxima's net
worth as a merger/acquisition candidate; and
(a) Undertake an appropriate evaluation of Proxima's net worth
as a merger/acquisition candidate; and
(b) Engage in a meaningful auction with third parties in an
attempt to obtain the best value for Proxima's public shareholders.
<PAGE> 6
16. The Individual Defendants have breached their fiduciary duties by
reason of the acts and transactions complained of herein, including their
decision to merge with ASK without making the requisite effort to obtain the
best offer possible.
17. Plaintiff and other members of the Class have been and will be
damaged in that they have not and will not receive their fair proportion of the
value of Proxima's assets and business, and will be prevented from obtaining
fair and adequate consideration for their shares of Proxima common stock.
18. The consideration to be paid to class members in the proposed
merger is unfair and inadequate because, among other things:
(a) The intrinsic value of Proxima's common stock is materially
in excess of the amount offered for those securities in the merger giving due
consideration to the anticipated operating results, net asset value, cash flow,
and profitability of the Company;
(b) The merger price is not the result of an appropriate
consideration of the value of Proxima because the Proxima Board approved the
proposed merger without undertaking steps to accurately ascertain Proxima's
value through open bidding or at least a "market check mechanism"; and
(c) By entering into the agreement with ASK, the Individual
Defendants have allowed the price of Proxima stock to be capped, thereby
depriving plaintiff and the Class of the opportunity to realize any increase in
the value of Proxima stock.
<PAGE> 7
19. By reason of the foregoing, each member of the Class will suffer
irreparable injury and damages absent injunctive relief by this Court.
20. ASK is named as a defendant in order to permit the Court to grant
complete relief.
21. Plaintiff and other members of the Class have no adequate remedy
at law.
WHEREFORE, plaintiff and members of the Class demand judgment against
defendants as follows:
A. Declaring that this action is properly maintainable as a class
action and certifying plaintiff as the representative of the Class;
B. Preliminarily and permanently enjoining defendants and their
counsel, agents, employees and all persons acting under, in concert with, or for
them, from proceeding with, consummating, or closing the proposed transaction;
C. In the event that the proposed transaction is consummated,
rescinding it and setting it aside, or awarding rescissory damages to the Class;
D. Awarding compensatory damages against defendants, individually and
severally, in an amount to be determined at trial, together with pre-judgment
and post-judgment interest at the maximum rate allowable by law, arising from
the proposed transaction;
E. Awarding plaintiff its costs and disbursements and reasonable
allowances for fees of plaintiff's counsel and experts and reimbursement of
expenses; and
<PAGE> 8
F. Granting plaintiff and the Class such other and further relief as
the Court may deem just and proper.
Dated: March 9, 1998
ROSENTHAL, MONHAIT, GROSS & GOODESS, P.A.
BY /s/ Norman M. Monhait
-------------------------------------
Suite 1401, Mellon Bank Center
P.O. Box 1070
Wilmington, DE 19899-1070
(302) 655-4433
Attorneys for Plaintiff
OF COUNSEL:
BERNSTEIN LIEBHARD & UFSHITZ
274 Madison Avenue
New York, NY 10016
(212) 770-1414
